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Gilead Sciences

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Basic Information

HQ Contact information

333 Lakeside Dr.
Foster City, CA
94404
Phone: (650) 574-3000
Fax: (650) 578-9264
1-800-GILEAD-5
1-800-445-3235

Country of incorporation

USA

Ownership status

Public

Primary industry sector

Biotechnology

Primary industry ranking

2006:

  • Fortune 500: 649 (801, 2005)[1]
  • Fortune 2006 Pharmaceutical Rank: 12[2]
  • 100 Fastest Growing Tech Companies: 9[3]
  • 2006 Business Week 50 Best Performing Companies: 3

Number of employees worldwide

2,515

Chief executive officer

John C. Martin, 55

Financial information

Ticker symbol

NASDAQ: GILD

Investor website

Gilead Investors

List of largest shareholders[4]

  1. FMR Corporation 6.95%
  2. AXA, 5.49%
  3. Barclay’s, 5.18%
  4. Janus Capital, 3.87%
  5. Price (T. Rowe) Associates, 3.81%
  6. Jennison Associates, 3.60%
  7. Capital Research and Management, 3.28%
  8. Vanguard Group, 2.78%
  9. Goldman Sachs Group, 2.64%

Total revenue[5]

2006: $3,026,139,000
2005: $2,028,400,000

Net income[6]

2006: ($1,189,957,000)

Due largely to their two major acquisitions this year.

2005: $813,900,000

Detailed Information

Company history

Gilead Sciences was originally formed under the name of "Oligogen" in June 1987 by Michael Riordan, a 29-yeard old MD, with degrees from Harvard and Johns Hopkins. Prior to founding Gilead, Riordan had worked for Menlo Ventures, a venture capital firm. The company’s name was changed to "Gilead Sciences" for the incorporation in 1988. Under the technical leadership of Mark Matteucci the company focused on discovery research making small strands of DNA (oligomers) to assess the potential of genetic code blockers (gene therapy). Its development of small molecule antiviral therapeutics was ushered in by John Martin in 1992 with the licensing of nucleotide compounds discovered in two European academic labs.

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 Isis Pharmaceuticals.

Gilead debuted on the NASDAQ in January 1992. Its IPO raised $86.25 million in proceeds[2].

In 1996, Gilead appointed John C. Martin as the company’s President and CEO. This same year they launched their first commercial product, Vistide for the treatment of cytomegalovirus (CMV) retinitis in patients with AIDS. The company cooperated with Pharmacia & Upjohn to market the product outside the U.S.A.

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.

In 2001, Gilead received FDA approval for Viread, an HIV treatment drug.

In January 2003 Gilead completed its acquisition of Triangle Pharmaceuticals. 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 January 1997, Donald Rumsfeld, a Board member since 1988, was appointed Chairman of the company.[7] He stood down from the Board in January 2001 when appointed Secretary of Defense at the start of George W. Bush's first term as President. Federal disclosure forms indicate that Rumsfeld owns between USD$5 million and USD$25 million in Gilead stock. The rise in Gilead's share prices from USD$35 to USD$57 per share will have added between USD$2.5 million to USD$15.5 million to Rumsfeld's net worth. [8]

In November 2005, George W. Bush urged Congress to pass $7.1 billion in emergency funding to prepare for the possible H5N1(bird flu) pandemic, of which one billion is solely dedicated to the purchase, and distribution of Tamiflu.

In July 2006, the FDA approved Atripla, a once a day, single tablet regimen for HIV. Atripla combines Sustiva, a Bristol-Myers Squibb product with Truvada(itself a combination of emtricitabine and tenofovir disoproxil fumarate), a Gilead product.[9] In it’s first six months the drug earned $205.7 million in salesBusiness Week Profile

Gilead continued its pattern of acquiring competitors, paying $2.5 billion for Myogen in October of 2006[10] and $133 million in November for Raylo Chemicals[11].

