Why We're Here

IIeana (front cover), living with HIV 06 12 HIV/AIDS 14 Hepatitis B and C 16 Additional Marketed Products 20 Therapies Respiratory and Cardiopulmonary 22 Gilead in the Community 24 Our Vision and Financial Highlights Corporate Information GILEAD SCIENCES 2006 ANNUAL REPORT 01 Stockholders Letter to GILEAD SCIENCES 2006 ANNUAL REPORT WHY WE’RE HERE WE’RE WHY

GILEAD SCIENCES 2006 ANNUAL REPORT 1-800-GILEAD-5 1-800-GILEAD-5 (1-800-445-3235) Gilead Sciences, Inc. Sciences, Gilead Drive Lakeside 333 94404 CA City, Foster 574-3000 (650) Phone: 578-9264 (650) Fax:

HEADQUARTERS

Other Hepsera AmBisome Franchise HIV 06 06 ($ in millions) ($ in millions) 05 05 04 04

3,000

$ 1,500 $ 1,000 $ $ 500 $ 0 $ $ $2,500 2,000 $ 1,500 $ 1,000 $ $ 500 $ 0

OPERATING CASH FLOW CASH OPERATING PRODUCT REVENUE PRODUCT

Non-GAAP Net Income Net Non-GAAP (Loss) Income Net GAAP 06 ($ in millions) 05

04 NET INCOME (LOSS) INCOME $ 500 NET $ 0 $ – 500 1,000 – $ 1,500 – $ 2,000 $ 1,500 $ 1,000 $ 06 ($ in millions) 05 04

,500

3 $ $ 0 $ 1,000 $ $ 500 $ 2,500 $ 2,000 $ 1,500 $ $ $ 3,000 $ TOTAL REVENUE TOTAL Eyetech Pharmaceuticals, Inc. (acquired by OSI Pharmaceuticals, Inc.), which completed its initial public offering in 2004. 2004. in offering public initial its completed which Inc.), Pharmaceuticals, OSI by (acquired Inc. Pharmaceuticals, Eyetech • The non-GAAP net income for 2005 excluded a one-time tax provision benefit related to a qualified dividend distribution made under the American Jobs Creation Act of 2004. of Act Creation Jobs American the under made distribution dividend qualified a to related benefit provision tax one-time a excluded 2006. 2005 for income November in net non-GAAP Myogen The and 2006 August • in Corus of acquisitions the with associated billion $2.39 of charges IPR&D of impact the excluded 2006 for income net • non-GAAP The • The non-GAAP net income for 2004 and 2005 excluded stock-based compensation expense relating to SFAS 123(R) as we began expensing stock-based compensation on January 1, 2006. 1, January on compensation stock-based expensing began we as 123(R) Notes: SFAS to relating expense compensation in stock-based warrants our excluded to 2005 and related 2004 gain a for and income debt net senior non-GAAP The convertible 2% million • $345.0 our of redemption the to related payment make-whole a excluded 2004 for income net non-GAAP The • Gilead Financial Highlights Financial Gilead IIeana (front cover), living with HIV 06 12 HIV/AIDS 14 Hepatitis B and C 16 Additional Marketed Products 20 Therapies Respiratory and Cardiopulmonary 22 Gilead in the Community 24 Our Vision and Financial Highlights Corporate Information GILEAD SCIENCES 2006 ANNUAL REPORT 01 Stockholders Letter to GILEAD SCIENCES 2006 ANNUAL REPORT WHY WE’RE HERE WE’RE WHY

HEADQUARTERS

Other Hepsera AmBisome Franchise HIV 06 06 ($ in millions) ($ in millions) 05 05 04 04

3,000

$ 1,500 $ 1,000 $ $ 500 $ 0 $ $ $2,500 2,000 $ 1,500 $ 1,000 $ $ 500 $ 0

OPERATING CASH FLOW CASH OPERATING PRODUCT REVENUE PRODUCT

Non-GAAP Net Income Net Non-GAAP (Loss) Income Net GAAP 06 ($ in millions) 05

04 NET INCOME (LOSS) INCOME $ 500 NET $ 0 $ – 500 1,000 – $ 1,500 – $ 2,000 $ 1,500 $ 1,000 $ 06 ($ in millions) 05 04

,500

3 $ $ 0 $ 1,000 $ $ 500 $ 2,500 $ 2,000 $ 1,500 $ $ $ 3,000 $ TOTAL REVENUE TOTAL Eyetech Pharmaceuticals, Inc. (acquired by OSI Pharmaceuticals, Inc.), which completed its initial public offering in 2004. 2004. in offering public initial its completed which Inc.), Pharmaceuticals, OSI by (acquired Inc. Pharmaceuticals, Eyetech • The non-GAAP net income for 2005 excluded a one-time tax provision benefit related to a qualified dividend distribution made under the American Jobs Creation Act of 2004. of Act Creation Jobs American the under made distribution dividend qualified a to related benefit provision tax one-time a excluded 2006. 2005 for income November in net non-GAAP Myogen The and 2006 August • in Corus of acquisitions the with associated billion $2.39 of charges IPR&D of impact the excluded 2006 for income net • non-GAAP The • The non-GAAP net income for 2004 and 2005 excluded stock-based compensation expense relating to SFAS 123(R) as we began expensing stock-based compensation on January 1, 2006. 1, January on compensation stock-based expensing began we as 123(R) Notes: SFAS to relating expense compensation in stock-based warrants our excluded to 2005 and related 2004 gain a for and income debt net senior non-GAAP The convertible 2% million • $345.0 our of redemption the to related payment make-whole a excluded 2004 for income net non-GAAP The • Gilead Financial Highlights Financial Gilead The commercial success of our marketed products provides us with the resources to generate new clinical data defining their profiles and supports our development of new therapeutic advancements. In 2006, we leveraged our strong financial position to broaden our product portfolio and better position the company for long-term growth. As we bring new products into clinical development, our goal remains the same – to improve the lives of patients worldwide suffering from life- threatening diseases.

