吉利德科學 (GILD) 2008 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the Gilead Sciences third quarter 2008 earnings conference call.

At this time, all participants are in a listen-only mode.

Later we will conduct a question-and-answer session.

As a reminder, this conference call is being recorded today, October 16, 2008.

I would now like to turn the call over to Susan Hubbard, VP of Investor Relations.

Please go ahead.

Good afternoon.

Welcome to Gilead's third quarter 2008 earnings conference call.

We are pleased you could join us today.

We issued a press release this afternoon providing results for the third quarter ended September 30, 2008.

This press release is available on our website at www.gilead.com.

We've also posted slides that outline the topics discussed on today's call.

Joining me on the call today to discuss our results are John Martin, Chairman and Chief Executive Officer; John Milligan, President and Chief Operating Officer; Kevin Young, Executive Vice President of Commercial Operations; Norbert Bischofberger, Executive Vice President of Research & Development and Chief Scientific Officer; and Robin Washington, Senior Vice President and Chief Financial Officer.

We will keep our prepared comments brief to allow more time for Q&A.

Before I turn the call over to John Martin, I would first like to remind you that we will be making statements related to future events, expectations, trends, objectives and financial results that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements are based on certain assumptions and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in any forward-looking statements.

I refer you to our Form 10-K for the year ended December 31, 2007; Form 10-Q for the first and second quarters of 2008; subsequent press releases; and other publicly-filed SEC disclosure documents for a detailed description of the risk factors affecting our business.

In addition ,please note that we undertake no obligation up to date or revise these forward-looking statements.

We will be making certain references to financial measures that are on a non-GAAP basis.

We provide a reconciliation between GAAP and non-GAAP numbers on our website.

I will now turn the call over to John Martin.

Thank you, Susan.

Good afternoon, everyone.

Thank you for joining us today.

We are pleased to summarize for you Gilead's accomplishments during the third quarter of 2008.

First, I'd like to knowledge Dr.

Rich Whitley's appointment to Gilead's Board of Directors.

Rich is Professor of Pediatrics, Microbiology, Medicine and Neurosurgery at the University of Alabama at Birmingham, and has been a key scientific advisor to Gilead since 1991.

We look forward to the contributions and insight he will offer to our Board as we evaluate opportunities to grow our business and at the same time ensure broad access to therapies we develop.

Second, last month we welcomed Dr.

Seigo Izumo, who joined Gilead as Senior Vice President, Cardiovascular Therapeutics and as a new member of our Executive Committee.

Seigo is a cardiologist who most recently served as Vice President and Global Head of Cardiovascular Research at Novartis Institutes for BioMedical Research.

His depth of knowledge in this area will be of great value as we continue to move our cardiovascular franchise forward.

Third, I would like to briefly comment on the quarter.

Gilead delivered a solid financial performance in the third quarter of 2008, driven by both our record product and total revenues as well as disciplined management of our expenses, resulting in non-GAAP EPS of $0.55, up 24% over the same period last year.

As Kevin will describe later in this call, our HIV franchise continues its momentum in gaining market share in all our commercial markets, both with patients new to therapy and in those switching off other regimens.

Key data from two large independent studies presented at the International AIDS Conference in Mexico City in August further differentiates the favorable safety and efficacy profile of a Tenofovir-containing regimen compared to Abacavir.

First, the data from the ACTG 5202 study were presented for the first time since the DSMB recommended in February this year that the patients with a high viral load arm be unblinded and switched off Epzicom.

Secondly, consistent with the DAD study findings presented in February at CROI, the new data from the smart study also indicated an increased risk of cardiovascular events for patients on an Abacavir-containing regimen.

This was also an important for Viread, which was approved for the treatment of chronic Hepatitis B by the U.S.

Food and Drug Administration and Health Canada in August and September respectively.

I have met and talked with many Hepatologists about the challenges they face in diagnosing and treating this disease, and one thing clear from these conversations is that the excellent profile Viread for HBV is well appreciated.

We believe that Viread can change the way doctors manage this disease.

While we made progress in the third quarter with our late-stage compounds, we did experience a setback with our new drug application for Aztreonam Lysine for Inhalation for the treatment of Cystic Fibrosis.

As you know, on September 16th we received a complete response letter from the FDA.

We are continuing our dialogue with the agency and will provide you with an update once we have more clarity on the path forward.

In the interim, we will continue to provide the product to patients in the United States through our expanded access program.

In addition to our expanded access program, we are continuing to enroll patients in the studies we initiated earlier this year, the mild study and the head-to-head study versus TOBI.

As we look to the future growth drivers of the company beyond our commercial products, I'm extremely pleased with our pipeline progress, particularly our two most promising HIV products, Elvitegravir and GS 9350, as well as Darusentan for resistant hypertension and GS 9190 for Hepatitis C.

