q3 12 earnings slides final

7/28/2019 Q3 12 Earnings Slides Final

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October 23, 2012October 23, 2012

Q3 2012 Earnings ResultsConference Call and Webcast


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Q3 2012 Corporate Highlights

FDA approved Stribild (elvitegravir 150 mg/cobicistat 150mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg), acomplete once-daily single tablet regimen for HIV-1 infection for

treatment-nave adults

FDA approved once-daily oral Truvada, in combination with safer sexpractices, to reduce the risk of sexually acquired HIV-1 infection in adultsat high risk

Truvada is the first agent to be approved for HIV prevention in uninfected adults, a strategy called pre-exposure prophylaxis

35 total abstracts accepted at the 19th International AIDS Conference inWashington, D.C (July 2012) - presentations included:

24-week data from a Phase 3 SPIRIT (Switching boosted PI to Rilpivirine In Combination with Truvada asa Single Tablet Regimen)

Two-year Phase 3 clinical trial results showed that the integrase inhibitor elvitegravir dosed once daily isnon-inferior to raltegravir dosed twice daily among treatment-experienced HIV patients

Full clinical trial results from a pivotal Phase 3 study evaluating cobicistat, a pharmacoenhancing or

boostingagent for HIV therapy, compared to ritonavir

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Q3 2012 Earnings Call Agenda

Introduction Patrick OBrien, VP, Investor Relations

Commentary

Q&A

Robin Washington, SVP and CFO

Kevin Young, EVP, Commercial Operations

J ohn Martin, Chairman and Chief Executive Officer

All Senior Management Including:

J ohn Milligan, President and COO

Norbert Bischofberger, EVP, R&D and CSO

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Robin WashingtonSVP and Chief Financial Officer



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$2,066 $2,133$2,208 $2,321 $2,358

$0

$500

$1,000

$1,500

$2,000

$2,500

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

InMi

llions

Total Product Sales

Q3 2012 up 14% over Q3 2011

6


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Product Sales by Geography

$ in millions

Q3 2012 Total Product Sales: $2,358

Europe: $781

(33% of Total)

(5% YoY Growth)

U.S.: $1,396

(59% of Total)

(20% YoY Growth)

Other International: $181

(8% of Total)

(18% YoY Growth)

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$384

$371$331

$349

$269

$0

$50

$100

$150

$200

$250

$300

$350

$400

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

In

Millions

Note: Non-GAAP R&D expenses exclude after-tax acquisition-related,restructuring and stock-based compensation expenses.

Non-GAAP R&D Expenses

Q3 2012 up 42% from Q3 2011 Key Metrics

Higher R&D expenses inQ3 2012 over Q3 2011

due primarily to:- Continued advancement

of the product pipeline,particularly in liver diseaseand oncology therapeuticareas

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$287$299$308$290$265

$0

$50

$100

$150

$200

$250

$300

$350

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

In

Million

s

Key Metrics

Higher SG&A expenses inQ3 2012 over Q3 2011

driven primarily by:

- Increased expenses tosupport the ongoinggrowth of the business

- Pharmaceutical excise taxresulting from U.S.healthcare reform (excisetax for 2012 estimated at~$80 - $100 million)

Non-GAAP SG&A Expenses

Q3 2012 up 8% from Q3 2011

Note: Non-GAAP SG&A expenses exclude after-taxacquisition-related, restructuring and stock-based compensation expenses.

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$745

$1,291

$453

$978$897

$0

$250

$500

$750

$1,000

$1,250

$1,500

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

InMilli

ons

* Q1 2012 included a $194 million payment to Pharmasset employees as part of stock based compensation &other payments.

** Q2 2012 included an inflow of $460 million in collections from Spain.

*

**

Operating Cash Flows

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OriginalGuidance

2/2/12

GuidanceUpdated

4/26/12

GuidanceUpdated7/26/12

$ 8,600 $ 8,800 $ 8,800 $ 9,000

Unchanged

$ 1,450 $ 1,525

Unchanged

Unchanged

Unchanged

73% 75%

$ 1,325 $ 1,400

$ 1,225 $ 1,300

26% 28%

$ 0.31 $ 0.34

Unchanged

Unchanged

Unchanged

Unchanged

Unchanged

$ 0.56 $ 0.59^

GuidanceUpdated10/23/12

Net Product Sales $ 9,100 $ 9,200

Non-GAAP*

Product Gross Margin Unchanged

R&D Unchanged

SG&A Unchanged

Effective Tax Rate Unchanged

Diluted EPS Impact of

Acquisition-Related,Restructuring and Stock-BasedCompensation Expenses

$ 0.62 $ 0.65^^

* Non-GAAP product gross margin and expenses exclude the impact of acquisition-related, restructuring andstock-based compensation expenses where applicable.

