Gilead Sciences Announces Third Quarter 2002 Financial Results

Increase in Viread Sales Push Total Product Revenues to $120 Million
Company Turns Cash Flow Positive for First Nine Months of 2002

Foster City, CA -- October 31, 2002

Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the third quarter ended September 30, 2002. Total revenues for the third quarter ended September 30, 2002, were $134.0 million, up 163 percent, compared to total revenues of $50.9 million for the third quarter of 2001. Net income for the third quarter 2002 was $20.8 million, or $0.10 per diluted share, which includes a one-time non-operating loss of $16.0 million realized upon the July 2002 sale of Gilead's shares in OSI Pharmaceuticals. This compares to a net loss in the third quarter 2001 of $25.2 million, or $0.13 per share.

Gilead reached a significant financial milestone during the third quarter, achieving positive operating cash flow for both the quarter and the first nine months of 2002. Operating cash flow for the quarter was $44.7 million, driven by higher earnings and improved working capital performance, compared with a decrease in cash from operations of $31.1 million for the same period last year.

Net revenues from product sales totaled $120.2 million, up 169 percent from the third quarter 2001. This growth was primarily driven by higher revenues from Viread® (tenofovir disoproxil fumarate) and AmBisome® (amphotericin B) liposome for injection. Sales of Viread were $68.9 million in the third quarter of 2002, or 57 percent of product sales, up from $44.7 million in the second quarter of 2002. AmBisome sales for the third quarter of 2002 were $48.6 million, an increase of 18 percent compared to the third quarter of 2001. Excluding the impact of foreign currencies relative to the U.S. dollar, AmBisome sales grew 11 percent for the third quarter of 2002 over the comparable quarter of 2001.

"With product revenues in excess of $120 million, our third quarter financial performance demonstrates our ability to continue to deliver novel therapeutics like Hepsera™ (adefovir dipivoxil) for chronic HBV to the market while continuing to increase our product sales of Viread and AmBisome," said John C. Martin, Ph.D., President and Chief Executive Officer of Gilead Sciences.

For the third quarter of 2002, royalty and contract revenues resulting from collaborations with corporate partners totaled $13.8 million. These revenues primarily include royalties on sales of AmBisome in the United States by Gilead's co-promotion partner Fujisawa Healthcare and contract revenue recognized for the licensing of a portion of the SELEX™ (Systemic Evolution of Ligands through EXponential Enrichment) process patent estate to Archemix Corporation in October 2001.

Research and development expenses for the third quarter of 2002 were $35.3 million, compared to $45.7 million for the same quarter in 2001. The lower expenses during the third quarter of 2002 is primarily attributable to the decrease in expenses associated with the Viread clinical program and the divestiture of Gilead's oncology portfolio to OSI Pharmaceuticals in December 2001.

Selling, general and administrative expenses for the three months ended September 30, 2002 were $42.3 million, compared to $32.0 million for the same quarter of 2001. The significant increase in expenses is primarily due to Gilead's increased global marketing efforts and the expansion of Gilead's U.S. and European sales forces to support the commercial launches of Viread and Hepsera.

Gilead also reported its results of operations for the nine months ended September 30, 2002. The company recorded net revenues from product sales of $284.7 million and aggregate contract and royalty revenues of $37.1 million. Sales of Viread for the nine months ended September 30, 2002 were $140.8 million, or 49 percent of product sales. AmBisome sales for the nine months ended September 30, 2002 were $136.0 million, a 12 percent increase over the nine months ended September 30, 2001. Excluding the impact of foreign currencies relative to the U.S. dollar, AmBisome sales grew 9 percent for the nine months ended September 30, 2002 over the comparable period of 2001. Net revenues of $321.8 million in the nine months ended September 30, 2002 compare to net revenues of $159.4 million in the first nine months of 2001. Net revenues for the first nine months of 2001 included product sales of $131.3 million and aggregate contract and royalty revenues of $28.1 million.

Net income for the nine months ended September 30, 2002 was $36.6 million, or $0.18 per diluted share. This compares to a net loss of $79.3 million, or $0.41 per share for the nine months ended September 30, 2001.

Research and development expenses for the nine months ended September 30, 2002 and 2001 were $99.7 million and $141.0 million, respectively. The substantially lower expenses during the first nine months of 2002 was attributable in part to the recognition in the first quarter 2001 of $10.6 million of a $13.0 million up-front payment to Cubist Pharmaceuticals related to the European licensing agreement for daptomycin signed in January 2001 and subsequently terminated in September 2002. In addition, Gilead's expenses have decreased compared to the first nine months in 2001 due to a decrease in expenses associated with the Viread clinical program and the divestiture of Gilead's oncology portfolio to OSI Pharmaceuticals in December 2001.