And as we exit this year and head into 2009, we will continue to keep a vigilant focus on managing our expenses.

One way we will accomplish this is by keeping the hurdle bar for our R&D programs high, very high, as we always have; only bringing forth molecules that have had profile to become best-in-class compounds in areas of significant unmet medical need, as our track record demonstrates with Viread, Hepsera, Tamiflu, and more recently Letairis.

I am pleased with the progress Gilead made in the third quarter, and we look forward to informing you of future and further corporate milestones and the continued advancement of our pipeline candidates.

We recognize that these are very challenging and uncertain times in the face of the global economy, but I can confidently say that the fundamentals of Gilead's business have never been stronger.

Next, Norbert will review our pipeline progress for the quarter.

Thank you, John.

In the third quarter of this year, Gilead achieved several significant R&D milestones further advancing our pipeline programs.

I am going to provide only a summarized overview of the advancements during the quarter, and will be happy to go into more detail during the Q&A portion of the call.

Starting with HIV, in the third quarter we began dosing patients in Phase III Elvitegravir, which is a pivotal non-inferiority study evaluating Elvitegravir versus Merck's Raltegravir in treatment-experienced parents.

As it is very early in the study, it is difficult for us to provide you with an estimate of enrollment completion or availability of data.

Clearly the treatment-naive population provides a much more significant commercial opportunity, with 80% of patients currently on either first or second-line therapy.

The current standard of care for those patients in those settings includes the use of fixed-dose combinations.

In order to move into Elvitegravir into that setting, we needed to produce our own boosting agent that we co-formulate with Elvitegravir and Truvada, which we now believe we have done with GS 9350.

The Phase I of GS 9350 to evaluate its safety, tolerability and metabolic profile in healthy volunteers has now been completed.

The data shows that 9350 increases blood levels of midazolam, a standard test compound used to assess boosting to a similar extent as the Retonavir control.

Based on the strength of this data, we have initiated a Phase I study assessing the bioequivalence and bioavailability of our own single-pill, complete fixed-dose regimen of Elvitegravir, 9350 and Truvada.

We hope to have data from this study by the end of this year.

As we have previously stated once we have that data, the results from the nine-month animal toxicology studies and agreement with the FDA, we will initiate a Phase II program in treatment-naive patients.

We hope to begin the first study in naives by mid next year.

We will also start a PK study of GS 9350 to investigate boosting of atazanavir or Reyataz, one of the most widely-prescribed protease inhibitors prior to the end of this year.

On the HCV front, which as you know represents our most focused research effort here at Gilead, we have now completed the enrollment in the Phase Ib study of 9190, our novel non-nucleoside polymerase inhibitor.

This study confirmed the safety and efficacy of the 40mg dose in a sufficient number of patients to allow us to go forward into a Phase II study.

We are targeting the initiation of the Phase II study in HCV-infected patients before the end of this year.

This will be a randomized double-blind placebo-controlled study comparing either 24 or 48 weeks of 9190 dosed at 40mg BID, each in combination with peginterferon and ribavirin to the standard of care; 48 weeks peginterferon and ribavirin in patients with treatment Type 1 Chronic HCV infection.

The targeted enrollment is 200.

The core primary objectives of this study are to compare the only and sustained biological response rate of 9190 versus placebo.

With regard to 9450, the caspase inhibitor in license from LG Life Sciences last year, the compound is currently being evaluated as a hepatoprotectant in an ongoing Phase IIa study in HCV-infected individuals.

The study is evaluating four doses of 9450 versus placebo in 110 HCV-infected individuals randomized evenly across the arms.

This is a 14-day with primary endpoints of safety and tolerability, and particularly endpoints of pharmacokinetics and changes from base line of certain metal enzymes and metabolic markers.

We anticipate data from this trial by the end of the year, which would allow us to move into a Phase IIb study in the first half of next year.

Based on our believe that this molecule may also have utility in other diseases such as fatty liver disease, we initiated a Phase II study in patients with NASH, or nonalcoholic steatohepatitis.

We dosed the first patient in September.

The study will enroll 110 patients randomized across four doses of 9450 and placebo.

The primary end point will be safety and tolerability of multiple oral doses of 9450.

Secondary endpoints include pharmacokinetics and activity as defined by changes from baseline of certain liver enzymes in metabolic markers.

Our HCV effort - research efforts are focused on compounds targeted at both viral and cellular targets.

Our research has led to do the discovery of some very interesting lead compounds, and we look forward to sharing more information as these compounds move into the clinic.

