Gilead Sciences Announces Third Quarter 2007 Financial Results

    - Record Product Sales of $962 Million, Up 44 Percent over Third
                            Quarter 2006 -

  - Total Revenues of $1.1 Billion, Up 41 Percent over Third Quarter
                                2006 -

               - Third Quarter EPS of $0.42 per Share -

      - Third Quarter Non-GAAP EPS of $0.45 per Share, Excluding
                  Stock-based Compensation Expense -

FOSTER CITY, Calif.--(BUSINESS WIRE)--Oct. 18, 2007--Gilead Sciences, Inc. (Nasdaq:GILD) announced today its results of operations for the quarter ended September 30, 2007. Total revenues for the third quarter of 2007 were $1.06 billion, up 41 percent compared to total revenues of $748.7 million for the third quarter of 2006. Net income for the third quarter of 2007 was $398.3 million, or $0.42 per diluted share, including after-tax stock-based compensation expense of $31.8 million. Excluding after-tax stock-based compensation expense, non-GAAP net income for the third quarter of 2007 was $430.1 million, or $0.45 per diluted share, compared to non-GAAP net income of $329.0 million, or $0.34 per diluted share, for the third quarter of 2006, which excluded after-tax stock-based compensation expense of $25.6 million and purchased in-process research and development (IPR&D) of $355.6 million.

Product Sales

Product sales were a record $961.9 million for the third quarter of 2007, compared to $670.1 million in the third quarter of 2006, a 44 percent increase. This growth was driven primarily by Gilead's HIV product franchise, including the continued strong uptake of Atripla(R) (efavirenz 600 mg/ emtricitabine 200 mg/ tenofovir disoproxil fumarate 300 mg) in the United States as well as the strong growth of Truvada(R) (emtricitabine and tenofovir disoproxil fumarate) in Europe. Hepsera(R) (adefovir dipivoxil) and AmBisome(R) (amphotericin B) liposome for injection also experienced solid sales growth compared to the same quarter last year.

HIV Franchise

HIV product sales were $805.8 million in the third quarter of 2007, a 45 percent increase from $557.3 million for the same period in 2006, driven primarily by the sales volume growth in Truvada and Atripla.

-- Truvada

Truvada sales were $409.1 million for the third quarter of 2007, an increase of 32 percent from $309.0 million in the third quarter of 2006. Truvada sales accounted for approximately 51 percent of our total HIV product sales and approximately 43 percent of Gilead's total product sales in the third quarter of 2007.

-- Atripla

Atripla sales were $241.1 million in the third quarter of 2007, an increase of 14 percent from $212.4 million in the second quarter of 2007 and more than triple the $68.4 million recorded in the third quarter of 2006, when sales of Atripla first commenced in the United States.

-- Viread

Sales of Viread(R) (tenofovir disoproxil fumarate) were $149.1 million in the third quarter of 2007, a 13 percent decrease from $170.6 million in the third quarter of 2006.

-- Emtriva

Emtriva(R) (emtricitabine) sales were $6.5 million for the third quarter of 2007, a decrease of 30 percent from $9.3 million in the third quarter of 2006.

Hepsera for Chronic Hepatitis B

Hepsera sales were $79.3 million for the third quarter of 2007, a 44 percent increase from $55.1 million in the third quarter of 2006, driven primarily by sales volume growth in the United States and Europe.

AmBisome for Severe Fungal Infections

Sales of AmBisome for the third quarter of 2007 were $68.5 million, an increase of 24 percent from $55.3 million for the third quarter of 2006, driven primarily by sales volume growth across European territories and Australia as well as a favorable foreign currency exchange impact.

Royalty, Contract and Other Revenues

For the third quarter of 2007, royalty, contract and other revenues resulting primarily from collaborations with corporate partners were $96.9 million, an increase of 23 percent from $78.7 million in the third quarter of 2006. The increase was driven primarily by the recognition of Tamiflu(R) (oseltamivir phosphate) royalties from F. Hoffmann-La Roche Ltd (Roche) of $77.4 million, compared to Tamiflu royalties of $62.7 million recognized in the third quarter of 2006, due to the higher Tamiflu sales recorded by Roche during the second quarter of 2007 compared to the same period in 2006.