^Diluted EPS impact of acquisition-related, restructuring and stock-based compensation expenses increased $0.25related to the acceleration of unvested stock options in the Pharmasset acquisition and included in the $11.1billion acquisition price.

($ in millions, except percentages and per share amounts)Full Year 2012 Guidance

^ Diluted EPS impact of acquisition-related, restructuring and stock-based compensation expenses increased$0.06 driven by changes in anticipated payments associated with the successful progression of our oncology andnon-HCV liver pipeline. 11


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Projected product gross margin GAAP to non-GAAP reconciliation:

GAAP projected product gross margin

Acquisition-related amortization of purchased intangibles

Non-GAAP projected product gross margin*

Projected research and development expenses GAAP to non-GAAP reconciliation:

GAAP projected research and development expenses

Acquisition-related expenses

Restructuring expenses

Stock-based compensation expenses

Non-GAAP projected research and development expenses

Projected selling, general and administrative expenses GAAP to non-GAAP

reconciliation:GAAP projected selling, general and administrative expenses

Acquisition-related expenses


Stock-based compensation expenses

Non-GAAP projected selling, general and administrative expenses

Projected diluted EPS impact of acquisition-related, restructuring and stock-basedcompensation expenses:

Acquisition-related expenses**


Stock-based compensation expenses^

Projected diluted EPS impact of acquisition-related, restructuring and stock-based compensation expenses

10/23/12

($ in millions, except percentages and per share amounts)Full Year 2012 Guidance

72% - 74%1% - 1%

73% - 75%

$1,448 - $1,529

(10) - (11)

(6) - (6)

(207) - (212)

$1,225 - $1,300

$0.17 - $0.18

0.01 - 0.01

0.44 - 0.46

$1,718 - $1,809

(85) - (87)

(6) - (8)

(177) - (189)

$1,450 - $1,525

* Stock-based compensation expenses have a less than one percent impact on non-GAAP projected product gross margin.** Acquisition-related expense includes $0.02 related to transaction expense for the Pharmasset acquisition.

Impacted by $193.9 million or $0.25 per diluted share of compensation charge related to the acceleration ofunvested stock options in the Pharmasset acquisition and included in the $11.1 billion acquisition price.

$0.62 - $0.65

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13


Kevin Young CBEEVP Commercial Operations


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$0

$500

$1,000

$1,500

$2,000

$2,500

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Salesin

Mill

ions

U.S. Europe Other International

Key Metrics

U.S.:

Growth driven by solid

demand Inventory levels remained at

the low-end of the range consistent with prior quarters

Non-retail purchasingsignificantly lower than Q1and Q2 2012

Europe:

Year-on-year revenue growth

driven by demand No austerity price actions

taken in Big 5 markets YTD2012

Antiviral Franchise Q3 2012 Financial Performanceand Key Metrics

Q3 2012 up 13% from Q3 2011

$1,795

$984.8

$677.

0

$1,860

$1,0

44.0

$684.

3

$1,0

82.6

$696.

5

$1,926$2,012

$717.

4

$1,1

43.9

$2,036

$710.

1

$1,1

70.2

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Stribild: First Integrase Containing Single TabletRegimen for the Treatment of HIV

Launched in the U.S. following FDA approval August 27,2012

Q3 2012 sales of $17.5 million (wholesaler inventory fill)

WAC ~$28,500/ per year

Approved for the use in HIV infected treatment-naveadults

European MAA approval anticipated Q1 2013

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$0

$25

$50

$75

$100

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Salesin

Millions


Key Metrics*

U.S.:

Captured 25% of nave

patient share Primarily being used in

healthier patients, AfricanAmericans and women ofchild bearing age

Europe & Other International:

Launched in 16 countriesincluding; UK, Germanyand France

Complera/Eviplera Q3 2012 FinancialPerformance and Key Metrics

*Sources:

U.S. data from Ipsos Healthcare U.S. SCOPE Q2 2012.

EU data from Ipsos Monitor Q2 2012 & SCOPE Q3 2012 andGilead estimates.