On the respiratory front, in additional to Cystic Fibrosis we are planning to evaluate Aztreonam Lysine in a Phase II study in patients with non-CF bronchiectasis, which is projected to begin prior to the end of the year.

We are also continuing to evaluate opportunities to explore Letairis in other indications beyond pulmonary arterial hypertension.

We are currently preparing to evaluate Letairis in patients with idiopathic pulmonary fibrosis, and are targeting the initiation of a Phase III study called ARTEMIS by the end of the year.

This is a placebo-controlled study involving patients with honeycombing of 5% or less by HRCT.

We will enroll approximately 600 patients randomized [2:1] active to placebo at over 190 investigational sites worldwide.

The primary endpoint is delay of disease progression or death in patients with IPF.

We also believe that Letairis, because of its mechanism of action and safety profile, could have applications in other areas such as pulmonary hypertension in IPF and also in renal transplantation.

And finally on the cardiovascular front, we have made significant progress in the first quarter in terms of enrollment in the two pivotal Phase III studies for Darusentan for resistant hypertension.

The DAR 311 study is now fully enrolled with 379 patients.

The last patients will cross the 14-week endpoint in the first quarter of next year, and therefore we would anticipate having data from this study in the second quarter of 2009.

The DAR 312 study, which is the larger of the two studies targeted at enrolling 770 patients, is now 52% enrolled.

We believe we are on track to complete enrollment and receive data from this study before the end of 2009.

We are also at the final stages of preparing the IND to initiate Phase II testing of Cicletanine, the product we purchased from Navitas in May of this year, in 150 patients with PAH.

Patients will be randomized across three doses of Cicletanine or placebo.

The primary endpoint will be change in six-minute walk distance followed by 12 weeks of treatment.

We anticipate we will begin this program by the end of the year.

As we discussed in our last earnings call, we have an extensive safety database from the products used in Europe for the treatment of general hypertension.

In summary, we have made significant progress with our R&D pipeline during the third quarter of 2008.

We now have four programs either in or moving towards Phase III, seven programs in Phase II, and multiple programs either at the Phase I or IND stage.

Next, Robin will review our financial performance for the quarter.

Robin?

Thank you, Norbert.

As you have all seen in the press release we just issued, the third quarter of 2008 was another very successful quarter for Gilead on multiple fronts.

Before turning to the specifics, I want to note that going forward Kevin will discuss regional sales in the context of his discussion of our commercial efforts for the quarter.

Third quarter product sales were $1.3 billion, marking our fourth consecutive quarter of surpassing $1 billion in product sales.

Antiviral product sales grew to $1.2 billion from $885 million, up 39% year-over-year and up 10% sequentially.

Atripla contributed $428 million or 35% to our third quarter antiviral product sales, resulting from the continued uptick of this product in the U.S.

and launches in Europe.

The Efavirenz portion of Atripla, which is distributed back to BMS and reflected in the COGS line, was approximately $156 million.

Truvada sales were $549 million or 45% to our third quarter antiviral product sales, up 34% year-over-year and up 6% sequentially, due primarily to sales volumes growth as well as a favorable foreign currency exchange impact.

Viread sales were $156 million for the third quarter of 2008, a year-over-year increase of 5% and a sequential increase of 4%.

Hepsera, for the treatment of Chronic Hepatitis B, generated sales of $91 million in the third quarter of 2008, up 15% on a year-over-year basis, driven by a favorable foreign currency exchange impact and sales volume growth.

Hepsera sales were up 1% sequentially.

Sales of AmBisome for severe fungal infections were $73 million for the quarter, a year-over-year increase of 6%, primarily driven by favorable foreign currency exchange impacts.

AmBisome sales increased by 4% sequentially, due primarily to sales volume growth in certain European countries as well as a favorable foreign currency exchange impact.

Finally, Letairis sales were $32 million for the third quarter of 2008, an increase of 28% on a sequential basis, primarily driven by sales volume growth.

Our royalty, contract and other revenues decreased by 66% year-over-year and by 46% sequentially, due primarily to the decrease in royalty revenues recognized from Tamiflu sales related to pandemic planning initiatives worldwide.

Royalties received from Roche and recognized in our revenues in the third quarter of 2008 were $9 million.

These royalties, which are paid one quarter in arrears, reflect a royalty rate of approximately 19% as applied to Roche's net sales of Tamiflu during its second quarter of 2008.

Turning to product gross margin.

As a reminder, my discussions of all margin and expense-related items are on a non-GAAP basis, which excludes the impact of stock-based compensation expense.

Non-GAAP product gross margin was approximately 78.1%, compared to a non-GAAP product gross margin of approximately 79.8% for the same quarter of last year and 78.8% for the second quarter of 2008.

