SC TO-C

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 21, 2011

Gilead Sciences, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-19731	94-3047598
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
333 Lakeside Drive, Foster City, California		94404
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (650) 574-3000

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

x Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events.

On November 21, 2011, Gilead Sciences, Inc. (“Gilead”) announced that it had signed a definitive agreement under which Gilead will acquire Pharmasset, Inc. (“Pharmasset”) for $137 cash per Pharmasset share. The transaction, which values Pharmasset at approximately $11 billion, was unanimously approved by Pharmasset’s Board of Directors. A copy of the Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Investor Presentation Slides to be reviewed by Gilead executives with investors are attached as Exhibit 99.2 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description
99.1	Joint Press Release of Gilead and Pharmasset dated November 21, 2011
99.2	Investor Presentation Slides

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

GILEAD SCIENCES, INC.
(Registrant)
By:	/s/ John F. Milligan, Ph.D.
	Name:	John F. Milligan, Ph.D.
	Title:	President and Chief Operating Officer

Dated: November 21, 2011

EXHIBIT LIST

Exhibit No.	Description
99.1	Joint Press Release of Gilead and Pharmasset dated November 21, 2011
99.2	Investor Presentation Slides

EX-99.1

Exhibit 99.1

Gilead Contacts Susan Hubbard, Investors (650) 522-5715 Amy Flood, Media (650) 522-5643	Pharmasset Contacts Richard E.T. Smith, Investors (609) 865-0693 Andrew Cole/Chris Kittredge, Media Sard Verbinnen & Co (212) 687-8080

GILEAD SCIENCES TO ACQUIRE PHARMASSET, INC. FOR $11 BILLION

- Accelerates Development of All-Oral Regimen for the Treatment of HCV -

- Leverages Gilead’s Infrastructure and Expertise in Antiviral Drug Development,

Manufacturing and Commercialization -

Foster City, California and Princeton, New Jersey, November 21, 2011 — Gilead Sciences, Inc. (Nasdaq: GILD) and Pharmasset, Inc. (Nasdaq: VRUS) announced today that the companies have signed a definitive agreement under which Gilead will acquire Pharmasset for $137 per share in cash. The transaction, which values Pharmasset at approximately $11 billion, was unanimously approved by Pharmasset’s Board of Directors. Gilead plans to finance the transaction with cash on hand, bank debt and senior unsecured notes. The company expects the transaction, when completed, to be dilutive to Gilead’s earnings through 2014 and accretive in 2015 and beyond. Further guidance will be provided when the transaction closes, which is expected to be in the first quarter of 2012.

Pharmasset currently has three clinical-stage product candidates for the treatment of chronic hepatitis C virus (HCV) advancing in trials in various populations. The company’s lead product candidate, PSI-7977, an unpartnered uracil nucleotide analog, has recently been advanced into two Phase 3 studies in genotype 2 and 3 patients. Both studies will utilize 12 weeks of treatment with PSI-7977 in combination with ribavirin. One study will compare this all-oral regimen against 24 weeks of the standard-of-care pegylated interferon/ribavirin in treatment-naïve patients, and the second study will compare the all-oral regimen to placebo in interferon-intolerant/ineligible patients. A third Phase 3 study in genotype 1 patients will be initiated in the second half of 2012, the design of which is dependent on the outcome of Phase 2 studies which are evaluating PSI-7977 in various combinations in genotype 1-infected patients. If successful, this strategy could lead to an initial U.S. regulatory approval of PSI-7977 in 2014. PSI-938, an unpartnered guanosine nucleotide analog, is being tested in a Phase 2b interferon-free trial as monotherapy and in combination with PSI-7977 in subjects with HCV of all viral genotypes. Mericitabine (RG7128), a cytidine nucleoside analog, is partnered with Roche and is being evaluated in three Phase 2b trials. Roche is responsible for all aspects of the development of mericitabine.

