`
` (Mark One)
`
` UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
`
`
`FORM 10-K
`
` ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2013
`
`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)
`
`
`Delaware
`94-3047598
`(State or Other Jurisdiction of Incorporation or Organization)
`(I.R.S. Employer Identification No.)
`333 Lakeside Drive, Foster City, California
`94404
`(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:
`
`Name of each exchange on which registered
`Title of each class
`Common Stock, $0.001 par value per share
`The Nasdaq Global Select Market
`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):
`
`Large accelerated filer x
`
`Non-Accelerated filer ¨
`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 28, 2013 was $60,272,481,253.*
`The number of shares outstanding of the registrant's Common Stock on February 14, 2014 was 1,538,252,914.
`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 2014 Annual
`Meeting of Stockholders, to be held on May 7, 2014, are incorporated by reference into Part III of this Report.
`* Based on a closing price of $51.27 per share on June 28, 2013. Excludes 343,332,813 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 28, 2013. 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 ¨
`
`
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`

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`GILEAD SCIENCES, INC.
`2013 Form 10-K Annual Report
`Table of Contents
`
`PART I
`Business
`Item 1
`Item 1A Risk Factors
`Item 1B Unresolved Staff Comments
`Properties
`Item 2
`Legal Proceedings
`Item 3
`Mine Safety Disclosures
`Item 4
`
`PART II
`Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`Item 5
`Item 6
`Selected Financial Data
`Management's Discussion and Analysis of Financial Condition and Results of Operations
`Item 7
`Item 7A Quantitative and Qualitative Disclosures about Market Risk
`Financial Statements and Supplementary Data
`Item 8
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
`Item 9
`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
`
`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
`
`Exhibits and Financial Statement Schedules
`
`
`
`
`
`
`
`
`
`
`
`3
`31
`47
`47
`47
`52
`
`
`
`53
`5 5
`5 6
`72
`75
`75
`75
`77
`
`
`
`77
`77
`77
`77
`77
`
`
`
`78
`
`140
`
`We own or have rights to various trademarks, copyrights and trade names used in our business, including the following: GILEAD ®, GILEAD
`SCIENCES®, STRIBILD®, COMPLERA®, EVIPLERA®, TRUVADA®, VIREAD®, EMTRIVA®, TYBOST®, SOVALDI®, HEPSERA®, VITEKTA®,
`LETAIRIS®, RANEXA®, CAYSTON®, AMBISOME®, VISTIDE®, VOLIBRIS®, and RAPISCAN®. ATRIPLA® is a registered trademark belonging to
`Bristol-Myers Squibb & Gilead Sciences, LLC. LEXISCAN ® is a registered trademark belonging to Astellas U.S. LLC. MACUGEN ® is a registered
`trademark belonging to Eyetech, Inc. SUSTIVA® is a registered trademark of Bristol-Myers Squibb Pharma Company. TAMIFLU ® is a registered trademark
`belonging to 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 below under “Risk Factors,” beginning at
`page 31. 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.
`
`2
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`

`

`PART I
`
`BUSINESS
`
`ITEM 1.
`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 experimental drug candidate, we strive to
`transform and simplify care for people with life-threatening illnesses around the world. Gilead's primary areas of focus include human immunodeficiency
`virus (HIV), liver diseases such as chronic hepatitis B virus (HBV) infection and chronic hepatitis C virus (HCV) infection, oncology/inflammation and
`serious cardiovascular and respiratory conditions. Headquartered in Foster City, California, we have operations in North and South America, Europe and
`Asia-Pacific. We continue to add to our existing portfolio of products through our internal discovery and clinical development programs and through a product
`acquisition and in-licensing strategy.
`
`2013 Highlights
`Over the past year, we executed on our strategy to bring best-in-class drugs to market. In the liver diseases area, we received approval from the U.S.
