AAAS Science and
Human Rights Coalition
July 26, 2010
Gregg Alton
Executive Vice President
Corporate and Medical Affairs
About Gilead Sciences
 Worldwide presence
– 4,000 employees
– 25 offices on 4 continents
 13 marketed drugs
– Primary therapeutic focus
in HIV/AIDS, liver disease and
serious cardiovascular and
respiratory conditions
 Eight successful acquisitions
– Expanding company’s therapeutic
reach
Strong Geographical Presence
Norway
Edmonton, Alberta
Mississauga, ON
Ireland
U.K.
The Netherlands
Germany
Austria
Belgium
Branford, CT
France
Durham, NC
Finland
Denmark
Turkey
Italy
Greece
Portugal
San Dimas, CA
Sweden
China
Switzerland
Spain
Foster City, CA
Palo Alto, CA
Australia
Seattle, WA
New Zealand
LEGEND
Gilead Locations
Research and Development Locations
Manufacturing Operations
Sales and Marketing Operations
Regional Partners to Support Registrations,
Product Distribution and Medical Education
Delta
Medicopharmacia
Puerto Rico
Pharma
IDS
Quadri
Nicholas
Piramal
Stendhal
Traphaco
Aspen*
Anspec
Gador
11 Distributors and 48 Sub-Distributors
Reaching 130 Countries
*Manufacturing and Distribution for Africa, in Africa
Our Therapeutic Areas
HIV/AIDS
Atripla
Truvada
Viread
Emtriva
Truvada/rilpivirine FDR
(Ph III)
Quad (Ph III)
Elvitegravir (Ph III)
Cobicistat (Ph III)
Liver Disease Cardiovascular
Respiratory
HBV
Heart Disease
Influenza
Hepsera
Viread
Ranexa
Lexiscan
Regadenoson (filed
with EMEA)
Ranolazine (Ph II)
Tamiflu
HCV
GS 9190 (Ph II)
GS 9256/GS 9190 (Ph I)
CF
Cayston
Aztreonam (Ph III)
PAH
Letairis
Cicletanine (Ph II)
Bronchiectasis
Aztreonam (Ph II)
NASH
Metabolic
GS 9450 (Ph II)
GS 9667 (Ph I)
IPF
Ambrisentan (Ph III)
Pulmonary
GS 6201 (Ph I)
Evolution of Fixed-Dose Combinations
GlaxoSmithKline
Zidovudine (AZT; 1987)
Combivir® (AZT/3TC;1997)
Trizivir® (ABC/AZT/3TC; 2000)
Lamivudine (3TC; 1995)
Abacavir (ABC; 1998)
Epzicom® (3TC/ABC; 2004)
Gilead / Bristol-Myers Squibb / Merck
Tenofovir (TDF; 2001)
Emtricitabine (FTC; 2003)
Efavirenz (EFV; 1998)
Truvada® (FTC/TDF; 2004)
Atripla® (EFV/FTC/TDF; 2006)
2006: Single Tablet Regimen Approved
1996
2006
30+ Pills a day
Introduction of Atripla®
HIV Pipeline – Addressing Unmet Needs
 Truvada/rilpivirine fixed-dose regimen
– Would be only second single-tablet regimen for HIV
– Safer for use in pregnant women
– Fewer CNS side effects
 Cobicistat (novel PK enhancer)
– No HIV activity
– Good chemical stability (heat stable)
– Enabling once-daily dosing of elvitegravir (integrase
inhibitor)
– Broader role with protease inhibitors for tolerable and safe
combination therapy
HIV Research – New Targets
 Active early-stage, preclinical research
program identifying compounds that
may inhibit HIV at newer targets in the
virus’ life cycle
– LEDGF Inhibitors
– Capsid Assembly Inhibitors
 Exploring strategies and compounds to
eradicate HIV in latently infected cells
– Eliminate cells actively replicating HIV
– Infection by newly produced virus
particles blocked by ARVs
D. D. Richman et al.,
Science 323, 1304 -1307 (2009)
Worldwide Impact of HIV/AIDS
UNITED STATES
DEVELOPING WORLD
~1 million infected
~33 million infected
56,300 new infections
per year
2.7 million new
infections per year
3 million years of
human life saved
Life expectancy in
sub-Saharan Africa: 51
Life expectancy upon
entering care:
24+
Without AIDS, life
expectancy would be
62
Gilead Access Program
 Particular focus on countries
hardest hit by the HIV/AIDS
epidemic
– 130 countries
– Including all of Africa
 Pricing tiers
– Based on a country’s economic
status and HIV prevalence
 Support for:
–
–
–
–
Regional distributors
Supply chain tools
Medical education
Product registrations