Selling, general and administrative expenses for the nine months ended September 30, 2002 were $123.7 million compared to $83.7 million for the same period in 2001. The significant increase in expenses is primarily due to Gilead's increased global marketing efforts and the expansion of Gilead's U.S. and European sales forces to support the commercial launches of Viread and Hepsera.

Corporate Highlights
In September, Gilead and Cubist Pharmaceuticals jointly announced the termination of their licensing agreement for the commercialization of Cidecin® (daptomycin for injection) and an oral formulation of daptomycin. The agreement, executed in January 2001, granted Gilead exclusive commercialization rights to the products in 16 European countries following regulatory approval. Under the terms of the discontinuation, Gilead does not owe any future payments to Cubist, and Cubist reacquired all European rights to both products.

Products and Pipeline Highlights
"The third quarter marked the achievement of several important milestones in Gilead's efforts to advance novel treatments for patients in need," said Dr. Martin. "The approval of Hepsera in the United States and the launch of Viread in additional countries in Europe continues to demonstrate our ability to effectively work with the various regulatory bodies around the world in order to facilitate rapid access to important treatments."

Viread® (tenofovir disoproxil fumarate) for HIV
During the third quarter, Gilead established pricing for Viread and launched the drug in several additional countries in Europe, including Spain, the Netherlands and Sweden. Most recently, Gilead launched Viread in Australia, and completed regulatory filings in Brazil and Switzerland.

In July, Gilead took part in the 14th International AIDS Conference in Barcelona, Spain. During this meeting, 18 Viread-related abstracts were presented. Highlights from the conference included:

• Forty-eight week data from a Phase III clinical trial (Study 903) comparing Viread to stavudine (d4T) when used in combination with lamivudine (3TC) and efavirenz in treatment-naïve HIV patients. Preliminary results from this study were previously announced on May 7.
• Genotypic and phenotypic analyses from a 48-week Phase II trial (Study 902) and a 48-week Phase III trial (Study 907) of Viread.

On September 27, at the 42nd Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC) in San Diego, California, the company presented new data from Study 903 regarding Viread's positive effects on serum lipid profiles and mitochondrial DNA content through 48 weeks compared to stavudine.

Hepseraä (adefovir dipivoxil) for Chronic Hepatitis B
In late September, Gilead received marketing clearance from the U.S. Food and Drug Administration (FDA) for its antiviral agent Hepsera, for the treatment of chronic hepatitis B. Hepsera's marketing authorization followed a unanimous recommendation from the FDA's Antiviral Drugs Advisory Committee for approval of the drug in early August 2002. Hepsera was granted a broad indication for the treatment of chronic hepatitis B in adults with evidence of active viral replication and either evidence of persistent elevations in serum aminotransferases (ALT or AST) or histologically active disease. The drug was shipped to wholesalers within days of FDA approval. The drug is administered as an oral 10 mg tablet and is the first nucleotide analogue to receive FDA approval for the treatment of chronic hepatitis B. Additional regulatory filings for Hepsera have been completed in the European Union, Canada, Australia and Turkey.

Conference Call
Gilead will host a conference call today, October 31, 2002, at 4:30 p.m. ET. To access the live call or the seven-day archive via the internet, log on to www.gilead.com. 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 view the webcast. Alternatively, please call 1-800-946-0712 (U.S.) or 1-719-457-2641 (international) to access the call. Telephone replay is available approximately two hours after the call through 8:30 p.m. EST, November 7, 2002. To access the replay, please call 888-203-1112 (U.S.) or 719-457-0820 (international). The conference ID number is 396392.

About Gilead Sciences
Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes therapeutics to advance the care of patients suffering from life-threatening diseases worldwide. The company has six marketed products and focuses its research and clinical programs on anti-infectives, including antivirals, antifungals and antibacterials. Headquartered in Foster City, CA, Gilead has operations in the United States, Europe and Australia.

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. These statements include those regarding Gilead's future financial results, including: revenues, research and development expenses, and selling, general and administrative expenses, the efficacy of any marketed or pipeline development products, the ability to file for or obtain marketing approval for Gilead's pipeline development products, or the competitive positioning of its marketed or pipeline development products. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially. These risks and uncertainties include those that can cause fluctuations in our financial results, such as our ability and the ability of our partners to successfully market our products and maintain revenue growth, in particular our ability to sustain the uptake and revenues for Viread; our ability to control the timing and amount of spending in our research and clinical programs; fluctuations in foreign currency against the U.S. dollar; our ability to achieve and the timing of milestones, as well as risk and uncertainties that affect our future prospects such as the risk that we may not continue to observe the safety, tolerability and efficacy data for Viread and Hepsera that we are observing today; the risk that we may not obtain European marketing approval for Hepsera; and other risks identified from time to time in the company's reports filed with the U.S. Securities and Exchange Commission.

The company directs readers to its Annual Report on Form 10-K, for the year ended December 31, 2001, filed in March 2002. 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.

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