`Food and Drug Administration (FDA) of our new drug application (NDA) for Sovaldi ® (sofosbuvir 400 mg). Sovaldi is a once-daily oral nucleotide analog
`polymerase inhibitor for the treatment of HCV infection as a component of a combination antiviral treatment regimen. The approval of Sovaldi represents a
`significant improvement in the treatment paradigm for some patients with HCV as it has shortened the duration of treatment and reduced or completely
`eliminated the need for pegylated interferon (peg-IFN) injections in certain viral genotype populations. In the HIV area, we expanded our single tablet regimen
`product offerings for the treatment of HIV with the European launch of Stribild ® (elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir
`disoproxil fumarate 300 mg), which combines four of our medicines in a once-daily single tablet regimen. We also received approval of Tybost ® (cobicistat)
`and Vitekta® (elvitegravir 85 mg and 150 mg), each a component of Stribild, from the European Commission. In the oncology/inflammation area, we filed for
`FDA and European Medicines Agency (EMA) marketing approval of idelalisib (formerly GS-1101), an investigational, targeted, oral inhibitor of PI3K delta,
`for the treatment of patients with refractory indolent non-Hodgkin’s lymphoma (iNHL) and relapsed chronic lymphocytic leukemia (CLL). We also continued
`to advanced our research and development pipeline, with more than 200 active clinical studies at the end of 2013, of which over 60 are Phase 3 clinical trials.
`
`HIV Program
`A substantial portion of our revenues is derived from our eight marketed HIV products. In 2013, we continued to be at the forefront of advancing HIV
`treatment through the development of new single tablet regimens. Our long-term goal is to ensure that all HIV patients have the option to 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. Because of this, we continue to focus on the development of new HIV medicines and co-formulations.
`With the launch of Stribild in the United States in 2012 and in Europe in 2013, Complera ®/Eviplera® (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir
`disoproxil fumarate 300 mg) in 2011 and Atripla® (efavirenz 600 mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg) in 2006, we now have three
`single tablet regimens available. In December 2013, we received FDA and EMA approval for Complera/Eviplera to be used by certain adult patients switching
`from another stable antiretroviral regimen. Complera/Eviplera was first approved in 2011 in the United States and Europe for patients new to antiretroviral
`therapy.
`
`In September 2013, we received EMA approval for Tybost, a pharmacokinetic enhancer that boosts blood levels of certain HIV medicines. Tybost is
`indicated as a boosting agent for the HIV protease inhibitors atazanavir (300 mg once daily) and darunavir (800 mg once daily) as part of antiretroviral
`combination therapy in adults with HIV-1 infection. This approval allows for the marketing of Tybost in all 28 countries of the European Union. In
`November 2013, the EMA approved Vitekta, an integrase inhibitor for the treatment of HIV-1 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.
`
`3
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`We also made important progress with the clinical development of tenofovir alafenamide (TAF), formerly known as GS-7340. A Phase 2 study showed
`that TAF is efficacious at a fraction of a dose of Viread® (tenofovir disoproxil fumarate 300 mg) and provides potential safety advantages. Based on these
`results, we commenced a Phase 3 trial evaluating the single tablet regimen of TAF, elvitegravir, cobicistat and emtricitabine for the treatment of HIV infection in
`treatment-naïve adults. Under an agreement with Janssen R&D Ireland (Janssen), formerly Tibotec Pharmaceuticals, we are also conducting Phase 2 trials
`evaluating a single tablet regimen of TAF, cobicistat, darunavir and emtricitabine for the treatment of HIV infection. In the first quarter of 2013, we completed
`enrollment of two Phase 3 clinical trials comparing a TAF-based regimen to Stribild in patients new to HIV treatment. Data from the studies will be available in
`the first quarter of 2014.
`
`Liver Diseases
`The HCV therapeutic market has been and continues to be vastly underserved. Due to the limitations of available therapies, only a small fraction of
`individuals who are infected with HCV are diagnosed, and an even smaller fraction of those patients are treated. Prior to May 2011, when the first protease
`inhibitors were approved, only about half of the patients responded to the current standard of care, which involves up to 48 weeks of therapy with a peg-
`IFN/ribavirin (RBV)-containing regimen. The addition of protease inhibitors to the standard of care has resulted in incremental response rates for patients with
`genotype 1 infection; however, this regimen causes substantial side effects such as fatigue, bone marrow suppression, potentially debilitating rash, anemia
`and neuropsychiatric effects. As such, discontinuation rates with these triple therapy combinations are significant.