$19

$19.0

$19.5

$20

$48.6

$52

$73

$65.0

$82.1

$99

$14.3

16

At i l Q3 2012 Fi i l P f


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$0

$250

$500

$750

$1,000

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Salesin

Millions


Atripla Q3 2012 Financial Performanceand Key Metrics

Key Metrics*

U.S.:

Most prescribed regimen

in HIV with 32% of alltreated patients

Captured 34% of navepatient share

Europe:

Most prescribed regimenin HIV with 24% of alltreated patients acrossthe Big 5 markets


Note: efavirenz (the active pharmaceutical component in Atripla purchased fromBMS) accounted for approximately 37% of Atripla sales in Q3 2012 whichrepresented $317 million to be paid to Bristol-Myers Squibb.

*Sources:U.S. data from Ipsos Healthcare U.S. HIV Monitor Q2 2012.EU data from Ipsos Monitor Q2 2012 & SCOPE Q3 2012 and

Gilead estimates.

Note: Atripla does not have a nave indication in Europe and is notpromoted to this group of patients.

Q3 2012 up 9% from Q3 2011

$795

$

501.6

$255.0

$863

$

547.5

$267.5

$

562.0

$270.7

$888

$280.1

$

570.8

$904

$270.3

$539.8

$865

17

T d Q3 2012 Fi i l P f


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$0

$250

$500

$750

$1,000

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Salesin

Millions


Key Metrics*

U.S.:

Most prescribed product

in HIV with 37% of alltreated patients


Europe:

Most prescribed productin HIV with 42% of alltreated patients

Captured 50% of nave

patient share

Truvada Q3 2012 Financial Performanceand Key Metrics

*Sources:

U.S. data from Ipsos Healthcare U.S. HIV Monitor Q2 2012.

EU data from Ipsos Monitor Q2 2012 & SCOPE Q3 2012 andGilead estimates.

Q3 2012 up 8% from Q3 2011

$745

$357

.7

$3

19.1

$746

$373

.6

$3

17.0

$373

.3

$3

21.9

$758

$3

28.8

$786

$393

.0

$414

.5

$3

29.9

$804

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John Martin, Ph.D.

Chairman and Chief Executive Officer


Anticipated Key Pipeline Milestones in 2H 2012


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Anticipated Key Pipeline Milestones in 2H 2012and 1H 2013

HIV/AIDSHIV/AIDS

Stribild

Q3 12

Q4 12

Q4 12

Q4 12

Q1 13

; U.S. FDA marketing approval August 27, 2012

Release top-line 96 week data from Phase 3 Studies 102 and 103

at HIV11 (Glasgow)

RAL 12 week switch study data

Initiate dosing in WAVES study Stribild to ATV/r + TVD in women

Anticipate European MAA approval

Truvada Q3 12 ; U.S. FDA PrEP marketing approval J uly 16, 2012

GS-7340

Q4 12

Q2 13

1H 13

Top-line data from Phase 2 24-week GS-7340 Quad vs. Stribild in

HIV study

Complete Phase 2 study with GS-7340 PI vs. Viread PI in HIV

Initiate two Phase 3 studies with GS-7340 Quad

CobicistatQ3 12

Q2 13

; Present 48 week Cobi vs. Ritonavir at IAC

Anticipate NDA approval for Cobicistat (PDUFA April 28, 2013)

ElvitegravirQ3 12

Q2 13; Present 96 week data from Phase 3 Study 145 at IAC

Anticipate NDA approval for Elvitegravir (PDUFA April 27, 2013)

Complera

Q3 12

Q4 12

;Top-line data from Phase 3b 48 week protease switch study

Top-line data from Phase 3b 48 week Atripla head-to-head study(Glasgow)

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Anticipated Key Pipeline Milestones in 2H 2012and 1H 2013 (contd)

Liver DiseaseLiver Disease

GS-7977

Q4 12

Q4 12

Q4 12

Q1 13

1H 13

Q2 13

; Initiate Phase 3 GS-7977 + GS-5885 FDC study in GT-1

HCV patients

Present SVR-4 data from Phase 2 Electron GS-7977 +

GS-5885 + RBV 12 weeks study in GT-1 treatment nave

HCV patients at AASLD

Top-line SVR-12 data from Phase 3 Positron study in

interferon ineligible and intolerant HCV patients

Top-line SVR-12 data from Fission, Fusion and NeutrinoPhase 3 studies

Initiate second confirmatory Phase 3 study with

7977 + GS-5885 in GT 1 nave patients

File for FDA and EMEA approval of GS-7977 in GT 2/3

patients with RBV and in GT 1, 4, 5 and 6 patients withPEG/RBV

GS-6624 4Q 12 Initiate three Phase 2b studies (2 in NASH and 1 in PSC)

