`
` UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
`
`
`FORM 10-K
`
` (Mark One)
`ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2016
`
`or
`
`o
`
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the transition period from to
`Commission File No. 0-19731
`
`
`
`GILEAD SCIENCES, INC.
`
`(Exact name of registrant as specified in its charter)
`
`
`
`94-3047598
`Delaware
`(I.R.S. Employer Identification No.)
`(State or Other Jurisdiction of Incorporation or Organization)
`94404
`333 Lakeside Drive, Foster City, California
`(Zip Code)
`(Address of principal executive offices)
`Registrant’s telephone number, including area code: 650-574-3000
`
`
`SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
`
`Title of each class
`Name of each exchange on which registered
`The Nasdaq Global Select Market
`Common Stock, $0.001 par value per share
`SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
`
`
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
`months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and
`posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and
`post such files). Yes x No ¨
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of
`registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
`Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large
`accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
`Accelerated filer ¨
`Non-Accelerated filer ¨
` (Do not check if a smaller reporting company)
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
`The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant based upon the closing price of its Common Stock on the Nasdaq
`Global Select Market on June 30, 2016 was $103,455,508,531.*
`The number of shares outstanding of the registrant’s Common Stock on February 16, 2017 was 1,307,066,900.
`DOCUMENTS INCORPORATED BY REFERENCE
`Specified portions of the registrant’s proxy statement, which will be filed with the Commission pursuant to Regulation 14A in connection with the registrant’s 2017 Annual
`Meeting of Stockholders, to be held on May 10, 2017, are incorporated by reference into Part III of this Report.
`* Based on a closing price of $83.42 per share on June 30, 2016. Excludes 90,648,083 shares of the registrant’s Common Stock held by executive officers, directors and any
`stockholders whose ownership exceeds 5% of registrant’s common stock outstanding at June 30, 2016. Exclusion of such shares should not be construed to indicate that any
`such person possesses the power, direct or indirect, to direct or cause the direction of the management or policies of the registrant or that such person is controlled by or under
`common control with the registrant.
`
`Smaller reporting company ¨
`
`Large accelerated filer x
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`GILEAD SCIENCES, INC.
`2016 Form 10-K Annual Report
`Table of Contents
`
`PART I
`Business
`Item 1
`Item 1A Risk Factors
`Item 1B Unresolved Staff Comments
`Item 2
`Properties
`Item 3
`Legal Proceedings
`Item 4
`Mine Safety Disclosures
`
`PART II
`Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`Item 5
`Selected Financial Data
`Item 6
`Management’s Discussion and Analysis of Financial Condition and Results of Operations
`Item 7
`Item 7A Quantitative and Qualitative Disclosures about Market Risk
`Item 8
`Financial Statements and Supplementary Data
`Item 9
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
`Item 9A Controls and Procedures
`Item 9B Other Information
`
`PART III
`Item 10
`Item 11
`Item 12
`Item 13
`Item 14
`
`PART IV
`Item 15
`Item 16
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`SIGNATURES
`
`Directors, Executive Officers and Corporate Governance
`Executive Compensation
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
`Certain Relationships and Related Transactions, and Director Independence
`Principal Accountant Fees and Services
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`Exhibits and Financial Statement Schedules
`Form 10-K Summary
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`43
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`109
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`109
`109
`109
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`We own or have rights to various trademarks, copyrights and trade names used in our business, including the following: GILEAD®, GILEAD
`SCIENCES®, AMBISOME®, CAYSTON®, COMPLERA®, DESCOVY®, EMTRIVA ®, EPCLUSA®, EVIPLERA®, GENVOYA®, HARVONI®, HEPSERA®,
`LETAIRIS®, ODEFSEY®, RANEXA®, SOVALDI®, STRIBILD®, TRUVADA ®, TYBOST®, VEMLIDY®, VIREAD®, VITEKTA®, VOLIBRIS® and ZYDELIG®.
`ATRIPLA® is a registered trademark of Bristol-Myers Squibb & Gilead Sciences, LLC. LEXISCAN® is a registered trademark of Astellas U.S. LLC.
