EFTA01446853.pdf

period but the magnitude of impact is greater in the near-term. The company has not given long-term tax guidance yet. we estimate '14 tax rate at 23% which could further decrease to 18% over time if sovaldi hits our revenue estimate on core biz basis, there was no impact from R&O tax in 2014. This one-time benefit lead to a .5-.75% hit to their tax rate. we calculate 2014 tax rate at —23.5% (28.5% core biz, then subtract 5% impact of 55.78 sovaldi sales). This math is based on our numbers suggest an implied sovaldi tax rate at —13% using revenue weighted calculations. This makes our weighted avg. tax rate for 2015 at —21%. Every 100bps tax rate impacts 2015 EPS by 10c (1.3% our of '14 EPS). Generic Sustiva will benefit COGS over next three years. We model COGS of 20% in '14 vs. 12% in '16 Sustiva (a component of Atripla not made by GILD) is going generic this year in Europe. In us, it will go generic in 2015. There is a step-down function of the royalty payments over three years according to mgmt. valuation & risks - Gilead still remains our top pick in large cap we value GILD at 5132/sh using 17x 2015 multiple (10% discount to its biotech peers due to patent cliff on base biz). our new '15 EPS is 57.75/sh. Risks: weak sovaldi launch, poor base biz performance Please click on below link for full report: http://pull.db-gmresearch.com/p/442-7CA3/21291538/0900b8c087e1098b.pdf Regards, EVS Equity Telephone: - 19 Please ensure all mails are also sent to our shared inbox evs.equityfocus@db.com to avoid getting overlooked. This email is sent to you by Evalueserve on behalf of Deutsche Bank Diese email wurde Ihnen von Evalueserve im Auftrag der Deutschen Bank gesendet For additional Deutsche Bank research, visit our web site: http://gm.db.com/equities Please refer to the disclaimer that applies to the research attached in this email. This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mail in error) please notify the sender immediately and delete this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. Please refer to http://www.db.com/en/content/eu_disclosures.htm for additional EU corporate and regulatory disclosures.(see attached file: Disclaimer.txt) (Embedded image moved to file: pic32619.gif) Tazia Smith Director I Key Client Partners - US Deutsche Bank Securities Inc Deutsche Asset & wealth Management 345 Park Avenue, 26th Floor New York. NY 10154 (Embedded image moved to file: pic08892.gif) CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0101259 CONFIDENTIAL SDNY_GM_00247443 EFTA01446853