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Anticipated Key Pipeline Milestones in 2H 2012and 1H 2013 (contd)

Cardiovascular/RespiratoryCardiovascular/Respiratory

Ranolazine

Q3 12

Q4 12Q2 13

; Initiate third Phase 3 study with metformin in patients with

type 2 diabetes mellitus

Complete Phase 4 Ranexa study (TERISA) Submit NDA and MAA for Ranexa (TERISA and SPECT MPI)

GS-6624 Q4 12 Initiate Phase 2 study LOXL2 mAb inhibitor for IPF

GS-1101

Q4 12Q4 12

Q4 12

Initiate Phase 3 study in CLL in combination with ofatumumab Initiate Phase 3 studies in iNHL in combination with rituximab

Initiate Phase 3 studies in iNHL in combination with

rituximab/bendamustine

Inflammation/OncologyInflammation/Oncology

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Pipeline Product Candidates:


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Pipeline Product Candidates:HIV and Liver Disease

HIV/AIDSStribild (elvitegravir/FTC/TDF/cobicistat) European Regulatory Submission

Cobicistat (PK enhancer) U.S. and European Regulatory Subm issionsElvitegravir (integrase inhibitor) U.S. and European Regulatory Subm issions

GS-7340 (TAF) in Various STRs

Liver Disease

HCVGS-7977 (nucleotide NS5B inhibitor)

GS-5885 (NS5A inhibitor)

GS-9451 (NS3 protease inhibitor)

GS-9256 (NS3 protease inhibitor)

GS-9190(non-nuc NS5B site 1 polymerase inhibitor)GS-9669(non-nuc NS5B site 2 polymerase inhibitor)

Liver Fibrosis

GS-6624(monoclonal antibody)

HBV

GS-9620 (TLR-7 agonist) - HBV/HCVGS-7340 (nucleotide reverse transcriptase inhibitor)

32

Phase

1Regulatory

Submissions

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Pipeline Product Candidates (contd)

Respiratory

Aztreonam for Inhalation Solution - Bronchiectasis

GS-6624(monoclonal antibody) - IPF

GS-5806 - Respiratory Syncytial Virus

Cardiovascular/Metabolic

Ranolazine (late sodium current inhibitor) - Incomplete revascularization post PCIRanolazine (late sodium current inhibitor) -CAD in Type 2 Diabetes Melli tus

Ranolazine (late sodium current inhibitor) -Paroxysmal atrial fibrillation

Oncology/Inflammation

GS-1101 (PI3K delta inhibitor) - CLLGS-1101(PI3K delta inhibitor) - iNHL

GS-6624 (monoclonal antibody) - Myelofibrosis

GS-6624 (monoclonal antibody) - Pancreatic Cancer

GS-6624 (monoclonal antibody) - Colorectal Cancer

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Phase

1

24

GS 7340 Phase 2 Studies in


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GS-7340 Phase 2 Studies inTreatment Nave HIV-1 Patients

Study 292: (Fully Enrolled, Data Q4 12)

(n = 171)

24 weeks

Screening

24 weeks

Randomization stratified by:HIV RNA level ( 100,000 c/mL or > 100,000 c/mL)

Treatment Arm 1 (n=114)


STR GS-7340 10mg/EVG 150 mg/COBI 150 mg/FTC 200 mg

+ placebo-to-match Stribild

Stribild + placebo-to-match EVG 150 mg/COBI 150 mg/

FTC200 mg/GS-7340 10 mg QD

Study 299: (Fully Enrolled, Data Q2 13)

(n = ~150)

24 weeks

Screening

24 weeks

Randomization stratified by:

HIV RNA level ( 100,000 c/mL or > 100,000 c/mL)



STR GS-7340 10mg/EVG 150 mg/COBI 150 mg/FTC 200 mg

+ placebo-to-match DRV 800 mg (400 mg tablet x2)/

COBI 150 mg/FTC 200 mg/TDF 300 mg QD

DVR 800 mg (400 mg tablet x2)/COBI 150 mg/

FTC 200 mg/TDF 300 mg

+ placebo-to-match STR GS-7340 10 mg QD/DVR 800 mg/

COBI 150 mg/FTC200 mg

Primary Endpoint:

Evaluate efficacy by the achievement HIV-1 RNA,


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Primary objective:Evaluate antiviral efficacy measured by (SVR 12) of the study regimens inpatients with chronic HCV infection

*SVR 4 data presented at CROI, one patient had not yet reached SVR 4.