`MACUGEN® is a registered trademark of Eyetech, Inc. SUSTIVA ® is a registered trademark of Bristol-Myers Squibb Pharma Company. TAMIFLU ® is a
`registered trademark of Hoffmann-La Roche Inc. This report also includes other trademarks, service marks and trade names of other companies.
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`This Annual Report on Form 10-K, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of
`Operations,” contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the
`Securities Act of 1933, as amended (the Securities Act), and the Securities Exchange Act of 1934, as amended (the Exchange Act). Words such as “expect,”
`“anticipate,” “target,” “goal,” “project,” “hope,” “intend,” “plan,” “believe,” “seek,” “estimate,” “continue,” “may,” “could,” “should,” “might,”
`variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements other than statements
`of historical fact are forward-looking statements, including statements regarding overall trends, operating cost and revenue trends, liquidity and capital
`needs and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions. We have based these
`forward-looking statements on our current expectations about future events. These statements are not guarantees of future performance and involve risks,
`uncertainties and assumptions that are difficult to predict. Our actual results may differ materially from those suggested by these forward-looking
`statements for various reasons, including those identified in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.” Given these risks and
`uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements included in this report are
`made only as of the date hereof. Except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission
`(SEC), we do not undertake, and specifically decline, any obligation to update any of these statements or to publicly announce the results of any revisions
`to any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or
`otherwise.
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`ITEM 1.
`
`BUSINESS
`
`PART I
`
`Overview
`Gilead Sciences, Inc. (Gilead, we or us), incorporated in Delaware on June 22, 1987, is a research-based biopharmaceutical company that discovers,
`develops and commercializes innovative medicines in areas of unmet medical need. With each new discovery and investigational drug candidate, we strive
`to transform and simplify care for people with life-threatening illnesses around the world. We have operations in more than 30 countries worldwide, with
`headquarters in Foster City, California. Gilead’s primary areas of focus include human immunodeficiency virus (HIV), liver diseases such as chronic hepatitis
`C virus (HCV) infection and chronic hepatitis B virus (HBV) infection, hematology/oncology, cardiovascular and inflammation/respiratory diseases. We seek
`to add to our existing portfolio of products through our internal discovery and clinical development programs and through product acquisition and in-
`licensing strategies.
`
`2016 Highlights
`Over the past year, we continued to bring best-in-class drugs to market that advance the standard of care by offering enhanced modes of delivery, more
`convenient treatment regimens, improved resistance profiles, reduced side effects and greater efficacy. In the area of HIV, U.S. Food and Drug Administration
`(FDA) and the European Commission approved two tenofovir alafenamide (TAF)-based regimens: Odefsey® (emtricitabine 200 mg/rilpivirine 25
`mg/tenofovir alafenamide 25 mg) for the treatment of HIV-1 infection in certain patients and Descovy® (emtricitabine 200 mg/tenofovir alafenamide 25 mg),
`a fixed-dose combination for the treatment of HIV-1 infection. In the liver diseases area, we received FDA and European Commission approval of Epclusa®
`(sofosbuvir 400 mg/velpatasvir 100 mg), the first all-oral, pan-genotypic, single-tablet regimen for the treatment of adults with genotype 1-6 chronic HCV
`infection. Epclusa is also the first single-tablet regimen approved for the treatment of patients with HCV genotype 2 and 3, without the need for ribavirin. We
`also received FDA approval of Vemlidy® (tenofovir alafenamide 25 mg), a once-daily treatment for adults with HBV infection with compensated liver
`disease. In the inflammation/respiratory area, we advanced filgotinib, a JAK1 inhibitor we are developing with Galapagos NV (Galapagos) to Phase 3 clinical
`trials for the potential treatment of rheumatoid arthritis, Crohn’s disease and ulcerative colitis. At the end of 2016, our research and development pipeline
`included 167 active clinical studies, of which 61 were Phase 3 clinical trials.
