Introduction-Gilead Sciences, Inc.

, commonly known as Gilead Sciences or

Gilead (also styled GILEAD) is an American biotechnology company that
researches, develops and commercializes drugs. The company focuses primarily
on antiviral drugs used in the treatment of HIV, hepatitis B, hepatitis C, and
influenza, including Harvoni and Sovaldi. Headquartered and founded in Foster
City, California, Gilead is a member of the NASDAQ Biotechnology Index and the
S&P 500.

Foundation-Gilead Sciences was founded in June 1987 by Michael L. Riordan, a

medical doctor who was 29 years old at the time. Riordan graduated from
Washington University in St. Louis, the Johns Hopkins School of Medicine and
the Harvard Business School. Three core scientific advisers worked with Riordan
to create the company and establish its scientific vision. These were Peter
Dervan of Caltech, Doug Melton of Harvard, and Harold Weintraub of the Fred
Hutchinson Cancer Research Center. Riordan served as CEO from inception until
1996. Menlo Ventures, a venture capital firm where Riordan worked for a year,
made the first investment in Gilead, of $2 million, and Menlo's partner DuBose
Montgomery served as Chairman of the Board until 1993, when Riordan became
Chairman. Riordan also recruited as scientific advisers Harold Varmus, a Nobel
laureate who later became Director of the National Institutes of Health, and Jack
Szostak, recipient of the Nobel Prize for Physiology or Medicine in 2009.

Vision and Mission- To advance therapeutics against life-threatening diseases

worldwide and to discover, develop and commercialize innovative therapeutics
in the areas of unmet medical needs that improve patient care.

Primary days and focus-The Company’s primary therapeutic focus was, and
continues to be, in antiviral medicines, a field that interested Riordan because
he contracted dengue fever, an untreatable viral disease, while working in
malnutrition clinics as a Henry Luce Scholar in the Philippines. Riordan recruited
Donald Rumsfeld to join the board of directors in 1988, followed by Benno C.
Schmidt, Sr., Gordon Moore, and George P. Shultz. Riordan tried to recruit
Warren Buffett as an investor and board member, but was unsuccessful.
Under the technical leadership of scientist Dr. Mark Matteucci, the company
focused its early discovery research on making small strands of DNA (oligomers)
to assess the potential of genetic code blockers (gene therapy). Its development
of small molecule antiviral therapeutics began in 1991 when CEO Riordan and
R&D head John C. Martin in-licensed a group of nucleotide compounds
discovered in two European academic labs; one of the compounds was
tenofovir, a pro-drug of which, trade named Viread, became one of the most
widely used anti-retroviral drugs.

Business expansion and Marketed Products-

1. Initial public offerings(1990-99)- In 1990, Gilead entered into a collaborative

research agreement with Glaxo for the research and development of genetic
code blockers, also known as antisense. This collaboration was terminated in
1998, and Gilead's antisense intellectual property portfolio was sold to Ionis
Pharmaceuticals. Gilead debuted on the NASDAQ in January 1992. Its initial
public offering raised $86.25 million in proceeds.
In June 1996, Gilead launched Vistide (cidofovir injection) for the treatment of
cytomegalovirus (CMV) retinitis in patients with AIDS. The company cooperated
with Pharmacia & Upjohn to market the product outside the United States.
In January 1997, Donald Rumsfeld, a Board member since 1988, was appointed
Chairman,[10] but left the Board in January 2001 when appointed United States
Secretary of Defense at the start of George W. Bush's first term as President.
In March 1999, Gilead acquired NeXstar Pharmaceuticals of Boulder, Colorado
following two years of negotiations with the company. At the time, NeXstar's
annual sales of $130 million was three times Gilead's sales. NeXstar's two
revenue-generating drugs were AmBisome, an injectable fungal treatment, and
DaunoXome, an oncology drug taken by HIV patients. Also in 1999, Roche
announced first approval of Tamiflu (oseltamivir) for the treatment of influenza.
Tamiflu was originally discovered by Gilead and licensed to Roche for late-phase
development and marketing. Viread (tenofovir) achieved first approval in 2001
for the treatment of HIV.
2. Antiviral era (2000-2009)- In 2002 Gilead changed its corporate strategy to
focus only on antivirals, and sold its cancer assets to OSI Pharmaceuticals for
$200 million. In December 2002, Gilead and Triangle Pharmaceuticals
announced that Gilead would acquire Triangle for around $464 million;
Triangle's lead drug was emtricitabine that was near FDA approval, and it had
two other antivirals in its pipeline. The company also announced its first full year
of profitability. Later that year Hepsera (adefovir) was approved for the
treatment of chronic hepatitis B, and Emtriva (emtricitabine) for the treatment
of HIV.
In 2004, Gilead launched Truvada, a fixed-dose combination of tenofovir and
emtricitabine.
In 2006, Gilead completed two acquisitions that allowed the company to branch
out from its historical antiviral franchise into the cardiovascular and respiratory
therapeutic arenas. Under an agreement with GlaxoSmithKline, Myogen
marketed Flolan (epoprostenol sodium) in the United States for the treatment
of primary pulmonary hypertension. Additionally, Myogen was developing (in
Phase 3 studies) darusentan, also an endothelin receptor antagonist, for the
potential treatment of resistant hypertension.
In 2006, the company acquired Corus Pharma, Inc. for $365 million. The
acquisition of Corus signaled Gilead's entry into the respiratory arena. Corus was
developing aztreonam lysine for the treatment of patients with cystic fibrosis
who are infected with Pseudomonas aeruginosa. In July 2006, the U.S. Food and
Drug Administration (FDA) approved Atripla, a once a day single tablet regimen
for HIV, combining Sustiva (efavirenz), a Bristol-Myers Squibb product, and
Truvada (emtricitabine and tenofovir disoproxil), a Gilead product. Gilead
purchased Raylo Chemicals, Inc. in November 2006 for a price of $133.3 million.
Raylo Chemical, based in Edmonton, Alberta, was a wholly owned subsidiary of
Degussa AG, a German company. Raylo Chemical was a custom manufacturer of
active pharmaceutical ingredients and advanced intermediates for the
pharmaceutical and biopharmaceutical industries. Later in the same year Gilead
acquired Myogen, Inc. for $2.5 billion (then its largest acquisition). With two
drugs in development (ambrisentan and darusentan), and one marketed
product (Flolan) for pulmonary diseases, the acquisition of Myogen has solidified
Gilead's position in this therapeutic arena.
Gilead expanded its move into respiratory therapeutics in 2007 by entering into
a licensing agreement with Parion for an epithelial sodium channel inhibitor for
the treatment of pulmonary diseases, including cystic fibrosis, chronic
obstructive pulmonary disease and bronchiectasis.
In 2009, the company acquired CV Therapeutics, Inc. for $1.4 billion, bringing
Ranexa and Lexiscan into Gilead. Ranexa is a cardiovascular drug used to treat
chest pain related to coronary artery disease, with both of these products and
pipeline building out Gilead's cardiovascular franchise. Later, in the same year
the company received the award for one of the Fastest Growing Companies by
Fortune. In the same year they were also named as one America's Top
Companies to work for by Forbes.

