From: Tazia Smith <I To: jeevacationggmail.com Cc: Vahe Ste anian <- >, Paul Morris Subject: Re: Biotech Se11-O1T.... [C] Date: Tue, 25 Mar 2014 13:45:13 +0000 Inline-Images: unnamed; unnamed(I); unnamed(2); unnamed(3); unnamed(4); unnamed(5); unnamed(6); unnamed(7); unnamed(8); unnamed(9); unnamed( I 0); unnamed( I I ); unnamed(I2) Classification: Confidential understood, will do From: Jeffrey Epstein <jeevacabccit§gmail.com> To: Tazia Smith Date: 03/25/2014 09A2 AM Subject: Re: Biotech Sell-Off.... (I] remind me tomorow remind On Tue, Mar 25, 2014 at 7:30 AM, Tazia Smith <tazia.smith@db.com> wrote: Classification: For internal use only Jeffrey - Biotech posted sharp declines. You are up $970 282 across your basket of names as of yesterday's (3124) close (detail below along with chart of Nasdaq Biotech Index and your holdings). Consider unwinding or hedging now and watching for entry point via total return swap or zero cost risk reversal as this negative momentum bottoms out. Note: Ariad an outlier (incrementally positive news on drug, Iclusig). The Financial limes features an article this morning suggesting that the sell-off in Biotech is a signal of a broader market peak. A letter from congressional representatives to Gilead questioning its plans to sell a hepatitis C drug (named Sovaldi) for $84,000 per dose has put the spotlight on Congress' concerns that the expense might saddle state Medicaid programs with steep costs. US is the only major health-care market remaining without any meaningful drug price controls -- increased risk for the sector once the Congress gets involved, especially if focused primarily on pricing. EFTA01193523 Description Trade Date Quantity Last Prices. Unit Cost Market Value Unrealized G/L SANGAMO BIOSCIENCES 05/28/2013 50,000.00 $ 19.80 $ 8.44 $ 990,000.00 $ 567,786.00 BIOGEN 02/14/2012 2,095.00 $ 312.60 $ 119.55 $ 654,897.00 $ 404,442.05 FOUNDATION MEDICINE 01/13/2014 25,000.00 $ 36.40 $ 27.51 910,000.00 $ 222,336.50 GILEAD SCIENCES INC 2/5/14, 3/7/14 8,100.00 $ 72.13 $ 79.41 $ 584,253.00 $ (58,951.00) ARIAD PHARMACEUTICALS 2/14/12, 1/24/13 16,535.00 $ 7.60 $ 17.60 $ 125,666.00 $ (165,331.40) Total Blotec $3,264,816.00 $ 970,282.15 Nasdaq Biotech Index - 1yr Price History NBI ( 2499.44 -77.77 i J 24 Mar 0 2587.92 f- 2587.92 L 2434.16 • 2499.44 NBI Index 99 Save As 99 Actions -'=47 911 Tr — Line CW't 03/25/2013 03/15/2014 Las: Pr:. ! al Compare km,. A.os MIMM L e uso SM VT: 11' SY Max Daily • + Track Security/Study Ever: 0, Zoom 2800 .! Annotate News • Last Price 2499.44 T High on 02/25/14 2854.26 7A00 -- Average 2155.07 2499.44 I Low on 03/25/13 1619.16 2400 2200 2000 1800 1600 IY ■ : vl sipAG urtne(15) :23:3e4Am 0 Jun Sep 2013 Dec Mar 2014 Ariad - lyr Price History EFTA01193524 ARIA US Market 14/- 4-4 K7.86 /7.88K 15x10 Prey 7.60 Vol 171 991 a r TSIV1gre llillm•nctions - 97) Edit - 9)9 Table Q L t e g :. Compare te Av;5 =MIMI :D 3D 1M 6/4 YE lY . SY Max Daily • if ef. Security/Story 40. Track z Annotate el News O. Zoom Last :'t Line Chart "Min O Volume i • Last Price 7.60 -4-20 T High on 09/10/13 22.52 -4- Average 12.8235 1 Low on 10/31/13 2.20 01 Event 4-15 10 y• Volume 0.172M • SMAVG (15) 1L128M Jun Sep Dec Mar 2013 a -100M kairta..A.... 2014 Biogen - lyr Price History IBIIB US Market a Prey 312.60 Vol 715 n r u99 Save As Last Price ID 3D 124 tel YTD 11, - Q314.75 /315.50Q 1x1 91 Actions Line SY Max Daly • t• Track Last Price 312.60 T High on 03/18/14 351.94 Average 250.467 / Low on 03/25/13 176.22 Table _ Compare Mov. Annotate === C News O. Zoom Line Chart Volume PI USD Pi M E.vn ■ Volume 715 IIISetyGi(15)a 4.806M Li 1 ji iEIN" IL Jun 2013 Sep Dec 2014 Mar 0 350 312.60 300 250 200 5M 1.806M GEEMI Foundation Medical - 1yr Price History EFTA01193525 US $ Market P35.25 /38.78K 1 x 1 Prev 36.40 Vol 543,200 951 Save As OS Actions - 97) Edit - 99 Tome vr— IFI Compare SD 3D MOM no M' SY Mam • ZS•eirlty/Olaey Z Annotate News '-1 Zoom Las: Price Line Chart ■Event I . Last Price 36.40 T High on 03/13/14 43.62 •••• Average 30.1647 1 Low on 09/24/13 18.00 epE Volum 0543M I-IIISMAVG (15) 0.265M I PitialnarE.? Sep Oct Nov Dec Jan Feb 2013 I 2014 Mar W0 O EIN 45 40 30 25 20 5M 0.543M Gilead - 1yr Price History GILD US I Market '72.64/72.82K 1 x 1 Prey 72.13 V-1 29,340 GILD US ui 03/25/2013 1D 3. : 99 Save As 98 Actions 99 Edit - 9S Table 03/25/2014 Last Price VT: IV 5Y 1 • Last Price 72.13 T High on 02/25/14 83.95 -I-Average 64.4132 A Li-e Max Daily • 4. Track .e_ AnnOtate. S News C Zooin I Compare WADY Av;s MEM= 1 Low on 03/25/13 44.98 lac art Volume PI USD 1", M E . 