The decreases from both [concerned] periods were due primarily to the higher proportion of Atripla sales, which includes the Efavirenz component at a zero gross margin.

Non-GAAP operating margin was 53.6%, compared to 56% for the same quarter last year and 51% for the second quarter of 2008, which also excludes the Navitas purchase-in-process R&D expense.

As you are aware, our non-GAAP operating margin is impacted by the Efavirenz component of a growing Atripla revenue stream, and a declining trend for Tamiflu royalties as previously discussed.

Excluding these factors, our core non-product operating margin continues to improve as we focus on profitability managing the growth of our business.

Non-GAAP R&D expenses were $170 million, a year-over-year increase of 40% and an increase of 6% sequentially, primarily as a result of increased clinical study research and related expenses from an expansion of activities in our R&D pipeline, as well as higher headcounts driven by the growth in our business.

This includes a $7 million milestone payment this quarter to Japan Tobacco related to advancement of Elvitegravir for HIV in the Phase III studies.

Non-GAAP SG&A expenses were $186 million, an increase of 13% year-over-year due primarily to increased compensation and benefits from higher headcount, as well as infrastructure and technology-related costs to support the continued growth in our business.

On a sequential basis, non-GAAP SG&A expenses decreased 16% due primarily to seasonally lower promotional and marketing spend, as well as the impact of certain termination-related expenses in our international operations during the quarter.

Foreign currency exchange had a net favorable impact of $59 million and $37 million on our third quarter 2008 revenues and pretax earnings respectively, when compared to the same period last year.

On a sequential basis the foreign currency exchange impact on our quarter 2008 revenue and pretax earnings was a favorable $15 million and $10 million respectively.

The different between a net favorable impact of foreign currency exchange on our revenues versus pretax earnings is primarily due to the costs related to our hedging activities, which reflect - which are also reflected in the interest and other income line.

With the volatility that we have seen in the financial markets, these costs as well as foreign currency exchange gains or losses have caused our interest and other income to decrease year-over-year and sequentially.

Our respective tax rate for the third quarter of 2008 was 27.7%, which compares favorably to the full year 2007 effective tax rate of 28.9%.

This decrease was driven primarily by increased earnings in favorable tax jurisdictions.

Next, I would like to turn to our cash position and our operating cash flow performance for the quarter.

Our balance sheet is stronger than it has ever been with cash, cash equivalents and marketable securities of $3.3 billion as of September 30, 2008; an increase of $534 million when compared to our $2.7 billion balance on December 31, 2007.

As of September 30, 2008, we reclassified our $1.3 billion convertible senior notes back into long-term liability due to the senior notes not being eligible for conversion into shares of our common stock.

The conversion eligibility of the note in future quarters will depend on the closing price of our common stock during the last 30 consecutive trading days of each quarter.

This will determine whether the notes will be classified as current or long-term liabilities.

In the third quarter of 2008, we generated $555 million in operating cash flow and repurchased 4.7 million shares of our common stock at a total cost of $250 million.

In the near future we intend to enter into an agreement to repurchase $750 million of our common stock on an accelerated basis.

The commencement of this repurchase program is contingent on market conditions and on Gilead not possessing material non-public information on the commencement date.

After this program is commenced, we will have approximately $1 billion remaining for share repurchases under the $3 billion share repurchase program authorized by the Board of Directors in October 2007, and which expires at the end of 2010.

As of September 30, 2008, we have spent $1.2 billion to retire approximately 25.9 million shares of our common stock under this program.

Now I would like to turn to our financial guidance for the full year 2008.

You can locate all of our guidance for 2008 on Gilead's corporate website.

We continue to be very pleased with the year-over-year and sequential growth in our product sales, particularly with our antiviral franchise.

During last quarter's call, we increased our net product revenue guidance for the full year 2008 by $200 million to a range of $4.9 billion to $5 billion.

This guidance assumes that the impact of foreign currency exchange fluctuations would remain consistent.

We are now reiterating that guidance of $4.9 billion to $5 billion and feel confident that even though it is relatively early in the quarter, we are on track to achieve the higher end of that range, given the continued strength and growth of our antiviral franchise.

This guidance reflects a change in our previous foreign exchange assumptions, given the volatility of the currency market.

Changes from these assumptions could affect both our revenues and expenses for the fourth quarter.

We are reiterating our initial 2008 non-GAAP product gross margin guidance range of 77% to 79%.

For non-GAAP R&D expenses and non-GAAP SG&A expenses, we are reiterating the guidance we provided last quarter of $650 million to $670 million, and $720 million to $740 million respectively.

Gilead remains committed to conscientious expense management to sustain the continued profitable growth of our company.

We are reducing our 2008 annual effective tax rate guidance of 28% to 29% to a range of 27% to 28%, due primarily to the Federal R&D credit extension.