Marketed Products Product Pipeline

PHASE

PRODUCT INDICATION PARTNER(S) CANDIDATE RESEARCH PRECLINICAL I II III NEW DRUG APPLICATION

Atripla™ HIV/AIDS Bristol-Myers Squibb Company (US and Canada) Ambrisentan Pulmonary Arterial Hypertension efavirenz 600 mg/emtricitabine 200 mg/ Merck & Co., Inc. (Developing World) tenofovir disoproxil fumarate 300 mg

Truvada® HIV/AIDS Japan Tobacco Inc. (Japan) Aztreonam Lysine for Inhalation Cystic Fibrosis emtricitabine and tenofovir disoproxil fumarate

Viread® HIV/AIDS Japan Tobacco Inc. (Japan) Tenofovir Disoproxil Fumarate Chronic Hepatitis B tenofovir disoproxil fumarate

Emtriva® HIV/AIDS Japan Tobacco Inc. (Japan) Darusentan Resistant Hypertension emtricitabine

Hepsera® Chronic Hepatitis B GlaxoSmithKline Inc. (Asia, Latin America) GS 9137 HIV/AIDS adefovir dipivoxil integrase inhibitor

AmBisome® Severe Fungal Astellas Pharma Inc. (US and Canada) GS 9190 Hepatitis C amphotericin B liposome for injection Infections Dainippon Sumitomo Pharma Co., Ltd. (Japan) polymerase inhibitor

Tamiﬂu® Inﬂuenza A and B F. Hoffmann-La Roche Ltd (Worldwide) Small Molecule Therapeutics Viral Infections oseltamivir phosphate

Macugen® Neovascular (wet) OSI Pharmaceuticals, Inc. (US) Small Molecule Therapeutics Cardiopulmonary pegaptanib sodium injection Age-related Macular Pﬁzer Inc. (Outside US) Degeneration (AMD)

Vistide® CMV Retinitis/AIDS Pﬁzer Inc. (Outside US) Inhaled Therapeutics Respiratory Infections cidofovir injection

Flolan® Primary Pulmonary GlaxoSmithKline Inc. (Outside US) epoprostenol sodium for injection Hypertension Designed and produced by Mentus, San Diego, California. www.mentus.com. Photography Walter Urie, www.uriephoto.com, Jorge de Araujo, www.dearaujophoto.com. GILEAD SCIENCES 2006 ANNUAL REPORT

To Our Stockholders, Employees and Friends: Since the founding of our company in 1987, Gilead has focused on developing and delivering medications that advance the treatment of life-threatening diseases worldwide. This is our singular motivation – it is why we are here. Our achievements in 2006 are the result of progress that can be traced over many years and, at the same time, create a foundation for continued growth in 2007 and beyond.

In 2006, Gilead’s products and partnerships generated MARKET LEADERSHIP IN HIV, HEPATITIS B AND more than $3 billion in total revenues. Now in our 20th INFLUENZA The year 2006 marked the 25th anniversary year, we are pleased with the rapid growth and continued of the first reported AIDS cases in the United States. Over commercial success of our products. And, most impor- the course of the last five years, Gilead has contributed tantly, we are proud that through our efforts to deliver to the tremendous progress made in the treatment of innovative therapeutics, we are improving the lives of HIV/AIDS. Today, our HIV therapies are critical compo- patients who are suffering from life-threatening diseases. nents of the most-prescribed highly active antiretroviral therapy (HAART) regimens and have contributed to the Infectious diseases, in particular, have been the focus of overall success of this treatment paradigm by helping to our efforts and the foundation of our business for nearly greatly reduce pill burden. Backed by years of safety and two decades. This year we leveraged our strong financial efficacy data, Viread and Truvada have each carved out position to broaden our product portfolio beyond infec- leadership positions among HIV treatments. As the first tious diseases and position the company for long-term and only complete HAART combination in a once-daily growth. Our acquisitions of Corus Pharma, Inc. and single tablet, Atripla has quickly joined their ranks since Myogen, Inc., and their investigational and commercial its U.S. approval in July 2006. Our HIV franchise, which products, will be the cornerstone of our new respiratory consists of Viread, Emtriva, Truvada and Atripla, generated and cardiopulmonary portfolio – expanding our ability to more than $2 billion in product sales in 2006. fulfill our strategic objective of developing and commercializing novel products that deliver therapeutic advancements to physicians and patients around the world.

ADVANCING THERAPEUTICS

1 GILEAD SCIENCES 2006 ANNUAL REPORT

In 2006, nearly 500,000 patients in the United States were receiving antiretroviral therapy for HIV infection. Of these, approximately half were taking one or more Gilead HIV medications. However, the potential for growth remains. Approximately 400,000 people have been diagnosed with HIV but have not yet started treatment, and another 250,000 are estimated to be HIV-infected but are unaware of their status.

Currently, treatment of HIV-positive patients is recom- In addition, strong market growth was seen for Tamiflu, a mended when plasma HIV viral load exceeds 10,000 product we invented and co-developed with our partner copies/mL and CD4 cell counts are between 200 and F. Hoffmann-La Roche Ltd (Roche) and one that is now 350 cells/mm3. Many physicians and virologists now sold worldwide by Roche. Tamiflu was initially developed believe that earlier diagnosis and initiation of treatment for the treatment and prevention of seasonal flu but is may improve outcomes and also significantly reduce the now also seen as a key component in pandemic planning spread of the disease. In September 2006, the U.S. Centers to prepare for the potential spread of the avian flu virus. for Disease Control and Prevention (CDC) took the first Largely due to corporate planning and government stock- step along this path and recommended routine, voluntary piling, Roche generated record sales of Tamiflu, resulting HIV screening in healthcare settings for all individuals ages in royalty revenue recognized by Gilead of more than 13 to 64. Improving HIV testing and diagnosis may help $364 million in 2006. raise awareness of the disease, bring more people into ENHANCED PRODUCT PIPELINE We have several drugs care and potentially reduce the rate of new infections. in development that could further enhance our HIV and We have also continued to grow our hepatitis franchise, hepatitis franchises. Currently, we have a novel integrase where Hepsera remains the most-prescribed antiviral inhibitor, GS 9137, in development for the treatment of treatment for chronic hepatitis B in the United States, HIV. Integrase inhibitors target a different stage in the HIV despite increased competition in this market. Tenofovir replication cycle than other currently marketed classes disoproxil fumarate, the active agent in Viread, is in of drugs, and may, in combination with other antiretro- Phase III clinical trials for the treatment of chronic virals, effectively prevent the replication of the virus in the hepatitis B. This compound has the potential to be the body, particularly resistant virus. We also have a novel growth driver for our hepatitis franchise, much in the compound in early clinical development, GS 9190, to treat same way it has been for our HIV portfolio. hepatitis C.

