Gilead Announces Third Quarter 1998 Financial Results

Foster City, CA -- October 28, 1998

Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the third quarter ended September 30, 1998. For this quarter, the Company reported revenues from net product sales of $1.4 million, contract revenues of $1.2 million and royalty revenues of $0.4 million, for total revenues of $3.0 million and net interest income of $4.1 million. This compares to revenues from net product sales of $2.3 million, contract revenues of $2.3 million and royalty revenues of $0.3 million, for total revenues of $4.9 million and net interest income of $4.7 million for the same quarter in 1997.

The net loss for the three months ended September 30, 1998 was $17.6 million, or $0.58 per share, compared to a net loss of $10.3 million, or $0.35 per share, for the same quarter in 1997.

Net revenues from product sales were derived from sales of VISTIDE^® (cidofovir injection), which Gilead markets independently in the United States for the treatment of cytomegalovirus (CMV) retinitis in patients with AIDS. The decline in VISTIDE-related revenues reflects a continuing decline in the incidence of CMV retinitis as a result of more effective human immunodeficiency virus (HIV) therapies. The other revenues resulted from collaborations with corporate partners, including contract revenues for research and development projects and royalties on product sales of VISTIDE outside of the United States by Gilead's partner Pharmacia & Upjohn.

Research and development expenses for the third quarter of 1998 were $16.7 million, compared to $13.6 million for the same period in 1997. This increase was due primarily to expenses associated with the advancement of four therapeutic candidates into later stages of clinical development.

Gilead also reported its results of operations for the nine months ended September 30, 1998. The Company reported net revenues from product sales of $4.8 million and aggregate contract and royalty revenues of $18.8 million, for total revenues of $23.6 million and net interest income of $14.1 million for this period. This compares to revenues from product sales of $9.3 million and aggregate contract and royalty revenues of $20.8 million, for total revenues of $30.1 million and net interest income of $12.9 million for the nine months ended September 30, 1997. The net loss for the nine months ended September 30, 1998 was $39.8 million, or $1.31 per share, compared to a net loss of $15.6 million, or $0.53 per share for the nine months ended September 30, 1997.

As of September 30, 1998, the Company had cash, cash equivalents and short-term investments of $295.9 million, compared to $322.3 million on 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, 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.

VISTIDE is a registered trademark of Gilead Sciences, Inc. To receive more information call Corporate Communications at 1-800-GILEAD-5 (1-800-445-3235).

GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
3 months ended, September 30			9 months ended, September 30
1998	1997	1998	1997
Revenues:
Product sales, net	$ 1,444	$ 2,326	$ 4,837	$ 9,316
Contract revenues	1,211	2,347	17,300	20,438
Royalty revenues	383	264	1,497	374
Total revenues	3,038	4,937	23,634	30,128
Costs and expenses:
Cost of sales	120	180	464	995
Research and development	16,720	13,604	53,978	39,126
Selling, general and administrative	7,875	6,233	23,060	18,525
Total costs and expenses	24,715	20,017	77,502	58,646
Income (loss) from operations	(21,677)	(15,080)	(53,868)	(28,518)
Interest income, net	4,118	4,749	14,083	12,949
Net Income (loss)	$ 17,559	$ 10,331	$ 39,785	$15,569
Basic and diluted income (loss) per share	$ (0.58)	$ (0.35)	$ (1.31)	$ (0.53)
Common shares used in the calculation of basic and diluted loss per share	30,482	29,406	30,293	29,147

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
September 30, 1998	December 31, 1997
Assets
Cash, cash equivalents and short-term investments	$ 295,861	$ 322,298
Other current assets	9,710	17,960
Total current assets	305,571	340,258
Property and equipment, net	9,731	10,313
Other assets	1,402	1,498
$316,704	$352,069
Liabilities and stockholders' equity
Current liabilities	$ 31,298	$ 33,391
Long-term obligations	747	1,331
Stockholders' equity	284,659	317,347
$316,704	$352,069