`In addition to advancing treatment options across therapeutic areas, we also enabled access to our medications for people who need them around the
`world. We continued to expand access to our medicines in low- and middle-income countries by pursuing multiple strategies, including entering into
`collaborations with governments, generic manufacturers, regional business partners, policy makers, healthcare providers, patient groups and public health
`entities. Today, 10 million people are receiving Gilead HIV medicines in low- and middle-income countries. In 2016, we also entered into a partnership with
`the World Health Organization (WHO) to provide $20 million in funding and drug donations over five years to expand access to diagnostic services and
`treatment for visceral leishmaniasis, the world’s second-deadliest parasitic infectious disease that affects up to 300,000 people annually in resource-limited
`countries.
`
`HIV
`
`Our goal is to ensure that all HIV patients can choose a single-tablet regimen that is right for them. Single-tablet regimens allow patients to adhere to a
`fully suppressive course of therapy more easily and consistently, which is critical for the successful management of the disease. HIV patients are living
`longer, thus facing additional health challenges to those experienced by newly diagnosed patients. We are motivated to continue improving on existing
`treatment options. The need for efficacy together with improved long-term safety has driven our development programs and the design of the studies we have
`completed and those that are planned.
`Our TAF single-tablet regimens seek to address the diverse needs of HIV patients worldwide. TAF is a novel targeted prodrug of tenofovir that has
`demonstrated high antiviral efficacy similar to and at a dose less than one-tenth that of Viread® (tenofovir disoproxil fumarate, TDF), as well as improvement
`in surrogate laboratory markers of renal and bone safety as compared to TDF in clinical trials in combination with other antiretroviral agents. With the launch
`of our two TAF-based single-tablet regimens, Genvoya® (elvitegravir 150mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir alafenamide 10 mg) and
`Odefsey, we now have five single-tablet regimens available for the treatment of HIV. Odefsey is currently the smallest pill of any single-tablet regimen for the
`treatment of HIV. Descovy, a fixed-dose combination for the treatment of HIV, also represents an important evolution in HIV care, as it is the first new HIV
`treatment backbone approved by FDA in more than a decade.
`In addition, we are evaluating bictegravir/emtricitabine/TAF in Phase 3 studies for the treatment of HIV. We anticipate completing these studies in the
`third quarter of 2017.
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`Liver Diseases
`Our goal is to advance the treatment options and standard of care for the HCV market. With the approval of Sovaldi® (sofosbuvir 400 mg), compared to
`the prior standard of care of up to 48 weeks, the duration of treatment was shortened to as few as 12 weeks and the need for peg-interferon injections in certain
`viral genotype populations was reduced or eliminated completely. Harvoni® (ledipasvir 90 mg/sofosbuvir 400 mg) is the first once-daily single-tablet
`regimen for the treatment of HCV genotype 1-infected patients, the most prevalent genotype in the United States. In 2016, we received approval of Epclusa,
`the first all-oral, pan-genotypic, single-tablet regimen for the treatment of adults with genotype 1-6 chronic HCV infection. Epclusa is also the first single-
`tablet regimen approved for the treatment of patients with HCV genotype 2 and 3, without the need for ribavirin. In the fourth quarter of 2016, we submitted a
`new drug application to FDA for the approval of an investigational, once-daily, single-tablet regimen containing sofosbuvir 400 mg, velpatasvir 100 mg and
`voxilaprevir 100 mg (SOF/VEL/VOX), for the treatment of HCV. The product, if approved, would offer an effective cure for patients who have failed prior
`therapy with other highly effective regimens.
`In 2016, we received FDA approval of Vemlidy, a once-daily treatment for adults with HBV infection with compensated liver disease.