`
`Through the acquisition of Pharmasset, Inc. (Pharmasset) in 2012, we acquired sofosbuvir, a nucleotide analog that acts to inhibit the replication of
`HCV. In December 2013, we received FDA approval for sofosbuvir under the brand name Sovaldi for the treatment of HCV as a component of a combination
`antiviral treatment regimen. In January 2014, we received European Commission approval of Sovaldi for the treatment of HCV. Sovaldi’s efficacy has been
`established in patients with HCV genotypes 1, 2, 3 or 4 infection (in 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. U.S. recommended regimens and
`treatment duration for Sovaldi combination therapy in HCV mono-infected or HCV/HIV-1 co-infected patients are as follows:
`
`
`Genotype 1 or 4
`Genotype 2
`Genotype 3
`Hepatocellular carcinoma awaiting liver transplantation
`
`
`Treatment
` Sovaldi + peg-IFN + RBV
` Sovaldi + RBV
` Sovaldi + RBV
` Sovaldi + RBV
`
`Duration
`
`
` 12 weeks
` 12 weeks
` 12 weeks
` 48 weeks or until liver transplant
`
`As noted in the table above, compared to the current standard of care of up to 48 weeks, Sovaldi has shortened the duration of treatment to as little as 12
`weeks and reduced or completely eliminated the need for peg-IFN injections in certain viral genotype populations.
`
`As our second generation therapy for the treatment of HCV, we are advancing the fixed-dose combination of ledipasvir/sofosbuvir (LDV/SOF) for the
`treatment of genotype 1 patients. Our NDA for the fixed-dose combination of LDV/SOF was supported by three clinical trials and was filed in February 2014.
`The first study, named ION-1, evaluates the fixed-dose combination of LDV/SOF with and without RBV for either 12 or 24 weeks in treatment-naïve genotype
`1 HCV-infected patients. The second Phase 3 study, named ION-2, evaluates the fixed-dose combination with RBV for 12 weeks or without RBV for 24
`weeks of therapy among treatment-experienced genotype 1 HCV-infected patients. The third study, named ION-3, evaluates the fixed-dose combination of
`LDV/SOF with and without RBV for eight weeks or without RBV for 12 weeks in non-cirrhotic, treatment-naïve genotype 1 HCV-infected patients.
`
`In Japan, we fully enrolled a Phase 3 study evaluating sofosbuvir in genotype 2 HCV-infected patients. We expect to file for regulatory approval of
`sofosbuvir in Japan in mid-2014. We also completed enrollment of Phase 3 studies evaluating the fixed-dose combination of LDV/SOF in genotype 1 infected
`HCV patients and sofosbuvir and RBV in genotype 2 infected HCV patients. Based on the results of these Phase 3 studies, we plan to file for regulatory
`approval for the fixed-dose combination of LDV/SOF in Japan in the fourth quarter of 2014.
`
`Our long term goal is to develop an oral pan-genotypic oral therapy for all HCV patients across genotypes. The fixed-dose combination of sofosbuvir and
`GS-5816, a nucleotide NS5B inhibitor/pan-genotypic NS5A inhibitor, is currently in Phase 2 clinical trials.
`
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`Oncology/Inflammation
`Over the last five years we have worked to advance our oncology franchise. Idelalisib, a PI3K delta inhibitor antibody, formerly known as GS-1101, is
`being evaluated for the treatment of iNHL and CLL. In September 2013, we filed an NDA for idelalisib for the treatment of patients with iNHL that is
`refractory (non-responsive) to rituximab and to alkylating-agent-containing chemotherapy. The FDA has set a target review date under the Prescription Drug
`User Fee Act (PDUFA) of September 11, 2014. In December 2013, we also filed an NDA for idelalisib for relapsed CLL. In February 2014, the FDA, which
`previously granted Breakthrough Therapy designation for idelalisib in CLL, accepted our NDA and set a target review date of August 6, 2014 under the
`PDUFA. In November 2013, our marketing authorization application for idelalisib for iNHL and CLL was validated by the EMA. With the acquisition of
`YM Biosciences Inc. in 2013, we acquired momelotinib or GS-0387, formerly known as CYT387, a JAK inhibitor being evaluated for the treatment of
`myelofibrosis. In 2013, we also advanced momelotinib to Phase 3 trials.
`
`Our Products
`HIV
`
`•
`
`•
`
`•
`
`Stribild is an oral formulation dosed once a day for the treatment of HIV-1 infection in treatment-naive adults. Stribild is our third complete single
`regimen for the treatment of HIV and is a fixed-dose combination of our antiretroviral medications, Vitekta, Tybost, Viread and Emtriva ®
`(emtricitabine). Stribild was approved by the FDA in August 2012 and the EMA in May 2013.
`Complera/Eviplera 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 the second complete single tablet regimen for the treatment of HIV and is a fixed-dose
`combination of our antiretroviral medications, Viread and Emtriva, and Janssen's non-nucleoside reverse transcriptase inhibitor, Edurant
`(rilpivirine).
`Atripla is an oral formulation dosed once a day for the treatment of HIV infection in adults. Atripla is the first once-daily 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) non-nucleoside reverse transcriptase inhibitor, Sustiva
`(efavirenz).