Front row (from left to right): James R. Meyers, Senior Vice President, Commercial Operations, North America; Gregg H. Alton, Senior Vice President and General Counsel; William A. Lee, PhD, Senior Vice President, Research; Anthony D. Caracciolo, Senior Vice President, Manufacturing and Operations. Back row: Norbert W. Bischofberger, PhD, Executive Vice President, Research 20 YEARS and Development and Chief Scientific Officer; John J. Toole, MD, PhD, Senior Vice President, Clinical Research; Kristen M. Metza, IMPROVING LIVES Vice President, Human Resources; A. Bruce Montgomery, MD, Senior Vice President, Head of Respiratory Therapeutics; John F. Milligan, PhD, Chief Operating Officer and Chief Financial Officer; Kevin Young, Executive Vice President, Commercial Operations; John C. Martin, PhD, President and Chief Executive Officer; Taiyin Yang, PhD, Senior Vice President, Pharmaceutical Development and Manufacturing. 3 GILEAD SCIENCES 2006 ANNUAL REPORT

As we have grown, our strong ﬁnancial position has enabled us to leverage corporate partnerships to build our portfolio of commercial products and investigational compounds. The 2006 acquisitions of Corus and Myogen added late-stage clinical candidates to our pipeline, providing near- and long-term revenue potential and placing Gilead in an excellent position to enter the respiratory and cardiopulmonary markets.

We completed the acquisitions of Corus and Myogen in We believe our experience in registering and commercial- our brands and products worldwide. In 2006, we began LONG-TERM GROWTH We have created an extraordi- the second half of 2006 – and welcomed their employees to izing highly differentiated specialty products will enable opening additional commercial operations in Europe to nary product portfolio that is improving the lives of hun- the team at Gilead. These companies possessed late-stage us to build these products into a successful respiratory lessen our reliance on distributors and to capture greater dreds of thousands of people with unmet medical needs. clinical drug candidates that demonstrated the potential and cardiopulmonary portfolio – and provide a founda- revenue from European Union product sales. This expan- Innovation in every aspect of our business has enabled to address significant unmet medical needs in the treat- tion for near- and long-term growth as we continue to sion will give us the ability to more effectively control the us to develop these best-in-class therapeutics and to ment of respiratory and cardiopulmonary diseases. look for additional opportunities to broaden this franchise launch and commercialization of our products in these successfully commercialize them worldwide. We remain and augment our existing pipeline. important markets. focused on developing and commercializing therapies With the acquisition of Corus in August, we gained a that will continue to transform treatment paradigms in Phase III drug candidate, aztreonam lysine for inhalation, With small molecule therapeutics constituting a signifi- We recognize the need to enhance access to our HIV HIV, hepatitis, respiratory and cardiopulmonary diseases. for the potential treatment of cystic fibrosis-related lung cant portion of our development efforts, in November we medications worldwide and have stepped up our efforts infections. Our acquisition of Myogen in November added made the decision to acquire Raylo Chemicals Inc. and this year to extend their availability to resource-limited I would like to thank our employees for their contribution two promising drug candidates to our development most of its assets from Germany-based, specialty chemi- parts of the world where the epidemic has hit the hardest. to our achievements this year. Ours is a team of inspired portfolio, ambrisentan for the treatment of pulmonary cals company Degussa AG. For more than 17 years, Raylo By the end of 2006, we completed regulatory submissions individuals who are as committed to improving patients’ arterial hypertension and darusentan for the treatment of generated the raw materials and manufactured the active for Viread in nearly all the 97 access program countries lives as the physicians who are our primary customers. resistant hypertension. Ambrisentan is currently under pharmaceutical ingredients (API) for several of our antiviral and reached non-exclusive license agreements with 11 Quite simply, it is why we are here at Gilead. We are review by the U.S. Food and Drug Administration (FDA). compounds. Our new Edmonton, Alberta site will help Indian generic manufacturers to produce and distribute pleased with what we have accomplished this year and Additionally, as part of the Myogen acquisition, we gained ensure clinical and commercial API supplies to support our generic versions of Viread in resource-limited countries. look forward to reporting our progress in 2007. a commercial therapeutic, Flolan, which is indicated for ongoing small molecule development programs and will We also established a partnership with Merck & Co., Inc. the long-term intravenous treatment of primary pulmo- assist in chemical development activities to improve exist- to distribute Atripla in the developing world. In addition, nary hypertension. Through Myogen’s existing agreement ing commercial manufacturing processes. through our Advancing AccessTM program, we continue with GlaxoSmithKline Inc. (GSK), we gained the rights to to support access for patients in the United States who John C. Martin, PhD WORLDWIDE REACH As our company continues to grow, market and distribute Flolan in the United States. cannot afford to pay for our medications. President and Chief Executive Officer we are increasingly focused on the commercialization of

5 growing ethnicminoritygroup intheUnited States, Ileana recognizes ofHIV/AIDSeducationandoutreach theimportance intheLatinocommunity. Ileana, with her daughter. her with Ileana,

In theUnited States, HIVisincreasingly anHIV-positive impactingcommunitiesofcolor andwomen.As womanbelongingtothelargestandfastest

HIV/AIDS in the United States. Worldwide sales of Viread were Truvada and Atripla), continues to have increasing tenofovir disoproxil fumarate (also a component of as part of combination therapy or in its molecule form where it is now available in 19 countries, helped contrib franchise sales in 2006. Its growing uptake in Europe, United States, accounting for more than half of our HIV scribed backbone for HIV combination therapy in the Emtriva, Truvada is currently the most commonly pre ute to $1.19 billion in total sales in 2006. patients in the United States are taking a tenofovir- HIV disease. Currently, more than half of all treated HIV use as a treatment for patients at varying stages of their containing regimen. This year tenofovir surpassed TRUVADA VIREAD lamivudine as the most widely prescribed HIV molecule $689 million in 2006. ing them into tablets that can be taken once a day. Our products have attained lead to secure a large and growing share of the HIV market. medicines with the goal of favorable safety, efficacy and resistance profiles, formulat Viread, Emtriva, Truvada, and now Atripla, for the treatment of HIV. We design HIV integral role in the field of combination therapy for HIV treatment, and we continue ership positions in the fight against the growing HIV epidemic. Each drug plays an The foundation of our HIV franchise, Viread, A fixed-dose combination of Viread and