`We are also evaluating selonsertib, an investigational small-molecule inhibitor of apoptosis signal-regulating kinase 1, or ASK-1, for the treatment of
`nonalcoholic steatohepatitis (NASH) in Phase 3 clinical trials. Based on the Phase 2 results, we intend to evaluate selonsertib in patients with NASH and
`moderate to severe fibrosis. We have two other compounds with different mechanisms currently in two Phase 2 studies in patients with NASH and fibrosis -
`GS-9674, an FXR agonist, and GS-0976, an acetyl-CoA carboxylase (ACC) inhibitor. Pending demonstration of single agent efficacy and safety in these
`Phase 2 studies, we plan to initiate combination studies with the three agents in 2017.
`
`Hematology/Oncology
`In the hematology/oncology area, we continued to progress our product candidates through clinical trials. Idelalisib, a PI3K delta inhibitor, is in Phase
`3 clinical trials for the treatment of patients with relapsed refractory chronic lymphocytic leukemia (CLL). We are also evaluating GS-5745, an
`investigational anti-MMP9 antibody, in a Phase 3 study for the treatment of gastric cancer.
`
`Inflammation/Respiratory
`In 2016, we closed on a license and collaboration agreement with Galapagos, a clinical-stage biotechnology company based in Belgium, for the
`development and commercialization of filgotinib, a JAK1 inhibitor being evaluated in Phase 3 trials for three inflammatory disease indications - rheumatoid
`arthritis, Crohn’s disease and ulcerative colitis. In 2017, we also expect to initiate Phase 2 clinical trials evaluating filgotinib in combination with GS-9876, a
`Syk inhibitor, and GS-4059, a BTK inhibitor, for the potential treatment of rheumatoid arthritis.
`
`Our Products
`
`HIV
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`•
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`•
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`•
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`•
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`Descovy is an oral formulation indicated in combination with other antiretroviral agents for the treatment of HIV-1 infection in adults and
`pediatric patients 12 years of age or older. Descovy is a fixed-dose combination of our antiretroviral medications, Emtriva ® (emtricitabine) and
`TAF. Descovy was approved by FDA and the European Commission in April 2016.
`Odefsey is an oral formulation dosed once a day for the treatment of HIV-1 infection in certain patients. Odefsey is a fixed-dose combination of
`our antiretroviral medications, Emtriva and TAF, and rilpivirine marketed by Janssen Sciences Ireland UC (Janssen), one of the Janssen
`Pharmaceutical Companies of Johnson & Johnson. Odefsey represents the smallest pill of any single-tablet regimen for the treatment of HIV.
`Odefsey was approved by FDA in March 2016 and the European Commission in June 2016.
`Genvoya is an oral formulation dosed once a day for the treatment of HIV-1 infection in adults. Genvoya is a single-tablet regimen for the
`treatment of HIV and is a fixed-dose combination of our antiretroviral medicines, Vitekta® (elvitegravir), Tybost® (cobicistat), Emtriva and TAF.
`Stribild® (elvitegravir/cobicistat/emtricitabine/TDF) is an oral formulation dosed once a day for the treatment of HIV-1 infection in treatment-
`naive adults. Stribild is a single-tablet regimen for the treatment of HIV and is a fixed-dose combination of our antiretroviral medications, Vitekta,
`Tybost, Viread and Emtriva.
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`Complera®/Eviplera® (emtricitabine/rilpivirine/TDF) is an oral formulation dosed once a day for the treatment of HIV-1 infection in adults. The
`product, marketed in the United States as Complera and in Europe as Eviplera, is a single-tablet regimen for the treatment of HIV and is a fixed-
`dose combination of our antiretroviral medications, Viread and Emtriva, and Janssen’s rilpivirine.
`Atripla® (efavirenz/emtricitabine/TDF) is an oral formulation dosed once a day for the treatment of HIV infection in adults. Atripla is a single-
`tablet regimen for HIV intended as a stand-alone therapy or in combination with other antiretrovirals. It is a fixed-dose combination of our
`antiretroviral medications, Viread and Emtriva, and Bristol-Myers Squibb Company’s (BMS’s) efavirenz.