Historical financial results

Business strategy

Since their founding in 1987, Gilead has routinely sought out partners for their drug products rather than trying to market them alone. Simultaneously they have attempted to grow by frequently acquiring their competitors.

Timetable of Mergers and Acquisitions
Year Company Price Notes
1999 Nexstar Pharmaceuticals $550 million Nexstar had two drugs (AmBisome and DaunoXome) of which only AmBisome is still in Gilead's portfolio, although it is not a major source of income for the company. DaunoXome was sold to Diatos in 2006.[12] As important as the products, Nexstar also provided Gilead with a much-needed sales force and commercialization team in Europe and Australia, and a manufacturing plant in San Dimas, California. [13]
2003 Triangle Pharmaceuticals $464 million Triangle owned the development and commercialization rights to emtricitabine, which although marketed as a stand-alone product (Emtriva), is also a component of the more profitable combination products Atripla and Truvada.[14]
2006 Corus Pharma, Inc. $365 million The acquisition of Corus and Myogen signaled Gilead's entry into the pulmonary arena. Corus was developing aztreonam lysine for the treatment of patients with cystic fibrosis who are infected with Pseudomonas aeruginosa
2006 Myogen, Inc. $2.5 billion The purpose of this acquisition was to acquire Letairis (ambrisentan), an orally administered, once a day, treatment for pulmonary arterial hypertension(PAH). Latairis(ambrisentan) was approved by the FDA in June, 2007
2006 Raylo Chemicals, Inc. $133.3 million Raylo was a subsidiary of Degussa AG. Gilead intends to use the Edmonton site for the further development of their own line of products. This is far different from past mergers which were targeted to gain access to potential new therapies. [15]

Business scope

Lines of business

Prescription Medications for:

  • HIV
  • Hepatitis B
  • Influenza

Units/subsidiaries [16]

Company Country
Bristol-Myers Squibb & Gilead, LLC United States
Gilead Biopharmaceutics Ireland Ireland
Gilead Holdings, LLC United States
Gilead Sciences Europe England
Gilead Sciences Holdings United States
Gilead Sciences GmbH Germany
Gilead Sciences SARL France
Gilead Sciences, S.r.L Italy
Gilead Sciences, SL Spain
Gilead Sciences, Lda Portugal
Gilead Sciences Limited Ireland
Gilead Sciences Ltd United Kingdom
Gilead Sciences International Ltd United Kingdom
Gilead Sciences Pty Limited Australia
Gilead Sciences (NZ) New Zealand
Gilead Sciences, BV Netherlands
Gilead Sciences Canada, Inc Canada
Gilead Sciences Hellas EPE Greece
Gilead Sciences Luxembourg, S.a.r.l. Luxembourg
Gilead Vintage Park, LLC United States
Leaf & Shield Insurance Bermuda

Major Wholesalers

2006:

  • Cardinal Health Inc, 17.8%
  • McKesson Corp, 12.1%
  • AmerisourceBergen Corp 11.1%

Major Products

Product Portfolio
Brand Name Drug Name(s) Indication Date Approved (USA)[17] Marketing Partner(s) U.S. Patent Expiration[18] European Patent Expiration[19] 2006 Sales (thousands)[20]
AmBisome® liposomal amphotericin B fungal infection, cryptococcal meningitis, Aspergillus, Candida, Cryptococcus infections 1997-08-11 Astellas Pharma 2016 2008 $223,031
Atripla® tenofovir, emtricitabine, and efavirenz HIV, AIDS 2006-07-12 Bristol-Myers Squibb 2021 2018 $205,729
Emtriva® emtricitabine HIV, AIDS 2003-07-02   2021 2016 $36,393
Flolan® epoprostenol sodium pulmonary hypertension 1995-09-20 GlaxoSmithKline expired expired
Hepsera® adefovir dipivoxil hepatitis B (HBV) 2002-09-20   2014 2011 $230,531
Letairis® ambrisentan pulmonary arterial hypertension 2007-06-15 GlaxoSmithKline    
Macugen® pegaptanib sodium solution age-related macular degeneration 2004-12-17 OSI and Pfizer 2017 2017
Tamiflu® oseltamivir phosphate influenza 1999-10-27 Roche 2016 2016
Truvada® emtricitabine and tenofovir HIV, AIDS 2004-08-02   2021 2018 $1,194,292
Viread® tenofovir HIV, AIDS 2001-10-26   2017 2018 $689,356
Vistide® cidofovir Cytomegalovirus retinitis 1996-06-26 Pfizer 2010 2012