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the United States as a once-daily single tablet for the treat first and only complete HAART combination available in efavirenz into a single tablet. The result was Atripla, the in the field of HIV medicine – to co-formulate Truvada and Bristol-Myers Squibb Company (BMS) – the first of its kind medication where the HIV epidemic has hit the hardest. limited parts of the world, to help ensure access to the with Merck, which holds rights to efavirenz in resource- of 2007. In addition, we completed a separate agreement October 2006. Approval is anticipated in the second half ing Authorisation Application in the European Union in ATRIPLA ATRIPLA share rights to efavirenz in Europe, submitted a Market from Atripla, we, together with BMS and Merck, which To expand the number of patients who could benefit 2006 U.S. FDA approval and launch in the United States. ment of HIV. Atripla exhibited strong uptake after its July In 2004, we established a U.S. joint venture with GILEAD SCIENCES SCIENCES GILEAD Among patients Among in the United States, approxi receiving antiretroviral treatment third-line regimens or beyond. and 33 percent are receiving receiving second-line regimens line treatment, 27 percent are mately 40 percent are on first- 2006

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7 GILEAD IN THE COMMUNITY RESPIRATORY AND ADDITIONAL MARKETED HEPATITIS B AND C HIV/AIDS CARDIOPULMONARY THERAPIES PRODUCTS called Assistance Publiquecalled Assistance –HôpitauxdeMarseille (APHM) low-income thatserves individuals. gay/bisexual men,manyofwhomare co-infectedwithHIVandhepatitisviruses. The hospitalcares formore ofalocalnetwork ofclinics than1,500AIDSpatientsannuallyandispart treating France. physicianat the HôpitaldeLaConception,alargecityhospitalinsouthern Dr. theneedsofavaried Ravauxworkspatient population,includingmigrants toserve and Isabelle Ravaux, MD, Centre d’Information et de Soins d’Immunodéﬁcience Humaine, Hôpital de La Conception, Marseilles, France. France. Marseilles, Conception, La de Hôpital Humaine, d’Immunodéﬁcience Soins de et d’Information Centre MD, Ravaux, Isabelle

Dr. Isabelle Ravaux isaleadingHIV- HIV/AIDS With HIV patients living longer and the potential for as much as 35 years. expectancy of HIV-positive patients can be extended by extend lives. If diagnosed soon after infection, the life tions. Earlier diagnosis and treatment may signiﬁcantly In September 2006, the U.S. CDC recommended HIV test when treatment is less effective. with HIV infection at an advanced stage of the disease, Recent studies show that many patients are diagnosed effectiveness and extend survival for HIV-positive people. Early diagnosis is critical in order to maximize HAART more patients being diagnosed and referred to care, the fore potentially reducing the annual rate of new infec United States who do not realize they are infected, there may help identify the estimated 250,000 people in the aged 13 to 64. The U.S. CDC believes routine HIV testing ing become a routine part of medical care for all Americans in AIDS therapy – the ﬁrst time HIV patients can take a complete HAART regimen in the United States and its pending approval in the European Union signify a landmark HIV infection into a long-term treatable disease. This year’s introduction of Atripla in grown to become the cornerstone of HAART for many patients, helping transform care. Since Viread was introduced in 2001, Gilead’s antiretroviral therapies have Ten years ago, the use of potent anti-HIV drug combinations revolutionized AIDS a single, once-daily tablet.

- - regimens has never been more important. That is why lamivudine and efavirenz out to five years. evaluated the safety and efficacy of treatment with Viread, extension of a pivotal Phase III clinical trial. These data 2006, we reported long-term data from Study 903E, an twice-daily Combivir and once-daily efavirenz. In September efavirenz (the components of Atripla) to a regimen of comparing a once-daily regimen of Viread, Emtriva and 96-week data from Study 934, our ongoing clinical trial of Truvada and Atripla. In August 2006, we reported trials of Viread, which is prescribed by itself and as part This year we reported data from two long-term clinical and tolerability profiles. our products and demonstrate their established safety availability of long-term clinical data on combination we design and conduct clinical trials to support use of GILEAD SCIENCES SCIENCES GILEAD HIV/AIDS treatment treatment HIV/AIDS number of immune system cells. as a result, help to increase the load,” in a patient’s body and, the amount of HIV, or “viral taken in combination to lower consist of at least three medications 2006

regimens

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9 GILEAD IN THE COMMUNITY RESPIRATORY AND ADDITIONAL MARKETED HEPATITIS B AND C HIV/AIDS CARDIOPULMONARY THERAPIES PRODUCTS HIV Therapies in Development mutate and develop resistance to the therapy. these combinations, the longer it takes for the virus to a patient’s immune cells. The higher the efﬁcacy of and halting the spread of the virus and destruction of disrupting the HIV lifecycle by a different mechanism ent classes of medications, each with the purpose of In February 2007, we announced the completion of a Phase II clinical trial rapid reduction in viral load. class of HIV drugs that may, in combination with other antiretrovirals, elicit a GS 9137, an integrase inhibitor. Integrase inhibitors are a new and important replication cycle. We made progress this year with our leading compound, the addition of novel drugs that target different mechanisms within the HIV We are focused on expanding upon our successful HIV franchise through combines antiretrovirals from at least two differ potentially can be targeted by a drug. HAART therapy number of steps, each representing a mechanism that its replication in the body. HIV replication involves a The key to successfully combating HIV is to disrupt of GS 9137 boosted with ritonavir. Positive safety and efﬁcacy data were pre and the design of our registrational studies is underway. sented at the 14th Conference on Retroviruses and Opportunistic Infections, -