`Truvada® (emtricitabine/TDF) is an oral formulation dosed once a day as part of combination therapy to treat HIV infection in adults. It is a fixed-
`dose combination of our antiretroviral medications, Viread and Emtriva. FDA also approved Truvada, in combination with safer sex practices, to
`reduce the risk of sexually acquired HIV-1 infection in adults at high risk; a strategy called pre-exposure prophylaxis (PrEP).
`Viread is an oral formulation of a nucleotide analog reverse transcriptase inhibitor, dosed once a day as part of combination therapy to treat HIV
`infection in patients two years of age and older. The European Commission also approved the use of Viread in combination with other
`antiretroviral agents for the treatment of HIV-1-infected adolescent patients aged two to less than 18 years with nucleoside reverse transcriptase
`inhibitor resistance or toxicities precluding the use of first-line pediatric agents. Viread is also approved for the treatment of HBV.
`Emtriva is an oral formulation of a nucleoside analog reverse transcriptase inhibitor, dosed once a day as part of combination therapy to treat HIV
`infection in adults. In the United States and Europe, Emtriva is also available as an oral solution approved as part of combination therapy to treat
`HIV infection in children.
`Tybost is a pharmacokinetic enhancer dosed once a day that boosts blood levels of certain HIV medicines. Tybost is indicated as a boosting agent
`for the HIV protease inhibitors atazanavir and darunavir as part of antiretroviral combination therapy in adults with HIV-1 infection.
`Vitekta is an oral formulation of an integrase inhibitor, dosed once a day as part of combination therapy to treat HIV infection in adults without
`known mutations associated with resistance to elvitegravir, the active ingredient of Vitekta. Vitekta is indicated for use as part of HIV treatment
`regimens that include a ritonavir-boosted protease inhibitor.
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`•
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`•
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`Liver Diseases
`Vemlidy is an oral formulation of a once-daily treatment of TAF for adults with HBV infection with compensated liver disease. Vemlidy was
`•
`approved by FDA in November 2016 and the European Commission in January 2017.
`Epclusa is an oral formulation of sofosbuvir and velpatasvir and the first pan-genotypic, single-tablet regimen for the treatment of adults with
`genotype 1-6 chronic infection. Epclusa is also the first single-tablet regimen approved for the treatment of patients with HCV genotype 2 and 3,
`without the need for ribavirin. Epclusa for 12 weeks was approved in patients without cirrhosis or with compensated cirrhosis (Child-Pugh A), and
`in combination with ribavirin for patients with decompensated cirrhosis (Child-Pugh B or C). Epclusa was approved by FDA in June 2016 and the
`European Commission in July 2016.
`Harvoni is an oral formulation of ledipasvir and sofosbuvir dosed once a day for the treatment of genotypes 1, 4, 5 and 6, HCV/HIV-1 co-
`infection, HCV genotype 1 and 4 liver transplant recipients, and genotype 1-infected patients with decompensated cirrhosis. In Europe, Harvoni is
`also indicated for certain patients with HCV genotype 4 infection, HCV genotype 3 infection with cirrhosis and/or prior treatment failure and
`those with HCV/HIV-1 co-infection.
`Sovaldi is an oral formulation of sofosbuvir dosed once a day for the treatment of HCV as a component of a combination antiviral treatment
`regimen. Sovaldi’s efficacy has been established in patients with HCV genotypes 1, 2, 3 or 4 infection (in the United States and Europe) and
`genotypes 5 and 6 infection (in Europe), including those with hepatocellular carcinoma meeting Milan criteria (awaiting liver transplantation)
`and those with HCV/HIV-1 co-infection.
`Viread is an oral formulation of a nucleotide analog reverse transcriptase inhibitor, dosed once a day for the treatment of HBV in adults with
`compensated and decompensated liver disease. We licensed to GlaxoSmithKline Inc. (GSK) the rights to commercialize Viread for the treatment of
`HBV in China, Japan and Saudi Arabia. In 2012, the European Commission approved the use of Viread for the treatment of HBV infection in
`adolescent patients aged 12 to less than 18 years with compensated liver disease and evidence of immune active disease. Viread is also approved
`for the treatment of HIV infection.