And finally, we are decreasing our guidance for after tax stock-based compensation expense, and anticipate the 2008 fully diluted EPS impact to be in the range of $0.11 to $0.13 per share.

In conclusion, our solid operating performance continues to be a validation of the significant efforts made by Gilead's employees to improve the lives of patients around the world.

At this point I would like to turn the call over to Kevin, who will discuss our commercial highlights for the quarter.

Thank you, Robin.

I am very pleased to discuss the significant commercial progress we made during the third quarter, namely the continued strength of our HIV business, the launch of Viread for HBV in the U.S.

and Europe, as well as the gains we have made in the U.S.

PH market with Letairis.

Before turning to our commercial performance for the quarter, I would like to remind you that for the analysis of market shares in the U.S.

and Europe, we rely on the most up-to-date third-party data available to us in each market.

Since the dates of these data points can fluctuate, we will identify the reference time periods as appropriate.

I would like to begin by discussing the performance of our antiviral franchise.

During the third quarter, U.S.

HIV revenues performed strongly, led by Atripla at $346 million, up 44% year-over-year; and Truvada at $262 million, up 27% year-over-year.

We were pleased to see a return of purchasing in the nonretail sector that was consistent with the strong growth in retail demand seen during the quarter.

As you recall, due to purchases by two of the large ADAP states with warehousing capabilities, namely Texas and Florida, in the first quarter of this year, nonretail purchasing in the second quarter was lighter as those inventories came down.

Going forward, we believe that nonretail purchasing will increase commensurate with retail demand.

Nevertheless, we will likely see quarterly fluctuations as a result of variability in fiscal year-end spending at the state level, as well as the recent implementation of a "use it or lose it" funding.

As a reminder, sales to the ADAP programs represent approximately 25% of our overall U.S.

HIV business.

In the second quarter of 2008, the number of patients being treated with antiretroviral therapy grew by 8% over the second quarter of 2007, to just over 551,000 patients.

We achieved near all-time highs for the total number of patients receiving Truvada, as well as Truvada patient share, as it continued to be the predominant backbone of choice for antiviral therapy in the U.S., returning to pre-Atripla launch levels with an impressive 192,000 patients on therapy, or approximately 35% of all treated patients.

In the third quarter, we saw the largest quarter-on-quarter prescription growth in Atripla since the fourth quarter of 2007, and the largest quarter-on-quarter growth in Truvada since the launch of Atripla in the third quarter of 2006.

This recent performance continues to underscore that we have two HIV growth products in the U.S., namely Truvada and Atripla.

This is particularly important as new third agents enter the market, most of which are paired with Truvada in their pivotal clinical studies.

Atripla remained the most prescribed regimen in HIV, with 28% of patients across all lines of therapy receiving Atripla.

Atripla, together with Truvada, continued to account for greater than four out of five treatment-naive patients, with approximately 55% taking Atripla and 30% on a Truvada regimen.

With the launch of Viread in HBV, we will no longer provide the patient numbers for the Tenofovir molecule, or Viread for HIV.

This is due to the challenges associated with differentiating Viread patient data and prescription data for HIV versus HBV.

The growth factors contributing to the HIV - U.S.

HIV performance continued to be fueled by positive trends on the HIV testing and screening front, where changes continue to be made nationwide.

This will be expanded upon by John Milligan in a moment.

We also believe we are beginning to see an early reaction to the safety and efficacy concerns surrounding Abacavir that emerged earlier this year, with additional supporting data having been presented in August at the International AIDS Conference.

We believe that ACTG 502, DAD and SMART data are starting to impact the choices physicians are making, particularly for treatment-naive patients.

Now turning to our HIV performance in Europe.

Comparable to the U.S., the big five countries in Europe continue to demonstrate robust growth.

At the end of the second quarter 2008, 265,000 patients were being treated with antiretrovirals within these five markets, representing a 7% year-over-year growth.

We continue to make excellent progress with all of our HIV products, and are very pleased with the initial launches of Atripla.

During the third quarter of 2008, Atripla contributed $71 million in European product sales and is now available in 14 countries throughout the EU, including four of the big five countries.

As we discussed last quarter, we remain in reimbursement discussions with France.

We are encouraged with the progress we have made, and believe we could complete these negotiations in the first half of 2009.

Of the patients receiving Atripla in the second quarter, approximately 41% converted from Truvada plus Sustiva, while 25% were switches from other regimens.

Importantly, 34% of patients starting Atripla were treatment-naive patients.

Truvada continued to build on the solid base throughout the EU, and remained the number one brand in all big five markets.

During the third quarter of 2008, Truvada contributed $257 million in revenues, up 41% from the same period in 2007.