“The acquisition of Pharmasset represents an important and exciting opportunity to accelerate Gilead’s effort to change the treatment paradigm for HCV-infected patients by developing all-oral regimens for the treatment of the disease regardless of viral genotype,” said John C. Martin, PhD, Chairman and Chief Executive Officer of Gilead. “Pharmasset presented compelling Phase 2 data earlier this month further characterizing the strong efficacy and safety profile of PSI-7977. The compound, together with Pharmasset’s other pipeline candidates, represents a strong strategic fit with Gilead’s vision, pipeline and capabilities. This transaction will serve to drive the long-term growth of our business, and we look forward to working closely with the Pharmasset team to advance a broad clinical program in HCV to address the unmet needs of patients and the medical community.”

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November 21, 2011 Page 2

“We are excited to join together with Gilead, which shares our commitment to providing HCV patients with new, highly efficacious and safe oral therapies,” said Schaefer Price, President and Chief Executive Officer, Pharmasset. “We are very encouraged by the data from our Phase 2 studies of PSI-7977 and believe strongly in the potential of this compound to be a component in the transformation of the treatment of chronic HCV. Gilead’s established expertise and leadership in the field of antiviral drug development and commercialization, coupled with the company’s existing portfolio of promising compounds for HCV, make this partnership an ideal step to fully realize the potential of our promising molecules as part of future all-oral combination therapies for millions of patients in need around the world.”

Gilead’s research and development portfolio includes seven unique molecules in various stages of clinical development for the treatment of HCV. Pegylated interferon in combination with ribavirin is currently part of the standard of care treatment for patients with chronic hepatitis C. Gilead is focused on advancing multiple compounds with different mechanisms of action and resistance profiles in combinations that will support delivery of an all-oral regimen that would eliminate the need for pegylated interferon. Three separate all-oral Phase 2 studies are currently ongoing, and Gilead expects clinical data from these studies to become available in 2012 and early 2013. Pharmasset’s compounds are complementary to Gilead’s existing HCV portfolio, and the transaction will help advance Gilead’s effort to develop an all-oral regimen for the treatment of HCV.

Terms of the Transaction

Under the terms of the merger agreement, a wholly-owned subsidiary of Gilead will promptly commence a tender offer to acquire all of the outstanding shares of Pharmasset’s common stock at a price of $137 per share in cash. Following successful completion of the tender offer, Gilead will acquire all remaining shares not tendered in the offer through a second step merger at the same price as in the tender offer.

The consummation of the tender offer is subject to various conditions, including a minimum tender of at least a majority of outstanding Pharmasset shares on a fully diluted basis, the expiration or termination of the waiting period under the Hart Scott Rodino Antitrust Improvements Act, and other customary conditions. The tender offer is not subject to a financing condition.

The $137 per share price in the transaction represents an 89% premium to Pharmasset’s closing share price on Friday, November 18, 2011, the last trading day prior to announcement, and 59% to Pharmasset’s all time high closing stock price.

Gilead has received commitments from Bank of America Merrill Lynch and Barclays Capital in connection with financing of the transaction.

Barclays Capital and Bank of America Merrill Lynch are acting as financial advisors to Gilead in the transaction. Morgan Stanley & Co. LLC is acting as the financial advisor to Pharmasset. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Gilead and Sullivan & Cromwell LLP is serving as legal counsel to Pharmasset.

Conference Call

Gilead will host a conference call today, Monday, November 21, 2011, at 8:00 a.m. Eastern Time, to discuss the proposed acquisition. To access the live call, please dial 1-800-599-9829 (U.S.) or 1-617-847-8703 (international). The conference passcode number is 61526607. Telephone replay is available approximately one hour after the call through 11:00 a.m. Eastern Time, November 24, 2011. To access, please call 1-888-286-8010 (U.S.) or 1-617-801-6888 (international). The conference passcode number for the replay is 39677531. The information provided on the teleconference is only accurate at the time of the conference call, and Gilead will take no responsibility for providing updated information.