`Hepsera® (adefovir dipivoxil) is an oral formulation of a nucleotide analog polymerase inhibitor, dosed once a day to treat HBV in patients 12
`years of age and older. We licensed to GSK the rights to commercialize Hepsera for the treatment of HBV in Asia Pacific, Latin America and
`certain other territories.
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`Hematology/Oncology
`•
`Zydelig® (idelalisib) is a first-in-class PI3K delta inhibitor for the treatment of certain blood cancers. In the United States, Zydelig is approved in
`combination with rituximab for patients with relapsed CLL for whom rituximab alone would be considered appropriate therapy and as
`monotherapy for patients with relapsed follicular B-cell non-Hodgkin lymphoma (FL) and small lymphocytic lymphoma (SLL) who have received
`at least two prior systemic therapies. In the European Union, Zydelig is approved for the treatment of CLL and FL.
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`•
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`Cardiovascular
`Letairis® (ambrisentan) is an oral formulation of an endothelin receptor antagonist (ERA) indicated for the treatment of pulmonary arterial
`•
`hypertension (PAH) (WHO Group 1) in patients with WHO Class II or III symptoms to improve exercise capacity and delay clinical worsening. We
`sublicensed to GSK the rights to ambrisentan, marketed by GSK as Volibris® (ambrisentan), for PAH in territories outside of the United States.
`Ranexa® (ranolazine) is an extended-release tablet for the treatment of chronic angina. We have licensed to Menarini International Operations
`Luxembourg SA the rights to Ranexa in territories outside of the United States.
`Lexiscan® (regadenoson) injection is indicated for use as a pharmacologic stress agent in radionuclide myocardial perfusion imaging (MPI), a test
`that detects and characterizes coronary artery disease, in patients unable to undergo adequate exercise stress. Astellas US LLC (Astellas) has
`exclusive rights to manufacture and sell regadenoson under the name Lexiscan in the United States. Rapidscan Pharma Solutions, Inc. (RPS) holds
`the exclusive right to manufacture and sell regadenoson under the name Rapiscan® in Europe and certain territories outside the United States. We
`receive royalties from Astellas and RPS for sales in these territories.
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`•
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`Inflammation/Respiratory
`Cayston® (aztreonam for inhalation solution) is an inhaled antibiotic for the treatment of respiratory systems in cystic fibrosis patients seven years
`•
`of age and older with Pseudomonas aeruginosa (P. aeruginosa).
`Tamiflu® (oseltamivir phosphate) is an oral antiviral available in capsule form for the treatment and prevention of influenza A and B. Tamiflu is
`approved for the treatment of influenza in children and adults in more than 60 countries, including the United States, Japan and the European
`Union. Tamiflu is also approved for the prevention of influenza in children and adults in the United States, Japan and the European Union. We
`developed Tamiflu with F. Hoffmann-La Roche Ltd (together with Hoffmann-La Roche Inc., Roche). Roche has the exclusive right to manufacture
`and sell Tamiflu worldwide, subject to its obligation to pay us royalties based on a percentage of the net sales of Tamiflu.
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`Other
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`AmBisome® (amphotericin B liposome for injection) is a proprietary liposomal formulation of amphotericin B, an antifungal agent to treat serious
`invasive fungal infections caused by various fungal species in adults. Our corporate partner, Astellas Pharma US, Inc., promotes and sells
`AmBisome in the United States and Canada, and we promote and sell AmBisome in Europe, Australia and New Zealand.
`Macugen® (pegaptanib sodium injection) is an intravitreal injection of an anti-angiogenic oligonucleotide for the treatment of neovascular age-
`related macular degeneration. Macugen was developed by Eyetech Inc. (Eyetech) using technology licensed from us and is now promoted in the
`United States by Valeant Pharmaceuticals, Inc. (Valeant), which acquired Eyetech in 2012. Valeant holds the exclusive rights to manufacture and
`sell Macugen in the United States, and Pfizer Inc. (Pfizer) holds the exclusive right to manufacture and sell Macugen in the rest of the world. We
`receive royalties from Valeant and Pfizer based on worldwide sales of Macugen.