- HIV Global Community Efforts with Merck for distribution of the drug in extendthe the reach of Atripla, wedeveloping also signed an agreement world. generic versions of Viread in the developing world. To based companies for manufacturing and distribution of licensing and technology transfer agreements to 11 India- To better enable access to therapy, this year we granted greatly reduced prices. program, we provide access to Viread and Truvada at areas, we have expanded our Gilead Access Program to to combat the epidemic. To enhance our reach into these particularly in developing countries with limited resources We recognize the need for access to our HIV therapeutics, us differentiate our products from other therapies. our communications with physicians worldwide, helping and head-to-head studies has become the focal point of The clinical data generated in long-term safety, efﬁcacy 97 countries, which includes all the countries of Africa, America and Southeast and Central Asia. Through this the Caribbean and many low-income nations in Latin therapies to treat HIV in developing countries is staggering. To improve the lives thirds of these people living in sub-Saharan Africa. The need for simpliﬁed, effective Forty million people are living with HIV throughout the world with more than two- continue our efforts to foster access to these drugs throughout the world. of a greater share of the global population suffering from this disease, we will

prevention strategies are urgently needed. We are com people becoming infected with HIV worldwide. New ments, each year there are still an estimated five million of Viread and Truvada in the prevention of the transmis mitted to gaining an understanding of the potential role prevent the transmission of HIV. efficacious, distribute to resource-limited countries a and CONRAD to develop, manufacture, and, if proven rights to the International Partnership for Microbicides partners. Additionally, in December 2006, we granted the National Institutes of Health and other third-party organized by Family Health International, the U.S. CDC, Viread and Truvada at no cost for use in ongoing studies sion of HIV. As part of that commitment, we are providing industry-based initiatives to improve access to HIV treat Even with government, non-profit organizations and gel formulation of tenofovir for use as a microbicide to GILEAD SCIENCES SCIENCES GILEAD In the same time period, 4.3 million people became highest number ever reported. died of AIDS worldwide, the In 2006, 2.9 million million 2.9 2006, In newly infected with HIV.

2006

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GILEAD IN THE COMMUNITY RESPIRATORY AND ADDITIONAL MARKETED HEPATITIS B AND C HIV/AIDS CARDIOPULMONARY THERAPIES PRODUCTS Kerstin Newland, RN; Martin Briseno, RN; Anush Arakelyan. Arakelyan. Anush RN; Briseno, Martin RN; Newland, Kerstin Front row (from lefttoright): participated intheHepseraparticipated oftheongoingtenofovir pivotal clinical trialsandispart disoproxil fumarate clinicalprogram. including viral hepatitis.In addition todiagnosingandtreating complexmedicalconditions, thestaffisengagedincutting-edgeresearch. The Center forLiver Diseaseand Transplantation RN; Shampa De, PhD. PhD. De, Shampa RN; The Center forLiver Diseaseand Transplantation atCedars-Sinai Medical Center provides forpatientscopingwithseriousliver-related high-level expertise illnesses, Julie Winn, MD, Assistant Director, Hepatology and Liver Transplant; F. Fred Poordad, MD, Chief, Hepatology and Liver Transplant. Transplant. Liver and Hepatology Chief, MD, F. Poordad, Fred Transplant; Liver and Hepatology Director, Assistant MD, Winn, Julie Back row: Ryan Cabatbat; Nicholas N. Nissen, MD, Director, Hepatobiliary and Pancreatic Surgery; Sandy Leong, Leong, Sandy Surgery; Pancreatic and Hepatobiliary Director, MD, Nissen, N. Nicholas Cabatbat; Ryan Middle row: Hepatitis B and C HEPATITIS B China, Japan, Korea and Taiwan. the Gilead territories, the most signiﬁcant of which include disease. GSK markets Hepsera in all countries outside of and Turkey, which have the highest prevalence of the in the European Union, particularly in France, Greece, Italy living with chronic HBV infections. Sales growth continues Europe is rising, with approximately nine million people to be living with chronic HBV. Incidence of the disease in where more than 1.25 million individuals are estimated prescription market for HBV antivirals in the United States Hepsera continues to capture more than half of the total in revenues in 2006. Approved by the U.S. FDA in 2002, chronic hepatitis B, generating more than $230 million remains one of the leading drugs on the market to treat Available in more than 30 countries worldwide, Hepsera passing it to others. with chronic (lifelong) HBV infections and unknowingly exacerbated by the fact that 400 million people are living it is 50 to 100 times more infectious than HIV. Its spread is rising infection rate is due in part to the virulence of HBV; people worldwide have been infected with the virus. The to prevent hepatitis B virus (HBV) infection, two billion tions that can go undetected for years. These silent infections, together with a lack of awareness about how hepatitis B and C are transmitted, signiﬁcantly contribute putting millions of people at risk of developing life-threatening liver disease and Viral infections caused by hepatitis B and C are growing in prevalence worldwide, be readily diagnosed, many people who contract the viruses develop chronic infec cancer. While both viruses can lead to the development of an acute disease that can to the spread of both diseases. Although an effective vaccine is available HEPATITIS C HCV-infected individuals in December of 2006. non-nucleoside HCV polymerase inhibitor, GS 9190, in to treat hepatitis C. We began clinical evaluation of a antiviral drugs toward the discovery of new therapies We are applying our expertise in the development of million people are newly infected each year. infected with the hepatitis C virus (HCV), and three to four Globally, an estimated 170 million people are chronically incidence of hepatitis C worldwide is growing unabated. pivotal studies before the end of 2007. chronic hepatitis B. We anticipate data from both these (Studies 102 and 103) of tenofovir disoproxil fumarate for completed enrollment in two pivotal Phase III clinical trials patients co-infected with HIV and HBV. In June 2006, we disoproxil fumarate lowered amounts of hepatitis virus in indication for this compound. In these studies, tenofovir the product led to the decision to pursue an additional of the disease. Data generated in our HIV clinical trials for fumarate, the active ingredient in Viread, for the treatment market, we are currently studying tenofovir disoproxil To garner a greater share of the growing hepatitis B With no vaccine on the horizon, the GILEAD SCIENCES SCIENCES GILEAD 95 percent effective in prevent While an HBV vaccine HBV an While hepatitis C. And no vaccine is available for already infected with the virus. it is not effective if a person is developing chronic hepatitis B, ing children and adults from 2006