Note: Part 1 (Arms 1-4 in GT 2/3 treatment naives) all achieved 100% SVR 4, SVR 12 and SVR 24.

ELECTRON Phase 2 Study Arms: Focus onOutcomes from HCV GT1 Arms to Support Phase 3

(SVR 12) (SVR 24)(SVR 4)12 1684 24 36Study Weeks

GS-7977 400 mg QD (GT 2/3)N = 1060% 60%60%

Arm 5

GS-7977 400 mg QD + RBV (GT 1 null responders)N = ~1011% (1/9)*

N = ~10 GS-7977 400 mg QD + RBV + Peg-IFN (GT 2/3)100%

Arm 6

Arm 7

GS-7977 400 mg QD + RBV (GT 1 Tx-naive)N = ~2588% (22/25)

GS-7977 400 mg QD + RBV (GT 2/3 Tx-experienced)N = ~2580% (12/15)

Arm 8

Arm 9

GS-7977 400 mg QD + GS-5885 90 mg + RBV (GT 1 null responders)N = ~10

GS-7977 400 mg QD + RBV 800 mg, fixed dose (GT 2/3 Tx-naive)N = ~10

GS-7977 400 mg QD + RBV (GT 2/3 Tx-naive)N = ~25

GS-7977 400 mg QD + GS-5885 90 mg + RBV (GT 1 Tx-naive)N = ~25

Arm 10

Arm 11

Arm 12

Arm 13

GS-7977 400 mg QD + GS-9669 500 mg QD + RBV (GT 1 null responders)N = ~10Arm 14

GS-7977 400 mg QD +GS-9669 500 mg QD + RBV (GT 1 Tx-naive)N = ~25Arm 15

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GS-7977 Phase 3 Programs: GT2/3

Primary objective:

Evaluate antiviral efficacy measured by sustained virologic response(SVR, defined as HCV RNA < lower limit of quantification (LLOQ) 12weeks post treatment)

Genotype 2/3(nave)

Genotype 2/3(IFN intolerant)

GS-7977 400mg QD+ RBV

Peg-IFN + RBV

N=~250

N=~250

N=~180

N=~60

SVR12

SVR12

12 24 36

GS-7977 placebo+ RBV placebo

SVR12

SVR12

POSITRON

FISSION

GS-7977 400mg QD+ RBV

study commenced March 2012, fully enrolled end of May 2012

Study Weeks

study commenced December 2011, fully enrolled end of April 2012

Genotype 2/3(treatment-experienced)

N=~100

N=~100GS-7977 400mg QD +

RBV (500 or 600mg) BID

SVR12

SVR12

FUSIONGS-7977 400mg QD +

RBV (500 or 600mg) BID

study commenced June 2012, fully enrolled July 2012

16 28

27

GS 7977 Ph 3 P GT 1 4 5 6


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12 24

N=~300

GS-7977 Phase 3 Program: GT 1,4,5,6

GS-7977 400 mg QD +PEG 180 g/week +

RBV 500 or 600 mg BID

Study Weeks

SVR 12

study commenced June 2012 fully enrolled early August 2012

NEUTRINO:Treatment-nave patients, multicenter, open-label study

Primary objective:

Determine efficacy of 12 weeks of treatment withGS-7977+PEG+RBV as measured by SVR12

Evaluate the safety and tolerability

28

Now Enrolling: GS-7977/GS-5885 Initial


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gPhase 3 FDC Study

Interim analysis (SVR4 of the 12 week arms) after200 patients (50/arm) have been enrolled

Design of 2nd confirmatory study TBD

GS-7977 400 mg + GS-5885

90 mg FDC

GS-7977 400 mg + GS-5885 90 mg FDC SVR12

GS-7977 400 mg + GS-5885

90 mg FDC/RBV

GS-7977 400 mg + GS-5885 90 mg FDC/RBV SVR12n=200/arm

GT1 TreatmentNave Patients

12 weeks 24 weeks

SVR12

SVR12

29

GS-1101 Phase 3 Studies


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GS 1101 Phase 3 StudiesRelapsed-refractory CLL Patients