Truvada plus Atripla, or Total Truvada, achieved new highs in the NRTI market, outperforming Kivexa with a prescription ratio of 2.6 to 1, up from 2.3 to 1 in January.

This continues to be an important metric for us to track, as we monitor the impacts of the Atripla launch and prescribing responses to the Abacavir safety publications and follow-on changes in treatment guidelines.

Turning to our Hepatitis franchise, since receiving European marketing approval for Viread in HBV, we have launched Viread in 14 countries, with Italy the last of the big five countries launching earlier this month.

While it remains early following the launch, we are very pleased with the feedback we have been receiving on the clinical, safety and cost benefit profile of Viread.

In the U.K., after some six months on the market Viread has already over Entecavir in market share.

On August 11 we received FDA marketing approval for Viread HBV in the U.S.

Our sales efforts are being conducted with the existing sales and marketing infrastructure that had been supporting Hepsera.

At the time of the Viread HBV launch, we believe that approximately 4% of Viread prescriptions were being written for HBV, and we believe we have already surpassed Epivir in new prescription market share just one month post-launch.

The reaction to our Viread label has been very positive.

Once marker of best-in-class status is always reimbursement.

Already over 50% of managed care plans are Viread HBV in a preferred position over Entecavir, either by co-pay, prior authorization or both.

For the first time since the launch of Truvada, there was no quarter-on-quarter decline in Viread prescriptions; an early indication that HBV prescribing is perhaps offsetting HIV-switching dynamics.

To support the launch of Viread, Gilead is partnering with many screening initiatives within the Asian American communities in the U.S., where the HBV-infected patient population remains largely unaware of their risk and status.

Now turning to our cardiovascular franchise and Letairis for the treatment of PAH.

Consistent with prior quarters, we conducted our proprietary PAH survey.

The survey involved over 120 prescribing physicians, who are responsible for more than 10,000 PAH patients, and included approximately 80% percent of the physicians surveyed last quarter.

According to our latest data, as we exited the third quarter more than one in four parents or 28% of those receiving an ERA were taking Letairis, up from 22% the previous quarter.

Letairis is used as monotherapy in 52% of patients, versus 48% as combination therapy.

Of all patients taking Letairis, over 30% have switched from placenta.

Additionally, we have expanded the prescribing base of physicians by 14% to almost 1,400 physicians.

We have four Letairis abstracts that have been accepted for the upcoming CHEST Meeting in Philadelphia, including two-year safety and efficacy follow-up, that is arguably the strongest long-term data yet to be seen in PAH.

Continuing to generate important long-term data sets such as these should further support the growth of Letairis.

In closing, I am very pleased to say that across franchises and geographies, the Gilead commercial business continued to expand at a robust pace during the third quarter.

I will now turn the call over to John Milligan, who will discuss our up-and-coming milestones and growth opportunities.

John?

Thank you, Kevin.

In summary, I am very pleased with our continued high level of productivity and consistent financial performance for the first nine months of the year.

We have numerous potential catalysts on the horizon for further growth of our franchises, specifically the presentation of important data sets at upcoming medical conferences, the impact of guidelines changes in U.S.

and abroad, an expanding pipeline of promising product candidates, and a very strong balance sheet.

In particular, the four medical conferences that span across our disease areas of focus are all kicking off at the end of this month.

On the HIV front, ICAAC/IDSA conferences will be taking place in Washington, D.C., where we anticipate the presentation of additional data from the 073 Study evaluating the safety and efficacy of switching to Atripla from other regimens.

We also look forward to the continuing dialogue around emerging data sets on the many risks associated with Abacavir use.

The American Association for the Study of Liver Disease Conference taking place in San Francisco will feature two-year data from both of our pivotal studs of Viread for the treatment of Chronic Hepatitis B.

And as Kevin just mentioned, the CHEST Conference in Philadelphia will highlight unprecedented two-year data from our ARIES-E study, which is the extension of our two-year pivotal studies of Letairis.

Finally, the North American Cystic Fibrosis Conference taking place in Orlando, Florida will feature ten Gilead-related posters or presentations and a company-sponsored symposium discussing the management of Pseudomonas infection.

Gilead remains highly committed to bringing forth advances in the care of patients suffering from Cystic Fibrosis.

In addition to medical conferences, we will be closely monitoring legislation at the state level to support HIV testing initiatives, bringing more patients into care and on to therapy.

In September, California passed a bill that requires all group and individual health insurance plans to cover routine HIV screening.

This new mandate on insurers will be a critical tool in driving routine screening, a move we anticipate other states could follow.

Guideline changes are also important drivers for growth.