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GILEAD IN THE COMMUNITY RESPIRATORY AND ADDITIONAL MARKETED HEPATITIS B AND C HIV/AIDS CARDIOPULMONARY THERAPIES PRODUCTS Gilead’s commercial forproducts suchasAmBisome, andmedicalsupport whichwasapproved inAustralia in1996. activities throughout Australia andNew Zealand. The Australian teamiscommittedtoproviding toourcustomers. thehighestqualityservice This commitmentisevidentthrough Fiona Palmer, Marketing; Joe Baini, General Manager; Angela Salamoussa, Marketing. Marketing. Salamoussa, Angela Manager; General Baini, Joe Marketing; Palmer, Fiona

Gilead’s operations inAustralia are responsible forsales,marketing andclinicaltrial

Additional Marketed Products by Roche, Tamiflu is approved for the treatment and TAMIFLU TAMIFLU AMBISOME in more than 40 countries worldwide. throughout the rest of the world. AmBisome is available Gilead retains exclusive marketing rights to AmBisome Sumitomo Pharma Co., Ltd. markets AmBisome in Japan. sells AmBisome in the United States and Canada. Dainippon in hospital settings. Astellas Pharma Inc. promotes and patients. These fungal infections are increasingly common fungal infections, particularly in immunocompromised of new competition. AmBisome is used to treat systemic ago, AmBisome remains a strong seller even in the face Tamiflu and Vistide collectively delivered solid financial results during 2006. as proven treatments for a range of other infectious and viral diseases. AmBisome, additional products continue to generate revenue and extend our corporate brand While our HIV and hepatitis drugs are significant revenue contributors to Gilead, Discovered by Gilead and marketed worldwide First approved in Europe more than 15 years

H5N1 virus, which is known to cause avian flu. To date, demonstrated effectiveness in blocking replication of the than any other antiviral flu treatment. Tamiflu has also flu season, doctors wrote more prescriptions for Tamiflu and is available in pill and liquid suspension form. Last of an influenza pandemic. 75 countries have begun to stockpile Tamiflu in the event prevention of all common strains of influenza A and B VISTIDE VISTIDE internationally by Pfizer Inc., Vistide is an antiviral for patients. The year 2006 marked the 10th anniversary the treatment of cytomegalovirus retinitis in AIDS of the product’s initial launch. Marketed in the United States by Gilead and GILEAD SCIENCES SCIENCES GILEAD The royalty stream royalty The in 2006. Tamiflu exceeded $364 million from the worldwide sales of 2006

generated

ANNUAL REPORT ANNUAL

GILEAD IN THE COMMUNITY RESPIRATORY AND ADDITIONAL MARKETED HEPATITIS B AND C HIV/AIDS CARDIOPULMONARY THERAPIES PRODUCTS Cardiopulmonary Therapies Respiratory and along with the approved drug for the treat promising late-stage product candidates of significant unmet medical need. The ing to address diseases that represent areas pounds will enable us to capture a signifi basis of our new respiratory and cardiopul gained through these acquisitions form the ment of primary pulmonary hypertension hypertension and other related diseases. pulmonary arterial hypertension, resistant of cystic fibrosis-related lung infections, cant share of the market in the treatment two specialty biopharmaceutical compa infectious diseases with the acquisitions of In 2006, we broadened our focus beyond nies, Corus and Myogen, which were work monary business. We believe these com

------– cheeringonherhometeam. ﬁbrosis. cystic with living Jade, has been on the sidelines of every footballgamethisyear has beenonthesidelinesofevery advancements inthetreatment ofcysticﬁbrosis, Jade Thanks to important Thanks toimportant

Respiratory Therapies for efficient and fast delivery with the eFlow. Aztreonam optimization of the drug formulation (aztreonam lysine) GmbH. PARI also contributed to the development and the eFlow® Electronic Nebulizer, developed by PARI The drug is delivered through a novel inhalation device, against Gram-negative bacteria, including aztreonam lysine for inhalation is an antibiotic with activity among people with CF. Developed by scientists at Corus, represents the single greatest cause of illness and death Pulmonary infection with Gram-negative bacteria, particu larly pulmonary candidate for the potential treatment of cystic fibrosis-related lung infections. portfolio with compounds to treat respiratory infections, including one late-stage the lungs and digestive tract. Our acquisition of Corus enhances our development worldwide. There is no known cure for this inherited chronic disease, which affects Cystic fibrosis (CF) impacts the lives of more than 70,000 people and their families Pseudomonas aeruginosa (P. aeruginosa), P. aeruginosa.

- lysine for inhalation was granted orphan drug status in for inhalation in treating CF patients with determine the safety and efficacy of aztreonam lysine Two pivotal Phase III clinical studies were initiated to the United States and the European Union. CF treatment option. approval, has the potential to become an important new that aztreonam lysine for inhalation, if granted marketing from the placebo-controlled AIR-CF2 study. We believe infections. In late 2006, we announced positive results GILEAD SCIENCES SCIENCES GILEAD further extend lives. in treatments are helping to CF is 36.5 years. Advancements age life-span of a patient with Cystic fibrosis fibrosis Cystic the first grade. Today, the aver were not expected to make it to children who suffered from CF unmet medical need. In 1995, P. aeruginosa remains an 2006 ANNUAL REPORT ANNUAL

- 17

GILEAD IN THE COMMUNITY RESPIRATORY AND ADDITIONAL MARKETED HEPATITIS B AND C HIV/AIDS CARDIOPULMONARY THERAPIES PRODUCTS Lewis J. Rubin, MD, Professor of Medicine, Pulmonary and Critical Care, University of California, San Diego. San California, of University Care, Critical and Pulmonary Medicine, of Professor MD, Rubin, J. Lewis for the treatment of pulmonary arterial hypertension. for thetreatment arterial ofpulmonary investigation anddirect care vascular diseases formore ofpatientswithpulmonary thantwenty years. He ontheSteering serves Committeefor the pivotal trialsofambrisentan

