Gilead Sciences, Inc. is a biopharmaceutical company that discovers, develops
and commercializes therapeutics to advance the care of patients suffering from
life-threatening diseases worldwide. We have six products that are currently marketed
in the U.S., all of which are also marketed in other countries worldwide. Our
research and clinical programs are focused on anti-infectives, including antivirals
and antifungals. We endeavor to grow our existing portfolio of products through
proprietary clinical development programs, internal discovery programs and an
active product acquisition and in-licensing strategy.
Our Products
· Viread is approved for sale and is sold in the U.S. by our U.S. commercial
team for use in combination with other antiretroviral agents for the treatment
of HIV infection. Viread is also sold internationally by our international commercial
teams, including in the European Union and Australia.
· Emtriva is approved for sale and is sold in the U.S. by our U.S. commercial
team for use in combination with other antiretroviral agents for the treatment
of HIV infection in adults. Emtriva is also sold in the European Union by our
international commercial teams. We are currently developing a fixed-dose combination
of Viread and Emtriva.
· AmBisome is approved for sale and is sold in more than 45 countries for the
treatment of life-threatening fungal infections and in some of these countries
for prevention of such infections. We market AmBisome in the major countries
of Europe and co-promote AmBisome in the U.S. with Fujisawa Healthcare, Inc.
(“Fujisawa”).
· Hepsera is approved for sale and is sold in the U.S. by our U.S. commercial
team for the treatment of chronic hepatitis B. Hepsera received marketing approval
in the European Union in March 2003 and has been launched in 13 countries in
the European Union. Additional launches in the other countries in the European
Union and other parts of the world are expected to occur in 2004.
· Tamiflu is approved for sale and is sold by our corporate partner Hoffmann-La
Roche (“Roche”) in more than 60 countries, including the U.S. and the European
Union, for the prevention and treatment of influenza, and in Japan, where it
is approved for the treatment of influenza.
· Vistide is approved for sale and is sold in the U.S. by our U.S. commercial
team, and by Gilead’s ex-U.S. partner, Pfizer Inc. (“Pfizer”) (formerly Pharmacia
Corporation), in 25 countries for the treatment of cytomegalovirus (“CMV”) retinitis
in patients with AIDS.
· DaunoXome is approved for sale and has been sold in more than 20 countries
for the treatment of AIDS-related Kaposi’s sarcoma. It was sold in the U.S.
by our U.S. commercial team and by independent distributors abroad. In December
2003, we decided to discontinue selling this product.
Commercial Operations
We have U.S. and international commercial sales operations. We have marketing
subsidiaries in the United Kingdom, Germany, Italy, Spain, France, Portugal,
Greece and Australia. Our commercial teams promote and sell Viread, Emtriva,
Hepsera and AmBisome in the U.S., Europe and Australia. AmBisome is also sold
by Fujisawa in the U.S. and by Sumitomo in Japan. GSK will promote and sell
Hepsera in Asia and South America. We sell Vistide in the U.S and our commercial
partner, Pfizer, sells Vistide outside of the U.S. Our commercial partner, Roche,
promotes and sells Tamiflu everywhere it is sold. Japan Tobacco Inc. (Japan
Tobacco) will promote and sell Viread and Emtriva in Japan when approved by
Japanese regulatory authorities.
Our commercial teams promote Viread, Emtriva and Hepsera through direct field
contact with physicians, hospitals, clinics and other healthcare providers who
are involved in the treatment of patients with HIV (for Viread) or chronic hepatitis
B (for Hepsera). They also promote AmBisome to infectious disease specialists,
hematologists, intensive care units, hospitals, home health care providers and
cancer specialists.
The European commercial team is supported by medical, sales operations, marketing,
financial, regulatory, legal affairs, manufacturing and human resources and
information technology personnel located primarily in our European headquarters
in Paris, France. The U.S. and Australian commercial teams are supported by
our worldwide headquarters in Foster City, California. In some countries outside
of the U.S., we have agreements with third-party distributors, including distributors
in certain of the countries where we have marketing operations, to promote,
sell and distribute Viread, Emtriva, Hepsera and AmBisome. These international
distribution agreements generally provide that the distributor has the exclusive
right to sell Viread, Emtriva and AmBisome in a particular country or several
countries for a specified period of time.
