<table><tr><th>From:</th><th>Richard Kahn</th></tr><tr><td>Sent:</td><td>Tuesday, August 2, 2016 7:28 PM</td></tr><tr><td>To:</td><td>jeffrey E.</td></tr><tr><td>Subject:</td><td>Biogen</td></tr></table>

Headlines coming across =rom WSJ that MRK/AGN have expressed =nterest in BIIB (link). BIIB is =9%.

stock at 3:27pm is 330.90

you own 2,O95 shares in =FL account with cost basis of 119.55 unrealized =ain 442,822

Richard Kahn
HBRK Associates Inc.
575 Lexington =venue 4th Floor
New York, NY 10022
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Begin forwarded message:

From: =/b>"Ens, Amanda"

Subject: =/b>RE: BAML =C...Thoughts on Positioning/Flows...Fear of Missing Biotech (FOMB)? - =uy the MLDIFOMB Basket

Date: =/b>August 2, 2016 at 2:59:54 PM =DT

To: =/b>Richard Kahn

Cc: Jeanne Brennan

Headlines=coming across from WSJ that MRK/AGN have =xpressed interest in BIIB (link). BIIB is +9%.

While NO price has been discussed in the article, this comes on the back =f the recent announcement that the CEO will be retiring from the =ompany in the coming months & recent newsflow which has been =ositive (SMA data).

Please let me know if =ou'd like to discuss any takeaways from the recent CFO roadshow =hat our analyst hosted (see link) as our sector specialist was up in Boston for the meeting.

M&A is one of the =rimary reasons why we're BULLISH on Biotech — more in =he write-up from yesterday on the Fear of Missing Biotech Basket —=MLDIFOMB.

From: Ens, Amanda Sent: Monday, August 01, 2016 2:53 PM To: 'Richard Kahn' Cc: 'Jeanne Brennan' Subject: BAML HC...Thoughts on =ositioning/Flows...Fear of Missing Biotech (FOMB)? - Buy the MLDIFOMB =asket

Please find =elow some thoughts from our healthcare sector specialist that I thought =ou might find interesting. Please let me know if you'd like to =iscuss further.

The latest Active Managers' Holdings update =link to note) offers a =resh opportunity to revisit positioning/thoughts within the Healthcare =ector, especially in the wake of our DC Conference back in mid-July (in which =he biggest takeaway in my view was lack of pricing regulations in CY17 =E2 see link to Ying's note) & recent marketing through various =egions.

While I'd =till characterize positioning within the sector (among dedicateds, HFs, =Os) as in a relative holding pattern (although now an UW relative to =istory — see Chart 14 below), I do believe that =entiment/positioning within Biotech specifically is ripe for an improvement/correction over the coming =onths (XBI still down 30% from the Jul-15 highs).

The general =ense I've picked up is a genuine Fear Of Missing Biotech...=hat I'm calling FOMB. Just 6 months ago the debate was IF you could own =iotech (given people were questioning the NT viability of the =pace)...this has largely shifted towards WHEN/WHAT NAMES to own in the =roup.

==> While I =hink the large caps will lead the group higher (evidenced by ALXN, =ELG, BIIB moves), I'd recommend BUYING our customized/optimized =iotech basket — MLDIFOMB (can be found on Bloomberg). =his basket is based on the XBI but strips out non-traditional names that happen to be in the =ndex.

While the November =lection is likely to cause volatility given Healthcare remains a =ontroversial topic, I do believe Biotech will outperform =ear-term & while it could be impacted on a Hillary win, it =s my view that drug pricing is NOT likely a focus in CY17.

Let me know if you =99d like to discuss

Below I've included some useful charts =round positioning & the always popular EPFR data.

Latest Active Managers Holding Update — Link to Research Note; Link to Chart 5

Biotech no longer the #1OW within the =ector...in fact relative weighting in the sector has come =own materially over the past several months.

&=bsp;

## Most "Overowned" Names =n HC — UNH, BIIB

5 Most OW Stocks — ALXN =note that this is a Top 10 OW amongst ALL stocks in SPX), ILMN, BSX, =RTX, REGN [Note ISRG, BIIB, HUM, CI have fallen from the top 5J

S =ost UW Stocks — DVA, UHS, PDCO, CNC, LH [Note HSIC & =KI have fallen from the bottom 5]

Most =oncentrated Ownership — ALXN, DVA, BSX, MNK, ISRG

EPFR Data on =ealthcare Flows

## Most "Overowned" Names =n HC — UNH, BIIB (cont.)

latest S&P 500 =elative Value Cheat Sheet - link to Note

Sell Side =ndicator - Link to note

With the latest Sell =ide Indicator rebounding slightly off a three-year low, the first =ptick since Feb but still indicating a "Buy" (). =he indicators expected 12m return is +21%.

Daniel Lundquist

Healthcare Specialist Sales

Global Equities

Bank of America Merrill Lynch
One Bryant Park | New York, 10036 | United States
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The power of global =onnections™

4

## Most "Overowned" Names =n HC — UNH, BIIB (cont.)

Find all Conference =vents via the Following Link: https://gems.bankofamerica.com <https://gems.bankofamerica.com/>

Disclaimer:

This material was =repared by Sector Specialist Sales personnel of Merrill Lynch and is =subject to the terms available at the following link: http://corp.bankofamerica.com/business/smb/landing/emaildisclai=er/americas/global-markets

This message, and any attachments, is =or the intended recipient(s) only, may contain information that is =rivileged, confidential and/or proprietary and subject to important terms and conditions =vailable at http://www.bankofamerica.com/emaildisclaimer <http://www.bankofamerica.com/emaildisclaimer> . If you are not the =ntended recipient, please delete this message.

2041542

Amanda Ens

Director

Bank of America Merrill Lynch

Merrill Lynch, Pierce, Fenner & =mith Incorporated

One Bryant Park, 5th Floor, New York, =Y 10036

The power of global =onnectionsn'

## Most "Overowned" Names =n HC — UNH, BIIB (cont.)

This message, and any attachments, is for the intended =ecipient(s) only, may contain information that is privileged, =onfidential and/or proprietary and subject to important terms and =onditions available at http://www.bankofamerica.com/emaildisclaimer. If you =re not the intended recipient, please delete this message.

=