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November 21, 2011 Page 3

About Pharmasset

Pharmasset is a clinical-stage pharmaceutical company committed to discovering, developing and commercializing novel drugs to treat viral infections. Pharmasset’s primary focus is the development of oral therapeutics for the treatment of hepatitis C virus (HCV) infection. Pharmasset’s research and development efforts are focused on nucleoside/tide analogs, a class of compounds which act as alternative substrates for the viral polymerase, thus inhibiting viral replication.

About Gilead Sciences

Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. Gilead’s mission is to advance the care of patients suffering from life-threatening diseases worldwide. Headquartered in Foster City, California, Gilead has operations in North America, Europe and Asia Pacific.

Forward-Looking Statement

This press release includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks, uncertainties and other factors. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including all statements regarding the intent, belief or current expectation of the companies’ and members of their senior management team. Forward-looking statements include, without limitation, statements regarding business combination and similar transactions, prospective performance and opportunities and the outlook for the companies’ businesses, including, without limitation, the ability of Gilead to advance Pharmasset’s product pipeline or develop an all-oral antiviral regimen for HCV, performance and opportunities and regulatory approvals, the anticipated timing of data from clinical data; the possibility of unfavorable results of the companies’ clinical trials; filings and approvals relating to the transaction; the expected timing of the completion of the transaction; the ability to complete the transaction considering the various closing conditions; and any assumptions underlying any of the foregoing. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those currently anticipated due to a number of risks and uncertainties. Risks and uncertainties that could cause the actual results to differ from expectations contemplated by forward-looking statements include: uncertainties as to the timing of the tender offer and merger; uncertainties as to how many of Pharmasset’s stockholders will tender their stock in the offer; the possibility that competing offers will be made; the possibility that various closing conditions for the transaction may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction; the effects of the transaction on relationships with employees, customers, other business partners or governmental entities; other business effects, including the effects of industry, economic or political conditions outside of the companies’ control; transaction costs; actual or contingent liabilities; and other risks and uncertainties detailed from time to time in the companies’ periodic reports filed with the Securities and Exchange Commission, including current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K. All forward-looking statements are based on information currently available to the companies, and the companies assume no obligation to update any such forward-looking statements.

Additional Information and Where to Find It

The tender offer described in this document has not yet commenced. This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of Pharmasset. At the time the offer is commenced, Gilead will file a Tender Offer Statement on Schedule TO with the U.S. Securities and Exchange Commission, and Pharmasset will file a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the offer. Pharmasset stockholders and other investors are urged to read the tender offer materials (including an Offer to Purchase, a related Letter of Transmittal and certain other offer documents) and the Solicitation/Recommendation Statement because they will contain important information which should be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the related Letter

-more-

November 21, 2011 Page 4

of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all stockholders of Pharmasset at no expense to them. The Tender Offer Statement and the Solicitation/Recommendation Statement will be made available for free at the Commission’s web site at www.sec.gov. Free copies of these materials and certain other offering documents will be made available by Gilead by mail to Gilead Sciences, Inc., 333 Lakeside Drive, Foster City, CA 94404, attention: Investor Relations.

In addition to the Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation Statement, Gilead and Pharmasset file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports, statements or other information filed by Gilead or Pharmasset at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. Gilead’s and Pharmasset’s filings with the Commission are also available to the public from commercial document-retrieval services and at the website maintained by the Commission at www.sec.gov.

###

For more information on Gilead Sciences, please visit the company’s website at www.gilead.com or call Gilead Public Affairs at

1-800-GILEAD-5 or 1-650-574-3000.