Collaborative Relationships
As part of our business strategy, we establish collaborations with other companies
to assist in the clinical development and/or commercialization of certain of
our products and product candidates and to provide support for our research
programs. We also evaluate opportunities for acquiring from other companies
products or rights to products and technologies that are complementary to our
business.
Archemix Corporation
In October 2001, we entered into an agreement with Archemix Corporation (Archemix).
Under this agreement we granted Archemix an exclusive sublicense to the SELEX
technology to identify aptamers, subject to the exclusion of all development
areas as to which rights have not already been granted or forfeited. Our rights
to the SELEX technology derive from a license to us from University License
Equity Holdings, Inc., (“ULEHI”), the successor to University Technology Corporation
and its predecessor University Research Corporation.
Chiron Corporation
In August 2003, we entered into a non-exclusive licensing agreement with Chiron
Corporation (Chiron) for the research, development and commercialization of
small molecule therapeutics against selected hepatitis C virus (HCV) drug targets.
Under the agreement, we received non-exclusive rights to Chiron’s HCV technology
for drug screening purposes. We expect this technology to assist us in our research
and discovery effort to identify and develop potential HCV therapies. Under
the terms of the agreement, we paid Chiron an up-front license fee and agreed
to make milestone payments and royalty payments if a product is developed using
the licensed technology.
EyeTech Pharmaceuticals
In March 2000, we entered into an agreement with EyeTech Pharmaceuticals, Inc.
(EyeTech) relating to a product named Macugen that it has developed for the
treatment of age-related macular degeneration (AMD) and diabetic macular edema
(DME). We invented the compound upon which Macugen is based, NX 1838, using
SELEX technology licensed to us from ULEHI.
We then licensed NX 1838 to EyeTech who further developed it into Macugen.
Under its license from us, EyeTech is required to pay us fees and milestone
payments, as well as a percentage of any revenue they generate from worldwide
sales of Macugen. In addition, EyeTech granted us warrants to purchase EyeTech
preferred stock. Our agreement with EyeTech expires upon the later of ten years
after first commercial sale of any product developed, or the date the last patent
expires under the agreement. EyeTech granted Pfizer a sublicense relating to
Macugen in December 2002. In December 2002, in connection with this sublicense,
we entered into a license with Pfizer on the same terms as contained in our
agreement with EyeTech. In December 2003, we also entered into an agreement
with EyeTech to supply Macugen to EyeTech for three years.
Fujisawa
In 1991, we entered into an agreement granting Fujisawa the exclusive right
to promote and sell AmBisome in Canada and the primary responsibility to promote
and sell AmBisome in the U.S. with Gilead as a co-promoter. Fujisawa pays us
approximately 17% of Fujisawa’s net revenues from sales of AmBisome in the U.S.
We reserved the right to promote and sell AmBisome in the rest of the world,
and pay Fujisawa 4% of our net revenues for AmBisome sales in significant Asian
markets, including Japan, Korea, Taiwan, China and India. We manufacture all
AmBisome that is sold worldwide. We sell AmBisome to Fujisawa for sale in the
U.S. at a price equal to our cost to manufacture the product, and for sale in
Canada at a price equal to our cost to manufacture the product, plus a specified
percentage. Our agreement with Fujisawa terminates when the last patent covering
AmBisome in the U.S. or Japan expires.
GlaxoSmithKline
In April 2002, we entered into a licensing agreement with GSK giving it exclusive
rights to commercialize Hepsera solely for the treatment of chronic hepatitis
B in Asia, Latin America and certain other territories. In addition to fees,
milestone payments and other contract revenues, GSK is required to pay us a
percentage of any revenue they generate from sales of Hepsera in the licensed
territories. Under our agreement with GSK, we have entered into a clinical and
commercial supply agreement with GSK under which we are required to supply them
with their clinical and commercial requirements at our fully burdened cost to
do so, subject to reasonable forecasting and ordering procedures. Our agreement
with GSK expires on an individual country basis the later of patent expiration
or ten years from first commercial sale in the particular country. In addition,
GSK has the right to electively terminate the agreement on 12 months notice
to Gilead, subject to a fee for elective termination under some circumstances
early during the term of the agreement.
