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From StartupTo Blue Chip: The Success Story Of

Gilead Sciences Inc.
By lnvestopedia I Updated June 3, 2015 - 8:22 AM EDT

Gilead Sciences (GILD) a biotechnology

company that generally focuses on
antiviral drugs and therapies for HIV,
hepatitis B and influenza. The company's
headquarters are in Foster City,
California. The company was founded in
1987 by Michael Riordan, a medical
doctor who went to Harvard. Riordan had
worked for a prominent venture capital
firm before founding Gilead. His unique
experience and medical background
combined with venture capital experience helped him obtain the necessary venture capital to
get Gilead off the ground.
Parity
Early Research Ex-Dividend
Gilead initially focused on developing treatments for HIV and AIDS. There were promising
Basis Point (BPS)
developments in the area of antisense drugs, which were thought to have the ability to block
the genetic messages that could trigger diseases. However, research in the field was still Regulation T - Reg T
nascent and highly speculative. Gilead operated in the red for a number of years as its Quantitative Easing
research in the field continued. Riordan was able to keep funding for the company going, even Federal Funds Rate
though the company was not realizing any revenue at the time.

In September 1991, Gilead obtained $20 million in private equity financing. The company then
Trading Center
began preparing for its initial public offering (IPO) . Gilead debuted on the Nasdaq exchange at
the end of January 1992, raising $86.25 million from the sale of around 5 million common
shares. Despite the success of the IPO, it still took a number of years before the company was
finally ready to release its first product to the market.
Partner Links
First Product Launch
The company's first drug, Vistide, received FDA approval in June of 1996. Vistide is an
injectable antiviral drug used to treat an eye infection in people with HIV/AIDS. Gilead signed
agreements with large pharmaceutical companies Upjohn and Pharmacia to market the
therapy outside of the U.S. Vistide marked the company's first successful product. In 2003, the
combination of Vistide, Viread (an HIV drug) and Hespera (for hepatitis B) had revenues of
$645 million for the company.

Tamiflu is Gilead's most well-known drug. In 1999, the FDA approved Tamiflu for the
treatment of influenza. The drug is often prescribed if a case of influenza is caught early
enough in a patient, and it is believed to reduce the impact and duration of the virus
significantly. Tamiflu played an important role during the bird flu outbreak in Asia in 2005.
During the outbreak, George W. Bush, as part of a larger emergency package, requested $1
billion to be spent on the purchase and stockpiling of the drug. Congress had previously
approved $1.8 billion for stockpiling Tamiflu specifically for military purposes.

Recent Developments
One of Gilead's more recent drugs is Sovaldi, used in the treatment of hepatitis C. Although
the drug is extremely effective at curing the disease, with an efficacy rate of around 90%,
Sovaldi has become controversial due to its high cost. The drug costs about $1,000 per pill,
with a total course of the medication adding up to around $84,000. Many insurance companies
have balked at paying this extremely high price. In 2014, the Philadelphia Transportation
Authority filed suit against Gilead over the medication's cost.

Despite this controversy, Gilead still continues to be extremely successful. In 2014, gross
revenues were $24.9 billion , versus $11.2 billion for 2013. Net income for 2014 was $13.3
billion. The stock was trading around $16 a share in 2010. As of 2015, shares were trading in
the range of $11 O a share. The company enacted an aggressive strategy of acquiring
pharmaceutical companies with promising pipeline drugs . The company acquired Pharmasset
Inc., an antiviral drug manufacturer, in 2011 for $11 billion. From 2013 to 2015, Gilead
acquired smaller pharmaceutical companies with drugs focusing on liver disease, cancer and
inflammatory diseases. These pipeline drugs may continue to provide significant revenue for
the company moving into the future.