1. Pharmaceutical Case Competition 2007 Biogen Idec: A Good Buy? November 30, 2007 Team 7: Rachel Dexter, PhD Chemistry Han Lee, MBA/PhD Genetics James Park, MD/PhD Neuroscience Johanna Rodriguez, PhD Chemistry Pauline Wyrembak, PhD Chemistry

2. Distribution of Pfizer’s Interests Possible Initiatives Cardiovascular Disease Biologics Vaccines Alzheimer’s Disease Multiple Sclerosis Pfizer as a Company

3. Multiple Sclerosis (MS) Overview Disease Profile U.S Market Sales for RRMS Drugs Total U.S. Sales $2.5 Billion Rodman and Renshaw Report, Sep 2006 493,600 patients in the U.S 85% of all patients - relapsing- remitting or secondary progressive MS Unmet Needs in MS: Mechanics - Compliance - Efficacy

4. FDA Approved MS Drugs Biogen: – Avonex: Immunomodulator, Interferon – Tysabri (Elan): Immunosuppressant, Monoclonal antibody Competition: – Betaseron: Bayer Schering Pharma AG – Copaxone: Teva – Rebif: Merck Serono Sanofi-Aventis – Novantrone: EMD Serono, Inc. and OSI Pharmaceuticals, Inc. 2007 200820092010201120122013201420152016 Patent Expiration AVONEX LIPITORVIAGRA Pfizer Drugs: TYSABRI CELEBREX

5. Pipeline MS Drugs Biogen: – Rituxan (Genentech): Phase II/III, Immunosuppressant, Monoclonal antibody – BG-12 (Oral): Phase III, Immunomodulator, Fumarate Competition: – IV: MBP8298 (BioMS), ABT-874 (Abbott), CAMPATH (Genzyme)… – Orals: FTY720 (Novartis), Mylinax (Serono/Merck), Teriflunomide (Sanofi- Aventis), Laquinimod (Teva)… 2007 200820092010201120122013201420152016 Enter Market Patent Expiration BG-12 AVONEX TYSABRI & RITUXAN ORALS? LIPITORVIAGRA Pfizer Drugs: CELEBREX

6. PositivesNegatives - Diversification into MS market - $5 Billion global market - Access to Biogen’s pipeline - Patent expiration of Avonex - Biogen’s existing partnerships - Tysabri side effects (Litigation) - Market saturation - Exacerbation of pipeline issues Should Pfizer acquire Biogen?

7. Projected Profits for Biogen’s MS Drugs In US Market Assumptions: Cost of Capital (COC) = 13 % Inflation = 3 % g = 4 % (Long-term GDP growth rate) Patent Expires: 80% drop in Revenue Orals Compete for Market Share Added Competition from Generics Bottom Line: $2 Billion

8. Pfizer’s Options Scenario 1: Acquire Biogen Scenario 2: Pass on Biogen Scenario 3: License from Biogen Scenario 4: Alternative acquisition Scenario 3: License from Biogen Scenario 4: Alternative acquisition

9. Recommendations Scenario 3: License BG-12 from Biogen - $25 Million for BG-12 (50% profit share) Scenario 4: Alternative Acquisition - Acquire BioMS Medical Corp. for MBP8298 - Market cap $238 Million (Toronto Stock Ex.) - MBP8298 predicted to have sales of $10 Billion between 2012 and 2018 - Slows progression, better dosing schedule (better compliance) - Returns: 16% (conservative estimate)

10. Acknowledgements Yale Biotechnology & Pharmaceutical Society Yale School of Management Boehringer Ingelheim, Pfizer, Roche, Vion Compass Strategic Consulting BioMS: Amanda Stadler Professor Charles Ahn, Yale University, Dept. of Applied Physics

11. Therapeutic AreaRecent Pfizer Initiatives Oncology Acquisition of Idun (4/2005) - Therapies to control apoptosis License agreement with Coley ( March 2005) -Toll-like receptor agonist for the potential treatment, control and prevention of cancer. Acquisition of Campto/Camptosar from Sanofi-Aventis (9/2004) - Treatment of colon cancer Potential acquisition of Biogen Cardiovascular Disease Acquisition of Esperion (2/2004) -Discovery and development of high- density lipoprotein (HDL)-targeted therapies Biologics Acquisition of Rinat (5/2006) -Company with several new central- nervous system product candidates. Acquisition of Bioren (8/2005) -Technology for optimizing antibodies Vaccines Acquisition of PowerMed (12/2006) -DNA-based vaccines for the treatment of influenza and chronic viral diseases Alzheimer’s Disease License/collaboration agreement with TransTech (9/2006) -Develop and commercialize small and large molecules Multiple Sclerosis Agreement with Serono (7/2002) -Co-promote Rebif Potential acquisition of Biogen Pfizer: Potential Growth Areas

12. Clinical Patterns of MS SP PP RR PR

13. InjectionOral Drug CopaxoneTysabriMBP8298FTY720Laquinimod StageIn Use Phase III Delivery s.c 40mg/day i.v 300mg/28days i.v. 500mg/6months oral 1.25mg/day oral 0.3mg/day MRI Lesion Decrease 38%24%UnivestigatedPositive44% (phase I) Relapse Rate Decrease 75%66%60% (phase II)53% (phase II) None (phase I) 8% (phase IIb) Disease CourseRR-MS Chronic progressive RR-MS Side Effects Local injection site reactions, naseau, anxiety, hypertonia Rash, arthralgia, headache, 2 instances of PML Local injection site reactions, occasional flush, mild hypotensions Sinusitus, mild headaches, gastrointestinal disorders, bradycardia Transient increases in liver enzymes s.c – sub cutaneously i.v – intra venously PML – progressive multifocal leukencephalopathy Kleinschnitz, et. al. J. Neurol. (2007), 254, 1473-1490

14. Financial Fundamentals 19.79 29.89 147.74 42.67 29.24 $59.5 $80.4 $19.8 $20.6

15. Current global MS market = $5 Billion United States (US) accounts for 50% of the global MS market 25,000 new cases per year in US (growth 0.5% per year) Biogen’s US MS drug sales represents ~40% total revenues Margins = 25% Minimal synergy Facts and Assumptions in DCF

16. Industry Average P/E Current NPV (DCF, COC = 13%) 6 70 48 Value of Biogen 2 20 14

17. 13% 8% 13% Industry Average P/E Current NPV (DCF, COC = 13%) NPV (DCF, COC = 8%) Value of Biogen 4 15 6 70 48 2 20 14

18. Value of Biogen Industry Average P/E Current NPV (DCF, COC = 13%) NPV (DCF, COC = 8%) NPV (DCF, COC = 8%, Optimistic AVONEX Sales) 4 18 13% 8% 61 15 8% 13% 8% 6 70 48 2 20 14

19. Projections