3. Current offerings (2010-2019)- In 2010, the company acquired CGI

Pharmaceuticals for $120 million, expanding Gilead's research expertise into
kinase biology and chemistry. Later that year, the company acquired Arresto
Biosciences, Inc. for $225 million, obtaining developmental-stage research for
treating fibrotic diseases and cancer.
In 2011, the company acquired Calistoga Pharmaceuticals for $375 million ($225
million plus milestone payments). The acquisition boosted Gilead's oncology and
inflammation areas. Later that year, Gilead made its most important acquisition
— and most expensive to date — with the $10.4 billion purchase of Pharmasset,
Inc. This transaction helped cement Gilead as the leader in treatment of the
hepatitis C virus by giving it control of sofosbuvir (see below).
On July 16, 2012, the FDA approved Gilead's Truvada for prevention of HIV
infection (it was already approved for treating HIV). The pill was a preventive
measure (PrEP) for people at high risk of getting HIV through sexual activity.
In 2013, the company acquired YM Biosciences, Inc. for $510 million. The
acquisition brings drug candidate CYT387, an orally-administered, once-daily,
selective inhibitor of the Janus kinase (JAK) family, specifically JAK1 and JAK2,
into Gilead's oncology pipeline. The JAK enzymes have been implicated in
myeloproliferative diseases, inflammatory disorders, and certain cancers.
 In 2015, the company made a trio of acquisitions:
  It bought Phenex Pharmaceuticals for $470 million. Its Farnesoid X
Receptor (FXR) program used small-molecule FXR agonists in the
treatment of liver diseases such as nonalcoholic steatohepatitis.
 It bought EpiTherapeutics for $65 million. This acquisition gave Gilead
first-in-class small molecule inhibitors of histone demethylases involved
in regulating gene transcription in cancer.
 It paid $425 million for a 15% equity stake in Galapagos NV, with
additional payments for Gilead to license the experimental anti-
inflammatory drug filgotinib, which may treat rheumatoid arthritis,
ulcerative colitis, and Crohn's disease.
In 2016, the company acquired Nimbus Apollo, Inc. for $400 million, giving
Gilead control of the compound NDI-010976 (an ACC inhibitor) and other
preclinical ACC inhibitors for the treatment of non-alcoholic steatohepatitis and
for the potential treatment of hepatocellular carcinoma. Also in 2016, the
company was named the most generous company on the 2016 Fortune list of
The Most Generous Companies of the Fortune 500. Charitable donations to
HIV/AIDS and liver disease organizations totaled over 440 million in 2015.
In August 2017, the company announced it would acquire Kite Pharma for $11.9
billion, equating to $180 cash per share, a 29% premium over the closing price
of the shares. The deal will add the promising CAR-T candidate to the company’s
existing portfolio. In November, the company announced it will acquire Cell
Design Labs for up to $567 million, after it indirectly acquired a stake of 12.2%
via the Kite Pharma deal.

