“Biogen Idec: Evaluating a Potential Acquisition” Team Stratecore Abby Kowaloff Clay Quint Pasquale Cirone Reshma Singh Victor Fok YBPS Case Competition November 30, 2007

Agenda MS Disease Overview Therapeutic Landscape Acquisition Evaluation Opportunity Assessment Plan of Action Conclusion Pfizer Competitive Strategy in MS

Multiple Sclerosis: Disease Condition Chronic inflammatory demyelinating CNS disease leading to impaired motor and sensory function Frequency: Most common debilitating illness in young adults Indicence 0.5 – 1 % per 1000 people Onset: age 20-50 (median: 24 years) 350,000 – 500,000 pts US; over 1 million worldwide Prognosis: PPMS: often need walking assistance in 6-7 years RRMS often maintain walking ability for 15-20 years post onset 1/3 patients will work after 15 years

MS Therapies: Mechanisms of Action Blood brain barrier TYSABRI* macrophage B cell Autoreactive T cell Lymphocyte Lymphocyte Secrete antibodies COPAXONE AVONEX* BETASERON REBIF Destroy myelin NORMAL myelin BG12* Fingolimod Laquinmod Cladribine teriflunomide Demyelination MS

Changing MS Therapeutic Landscape Crowded and moving towards oral therapies Expected Date to Market and Patent Expiration I.M. I.V. ORAL S.C. U.S. MS Drug Sales ($MM), 2006 Current Therapy Phase III Future landscape: Oral Therapies Crowded Space Lack of clinical efficacy for BG-12 Oral therapy: better convenience Phase II

Is Biogen Worth Buying? Pipeline Assessment Phase Preclinical/ Phase I Discovery Phase II Phase III Market Pipeline AVONEX NPV: $5.0 B TYSABRI NPV: $236 MM BG-12 Clinically Inferior RITUXAN Cancer Indication/Injectable Daclizumab Clinically Inferior Avonex is sole viable profit generator Goes off patent in 2011 CDP 323 Already licensed Anti- LINGO-1 Early stage; high risk NgR-Fc

Pfizer Will Not Buy Biogen is Overvalued Biogen Market Cap (2007): ~$21 B Biogen Valuation: $5.3 B Epidemiologic Assumptions (RMRS): 20,000 new cases/year 25,000 incidence less other forms of MS, discontinued therapy, death, etc. Slow increase of % affected patients treated (+1%/yr) Commercial Assumptions Mid-range sales growth case Valuation only includes MS portfolio (~98% of 2006 sales) Adjusted according to year-by-year competitive landscape Terminal growth rate (post-2015): 3% (standard) Pfizer WTP (including premium): $7 B Overvalued! Small +/-: 9% (plus 3% constant) Medium: 17%

Unlocking Synergies: $135 MM Pfizer/Biogen Collaboration Pfizer strategic priorities: Compete in the MS space and expand presence in biologics Proposal: Collaborate with Biogen on Anti-LINGO-1 or NgR-Fc Novel mechanism to promote remyelination Deal Structure Milestone Compensation/Assistance Upfront (2007) $20 million R&D Assistance $10 million Phase I (Assumption: 2009) $5 million Phase II (Assumption: 2011) Phase III (Assumption: 2012) $50 million Approval (Assumption: 2014) $30 million Royalty Agreement 65-35% Pfizer/Biogen Revenue-sharing Other major companies have licensed all of the Phase II/III MS drugs

Pfizer Competitive Strategy in MS Partnerships for the Future No short-term licensing for oral immunomodulating therapies BG-12 not likely to gain significant market share Focus resources on remyelinating mechanisms Capture future MS market to pre-empt competitor licensing moves Investigate further indications for biologics Collaborate to develop cell-based therapies

Questions?

Additional Slides

Future Competitive Landscape: Oral Therapies Dominate Biogen Anticipated Oral Drug Market Share Biogen Current Market Share

Restorative Strategies for MS Strategy Mechanism Phase Phenytoin and Flecainide Block Sodium Channels Clinical Trials Antagonists Jagg-Notch Promotes oligdodendrocyte differentiation Animal Studies Neural growth factors Promote neuronal survival Antagonitsts of Nogo2/Lingo-1 Animal studies Progenitor Cells (MSC/OEC) Initiate myelin repair Early Human Trials

Mechanism of NgR-FC and Anti-LINGO-1