Research and Development

Research and development (R&D) expenses in the third quarter of 2007 were $140.4 million compared to $93.3 million for the same quarter in 2006. Non-GAAP R&D expenses, which exclude stock-based compensation expense, for the third quarter of 2007 were $122.0 million, compared to $80.0 million for the same quarter in 2006. Non-GAAP R&D expenses for the third quarter of 2007 were higher primarily as a result of increased compensation and benefits related to higher headcount, as well as increased clinical study expenses related to Gilead's respiratory and cardiovascular franchises, which were acquired in the latter part of 2006.

Selling, General and Administrative

Selling, general and administrative (SG&A) expenses in the third quarter of 2007 were $173.0 million compared to $132.5 million for the same quarter in 2006. Non-GAAP SG&A expenses, which exclude stock-based compensation expense, for the third quarter of 2007 were $148.4 million, compared to $116.6 million for the same quarter in 2006. Non-GAAP SG&A expenses for the third quarter of 2007 were higher primarily as a result of increased compensation and benefits related to increased headcount, increased marketing and promotional expenses as well as other consulting and support services expenses related to our cardiovascular franchise.

Net Foreign Exchange Impact on Pre-Tax Earnings

The net foreign exchange impact on third quarter 2007 pre-tax earnings, including revenues and expenses generated from outside the United States and impact of our hedging activities, was a favorable $17.4 million compared to the same quarter in 2006, due primarily to the stronger Euro relative to the U.S. dollar.

Cash, Cash Equivalents and Marketable Securities

As of September 30, 2007, Gilead had cash, cash equivalents and marketable securities of $2.22 billion compared to $1.39 billion as of December 31, 2006. The increase in cash, cash equivalents and marketable securities was primarily attributable to $1.25 billion of operating cash flows generated during the first nine months of 2007, partially offset by the Gilead's repurchase of $454.9 million of its common stock under its stock repurchase program during the second quarter of 2007.

    Product and Pipeline Highlights

    Antiviral Franchise

In July 2007, Gilead announced the presentation of 144-week data from an ongoing clinical trial, Study 934, comparing a once-daily regimen of Truvada and Sustiva(R) (efavirenz) to a twice-daily regimen of Combivir(R) (lamivudine/zidovudine) with Sustiva once daily in treatment-naive adults with HIV. These data were presented in July 2007 at the 4th International AIDS Society Conference on HIV Pathogenesis, Treatment and Prevention in Sydney, Australia by Jose Arribas, MD, of the University Hospital La Paz, Madrid, Spain (Poster #WEPEB029).

Cardiovascular Franchise

In September 2007, Gilead announced that data from a Phase IIb study (DAR-201) of darusentan, an investigational treatment for resistant hypertension, were published in the October 2007 edition of the Journal of Clinical Hypertension. In this study, darusentan was evaluated as an add-on antihypertensive treatment in patients who had not achieved goal blood pressure while being treated with full doses of three or more antihypertensive medications, including a diuretic. Preliminary data from this study were previously presented at the 55th Annual Scientific Session of the American College of Cardiology Conference in Atlanta, Georgia.

Respiratory Franchise

In August 2007, Gilead entered into an exclusive licensing and co-development agreement for P-680, an epithelial sodium channel (ENaC) inhibitor discovered by privately-held Parion Sciences, Inc. The agreement grants Gilead worldwide commercialization rights to P-680 for the treatment of pulmonary diseases, including cystic fibrosis (CF), chronic obstructive pulmonary disease and non-CF bronchiectasis. In addition, under the agreement, the companies will collaborate on a research program to identify other promising ENaC blocker-based drug candidates utilizing Parion's proprietary ENaC-based chemistry platform.

Conference Call

At 4:30 p.m. Eastern Time today, Gilead will host a conference call with a simultaneous webcast to discuss the results of its third quarter of 2007. During this call/webcast, Gilead's management will be discussing the company's third quarter 2007 results and providing a general business update. The webcast will be available live via the internet by accessing Gilead's website at www.gilead.com. To access the webcast, please connect to the company's website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be needed to hear the webcast. Alternatively, please call 1-800-435-1398 (U.S.) or 1-617-614-4078 (international) and dial the participant passcode 63822863 to access the call.