Japan Tobacco
In July 2003, we entered into a licensing agreement with Japan Tobacco under
which Japan Tobacco obtained the rights to commercialize products in Gilead’s
HIV portfolio in Japan. The agreement includes Viread, Emtriva and a future
co-formulation of the two products. We received an up-front fee and are entitled
to receive milestone payments. Japan Tobacco also is required to make payments
to us based on product sales in Japan. Japan Tobacco has submitted an application
for Viread and expects to submit an application for Emtriva and a co-formulation
of the two products to Japanese regulatory authorities this year. As contemplated
by the license agreement, in December 2003 we completed a supply agreement with
Japan Tobacco under which we will supply Japan Tobacco with Viread and Emtriva
and a future co-formulation of the two products.
OSI Pharmaceuticals
In December 2001, we sold to OSI Pharmaceuticals (OSI) our pipeline of clinical
stage oncology products and related intellectual property, as well as our Boulder,
Colorado operations. In consideration for the assets, we received from OSI $130.0
million in cash and 924,984 shares of OSI common stock. Additionally, OSI is
required to pay us up to an additional $30.0 million in either cash or a combination
of cash and OSI common stock upon the achievement by OSI of certain milestones
related to the development of NX 211, the most advanced of the oncology product
candidates. Separately, under a manufacturing agreement with OSI, we have agreed
to produce for OSI liposomal formulations of two products, including NX 211,
at our manufacturing facility in San Dimas, California.
Pfizer
In 1996, we entered into an agreement with Pfizer (formerly Pharmacia Corporation)
relating to Vistide. Under this agreement, Pfizer has the exclusive right to
market and sell Vistide in all countries outside of the U.S., subject to payment
to us of a percentage of net revenues. We are required to sell Pfizer bulk Vistide
and to maintain the Vistide patents. Our agreement with Pfizer expires on an
individual country basis upon patent expiration or ten years from first commercial
sale in countries where the product is not covered by a patent. In addition,
Pfizer may terminate the agreement as a whole upon six months notice or upon
notice on an individual country basis, three months before applying for marketing
approval of a competitive product.
Roche
In 1996, we entered into a collaboration agreement with Roche granting Roche
exclusive worldwide rights to Tamiflu, as well as other proprietary influenza
neuraminidase inhibitors. As of December 31, 2003, we have received license
fees and milestone payments from Roche totaling $48.7 million relating to the
execution of this agreement and to regulatory filings and approvals for Tamiflu.
Roche also funded all of the research and development costs for Tamiflu, including
reimbursement to us of $28.1 million for the period from January 1, 1997 through
December 31, 2001. Under the agreement, Roche is responsible for pricing, manufacturing,
promoting and selling Tamiflu on a worldwide basis and pays us a percentage
of its net revenues from sales of Tamiflu, subject to reduction for certain
defined manufacturing costs. Our agreement with Roche terminates on an individual
country basis on the later of patent expiration or ten years from first commercial
sale in the particular country. In addition, Roche has the right to terminate
the agreement in its entirety or an individual country basis prior to expiration
at any time upon 12 months notice.
Sumitomo
In 1996, we entered into an agreement with Sumitomo that gave Sumitomo the
exclusive right to develop and market AmBisome in Japan. In addition to milestone
payments, Sumitomo is required to pay us a percentage of any revenue they generate
from Japanese sales of AmBisome. If AmBisome is approved for sale in Japan,
we would manufacture AmBisome for sale by Sumitomo in Japan. The price that
we would charge Sumitomo for the supply of AmBisome and the percentage of revenues
that they would be required to pay to us would be determined by the price of
AmBisome in Japan. Our agreement with Sumitomo terminates on the later of patent
expiration in Japan or ten years from first commercial sale in Japan.