EX-99.2

Gilead to Acquire Pharmasset

November 21, 2011

Exhibit 99.2

Slide 2

Safe Harbor Disclaimer

Statements included in this presentation that are not historical in nature are “forward-looking statements” within the

meaning of the Private Securities Litigation Reform Act of 1995.  Gilead cautions readers that forward-looking

statements are subject to certain risks and uncertainties, which could cause actual results to differ materially. These

risks and uncertainties include: Gilead’s ability to consummate the acquisition of Pharmasset and advance

Pharmasset’s product pipeline as planned; Gilead’s ability to successfully develop its HCV franchise; Gilead’s ability to

develop an all oral antiviral regimen for HCV; and Gilead’s ability to achieve its anticipated full year 2011 financial

results. Gilead directs readers to its Quarterly Report on Form 10-Q for the third quarter ended September 30, 2011

and subsequent current reports on Form 8-K. Gilead claims the protection of the Safe Harbor contained in the Private

Securities Litigation Reform Act of 1995 for forward-looking statements. All forward-looking statements are based on

information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking

statements.

This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of Pharmasset.  At the

time the offer is commenced, Gilead will file a Tender Offer Statement on Schedule TO with the U.S. Securities and

Exchange Commission, and Pharmasset will file a Solicitation/Recommendation Statement on Schedule 14D-9 with

respect to the offer.  Pharmasset stockholders and other investors are urged to read the tender offer materials

(including an Offer to Purchase, a related Letter of Transmittal and certain other offer documents) and the

Solicitation/Recommendation Statement because they will contain important information which should be read carefully

before any decision is made with respect to the tender offer.  The Offer to Purchase, the related Letter of Transmittal

and certain other offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all

stockholders of Pharmasset at no expense to them.  The Tender Offer Statement and the Solicitation/Recommendation

Statement will be made available for free at the Commission's web site at www.sec.gov. 

Slide 3

Agenda

1. 

Pharmasset  Acquisition Highlights 

2.

HCV Landscape

3.

Overview of Pharmasset  HCV Portfolio

4.

Gilead’s  Combined HCV Opportunity

Page

4

8

16

22

Slide 4

Pharmasset Acquisition Highlights

Slide 5

Terms of the Agreement

Cash tender offer at $137 per share

Transaction value of approximately $11 billion

Tender offer expected to close within Q1 12

–

Subject to minimum tender requirement

–

Hart-Scott-Rodino (antitrust) clearance

–

Other customary conditions

Slide 6

Strategic Rationale

Accelerates Gilead’s strategy to develop the first all-oral

regimen for the treatment of HCV

–

PSI-7977 is the most potent, advanced nucleotide in clinical development

–

Phase 3 clinical studies of PSI-7977 in combination with ribavirin open to

enrollment

–

Targeted U.S. FDA approval in 2014

Since HCV can be cured, it will be important to be first to

market with an all-oral, well-tolerated regimen

Opportunity for significant revenue growth and diversification in

2014 and beyond

–

Composition of matter patent protection for PSI-7977 into 2029

Pharmasset is a strategic fit with Gilead’s areas of operational

excellence

Slide 7

Fit with Gilead’s Areas of Operational Excellence

Established expertise and commitment to liver disease

Preclinical, clinical development and regulatory expertise

–

Developed and commercialized 5 HIV and 2 hepatitis products

–

Viread regulatory approvals in approximately 140 countries

–

Established team:  Quad NDA filing in 6 weeks after last patient, last visit

Expertise in process research and development, and

established worldwide API and product manufacturing network

–

Developed 1 fixed-dose combination and 3 single-tablet regimens in HIV

–

Manufacture tenofovir DF at >110 metric tons per year

Established commercial operations in 23 countries worldwide,

with expanding presence in Asia

Slide 8

HCV Landscape

Slide 9

<1%

1-1.9%

2-2.9%

>3%

Not tested

HCV Prevalence in Core and Emerging Markets (M)

Global Prevalence of HCV is Estimated to be

160 Million Individuals

(1)

HCV Prevalence

(% of population)

Region

US

2

Japan

2

Europe

Other

3

Asia

3

Latin

America

3

All GT

2.9

3.7

0.6

6.7

70.8

5.4

GT1 (%)

73%

63%

70%

65%

39%

68%

EU-Core 5

2

Sources:  1) Lavanchy, et al. 2011.  2) Gilead Forecast (2011 prevalence estimate). 3) Cornberg, Sievert, and Kershenobich, et al 2011.

