Press Releases

January 27, 1999

Gilead Announces Fourth Quarter and 1998 Year-End Financial Results

Foster City, CA -- January 27, 1999

Gilead Sciences, Inc. (NASDAQ:GILD) announced today its results of operations for the fourth quarter ended December 31, 1998. For the quarter, the Company reported revenues from net product sales of $1.2 million, revenues from collaborative agreements of $6.9 million and revenues from product royalties of $0.8 million, for total revenues of $8.9 million and net interest income of $4.2 million. This compares to revenues from net product sales of $2.4 million, revenues from collaborative agreements of $7.0 million and revenues from product royalties of $0.5 million, for total revenues of $9.9 million and net interest income of $4.8 million for the same quarter in 1997. The net loss for the three months ended December 31, 1998 was $16.3 million or $0.53 per share, compared to a net loss of $12.4 million or $0.42 per share for the same quarter in 1997.

The net revenues from product sales were derived from the sale of VISTIDE^® (cidofovir injection), which Gilead markets independently in the United States for the treatment of cytomegalovirus (CMV) retinitis in patients with AIDS. The other revenues were contract revenue from the sale of Gilead's antisense patent estate, research and development funding and royalties on product sales of VISTIDE in the European Union, by Gilead's partner Pharmacia & Upjohn. Gilead also received royalties from Hoffmann-La Roche Inc. for co-promoting Roferon®-A (Interferon alfa-2a, recombinant) in the United States for the treatment of hepatitis C virus infection. The co-promotion agreement with Roche concluded at the end of 1998.

During the fourth quarter of 1998, Gilead recorded $6.0 million in contract revenue from Isis Pharmaceuticals for the sale of Gilead's antisense patent estate. Of this amount, Gilead received $2.0 million in December 1998, and the remainder is payable in three installments over the next three years.

Research and development expenses for the fourth quarter of 1998 were $21.3 million, compared to $20.0 million for the same period in 1997.

The Company also announced its results of operations for the year ended December 31, 1998. For the full year, the Company reported revenues from net product sales of $6.1 million, revenues from collaborative agreements of $24.2 million and revenues from product royalties of $2.3 million, for total revenues of $32.6 million and net interest income of $18.3 million. For the year ended December 31, 1997, Gilead reported revenues from net product sales of $11.7 million, revenues from collaborative agreements of $27.4 million and revenues from product royalties of $0.9 million, for total revenues of $40.0 million and net interest income of $17.8 million. For the year ended December 31, 1998, research and development expenses were $75.3 million, compared with $59.2 million for the year ended December 31, 1997. This increase was due primarily to expenses associated with the advancement of four therapeutic candidates into later stages of clinical development. The net loss for the twelve months ended December 31, 1998 was $56.1 million or $1.85 per share, compared to a net loss of $28.0 million or $0.95 per share for the twelve months ended December 31, 1997.

As of December 31, 1998, the Company had cash, cash equivalents and short-term investments of $279.9 million compared to $322.3 million at December 31, 1997.

Gilead Sciences is an independent biopharmaceutical company that seeks to provide accelerated treatment solutions for patients and the people who care for them. The Company discovers, develops and commercializes proprietary therapeutics for important viral diseases, including a currently marketed product, VISTIDE (cidofovir injection), for the treatment of CMV retinitis, a sight-threatening viral infection in patients with AIDS. In addition, the Company is developing products to treat diseases caused by HIV, hepatitis B virus and influenza virus. Gilead common stock is traded on The Nasdaq Stock Market under the symbol GILD.

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

	Three months ended December 31,		Year ended December 31,
	1998	1997	1998	1997
	(unaudited)			(note 1)
Revenues
Product sales, net	$ 1,237	$ 2,419	$ 6,074	$ 11,735
Contract revenues	6,898	6,975	24,198	27,413
Royalty revenues	801	515	2,298	889
Total revenues	8,936	9,909	32,570	40,037
Costs and expenses
Cost of sales	130	172	594	1,167
Research and development	21,320	20,036	75,298	59,162
Selling, general and      administrative	7,943	6,947	31,003	25,472
Total costs and expenses	29,393	27,155	106,895	85,801
Loss from operations	(20,457)	(17,246)	(74,325)	(45,764)
Interest income, net	4,167	4,822	18,250	17,771
Net loss	$(16,290)	$(12,424)	$(56,075)	$(27,933)
Basic and diluted loss per share	$ (0.53)	$ (0.42)	$ (1.85)	$ (0.95)
Common shares used in the calculation of basic and diluted loss per share	30,571	29,860	30,363	29,326

Note 1: Derived from audited financial statements at that date.

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

	December 31, 1998			December 31, 1997
	(note 1)			(note 1)
Assets
Cash, cash equivalents and           short-term investments	$ 279,939			$ 322,298
Other current assets	8,371			17,960
Total Current Assets	288,310			340,258
Property and equipment, net	10,182			10,313
Other assets	4,368			1,498
	$ 302,860			$ 352,069
Liabilities and stockholders' equity
Current liabilities	$ 31,750			$ 33,391
Long-term obligations	563			1,331
Stockholders' equity	270,547			317,347
	$ 302,860			$ 352,069

Note 1: Derived from audited financial statements at that date.