Competitors

GlaxoSmithKline
Pfizer

Geographic scope

Countries of operation

United States
Canada
France
United Kingdom
Australia
Ireland
Greece
Portugal
Spain
Italy

Breakdown of revenues[21]

2006(thousands):

  • HIV Products: $2,125,770
  • Other: $462,427
  • Royalties: $416,526

2005(thousands):

  • HIV Products: $1,394,098
  • Others :$415,201
  • Royalties: 196,873

Breakdown of profits

Breakdown of employees

Governance

Executives

Board members & affiliations

Executive/director compensation

2006: $2.45 million and $30.05 million in exercised stock options[22]
2005: $15.1 million[23]

Labor

Domestic

Global

Political & public influence

Political contributions

Lobbying

In 2006, Gilead spent $810,000 on lobbing, a 40% increase in their annual lobbying expenses.[24]

In the first half of 2007 they had already spent $380,000 more on lobbying. Their efforts were primarily directed at issues of international health and intellectual property rights and AIDS-related public health programs.[25]

Corporate Accountability

Corporate Governance

As of November 6, 2007, Gilead ranks ahead of 58.6% of S&P 500 Companies and 96.5% of Pharmaceutical companies in their Corporate Governance Quotient[26]

Social responsibility initiatives

  • Brazil:
In May 2006, Gilead reached an agreement with the Brazilian Health Ministry to reduce the price of Viread by approximately 50%. This occurred in response to the Brazilian government considering issuing compulsory license to permit the manufacture of otherwise patented products aimed at HIV treatment.

Articles and resources

Related SourceWatch articles

Sources

  1. 2006 Fortune 500
  2. ibid
  3. Business 2.0 100 Fastest Growing Tech Companies
  4. Yahoo Financial Report
  5. Gilead Sciences 2006 Annual Report, filed April 10, 2007
  6. ibid
  7. Gilead Press Release, “Donald H. Rumsfeld Named Chairman of Gilead Sciences”
  8. Schwartz, Nelson D. “Rumsfeld's growing stake in Tamiflu”, CNN, Oct 31, 2005.
  9. Pollack, Andrew. “FDA Backs AIDS Pill to Be Taken Once a Day”, NY Times, July 12, 2006.
  10. Gilead Press Release
  11. Gilead Press Release
  12. Press Release, “ Diatos Announces Acquisition of Specialty Cancer Product DaunoXome® from Gilead” March, 28, 2006.
  13. Gilead Press Release, “Gilead Sciences and NeXstar Pharmaceuticals to Merge”, March 1, 1999.
  14. Gilead Press Release, “Gilead Sciences to Acquire Triangle Pharmaceuticals for $464 Million”, Dec. 4, 2004.
  15. Gilead Sciences (2006-06-06). "Gilead Sciences to Acquire Degussa's Raylo Chemicals Inc.; Purchase to Expand Gilead's Manufacturing Scale-Up Capacity for Investigational Therapies". Press release. Retrieved on 2007-08-15.
  16. Gilead Sciences 10-K March, 3 2006
  17. FDA Approved Drug Products
  18. Gilead, 2006 10-K
  19. [ibid]
  20. ibid
  21. Gilead Sciences 2006 10-K
  22. Yahoo Financial Profile
  23. Forbes Executive Pay Report
  24. Sourcewatch Report on Gilead
  25. [1]
  26. Yahoo Financial Report

External resources

External articles

Books on company