Country populations from 2009 World Bank estimates

Slide 10

Over

12

Million

Infected

Individuals

in

Major

Markets

(1)

with Fewer than 200,000 Treated per Year

Treated/

Year

182

Diagnosed

Prevalence

12,601

Patients in thousands

36%

4,524

1. Major markets include US, EU-5, Japan, Australia, Austria, Brazil, Denmark, Finland, Greece, Ireland, Norway, Poland, Portugal, Sweden, Switzerland, Turkey, Canada

Sources: 

Prevalence

–

KantarHealth

Core-5

EU

epidemiology

analysis

(2010),

NHANES

(1999-2006),

Armstrong

(2004),

Hepatology,

40(4:S1):176a,

Chak

(2011),

Liver

Intl.,

8,

1090-1101,

Cornberg

(2011),

Liver

Intl.,

31

(s2),

31-60,

Kershenobich

(2011),

Liver

Intl.,

31

(s2),

18-29

Diagnosed

–

KantarHealth

Core-5

EU

epidemiology

analysis

(2010),

Armstrong

(2004)

Hepatology,

40(4:S1):176a,

Culver

(2000),

Transfusion

40:1176

Treated

–

IMS

MIDAS

(2004

–

2009),

Synovate

chart

audits

(2007),

Roche

and

Schering

Plough

annual

reports

(2009)

HCV: A Significant Unmet Medical Need

4%

Slide 11

0

10

20

30

40

50

60

70

80

IFN 24 Wk

IFN 48 Wk

IFN/RBV 24 Wk

IFN/RBV 48 Wk

(1998)

IFN/RBV 48 Wk

(2001)

PegIFN/RBV 48

Wk

PI +

PegIFN/RBV 48

Wk (2011)

6%

13-19%

31-35%

38-43%

45-47%

54-63%

66-79%

IFN

24 Weeks

IFN

48 Weeks

IFN/RBV

24 Weeks

IFN/RBV

48 Weeks

1998

IFN/RBV

48 Weeks

2001

PegIFN/RBV

48 Weeks

Protease

Inhibitor +

PegIFN/RBV

24-48 Weeks

2011

HCV Treatment Evolution

IFN = Interferon

RBV = Ribavirin

PegIFN = Pegylated Interferon

FDA Approval of

Protease Inhibitors (PIs)

in May 2011

Slide 12

Challenges of Current PI-based Treatment Remains

Additional safety issues and exacerbation of side effects

(rash and anemia)

–

Discontinuation rates significantly increased on PIs

Lower response rates in sub-populations

(previous IFN/RBV non-responders, cirrhotics)

Burdensome for patients and practitioners

–

PIs dosed 2-3 times per day, plus ribavirin and a

self-administered injection

–

Time intensive adverse event management, complexity of

response guided therapy

Slide 13

Ultimate Goal in HCV Therapy

Once a day

Pan-genotype

No clinical resistance

No response guided therapy

Short duration

Safe with manageable

side effects

High cure rates

Suitable for all populations

Ideal HCV Therapy Most Likely Achieved

Ideal HCV Therapy Most Likely Achieved

through a Combination of Two or More Drugs

through a Combination of Two or More Drugs

Easier for doctors and

patients

Leads to increased

diagnosis and treatment

Potential to cure many

more patients

Lowers cost to healthcare

system due to prevention

of end-stage liver disease

Slide 14

2010

2010

2011

2011

2020

2020

IFN Free Strategy

Ultimate Goal

The Evolution of HCV Therapy: 2010

Current Standard of

Care (SOC):

