Viral infections caused by hepatitis B and C are growing in prevalence worldwide, putting millions of people at risk of developing life-threatening liver disease and cancer. While both viruses can lead to the development of an acute disease that can be readily diagnosed, many people who contract the viruses develop chronic infections that can go undetected for years. These silent infections, together with a lack of awareness about how hepatitis B and C are transmitted, significantly contribute to the spread of both diseases.

To garner a greater share of the growing hepatitis B market, we are currently studying tenofovir disoproxil fumarate, the active ingredient in Viread, for the treatment of the disease. Data generated in our HIV clinical trials for the product led to the decision to pursue an additional indication for this compound. In these studies, tenofovir disoproxil fumarate lowered amounts of hepatitis virus in patients co-infected with HIV and HBV. In June 2006, we completed enrollment in two pivotal Phase III clinical trials (Studies 102 and 103) of tenofovir disoproxil fumarate for chronic hepatitis B. We anticipate data from both these pivotal studies before the end of 2007.

HEPATITIS C

With no vaccine on the horizon, the incidence of hepatitis C worldwide is growing unabated. Globally, an estimated 170 million people are chronically infected with the hepatitis C virus (HCV), and three to four million people are newly infected each year. We are applying our expertise in the development of antiviral drugs toward the discovery of new therapies to treat hepatitis C. We began clinical evaluation of a non-nucleoside HCV polymerase inhibitor, GS 9190, in HCV-infected individuals in December of 2006.

HEPATITIS B

Although an effective vaccine is available to prevent hepatitis B virus (HBV) infection, two billion people worldwide have been infected with the virus. The rising infection rate is due in part to the virulence of HBV; it is 50 to 100 times more infectious than HIV. Its spread is exacerbated by the fact that 400 million people are living with chronic (lifelong) HBV infections and unknowingly passing it to others.

Available in more than 30 countries worldwide, Hepsera remains one of the leading drugs on the market to treat chronic hepatitis B, generating more than $230 million in revenues in 2006. Approved by the U.S. FDA in 2002, Hepsera continues to capture more than half of the total prescription market for HBV antivirals in the United States where more than 1.25 million individuals are estimated to be living with chronic HBV. Incidence of the disease in Europe is rising, with approximately nine million people living with chronic HBV infections. Sales growth continues in the European Union, particularly in France, Greece, Italy and Turkey, which have the highest prevalence of the disease. GSK markets Hepsera in all countries outside of the Gilead territories, the most significant of which include China, Japan, Korea and Taiwan.

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