During third quarter, the European AIDS Clinical Society as well as the International AIDS Society provided revised treatment recommendations based on the ACTG 5202 study, (inaudible)results the DAD study and data released at the International Aids Conference in Mexico City.

The revised treatment recommendations mirrored each other putting Truvada as the first line therapy of choice, with Abacavir-containing regimens for use of caution in patients with a high cardiovascular risk, and that Abacavir should not be used in patients with a viral load greater than 100,000 copies.

These changes are similar to the British HIV Association recommendations modified earlier in the year.

We await potential inclusion of these data sets in the U.S.

Department of Health and Human Service guidelines.

In addition, the American College of Obstetricians and Gynecologists revised their recommendations from screening just pregnant women to routinely screening all women aged between 19 and 64 for HIV, regardless of risk factors.

With regard to Viread for HBV, just today the European Association for the Study of the Liver clinical practice guidelines were published online, prominently and favorably positioning Viread for first-line therapy.

These guidelines are currently at press, and are anticipated to appear in the January issue of the Journal of Hepatology.

We also expect Viread to receive similar positioning in the soon-to-be-released U.S.

HBV treatment guidelines.

Gilead's pipeline holds more promising opportunities than ever before.

2009 will be the year of the emergence of very important data sets on Elvitegravir and GS 9350 for HIV, pivotal data for Darusentan in resistant hypertension, and earlier-stage compounds such as GS 9190 for HCV and GS 9450 for HCV and CV and NASH.

We look forward to providing you with updates on these research efforts and drug candidates as they progress.

As John Martin stated, we have and will continues to critically evaluate each of these programs, and will advance only those that have the potential to become market leaders.

Gilead had an extremely strong balance sheet exiting the third quarter, with approximately $3.3 billion in cash, cash equivalents and marketable securities.

While we recognize that these are very challenging economic times, given our cash position and cash flow, we are well positioned for business development opportunities that may augment our already strong pipeline, as those resulting value to shareholders through share repurchase activities.

The fundamentals of Gilead's business, both domestically and abroad, have never been stronger.

I will now turn the call over to the operator to begin the question-and-answer portion of the call.

(OPERATOR INSTRUCTIONS)

First question, Mark Schoenbaum with Deutsche Bank.

Hey guys, thanks for taking my question.

Also thanks for a good quarter, the market needed it.

Maybe John, I can ask you a follow-up from last quarter's - my question on the last quarter call.

What's your current thinking about R&D, and I know you haven't given long-term guidance, but can you make any comments around how you guys are thinking about R&D as a percent of revenues over the long-term?

There was some confusion on the last call where I think you mentioned a number, and I was just wondering if you could follow up on that and maybe just clarify, please?

So Mark, there was a lot of confusion over the last call.

In fact, I think we spent the majority of the last quarter trying to explain what was said there because we talked a little bit about industry averages.

So as a result of that I'm not going to put out any numbers in this quarter, as I promised I would not.

I think, as John and I have stated, we are going to continue to focus on the most effective ways to manage the business, trying to get the most out of each protocol and each molecule for the least amount of money.

That's been our philosophy all along and we'll continue to do this.

I think we manage the business very effectively, even if you look at this quarter, where R&D is just under 12.5% of product revenues.

I think that we can manage the business very effectively in the range that we are in today.

: Thank you.

Our next question comes from the line of Thomas Wei with Piper Jaffray.

Go ahead.

Thanks.

I'm just trying to reconcile your revenue guidance with some of the qualitative commentary on revenue drivers from the call.

So other than the foreign exchange effect, you didn't really highlight anything else about the third quarter that would suggest that you think that that growth is an anomaly, and if you were to continue that type of growth for the fourth quarter and you realize no benefit from your hedging activities on foreign currencies, and you had to recognize the full effect of the decline in the Euro quarter-to-date, you would still be way above the top end of the guidance range.

So is there something that we are missing there on the fundamentals of the business that makes you uncomfortable about extrapolating those growth trends in the third quarter?

It's John Mulligan.

We are, as always, uncertain about currency especially in this environment, so we cannot or won't even pretend to predict where the dollar is going to be going forward.

That's the number one driver of uncertainty in our business.

Beyond that, we don't see any growth drivers which would be contrary to what you just said in your position statement.

So we do feel the fundamentals of the business are very strong.

The U.S.

and European growth drivers are very strong.

So I think the only underlying uncertainty for us is currency.

I'll just add to that, Thomas.

You saw the growth in prescriptions, IMS came out about a day or week ago, Wolters Kluwer this morning, which virtually exactly mirrored the growth that we saw quarter-on-quarter in IMS, so that was very encouraging for both Atripla and Truvada.

The one thing I just want to do reiterate from my text was the nonretail.