Arm 1 (n=80)

Placebo +

Rituximab 375 mg/m2 week 0 +Rituximab 500 mg/m2 week 2, 4, 6, 8, 12, 16, 20

GS-1101 150 mg BID +Rituximab 375 mg/m2 week 0 +

Rituximab 500 mg/m2 week 2, 4, 6, 8,12,16, 20

Arm 2 (n=80)

Screening

(Randomized Double-Blind Initial Therapy)(Double-Blind Continuing Therapy)

Until PD

GS-1101 150 mg BID

Placebo BID

Study 116

Study 115

Arm 1 (n=195)

Placebo +Bendamustine 70 mg/m2 D1,2 Q4 weeks +

Rituximab 375 C1, 500mg/m2 C2-6

GS-1101 150 mg BID +Bendamustine 70 mg/m2 D1,2 Q4 weeks +

Rituximab 375 C1, 500 mg/m2 C2-6

Arm 2 (n=195)

Screening

(Randomized Double-Blind Initial Therapy)24 Weeks

(Double-Blind Continuing Therapy)Until PD

GS-1101 150 mg BID

Placebo BID

Primary objective: Evaluate the effect of adding GS-1101 to rituximab on progression-free

survival (PFS)30


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31

Appendix Slides


Fi i l Hi hli ht Q3 2012


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Financial Highlights: Q3 2012(US$ mill ions, except per share amounts)

% ChangeQ3 2011Q3 2012

$ 1.00Non-GAAP diluted EPS*

287SG&A*

384R&D*580COGS*

$ 1,250Non-GAAP costs and expenses*

$ 2,427Total revenues

69Royalty, contract and other revenues

215Viread

804

Atripla 865

Truvada

2,036Antiviral products

14%$ 2,358Product sales

13%

(2%)

9%

8%

11%

28Cayston 20%87AmBisome 6%

105Letairis 33%

Ranexa 95 16%

23%

14%

19%

$ 789Non-GAAP net income* (1%)

99Complera/Eviplera

$ 1.02

265

269

512

$ 1,047

$ 2,122

56

79

19

193

745

795

1,795

82

82

$ 795

$ 2,066

24

13%42%

8%

421%

*Non-GAAP costs and expenses, net income and diluted EPS exclude the impact of acquisition-related,restructuring and stock-based compensation expenses where applicable. 32

Fi i l Hi hli ht Y t D t


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Financial Highlights: Year to Date(US$ mill ions, except per share amounts)

% ChangeYTD 2011YTD 2012

$ 2.89Non-GAAP diluted EPS*

894SG&A*

1,086R&D*1,742COGS*

$ 3,722Non-GAAP costs and expenses*

$ 7,114Total revenues

227Royalty, contract and other revenues

256AmBisome

622Viread

2,348

Atripla 2,657

Truvada

5,974Antiviral products

15%$ 6,888Product sales

Ranexa 274

15%

1%

13%

10%

14%

3%

16%

5%

15%

22%

$ 2,261Non-GAAP net income* (2%)

19224

547

2,129

2,361

5,190

$ 5,969

$ 2.87

805

7691,480

$ 3,054

$ 6,185

216

24974Cayston 14%65

294Letairis 37%215

236

$ 2,296

Complera/Eviplera

18%41%

11%

1078%

*Non-GAAP costs and expenses, net income and diluted EPS exclude the impact of acquisition-related,restructuring and stock-based compensation expenses where applicable. 33

Total Revenues


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$2,427$2,405$2,282

$2,200

$2,122

$0

$500

$1,000

$1,500

$2,000

$2,500

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

InMilli

ons

Total Revenues

Q3 2012 up 14% over Q3 2011

34


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Other Product Sales

ProductProduct

($ in Millions)($ in Millions)

Q32011

Q42011

Q12012

Q22012

Q32012

YTD2012

%From Q3

2011

Viread $192.9 $190.9 $191.7 $215.4 $214.9 $622.0 11%

Letairis $79.0 $78.7 $87.3 $101.6 $105.1 $294.0 33%

Stribild NA NA NA NA $17.5 $17.5 NA

Ranexa $82.0 $83.7 $83.2 $95.6 $95.1 $273.8 16%

AmBisome $82.2 $80.8 $84.8 $83.7 $87.4 $255.9 6%

Hepsera $35.6 $32.3 $29.3 $26.2 $27.3 $82.8 (23%)