0 85 80 7S iv 65 60 55 50 45 I. Volume 29340 kitimix415444.756M` 11 Jun Sep Lec Vol 2013 ?C14 Sangamo - 1yr Price History EFTA01193526 SGMO US K19.8.5 /21.40Q 2 2 19.80 )1 2 907.036 SGMO US ui 03/25/2013 99 Save 0325/2014 sM As 961Actions - !1 LT- a SY Ma. Daily V Track ..t.Arswitate Last Price lY • Last Price 19.80 T High on 03/19/14 23.86 Average 12.1209 I Low on 06/26/13 7.31 97) Edit - 91!) Table ___ C SecuntyiEtLe., 7._ News O, Zoom Volume al Event "Mr O 24.00 22.00 MIN -18.00 -16.00 14.00 12.00 •10.00 •8.00 93.1 Volume 2.907M L • SMAVG (15) 2.7488 i-10M A CM Jun Sep 2013 Dec 2014 Mar 2.907)1 Healthcare sector has outperformed S&P500 last 4 years and has been the best-performing sector YTD Improving R&D returns Ongoing efficiency gains due to various 'self-help' measures More supportive regulatory and payor environment Increasing number of financings and IPOs in Q1 Frequent upward revisions lately to sales estimates at the largest biotechnology companies Nasdaq Biotech Index (NBI) dropped 4.4% Friday Sharpest decline since Oct-11 Triggered by a letter from congressional representatives to a biotech company Gilead Sciences, questioning its plans to sell a hepatitis C drug (named Sovaldi) for $84,000 per dose Gilead required to give briefing by 03-Apr Sovaldi expected to generate >$4bn in sales this year The drug's expense might saddle state Medicaid programs with steep costs The whole sector is as risk US is the only major health-care market remaining without any meaningful drug price controls Risk for the whole sector once the Congress gets involved, especially if focused primarily on pricing The biggest NBI firms sold-off significantly EFTA01193527 1d chg (%) Index Wt (%) BIOGEN IDEC INC .8.2 7.9 AMGEN INC -3.2 7.8 GILEAD SCIENCES INC -4.6 7.0 REGENERON PHARMACEUTICALS -5.4 6.9 CELGENE CORP -3.7 6.5 ALEXION PHARMACEUTICALS INC -8.0 4.6 ILLUMINA INC -5.4 4.6 MYLAN INC -0.9 4.3 VERTEX PHARMACEUTICALS INC -5.1 3.8 BIOMARIN PHARMACEUTICAL INC -5.9 2.5 Ways to hedge exposure to the US biotech sector • ProShares UltraShort Nasdaq Biotech Fund (BIS US Equity): designed to be 2x short the NBI • Options on iSharesNasdaq Biotech ETF (IBB US Equity) NBI — last 5 ears 2009 2010 2011 2012 2013 N3I Incex (Nascaq Btotec"roIa;y I-dex) Copyright! 2014 Bloomberg Finance . 201 23-Mar-2014 14:35:20 NBI vs S&P500 — last 1 ear Normalized As Of 03/23/2013 Hi: 57.370 NBI Index - SPX Index 38.8807 2Cn0-5107 AAm\N" Jun 2013 Sep Mar 2014 20 • NBI - last 1 year EFTA01193528 Sep Oct Nov Dec Jan Mar 2013 NU Index (Nasdaq Biotectrobagy Index) Daily MSEP2013-LWR2014 2900 2600 2700 2577.21 2500 2400 2300 2200 2100 2000 Feb 2014 Cosyrigit 2014 Bloomberg Finance LP. 23-mar-2014 14:35:S2 KCP Capital Markets This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received ttis e-mail I, error) please notify the sender inmediately and destroy this e-mail. My unauthorized copying. disclosure or distribution of the material in this e-mail is strictly forbidden. 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 Tel. Fax Erna 1:kg1401%40-PeelrbrOn. This communication may contain confidential and/or privileged information. If you are not the intended recipient (or have received this communication in error) please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Deutsche Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. EFTA01193529 #ilgi*#ilgi***Plgi##*Plgilg#*#ilgi*#ilgi***Plgi##*Plgilg#*#ilgi*#ilgi***Plgilg The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of Jeffrey Epstein Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com, and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved This communication may contain confidential and/or privileged information. If you are not the intended recipient (or have received this communication in error) please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Deutsche Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. EFTA01193530