`Antiviral product sales, which include sales of our HIV and other antiviral products and our HCV products, were $27.7 billion, $30.2 billion and $22.8
`billion in 2016, 2015 and 2014, respectively, and represented 91% of our total revenues in 2016, 93% of our total revenues in 2015 and 92% of our total
`revenues in 2014. Sales of our other products were $2.2 billion, $1.9 billion and $1.7 billion in 2016, 2015 and 2014, respectively, and represented 7% of our
`total revenues in 2016, 6% of our total revenues in 2015 and 7% of our total revenues in 2014. See Management’s Discussion and Analysis of Financial
`Condition and Results of Operations included in Item 7 and Note 16, Segment Information of the Notes to Consolidated Financial Statements included in
`Item 8 of this Annual Report on Form 10-K for additional information related to sales by product.
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`Commercialization and Distribution
`We have U.S. and international commercial sales operations, with marketing subsidiaries in over 30 countries. Our products are marketed through our
`commercial teams and/or in conjunction with third-party distributors and corporate partners. Our commercial teams promote our products through direct field
`contact with physicians, hospitals, clinics and other healthcare providers. We generally grant our third-party distributors the exclusive right to promote our
`product in a territory for a specified period of time. Most of our agreements with these distributors provide for collaborative efforts between the distributor
`and Gilead in obtaining and maintaining regulatory approval for the product in the specified territory.
`We sell and distribute Epclusa, Harvoni, Sovaldi, Vemlidy, Descovy, Odefsey, Truvada, Atripla, Stribild, Complera, Viread, Genvoya, Emtriva, Tybost,
`Vitekta, Ranexa, AmBisome, Zydelig and Hepsera in the United States exclusively through the wholesale channel. Our product sales to three large
`wholesalers, McKesson Corporation, AmerisourceBergen Corporation and Cardinal Health, Inc. each accounted for more than 10% of total revenues for each
`of the years ended December 31, 2016, 2015 and 2014. On a combined basis, in 2016, these wholesalers accounted for approximately 88% of our product
`sales in the United States and approximately 56% of our total worldwide revenues. Letairis and Cayston are distributed exclusively by specialty pharmacies.
`These specialty pharmacies dispense medications for complex or chronic conditions that require a high level of patient education and ongoing counseling.
`We sell and distribute Epclusa, Harvoni, Sovaldi, Vemlidy, Descovy, Odefsey, Truvada, Atripla, Stribild, Eviplera, Viread, Emtriva, Tybost, Vitekta,
`Genvoya, Ranexa, AmBisome, Zydelig and Hepsera in Europe and countries outside the United States where the product is approved, either through our
`commercial teams, third-party distributors or corporate partners.
`
`U.S. Patient Access
`We make it a priority to increase access to our medicines for people who can benefit from them, regardless of their ability to pay. In the United States,
`our U.S. patient support and assistance programs help patients and their families understand their access options. We assist patients with understanding
`insurance coverage, financial assistance options and eligibility for free treatment. We make our therapies accessible for uninsured individuals and those who
`need financial assistance. We also support programs for those unable to afford the co-payments associated with health insurance programs. Half of all patients
`taking our HIV medicines in the United States already receive them through federal and state programs at substantially discounted prices. We also have a
`long history of working with state AIDS Drug Assistance Programs (ADAPs) to provide lower pricing for our HIV medicines. The price freeze we instituted for
`ADAPs in 2008 was extended in 2013 through the end of 2017, providing important support to these critical programs as they evolve in the changing U.S.
`healthcare environment.
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`Developing World Access
`Under our Gilead Access Program, established in 2003, certain of our products for HIV/AIDS, viral hepatitis and visceral leishmaniasis are available at
`substantially reduced prices in the developing world. Today, 10 million people are receiving Gilead HIV medicines in low- and middle-income countries. We
`have entered into a number of collaborations related to access to our products in the developing world, which include:
`Licenses with Generic Manu