A replay of the webcast will be archived on the company's website for one year, and a phone replay will be available approximately two hours following the call through October 21, 2007. To access the phone replay, please call 1-888-286-8010 (U.S.) or 1-617-801-6888 (international) and dial the participant passcode 65873786.

About Gilead

Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. The company's mission is to advance the care of patients suffering from life-threatening diseases worldwide. Headquartered in Foster City, California, Gilead has operations in North America, Europe and Australia.

Non-GAAP Financial Information

Non-GAAP net income, net income per diluted share, R&D expenses and SG&A expenses for the 2007 periods are presented excluding the impact of stock-based compensation expense and the related methodology for deriving dilutive securities. Non-GAAP net income, net income per diluted share, R&D expenses and SG&A expenses for the 2006 periods are presented excluding the impact of stock-based compensation expense and the related methodology for deriving dilutive securities, as well as the impact of the IPR&D charge incurred in connection with the acquisition of Corus Pharma, Inc. Management believes this non-GAAP information is useful for investors, taken in conjunction with Gilead's GAAP financial statements, because management 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 the company's operating results as reported under United States generally accepted accounting principles.

Forward-looking Statements

Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: Gilead's ability to sustain growth in revenues for its HIV franchise, Hepsera and AmBisome; unpredictable variability of Tamiflu royalties and the strong relationship between this royalty revenue and global pandemic planning and supply; Gilead's ability to receive regulatory approvals in a timely manner or at all, for new and current products; Gilead's ability to successfully develop its respiratory and cardiovascular franchises; initiating and completing clinical trials may take longer or cost more than expected; and other risks identified from time to time in Gilead's reports filed with the U.S. Securities and Exchange Commission. You are urged to consider statements that include the words "may," "will," "would," "could," "should," "might," "believes," "estimates," "projects," "potential," "expects," "plans," "anticipates," "intends," "continues," "forecast," "designed," "goal," or the negative of those words or other comparable words to be uncertain and forward-looking.

Gilead directs readers to its Annual Report on Form 10-K for the year ended December 31, 2006, its Quarterly Reports on Form 10-Q for the first and second quarters of 2007 and its subsequent current reports on Form 8-K. Gilead claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. All forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking statements.

Viread, Emtriva, Truvada, AmBisome and Hepsera are registered trademarks of Gilead Sciences, Inc.

Atripla is a registered trademark of Bristol-Myers Squibb & Gilead Sciences, LLC.

Sustiva is a registered trademark of Bristol-Myers Squibb Pharma Company.

Tamiflu is a registered trademark of F. Hoffmann-La Roche Ltd.

For more information on Gilead Sciences, Inc., please visit www.gilead.com or call the Gilead Public Affairs Department at 1-800-GILEAD-5 (1-800-445-3235).

                        GILEAD SCIENCES, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (unaudited)
               (in thousands, except per share amounts)

                          Three Months Ended      Nine Months Ended
                             September 30,          September 30,
                         --------------------- -----------------------
                            2007       2006       2007        2006
                         ----------- --------- ----------- -----------
Revenues:
    Product sales        $  961,931  $670,060  $2,707,214  $1,820,104
    Royalty, contract
     and other revenues      96,872    78,673     428,108     306,809
                         ----------- --------- ----------- -----------
Total revenues            1,058,803   748,733   3,135,322   2,126,913
                         ----------- --------- ----------- -----------

Costs and expenses:
    Cost of goods sold
     (1)                    198,460   109,791     553,229     278,031
    Research and
     development (1)        140,357    93,305     406,378     272,241
    Selling, general and
     administrative (1)     172,956   132,529     525,693     426,567
    Purchased in-process
     research and
     development (2)              -   355,568           -     355,568
    -------------------------------- --------- ----------- -----------
Total costs and expenses    511,773   691,193   1,485,300   1,332,407
                         ----------- --------- ----------- -----------