PEG + RBV

Combination

Oral Antivirals +

Shorter Course IFN

Broad Genotypic Oral

Antiviral Regimen

The First Antivirals

+ SOC to Improve

Response Rates

and Reduce

Duration

All Oral Antiviral

Regimen

IFN Sparing Strategy

Slide 15

Current Standard of

Care (SOC):

PEG + RBV

The First Antivirals

+ SOC to Improve

Response Rates

and Reduce

Duration

The Competitive Nature and Speed of Development

Have Significantly Accelerated the Timelines

Ultimate Goal

All Oral Antiviral

Regimen

IFN Free Strategy

2010

2010

2011

2011

2020

2020

Broad Genotypic Oral

Antiviral Regimen

2014

2014

Slide 16

Overview of Pharmasset HCV Portfolio

Slide 17

Pharmasset’s HCV Nucleotide Portfolio

PSI-7977

PSI-938

RG 7128

•

3.6 log HCV RNA 

with 400 mg QD over 3 days

•

Phase 3 in combination with ribavirin

open to enrollment

•

Highest on treatment and SVR rates to date

•

Unpartnered with worldwide rights

•

3.6 log HCV RNA 

with 300 mg QD over 3 days

•

Phase 2

•

14 day data, with ongoing 12 week studies

•

Unpartnered with worldwide rights

•

0.6 log HCV RNA 

with 1gm BID

•

Phase 2b

•

Partnered with Roche

Slide 18

PSI-7977: Pharmasset’s Lead Pyrimidine

Nucleotide Analogue

Excellent safety profile

–

250 patients at 8 weeks or more

–

1,500 patients by May 2014

High rates of cure in genotype 2/3

–

100% (10/10) with ribavirin

–

60% (6/10) without ribavirin

Studies in genotype 1 ongoing

–

Expecting Phase 2 SVR12 data early 2012

Multiple expanding data sets from studies in different

patient populations

Slide 19

PSI-7977: Genotype 2/3 Phase 2 Results

(ELECTRON)

Time

(Weeks)

PSI-7977

RBV

12 weeks PEG

PSI-7977

RBV

NO PEG

PSI-7977

NO PEG

NO RBV

n/n (%) < LOD

n/n (%) < LOD

n/n (%) < LOD

2

8/11 (82%)

8/10 (80%)

8/10 (80%)

4

11/11 (100%)

10/10 (100%)

10/10 (100%)

12

11/11 (100%)

10/10 (100%)

10/10 (100%)

SVR4

11/11 (100%)

10/10 (100%)

6/10 (60%)

SVR12

11/11 (100%)

10/10 (100%)

n/a

n/a –

not yet available

Slide 20

Pharmasset’s Phase 3 Program

(Announced November 1, 2011)

Genotype 2/3

(naïve)

Genotype 2/3

(IFN intolerant)

N=~250

N=~250

N=~150

N=~75

SVR12

SVR12

0

12

24

36

SVR12

SVR12

0

12

24

POSITRON

FISSION

36

PSI-7977 400mg

+ RBV

Peg-IFN + RBV

PSI-7977 400mg

+ RBV

PSI-7977 placebo

+ RBV placebo

A

third

Phase

3

study

to

be

initiated

in

genotype

1

patients

in

1H

12

Targeted U.S. FDA approval in 2014

Slide 21

Key Remaining Questions in the Treatment of HCV

Will one regimen work for all genotypes or will different

regimens be required for different genotypes?

How many molecules or mechanisms do you need?

Can ribavirin be replaced?

What is the minimum duration of therapy?

Can HCV be cured with once-daily therapy?