Cayston $23.6 $25.9 $22.8 $23.0 $28.3 $74.1 20%

35

European Total Product Sales Increased 8%


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Year-over-Year Excluding FX

FX impact to European revenues was unfavorable $7

million QoQ and unfavorable $22 million YoY

FX impact to international revenues (including ROW) was

unfavorable $6 million QoQ and unfavorable $21 million

YoY

FX impact to pre-tax income was unfavorable $2 million

QoQ and unfavorable $7 million YoY

SalesinMillions

$745 $749

$764

$786 $781

$500

$600

$700

$800

Q3'11 Q4'11 Q1'12 Q2'12 Q3'12

Q3'12 Q3'11 YoY Excl FX

Atripla $270 $255 6% 9%

Truvada $330 $319 3% 6%

Viread $82 $83 (1%) 4%

Eviplera $14 $0 NM NM

Hepsera $12 $18 (34%) (31%)

AmBisome $60 $61 (2%) 3%

Other $13 $9 41% 53%

Total $781 $745 5% 8%

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$0

$25

$50

$75

$100

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

SalesinMillions

Tamiflu Other

Key Metrics

Q3 2012 increased from

Q3 2011 due to:- Increase in other royalty

revenues, whichincluded higher royaltiesfrom GSK for Volibris

and J apan Tobacco forTruvada

Total Royalty, Contract and Other Revenues

Q3 2012 up 23% from Q3 2011

$56

$3.7

$67

$10.1

$74

$7.6

$28.1

$84

$69

$4.7

37

N GAAP P d t G M i


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75.5%74.3%74.5%73.4%75.3%

0%

25%

50%

75%

100%

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Note: Non-GAAP product gross margins exclude after-tax acquisition-related, restructuring andstock-based compensation expenses.

Non-GAAP Product Gross Margins

Key Metrics

Q3 2012 increased from

Q2 2012 due to:- Higher royalty expense

in Q2 2012

- Lower Atripla revenuemix in Q3 2012

- Minimal impact fromStribild

- Maintaining full yearguidance at 73% - 75%

38

N GAAP O ti M i


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48.5%47.2%47.3%45.2%50.7%

0%

20%

40%

60%

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Key Metrics

Q3 2012 decreasefrom Q3 2011 driven

primarily by:

- Increasedinvestments in R&D

Non-GAAP Operating Margins

Note: Non-GAAP operating margins exclude after-tax acquisition-related, restructuring and stock-based compensation expenses.

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N GAAP Eff ti T R t


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Non-GAAP Effective Tax Rate

Effective tax rate increased year-over-year due to:

Expiration of the federal R&D tax credit

Geographic mix of earnings

Q32011

Q32012

YTD2012

Effective Tax Rate 24.3% 27.6% 27.2%

40

Non-GAAP Diluted EPS


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$1.00$0.99

$0.91$1.02 $0.97

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Notes: Non-GAAP diluted EPS excludes after-tax acquisition-related, restructuring and stock-based compensation expenses.

^

Includes the impact from the one-time charge of $40 million related to Greek bonds as a result of the Greekgovernments debt restructuring or $0.05.

Q3 2012 down 2% from Q3 2011

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GAAP to Non-GAAP


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Earnings Per Share Reconciliation

Three MonthsEnded

Sept. 30, 2012

GAAP EPS $0.85

Stock-Based Compensation Expenses $0.05

Acquisition-Related Expenses $0.09

Non-GAAP EPS $1.00

Note: Amount may not sum due to rounding.

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Other Selected Financial Information


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Other Selected Financial Information

($ in Millions, except days sales outstanding)Jun. 30,

2012Sept. 30,

2012

Cash, Cash Equivalents & Marketable Securities $2,271.7 $2,651.1

Interest Expense (Non-GAAP) andOther Income (Expense), net

($89.5) ($92.8)

Inventories $1,603.4 $1,617.4

Days Sales Outstanding (Accounts Receivable) 56 59

Common Shares Repurchased During the Quarter* $240.9 $205.2

Diluted Shares Used in Per Share Calculation for the Quarter(Non-GAAP)

778.9 791.0

Diluted Shares Used in Per Share Calculation for the Quarter(GAAP)

780.5 792.3

Common Shares Outstanding 756.2 757.9

* $5.0 billion share repurchase program authorized J anuary 20, 2011, with $4.1B remaining as of September 30, 2012.43