Major Break-through and asset-The drug sofosbuvir had been part of the 2011
acquisition of Pharmasset. In 2013, the FDA approved this drug, under the trade
name Sovaldi, as a treatment for the hepatitis C virus. Forbes magazine ranked
Gilead its number 4 drug company, citing a market capitalization of US$113
billion and stock appreciation of 100%, and describing their 2011 purchase of
Pharmasset for $11 billion as “one of the best pharma acquisitions ever”.
Deutsche Bank estimated Sovaldi sales in the year's final quarter would be $53
million, and Barron's noted the FDA approval and subsequent strong sales of the
“potentially revolutionary” drug as a positive indicator for the stock.
On July 11, 2014, the United States Senate Committee on Finance investigated
Sovaldi's high price ($1,000 per pill; $84,000 for the full 12-week regimen).
Senators questioned the extent to which the market was operating “efficiently
and rationally”, and committee chairman Ron Wyden (D-Oregon) and ranking
minority member Chuck Grassley (R-Iowa) wrote to CEO John C. Martin asking
Gilead to justify the price for this drug. The committee hearings did not result in
new law, but in 2014 and 2015, due to negotiated and mandated discounts,
Sovaldi was sold well below the list price. For poorer countries, Gilead licensed
multiple companies to produce generic versions of Sovaldi; in India, a pill's price
was as low as $4.29.
Gilead later combined Sovaldi with other antivirals in single-pill combinations.
First, Sovaldi was combined with ledipasvir and marketed as Harvoni. This
treatment for hepatitis C cures the patient in 94% to 99% of cases (HCV genotype
1). By 2017, Gilead was reporting drastic drops in Sovaldi revenue from year to
year, not only because of pricing pressure but because the number of suitable
patients decreased. Later single-pill combinations were Epclusa (with
velpatasvir) and Vosevi (with velpatasvir and voxilaprevir).

Finances-For the fiscal year 2017, Gilead Sciences Insurance reported earnings
of US$4.628 billion, with an annual revenue of US$26.107 billion, a decline of
14.1% over the previous fiscal cycle. Gilead Sciences's shares traded at over $70
per share, and its market capitalization was valued at US$93.4 billion in October
2018.

Revenue Net income Total Assets Price per Share

Year Employees
in mil. USD$ in mil. USD$ in mil. USD$ in USD$

2005 2,028 814 3,766 9.77

2006 3,026 −1,190 4,086 14.31

2007 4,230 1,585 5,835 18.30

2008 5,336 1,979 6,937 22.74

2009 7,011 2,636 9,699 21.32

2010 7,949 2,901 11,593 18.15

2011 8,385 2,804 17,303 18.46

2012 9,702 2,592 21,240 26.13

2013 11,202 3,075 22,579 51.83 6,000

2014 24,890 12,101 34,664 82.82 7,000

2015 32,639 18,108 51,716 98.83 8,000

2016 30,390 13,501 56,977 78.87 9,000

2017 26,107 4,628 70,283 70.13 10,000

2018 22,127 5,455 63,675 63.86 11,000[40]

Tax structures-On December 26, 2018, The Times reported that Gilead had used
the Double Irish arrangement to avoid U.S. corporate taxes on non–U.S. profits,
reporting that "A US pharmaceutical firm used a controversial tax loophole
arrangement to shift almost €20 billion in profits through an Irish entity in just
two years".

Prospects for the future-As of 2017, Gilead's challenge is to develop or acquire

new blockbuster drugs before its current revenue-producers wane or their
patent protection expires. Like other pharmaceutical companies, it stands to
gain from efforts by U.S. President Donald Trump to repeal taxes imposed by the
Affordable Care Act (ACA). However, Gilead also benefitted from the expansion
of Medicaid in the ACA; Leerink analyst Geoffrey Porges wrote that Gilead's HIV
drugs could face funding pressure under reform proposals. Gilead has $32 billion
in cash, but $27.4 billion is outside the U.S. and is unavailable for acquisitions
unless Gilead pays U.S. tax on it, though it could borrow against it. Gilead would
benefit from proposals to let companies repatriate offshore capital with minimal
further taxation.[43]
Gilead's Entospletinib has shown a 90% complete response rate (medicine) for
MLL type AML

Conclusion- With each new drug discovery, Gilead seeks to improve the care of
millions of patients living with life-threatening diseases around the world,
including regions where access to medicine is limited or does not yet exist.
Gilead recognizes that patients and communities often face challenges in
accessing the best possible care, and they know that passion for scientific
discovery alone — and that Gilead alone — cannot solve these challenges. This
is why, through their grantee programs they support patient advocates,
nonprofits and healthcare professionals around the world who work tirelessly in
local communities to improve people’s lives day after day.
Gilead works with organizations across all their therapeutic areas, partnering to
advance the goals of our giving mission: to improve health access, eliminate the
barriers to healthcare encountered by underserved populations, advance
education among healthcare professionals and support the local communities
in which they operate.

Acknowledgement- I am thankful to Dr. Angshuman Lahiri for providing an

opportunity to pursue a report on Gilead sciences and conduct it successfully.