Slide 22

Gilead’s Combined HCV Opportunity

Slide 23

Pharmasset and Gilead Combined HCV Efforts

Position Us to Answer These Questions

High barrier to resistance/pan-genotypic compounds will be an

important component for any all-oral regimen

–

Pharmasset’s PSI-7977 is the most advanced, pan-genotypic compound

with a high barrier to resistance

–

Ongoing efforts at Gilead to identify other pan-genotypic compounds

Complementary portfolio accelerates potential for oral regimens

–

Includes

direct

acting

antivirals

with

four

different

mechanisms

in

Phase

2/3 clinical development

–

Potential to pursue different combinations to then answer the question of

duration of treatment and necessity of ribavirin

Complementary portfolios cover a number of opportunities for

once-daily regimens

–

Potential for co-formulation

Slide 24

Phase

PC

GS

9451

(NS3

protease

inhibitor)*

GS

5885

(NS5A

inhibitor)*

GS

9620

(TLR-7

agonist)*

GS

6620

(nucleotide

NS5B

inhibitor)**

GS

9669

(non-nuc

NS5B

site

2

inhibitor)*

Combined HCV Clinical Portfolio

*

Once-daily dosing

I

II

III

PSI-7977

(nucleotide

NS5B

inhibitor)*

PSI-938

(nucleotide

NS5B

inhibitor)*

Pharmasset Acquisition

Complements and Accelerates

Gilead’s HCV Portfolio

GS

9256

(NS3

protease

inhibitor)**

Tegobuvir/GS

9190

(non-nuc

NS5B

inhibitor)

**

No further clinical trials planned

Slide 25

All-Gilead Portfolio Increases the Chance of

Developing Oral Therapies across Genotypes

Nuc

PI

NS5A

Non-Nuc

GS 5885

PSI-7977

PSI-938

GS 9451

GS 9190

GS 9669

Combination Therapies with High Potency May Further

Combination Therapies with High Potency May Further

Shorten Duration and Eliminate Ribavirin

Shorten Duration and Eliminate Ribavirin

Slide 26

2012 Key HCV Milestones

Initiate and integrate Pharmasset’s Phase 3 programs

–

GT 2/3 programs: no change

–

GT 1: Phase 2 data will determine strategy

Initiate clinical trial with PSI-7977 to define minimum

treatment duration in GT 2/3 patients

Initiate multiple enabling drug-drug interaction studies with

Gilead and Pharmasset assets

Explore combinations that exclude ribavirin

Initiate programs in pre-transplant and HIV co-infected

populations

SVR data from Gilead’s all-oral Phase 2 Study 120 at EASL

Slide 27

In Summary

Accelerates Gilead’s strategy to develop the first all-oral

regimen for the treatment of HCV

Since HCV can be cured, it will be important to be first to

market with an all-oral, well-tolerated regimen

Pharmasset is a strategic fit with Gilead’s areas of

operational excellence

Opportunity to change revenue trajectory starting in 2014

Slide 28

Gilead’s Business Prospects

Strong confidence in our core business

–

LTM HIV revenues of ~$6.4B in a total ~$13.0B market

–

LTM ~$1B in revenues coming from products outside HIV

Anticipate major HIV product launches in 2012

–

New revenue sources through partnerships to follow

More Phase 2/3 programs across therapeutic areas than

ever before

–

HIV, liver disease, oncology/inflammation/fibrosis, respiratory and

cardiovascular

Note: LTM = last twelve months

Slide 29

Financial Impact of Pharmasset Acquisition

Cash flows from core business will allow us to finance transaction

Expect to use existing cash and $6.2 billion in incremental debt

Committed to retaining investment grade credit rating

–

Debt/EBITDA ratio to return to

1.5x at closing + 1 year

Transaction expected to be dilutive initially and

significantly accretive beyond 2015

–

Increased interest expense associated with transaction debt

–

Share repurchases to offset dilution as debt is repaid

Slide 30

Transaction Summary

Unique opportunity to dramatically change HCV disease

burden worldwide

Potential to extend leadership in liver disease to HCV

Opportunity to parallel the commercial success in HIV

Redefined potential for revenue growth in 2014 and beyond

Gilead to Acquire Pharmasset

November 21, 2011