Income from operations      547,030    57,540   1,650,022     794,506

Interest and other
 income, net                 29,502    36,197      80,295     102,082
Interest expense             (2,989)   (6,081)    (10,243)    (15,012)
Minority interest in
 joint venture                2,478     1,640       7,032       3,878
                         ----------- --------- ----------- -----------
Income before provision
 for income taxes           576,021    89,296   1,727,106     885,454
Provision for income
 taxes (1)                  177,702   141,460     513,450     409,764
                         ----------- --------- ----------- -----------
Net income (loss)        $  398,319  $(52,164) $1,213,656  $  475,690
                         =========== ========= =========== ===========

Net income (loss) per
 share - basic           $     0.43  $  (0.06) $     1.31  $     0.52
                         =========== ========= =========== ===========

Net income (loss) per
 share - diluted         $     0.42  $  (0.06) $     1.26  $     0.49
                         =========== ========= =========== ===========

Shares used in per share
 calculation - basic        926,963   914,866     928,519     917,546
                         =========== ========= =========== ===========

Shares used in per share
 calculation - diluted      959,043   914,866     962,804     956,202
                         =========== ========= =========== ===========

----
 Notes:
(1) The following is the stock-based compensation expense included in
     the respective captions of the condensed consolidated statements
     of operations above:

                          Three Months Ended      Nine Months Ended
                             September 30,          September 30,
                         --------------------- -----------------------
                            2007       2006       2007        2006
                         ----------- --------- ----------- -----------

    Stock-based
     compensation
     expense:
       Cost of goods
        sold             $    3,138  $  2,524  $    8,350  $    8,236
       Research and
        development          18,360    13,267      56,129      38,108
       Selling, general
        and
        administrative       24,563    15,954      86,683      51,800
    Income tax effect       (14,284)   (6,165)    (44,939)    (21,340)
                         ----------- --------- ----------- -----------
          Total stock-
           based
           compensation
           expense, net
           of tax        $   31,777  $ 25,580  $  106,223  $   76,804
                         =========== ========= =========== ===========

(2) For the three and nine months ended September 30, 2006, Gilead
     incurred $355.6 million of purchased in-process research and
     development as a result of the acquisition of Corus Pharma, Inc.
     in August 2006.
                        GILEAD SCIENCES, INC.
       RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
                             (unaudited)
               (in thousands, except per share amounts)

Below is a reconciliation of Gilead's GAAP operating results and
 diluted per share amounts as reported in the attached press release.
 Non-GAAP net income and net income per diluted share for the 2007
 periods are presented excluding the impact of stock-based
 compensation expense and the related methodology for deriving
 dilutive securities.  Non-GAAP net income and net income per diluted
 share for the 2006 periods are presented excluding the impact of
 stock-based compensation expense and the related methodology for
 deriving dilutive securities, as well as the impact of the purchased
 in-process research and development charge incurred in connection
 with the acquisition of Corus Pharma, Inc.  Management believes this
 non-GAAP information is useful for investors, taken in conjunction
 with Gilead's GAAP financial statements, because management 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 the company's operating results as
 reported under GAAP.


                              Three Months Ended   Nine Months Ended
                                 September 30,       September 30,
                              ------------------- --------------------
                                2007      2006       2007       2006
                              --------  --------- ----------  --------

Net income (loss) (GAAP)      $398,319  $(52,164) $1,213,656  $475,690
Purchased in-process research
 and development                     -   355,568           -   355,568
Stock-based compensation
 expense, net of tax            31,777    25,580     106,223    76,804
                              --------  --------- ----------  --------
Net income (Non-GAAP)         $430,096  $328,984  $1,319,879  $908,062
                              ========  ========= ==========  ========


Shares used in per share
 calculation - diluted (GAAP)  959,043   914,866     962,804   956,202
Dilutive securities              1,780    38,780       2,108     1,335
                              --------  --------- ----------  --------
Shares used in per share
 calculation - diluted (Non-
 GAAP)                         960,823   953,646     964,912   957,537
                              ========  ========= ==========  ========