Access Initiatives – Generic Partnerships
 Goal: Achieve the lowest price
for least developed countries
 Rationale: Indian manufacturers
have proven track record in delivering
high volume/low margin quality
products
 Parameters:
– Full technology transfer to speed production and ensure
quality
– Develop any tenofovir-based FDC or pediatric formulation
– Free to sell API within India with no royalty payment to
Gilead
– Free to set own price for finished product
– Distribute within India and 94 other countries, pay 5%
royalty to Gilead
– Seek WHO or tentative FDA approval
Expanding Access to HIV Treatment:
Lower Prices, More Patients
800,000
702,911
$17.00
700,000
$16
600,000
$14
508,103
$12.42
500,000
$12.00
$12
400,000
$10
300,000
$8.25
$8
$7.25
$6
31,000
200,000
100,000
129,279
$4
0
2006
2007
2008
2009
2010
# patients reached
Lowest generic price/month
$18
Price
Patients
Case Study: Matrix
55 Countries covered by Matrix – 58% of licensed territory
The Cost of Viread
COST OF VIREAD TABLET
(PER DAY)
$0.57 $1.00 $1.75 $4.00
15% Dist.
Margin
Cost of
manufacturing,
pre-distribution,
pharmacovigilance,
medical education
+ 5% royalty
$17.13
Intellectual Property
Return on investment,
incentive for innovation
$21.43
Model is Financially Self-Sustaining
FY 2009
FY 2008
Total Revenue
(in $,000)
33,117
19,365
Total COGS
(in $,000)
25,959
16,809
Operating Expenses
(in $,000)
3,556
4,243
Total Contribution Margin
(in $,000)
3,601
(1,688)
Total Contribution Margin
(as % of Total Revenue)
10.9%
-8.7%
Full Year 2010 Guidance
($ in millions, except percentages and per share amounts)
Provided on 4/20/10
Net Product Sales
$ 7,400 – 7,500
Updated on 7/20/10
$ 7,300 – 7,400^
75% – 77%
75% – 77%
R & D*
$ 850 – 870
$ 850 – 870
S G & A*
$ 900 – 920
$ 900 – 920
Non-GAAP Product Gross Margin*
Non-GAAP Expenses
Effective Tax Rate
Diluted EPS Impact of Acquisition,
Restructuring and Stock-Based
Compensation Expenses
25% – 26%
26.5% – 27.5%^^
$ 0.27 – 0.30
$ 0.25 – 0.28^^^
^ Reduction in net product sales guidance for full year 2010 was driven by the impact of foreign currency fluctuations.
^^ Increase in effective tax rate for full year 2010 was driven by higher U.S. revenue growth and lower revenues in Europe.
^^^ Decreases in diluted EPS impact of acquisition, restructuring and stock-based compensation expenses for full year 2010 was driven by lower projections of
stock-based compensation expenses, partially offset by higher restructuring expenses related to our decision to close operations in Durham, North Carolina.
* Non-GAAP product gross margin and expenses are non-GAAP and exclude the impact of acquisition, restructuring and stock-based compensation expenses,
where applicable. Management believes this non-GAAP information is useful for investors, taken in conjunction with Gilead’s GAAP financial statements, because
management currently uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a
comprehensive set of accounting rules and should only be used to supplement an understanding of Gilead’s operating results as reported under U.S. GAAP.
Looking Ahead
 Continued commitment to R&D – new targets, new treatments for HIV
 Expand Gilead Access Program
– Build on existing generic partnerships
– As approved, introduce new products into program
(e.g., TMC278 fixed-dose regimen)
 UNITAID Patent Pool
– Gilead is actively participating in discussions to move this important
initiative forward
– Like partnerships with generic manufacturers, a patent pool could
increase access by lowering prices, while respecting IP
 Evaluate participation in new efforts for expanding access while
encouraging innovation
Thank You