Viread and Emtriva. The HIV competitive landscape is becoming more crowded
and complicated as treatment trends continue to evolve. A growing number of
anti-HIV drugs are currently sold or are in advance stages of clinical development.
Of the 22 branded drugs available in the U.S., Zerit (stavudine, d4T) sold by
Bristol-Myers Squibb (BMS) and the fixed combination products, Combivir (AZT
and 3TC) and Trizivir (AZT, 3TC, ABC), both sold by GSK, represent the most
direct competition for Viread. These companies are in the process of launching
formulations of existing drugs now indicated by the FDA for once-daily oral
dosing. These include GSK’s 300 mg dose of Epivir (3TC) and BMS’s new extended
release formulation of Zerit. Other recently approved antiretroviral products
include atazanivir (QD protease inhibitor from BMS) and Fuzeon (injectable integrase
inhibitor from Roche/Trimeris). GSK has filed an application for approval of
a once-daily dose of Ziagen (abacavir), as well as a new fixed dose combination
of Ziagen and Epivir. Other companies competing in the HIV therapeutic category
are Pfizer, Merck, Boehringer-Ingelheim and Abbott.
AmBisome. AmBisome faces strong competition from several current and expected
competitors. Current competitors include:
· conventional amphotericin B, made by BMS and numerous generic manufacturers;
· caspofungin, a product developed by Merck, which is marketed as Cancidas
in the U.S. and as Caspofungin elsewhere;
· voriconazole, developed by Pfizer, which is marketed as Vfend; and
· other lipid-based amphotericin B products approved in the U.S. and throughout
Europe, including Abelcet, sold by Enzon Corp. in the U.S., Canada and Japan
and by Medeus Pharma Ltd. in Europe, and Amphotec, sold by InterMune Pharmaceuticals,
Inc.
Presently unapproved but expected competitors include a class of treatments
called echinocandins, including Fujisawa’s micafungin, which received marketing
approval in Japan in October 2002 and is under review for regulatory approval
in the U.S. and Canada, and anidulafungin, a Vircuron, Inc. (formerly Versicor,
Inc.) product candidate, which is being evaluated in multiple late-stage clinical
trials. Finally, Schering Plough is developing Noxafil (posaconazole), which
is currently in Phase 3 trials.Competition from these current and expected competitors
has eroded and is likely to continue to erode the revenues we receive from sales
of AmBisome.
Hepsera. Hepsera faces significant competition from existing therapies for
treating patients who are infected with HBV. Most significantly:
· Epivir-HBV (lamivudine) was developed by GSK in collaboration with Shire
Pharmaceuticals, and is sold in all major countries throughout North and South
America, Europe, and Asia. It is an orally administered nucleoside analogue
that inhibits HBV DNA polymerase.
· Intron-A (interferon alfa-2b) is sold by Schering Plough in major countries
throughout North and South America, Europe, and Asia. Intron-A is an injectable
drug with immunomodulatory effects.
Hepsera may also face competition from clinical-stage candidates, including
Bristol-Myers Squibb’s entecavir and Idenix’s LdT, two oral nucleoside analogues
currently in Phase 3 trials. Other competition will include Roche’s Pegasys
(pegylated interferon alfa-2a), which is currently being studied for chronic
hepatitis B.
Tamiflu. Tamiflu competes with Relenza, an anti-flu drug that is sold by GSK.
Relenza is a neuraminidase inhibitor that is delivered as an orally-inhaled
dry powder.
Vistide. Vistidecompetes with a number of drugs that also treat CMV retinitis,
including ganciclovir, sold in intravenous and oral formulations by Roche and
as an ocular implant by Bausch & Lomb Incorporated; valganciclovir, also
marketed by Roche; foscarnet, an intravenous drug sold by AstraZeneca; and,
formivirsen, a drug injected directly into the eye sold by CibaVision.
A number of companies are pursuing the development of technologies competitive
with our research programs. These competing companies include specialized pharmaceutical
firms and large pharmaceutical companies acting either independently or together
with biopharmaceutical companies. Furthermore, academic institutions, government
agencies and other public and private organizations conducting research may
seek patent protection and may establish collaborative arrangements for competitive
products and programs.