Net income (loss) per share -
 diluted (GAAP)               $   0.42  $  (0.06) $     1.26  $   0.49
                              ========  ========= ==========  ========
Net income per share -
 diluted (Non-GAAP)           $   0.45  $   0.34  $     1.37  $   0.95
                              ========  ========= ==========  ========
                        GILEAD SCIENCES, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)

                                           September 30,  December 31,
                                                2007          2006
                                           -------------  ------------
                                             (unaudited)     (Note 1)

  Cash, cash equivalents and marketable
   securities                              $   2,218,051  $  1,389,566
  Other current assets                         1,778,278     1,492,355
  Property, plant and equipment, net             441,797       361,299
  Other noncurrent assets                        879,449       842,761
                                           -------------  ------------
         Total assets                      $   5,317,575  $  4,085,981
                                           =============  ============

  Current liabilities                      $     691,439  $    764,276
  Long-term liabilities and minority
   interest                                    1,644,291     1,505,987
  Stockholders' equity                         2,981,845     1,815,718
                                           -------------  ------------
     Total liabilities and stockholders'
      equity                               $   5,317,575  $  4,085,981
                                           =============  ============


Note:
(1) Derived from audited consolidated financial statements at that
 date.
                        GILEAD SCIENCES, INC.
                        PRODUCT SALES SUMMARY
                             (unaudited)
                            (in thousands)


                              Three Months Ended   Nine Months Ended
                                September 30,        September 30,
                              ------------------ ---------------------
                                 2007     2006      2007       2006
                              --------- -------- ---------- ----------
HIV products:
  Truvada - U.S.              $ 206,681 $201,482 $  579,725 $  589,010
  Truvada - Europe              183,523  100,544    502,154    253,633
  Truvada - Other
   International                 18,880    7,007     58,503     14,592
                              --------- -------- ---------- ----------
                                409,084  309,033  1,140,382    857,235
                              ========= ======== ========== ==========

  Atripla - U.S.                240,217   68,373    641,706     68,373
  Atripla - Europe                    -        -          -          -
  Atripla - Other
   International                    884        -      1,962          -
                              --------- -------- ---------- ----------
                                241,101   68,373    643,668     68,373
                              ========= ======== ========== ==========

  Viread - U.S.                  63,488   71,795    194,841    222,439
  Viread - Europe                62,944   71,931    199,892    240,251
  Viread - Other International   22,676   26,898     69,950     67,151
                              --------- -------- ---------- ----------
                                149,108  170,624    464,683    529,841
                              ========= ======== ========== ==========

  Emtriva - U.S.                  3,315    5,064     10,213     13,384
  Emtriva - Europe                2,408    3,347      9,014     12,601
  Emtriva - Other
   International                    738      861      5,161      1,914
                              --------- -------- ---------- ----------
                                  6,461    9,272     24,388     27,899
                              ========= ======== ========== ==========

Total HIV products - U.S.       513,701  346,714  1,426,485    893,206
Total HIV products - Europe     248,875  175,822    711,060    506,485
Total HIV products - Other
 International                   43,178   34,766    135,576     83,657
                              --------- -------- ---------- ----------
                                805,754  557,302  2,273,121  1,483,348
                              ========= ======== ========== ==========

Hepsera - U.S.                   32,387   23,426     94,647     69,615
Hepsera - Europe                 36,087   25,012    103,004     77,242
Hepsera - Other International    10,799    6,675     28,139     17,755
                              --------- -------- ---------- ----------
                                 79,273   55,113    225,790    164,612
                              ========= ======== ========== ==========

AmBisome                         68,508   55,313    194,764    164,740
Other products                    8,396    2,332     13,539      7,404
                              --------- -------- ---------- ----------
                                 76,904   57,645    208,303    172,144
                              ========= ======== ========== ==========

Total product sales           $ 961,931 $670,060 $2,707,214 $1,820,104
                              ========= ======== ========== ==========

    CONTACT: Gilead Sciences, Inc.
             John Milligan, 650-522-5756
             Susan Hubbard, 650-522-5715

    SOURCE: Gilead Sciences, Inc.