`Truvada® (emtricitabine and tenofovir disoproxil fumarate) 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. In 2012, the 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. In 2012, the European Commission also approved the use of Viread in combination with other
`antiretroviral agents for the treatment of HIV-1 infected pediatric 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 chronic HBV in
`adults.
`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. We received
`marketing approval of Tybost in all 28 countries of the European Union.
`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. We received marketing approval of Vitekta in all 28 countries of the European Union.
`Liver Diseases
`Sovaldi is an oral formulation of a nucleotide analog polymerase inhibitor dosed once a day for the treatment of HCV as a component of a
`•
`combination antiviral treatment regimen. Sovaldi was approved by the FDA in December 2013 and by the European Commission in January
`2014. Sovaldi’s efficacy has been established in patients with HCV genotypes 1, 2, 3 or 4 infection (in United States and Europe) and genotypes
`5 and 6 infection
`
`•
`
`•
`
`•
`
`•
`
`•
`
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`•
`
`•
`
`(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 chronic HBV in adults
`with compensated and decompensated liver disease. We licensed to GlaxoSmithKline Inc. (GSK) the rights to commercialize Viread for the
`treatment of chronic HBV in China, Japan and Saudi Arabia. In 2012, the EMA approved the use of Viread for the treatment of chronic 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 in patients two years of age and older in combination with other antiretroviral agents.
`Hepsera® (adefovir dipivoxil) is an oral formulation of a nucleotide analog polymerase inhibitor, dosed once a day to treat chronic HBV in
`patients 12 years of age and older. We licensed to GSK the rights to commercialize Hepsera for the treatment of chronic HBV in Asia
`Pacific, Latin America and certain other territories.
`
`•
`
`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®/Rapiscan® (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, subject to its obligations to pay
`us royalties based on sales of Lexiscan in the U.S. 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.
`
`•
`
`Respiratory
`•
`
`•
`
`Other
`•
`
`•
`•
`
`Cayston® (aztreonam for inhalation solution) is an inhaled antibiotic for the treatment of respiratory systems in cystic fibrosis (CF) 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.
`
`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.
`Vistide® (cidofovir injection) is an antiviral injection for the treatment of cytomegalovirus retinitis in adult patients with AIDS.
`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.
`
`Sales of our antiviral products, which include products in our HIV and liver diseases areas described above, were $9.34 billion in 2013, $8.14 billion
`in 2012 and $7.05 billion in 2011. This represented 83% of our total revenues in 2013 and 84%
`
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`of our total revenues in both 2012 and 2011. Sales of our other products were $1.46 billion in 2013, $1.26 billion in 2012 and $1.05 million in 2011. This
`represented 13% of our total revenues in 2013, 2012 and 2011. See Item 7, Management's Discussion and Analysis included in this Annual Report on Form
`10-K for more information regarding our revenues.
`
`Commercialization and Distribution
`We have U.S. and international commercial sales operations, with marketing subsidiaries in Australia, Austria, Belgium, Brazil, Canada, the Czech
`Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Poland, Portugal,
`Russia, South Korea, Spain, Sweden, Singapore, Switzerland, Turkey, the United Kingdom and the United States.
`
`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 Stribild, Complera, Atripla, Truvada, Viread, Hepsera, Emtriva, Ranexa, Sovaldi and Vistide in the United States exclusively
`through the wholesale channel. Our product sales to three large wholesalers, Cardinal Health, Inc., McKesson Corp. and AmerisourceBergen Corp., each
`accounted for more than 10% of total revenues for each of the years ended December 31, 2013, 2012 and 2011. On a combined basis, in 2013, these
`wholesalers accounted for approximately 80% of our product sales in the United States and approximately 50% 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 Stribild, Eviplera, Atripla, Truvada, Sovaldi, Viread, Hepsera, Emtriva,
`Vitekta, Tybost and AmBisome 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 assistance programs help 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 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 2014, providing important support to these critical programs as they evolve in the changing United States healthcare environment.
`
`Access in the Developing World
`Through the Gilead Access Program, established in 2003, certain of our products for the treatment of HIV, chronic HBV and visceral leishmaniasis are
`available at substantially reduced prices in the developing world. Gilead delivers its medicines in these countries by working with regional business partners to
`distribute brand-name Viread and Truvada at prices that are based on a country's ability to pay and represent little or no profit to Gilead. We also have
`partnerships with India-based companies to expand access to generic versions of our HIV