Dr. Rubin hasbeeninvolved inbasicresearch, clinical

Cardiopulmonary Therapies potential treatmentforresistanthypertension. currently beingevaluatedinPhaseIIIclinicaltrialsasa Another candidateindevelopment,darusentan,is endothelin receptor antagonist of choice for the treat believe that ambrisentan has the proﬁle to become the United States and the European Union. If approved, we granted orphan drug status as a treatment for PAH in the an estimated six-month review. The compound has been granted priority review of the NDA, giving ambrisentan as a treatment for PAH. In February 2007, the U.S. FDA Drug Application (NDA) to the U.S. FDA for ambrisentan treatments. In December 2006, we submitted a New there remains an unmet need for safe and effective new Current therapeutic options for PAH are limited, and ment of PAH. from the acquisition of Myogen. are the foundation of Gilead’s cardiopulmonary development portfolio and resulted for the treatment of PAH and darusentan for the treatment of resistant hypertension, (PAH) and resistant hypertension. Two endothelin receptor antagonists, ambrisentan several cardiovascular disease conditions, including pulmonary arterial hypertension of blood ﬂow and cell division. Elevated endothelin blood levels are associated with Endothelin is a small peptide hormone believed to play a critical role in the regulation

- the ﬁeld of PAH. specialty sales team to gain experience selling products in has provided an important opportunity for our U.S.-based ment of primary pulmonary hypertension. This product markets Flolan. tories outsideoftheUnitedStates,whereGSKcurrently holds therightstocommercializeambrisentaninterri- Through itsMarch2006agreementwithMyogen,GSK was approved in 1995 for the long-term intravenous treat that helps regulate the size or diameter of blood vessels. It to prostacyclin, a naturally occurring chemical in the body Developed by GSK, Flolan is a synthetic chemical similar commercialization rights for Flolan in the United States. Through our acquisition of Myogen, we also gained GILEAD SCIENCES SCIENCES GILEAD 50 percent of PAH patients Pulmonary arterial hyper arterial Pulmonary ﬁve years of diagnosis. succumb to the disease within tension tension as in men. Approximately cases are reported in women worldwide. Twice as many that affects 200,000 people is a debilitating disease 2006 ANNUAL REPORT ANNUAL -

GILEAD IN THE COMMUNITY RESPIRATORY AND ADDITIONAL MARKETED HEPATITIS B AND C HIV/AIDS CARDIOPULMONARY THERAPIES PRODUCTS Gilead in the Community medications for people who cannot obtain reimbursement or afford to Our U.S. Advancing Access program provides access to certain Gilead Rodriguez Ernie have received Gilead therapies. pay for them. Since the program’s inception, more than 10,000 patients ,

Gilead CommunityLiaison, Chicago, Illinois

groups to better understand, and to address, their needs and concerns. active role in their treatment. We also work closely with patient advocacy on driving awareness of HIV and HBV, encouraging patients to take an programs in which we participate. These grassroots programs are focused Community partnerships are a key component of the patient education Kevin Stapleton, PhD Stapleton, Kevin Reagan Carol zations providing important services to our local and patient communities. funds for non-proﬁt healthcare organizations. In addition, we provide unre community events such as local walks, marathons and bicycle rides to raise every day. Gilead employees make the time to participate in annual patient Each of our more than 2,500 employees is part of implementing our mission stricted educational grants to support the efforts of third-party patient organi improve the lives of patients around the world. products that deliver therapeutic advancements and Our mission is to develop and commercialize novel hundreds of thousands of people worldwide and a With 10 products currently on the market beneﬁting ,

Accounting, San Dimas, California and , Respiratory Pharmaceutical Development, Seattle, Washington

- - pipeline of promising late-stage products, we which we live and work. products we offer to the broader communities in this goal. Our commitment extends beyond the believe we are making signiﬁcant progress toward Established in 2005, the Gilead Foundation is a non-proﬁt philanthropic orga Global Camps Africa Camps Global education programs in underserved communities in the United States. programs in resource-limited countries, as well as disease awareness and support HIV education, healthcare training and infrastructure, and treatment world. In 2006, the Gilead Foundation funded more than 25 organizations to nization that seeks to improve access to healthcare for people around the children affected by HIV/AIDS with the goal of creating a healthy vision for their future. WHY WE’RE HERE , a Gilead Foundation-funded program, offers a camp experience for GILEAD SCIENCES SCIENCES GILEAD 2006

ANNUAL REPORT ANNUAL - 21

GILEAD IN THE COMMUNITY RESPIRATORY AND ADDITIONAL MARKETED HEPATITIS B AND C HIV/AIDS CARDIOPULMONARY THERAPIES PRODUCTS GILEAD SCIENCES 2006 ANNUAL REPORT

Gilead has grown markedly in the 20 years since its inception. Our successful identification and development of drugs that attack HIV at different stages of the William Delaney, PhD, Biology, Foster City, California virus’s replication has established Gilead as a leader in this therapeutic category. Our resulting financial success has enabled us to fuel the development of new therapies for HIV and hepatitis, and to expand our product portfolio to include novel therapies to treat chronic respiratory and cardiopulmonary diseases. Our contin- Lloyd E. Bailey, MD, Attending Physician, Spellman Center for HIV Related Disorders, St. Vincent’s Midtown Hospital, New York ued financial and corporate growth will not change who we are. We remain committed to developing and commercializing innovative therapeutics to treat life- threatening diseases worldwide. That is why we’re here at Gilead – for patients and their families.