Pharmasset Acquisition Financing


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Pharmasset Acquisition Financing

Deal

Structure

Sample Deal

Structure

Funding Sources

At AcquisitionClose

Jan. 2012Sept. 30,

2012

Senior Credit Facilities $2.15 B $1.10 B

$3.70 B

~2.2x

Senior Unsecured Notes(3, 5, 10 and 30 year maturities)

$3.70 B

Debt to EBITDA* ~2.4x

* Inclusive of all outstanding debt.Net interest impact from the acquisition is projected to be ($230) million for 2012.Total interest expense and amortization from all debt sources anticipated at ~$90 million per quarter in 2012.

Goal by Mid-2013 - Debt to EBITDA of ~1.5x

44

2012 YTD Share Repurchase Activity2012 YTD Share Repurchase Activity


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2012 YTD Share Repurchase Activity2012 YTD Share Repurchase Activity

Type ofRepurchase

DollarAmount

(In Millions)

ShareNumber(In Millions)

AveragePurchase Price

Q1 2012 Open Market $20.8 0.4 $51.62

Q2 2012 Open Market $240.9 4.8 $49.74

Q3 2012 Open Market $205.2 3.5 $59.29

Totals $466.9 8.7 $53.62

$5.0 billion share repurchase program authorized J anuary 20, 2011, with $4.1B remaining as of September 30, 2012.45

Dilution from Outstanding Convertible NotesDilution from Outstanding Convertible Notes


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Dilution from Outstanding Convertible NotesDilution from Outstanding Convertible Notes

2013 2014 2016Total

Dilution*

Average share priceQ3 2012 $57.34YTD 2012 $51.65

Convertible Notes $650M $1.25B $1.25B

Conversion Price $38.10 $45.08 $45.41Q3 Share Dilution 5.7M 5.9M 5.7M 17.4M

YTD Share Dilution 4.5M 3.5M 3.3M 11.3M

WarrantsWarrant Exercise Price $53.90 $56.76 $60.10

Q3 Share Dilution 1.0M 0.3M - 1.3M

YTD Share Dilution - - - -

Dilutive Impact of Outstanding Notes

* May not total due to rounding.46

U.S. and Big 5 EU HIV Market Dynamics


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0

200

400

600

800

1,000

1,200

1,400

HIV Infected* Diagnosed* In Care** On Antiretroviral

Treatment**

P

atients

in

000's

~1,200

~941

~634~737

In the U.S., ~600,000 HIV infected peopleNOT on antiretroviral treatment

U.S. and Big 5 EU HIV Market Dynamics

^Moving annual total.

7%^

Sources:

* March 2012 CDC estimates as of the end of 2008.

** Ipsos Healthcare U.S. HIV Monitor Q2 2012.

0

100

200

300

400

500

600

700

800

HIV Infected* Diagnosed* In Care** On Antiretroviral

Treatment**

Patientsin000's

In the Big 5 EU, ~300,000 HIV infected peopleNOT on antiretroviral treatment

Sources:

* National Surveillance Units per country & ECDC 2011.

** IMS/GERS Q2 2012 & Ipsos EU HIV Monitor Q1 2012.

~645

~424~336

~394

6%^

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Gileads Ongoing HIV R&D Focus


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Gilead s Ongoing HIV R&D Focus

Marketed Single Tablet Regimens ATRIPLA (1550 mg)

1st NNRTI-Based STR

COMPLERA (1150 mg) 2nd NNRTI-Based STR

STRIBILD (1350 mg)

EVG/COBI/FTC/TDF 1st Integrase Inhibitor-Based STR

Future Single Tablet Regimens GS-7340 / Darunavir / Cobicistat / Emtricitabine

(1600 mg)

1st Protease Inhibitor-Based STR (Phase 2)

GS-7340 Quad (1050mg) GS-7340 / Elvitegravir / Cobicistat / Emtricitabine 2nd Integrase Inhibitor-Based STR (Phase 2)

ATRIPLA

COMPLERA

STRIBILD

GS-7340/DRV/COBI/FTC

GS-7340/EVG/COBI/FTC

Bring Forward New Once-Daily, Single Tablet Regimens toProvide Additional Options for Patients

Bring Forward New Once-Daily, Single Tablet Regimens toProvide Additional Options for Patients

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Q3 2012 Earnings Results

Conference Call and Webcast

q3 12 earnings slides final

Documents