GILEAD MILESTONES Oanh, living with hepatitis B

1987 1990 1991 1996 1999 2001 2002 2003 2004 2006 2007

Gilead AmBisome In-licensed Vistide NeXstar Acquired Viread Hepsera Triangle Truvada Atripla Approved Founded Approved Nucleotides Approved (Establishment Approved Approved Acquired Approved Corus Acquired OUR VISION from IOCB/Rega of European Emtriva Macugen Operations) Raylo Acquired Approved Approved Tamiﬂu Approved Myogen Acquired

23 Corporate Information

BOARD OF DIRECTORS EXECUTIVE COMMITTEE SCIENTIFIC ADVISORY BOARD CORPORATE SECRETARY ANNUAL MEETING James M. Denny John C. Martin, PhD Bernard M. Wagner, MD Gregg H. Alton The annual meeting of Chairman, Gilead Sciences President and (Chairperson) Senior Vice President and stockholders will be held at Board of Directors Chief Executive Officer New York University General Counsel 10:00 a.m. on Wednesday, Medical Center May 9, 2007 at the Westin Paul Berg, PhD Norbert W. Bischofberger, PhD CORPORATE COUNSEL San Francisco Airport Hotel. Nobel Prize Winner, Chemistry Executive Vice President, Jacqueline K. Barton, PhD Cooley Godward Kronish LLP Cahill Professor, Emeritus, Research and Development California Institute of TRANSFER AGENT AND REGISTRAR Palo Alto, California Stanford University and Chief Scientific Officer Technology Communications concerning Medical Center INDEPENDENT REGISTERED stock transfer requirements, John F. Milligan, PhD Francis V. Chisari, MD PUBLIC ACCOUNTANTS lost certificates and changes of John F. Cogan, PhD Chief Operating Officer The Scripps Research Institute address should be directed to Senior Fellow, Hoover and Chief Financial Officer Ernst & Young LLP the Transfer Agent: Institution, Stanford University Peter B. Dervan, PhD Palo Alto, California Kevin Young California Institute Mellon Investor Services LLC Etienne F. Davignon Executive Vice President, of Technology CORPORATE HEADQUARTERS PO Box 3315 Minister of State Commercial Operations Gilead Sciences, Inc. South Hackensack, NJ 07606 Vice-Chairman, Suez-Tractebel Joel R. Huff, PhD 333 Lakeside Drive USA Gregg H. Alton Foster City, CA 94404 (800) 710-0940 Carla A. Hills Senior Vice President and Howard S. Jaffe, MD USA www.melloninvestor.com Chair and Chief Executive General Counsel Gilead Foundation (800) 445-3235 or Officer, Hills & Company, (650) 574-3000 EQUAL OPPORTUNITY EMPLOYER International Consultants Anthony D. Caracciolo Paul E. Klotman, MD www.gilead.com Gilead Sciences is proud to be Senior Vice President, Mt. Sinai Medical Center an equal opportunity employer John W. Madigan Manufacturing and Operations STOCKHOLDER INQUIRIES and extends employment to Retired Chairman and Mary E. Klotman, MD Inquiries from our stockholders men and women from cultur- Chief Executive Officer of William A. Lee, PhD Mt. Sinai Medical Center and potential investors ally diverse backgrounds. Tribune Company Senior Vice President, Research regarding our company are Our environment respects John W. Mellors, MD always welcome and will individual differences and John C. Martin, PhD James R. Meyers University of Pittsburgh receive a prompt response. recognizes each employee President and Chief Executive Senior Vice President, School of Medicine Please direct your requests as an integral member of our Officer, Gilead Sciences Commercial Operations, for information to: company. Our workforce North America Eugene R. Schiff, MD, FACP, reflects these values and Gordon E. Moore, PhD FRCP, MACG Investor Relations celebrates the individuals who Chairman Emeritus, A. Bruce Montgomery, MD University of Miami Gilead Sciences, Inc. make up our growing team. Intel Corporation Senior Vice President, Head of School of Medicine 333 Lakeside Drive Respiratory Therapeutics Foster City, CA 94404 Nicholas G. Moore Robert T. Schooley, MD USA Retired Global Chairman, John J. Toole, MD, PhD University of California, Phone: (800) 445-3235 or PricewaterhouseCoopers Senior Vice President, San Diego (650) 574-3000 Clinical Research Fax: (650) 578-9264 Gayle Edlund Wilson Richard J. Whitley, MD Director, Education Financing Taiyin Yang, PhD University of Alabama Information regarding Foundation of California and Senior Vice President, at Birmingham Gilead is also available Ralph M. Parsons Foundation Pharmaceutical Development at www.gilead.com. and Manufacturing DIRECTOR EMERITUS, GILEAD STOCK LISTING SCIENCES BOARD OF DIRECTORS Kristen M. Metza George P. Shultz, PhD Vice President, Gilead common stock is traded Distinguished Fellow, Hoover Human Resources on The Nasdaq Global Select Institution, Stanford University Stock Market®, under the NASDAQ symbol: GILD. IIeana (front cover), living with HIV 06 12 HIV/AIDS 14 B and C Hepatitis 16 Marketed Products Additional 20 Therapies and Cardiopulmonary Respiratory 22 in the Community Gilead 24 Our Vision Highlights Information and Financial Corporate GILEAD SCIENCES 2006 ANNUAL REPORT 01 Stockholders Letter to GILEAD SCIENCES 2006 ANNUAL REPORT WHY WE’RE HERE WE’RE WHY

HEADQUARTERS

Other Hepsera AmBisome Franchise HIV 06 06 ($ in millions) ($ in millions) 05 05 04 04

3,000

$ 1,500 $ 1,000 $ $ 500 $ 0 $ $ $2,500 2,000 $ 1,500 $ 1,000 $ $ 500 $ 0

OPERATING CASH FLOW CASH OPERATING PRODUCT REVENUE PRODUCT

Non-GAAP Net Income Net Non-GAAP (Loss) Income Net GAAP 06 ($ in millions) 05

04 NET INCOME (LOSS) INCOME $ 500 NET $ 0 $ – 500 1,000 – $ 1,500 – $ 2,000 $ 1,500 $ 1,000 $ 06 ($ in millions) 05 04

,500

HEADQUARTERS

Other Hepsera AmBisome Franchise HIV 06 06 ($ in millions) ($ in millions) 05 05 04 04

3,000

$ 1,500 $ 1,000 $ $ 500 $ 0 $ $ $2,500 2,000 $ 1,500 $ 1,000 $ $ 500 $ 0

OPERATING CASH FLOW CASH OPERATING PRODUCT REVENUE PRODUCT

Non-GAAP Net Income Net Non-GAAP (Loss) Income Net GAAP 06 ($ in millions) 05

04 NET INCOME (LOSS) INCOME $ 500 NET $ 0 $ – 500 1,000 – $ 1,500 – $ 2,000 $ 1,500 $ 1,000 $ 06 ($ in millions) 05 04

,500