That does fluctuate.

We do have these large buying centers, particularly Florida and Texas, and just depending on where they are placed with use of their funds they can vary quarter-to-quarter.

It was nice to see it come back in the third quarter because of our low second quarter, which had been created by the high first quarter, but just how that lands every quarter is always very difficult to judge.

Our next question comes from the line of Geoffrey Porges with Bernstein.

Go ahead.

Thanks very much for taking the question, and congratulations on a very solid quarter.

Kevin, could you just give us a little bit more information on the HIV numbers?

You've given us in the past a number of patients on Atripla, Truvada and Viread, HIV patients in the U.S.

and Europe, could you give that to us, and perhaps comment a little bit more on that growth you are seeing in the U.S.

market, what is causing it and how sustainable is it?

Is it temporary or do you think that's going to persist through the end of the year and next year?

Let me try the numbers for you, Jeff.

Overall treated patients with antiretrovirals, as I said in the text, was just over 550,000 patients, 551,000 patients.

On Atripla was 154,000 patients, and on Truvada was 192,000 patients.

In terms of patients left on Truvada plus Sustiva, there really isn't a lot of patients left now actually to convert, that's only 10,000 patients.

There are 16,000 patients left on Combivir plus Sustiva.

So we've done a great deal of conversion there.

In fact, the majority of our business now going on to Atripla is coming from naive patients, at a 75% level.

In terms of Europe, the number of antiretroviral-treated patients is 265,000, just over 9,000 patients to date on Atripla and 112,000 on Truvada.

So you can still see that Truvada is the lion's share of our business, but as we achieved in the U.S.

that will start to significantly grow as we are rolling out the countries.

I think in terms of the increase in the U.S., I do feel that it's a mix of reasons.

Obviously as John Milligan pointed out, we are seeing I think some very positive trends around testing and linkage to care that's beneath the testing, as well as the need to be starting therapy earlier, and I do think we are starting to get traction on the situation with Abacavir.

I think the data coming out of IES, which gave a full airing of the 5202, was quite significant.

We certainly feel in the U.S.

that that changes around naive prescribing.

So I think those are the underlying drivers.

Thank you very much.

That was very helpful.

Our next question comes from the line of Meg Malloy with Goldman Sachs.

Go ahead.

Thank you very much.

Just as a follow-up to that, do you have an estimate of the number of patients in the U.S.

and EU that you think are on Abacavir?

I think in terms of Abacavir, it's about 200,000 patients.

I think that was about the number we had.

The U.S.

HIV molecule share for Abacavir is about 104,000 patients, and in Europe is about 73,000 patients.

Thank you, Susan.

So we have (inaudible) we talked about 186,000 patients on the Abacavir molecule in the days that first started to emerge.

I would just add to that, Meg, I think where we see the lead country very much starting to switch patients is the U.K.

John Milligan was there recently and met with quite a number of the opinion leaders in London.

Just this week was the British HIV Association meeting, and one of the presenters put up data around both naive starts, which was actually very limited, as well as switching off Abacavir, and that was quite significant.

So there is definitely a trend in the U.K.

market to not only alter initial prescribing, but also the - fundamentally switching patients off, and our job is to see if that can be recreated in the other European markets.

Great.

Thanks, very helpful.

Our next question comes from the line of David Risinger with Merrill Lynch.

Go ahead.

Yes, thanks very much.

I was hoping that you could clarify the timing for the start of Phase II for the combination of Elvitegravir plus the PK enhancer, and also the timing for the start of Phase II for the Quad.

Thank you.

Yes, so David, as I said in my script we need three pieces, three things we need.

First of all, it is completing the ongoing bioavailability and bioequivalence study of the Quad, that's ongoing, we should have that by the ends of the year.

Secondly, we need the chronic toxicology data of the - for the booster; we should have that towards the ends of this year.

And then we have to make an agreement with FDA about what the whole strategy is going to look like.

So with regards to when are we going to initiate the Phase II, I would say towards the middle of next year we will be in a position to initiate Elvitegravir plus our booster in a Phase II study.

And you also asked about the Quad; by the way that is the same thing.

We are going to use the Quad single tablet complete regimen in the Phase II study to evaluate both the booster and Elvitegravir.

I hope that answers your question.

Thank you.

Our next question comes from the line of Yaron Werber with Citigroup.

Go ahead.

This is actually Richard asking a question for Yaron.

Can you talk about the interest rate on the cash balances in 3Q, and give us some predictions for 2009?

Thanks.

Richard, can you repeat, what was it you were looking for for the balances?

Interest rate and the cash balances in 3Q, and the outlook fro 2009.

Okay, the interest rate that we earned?

Yes.

Okay.

The interest rate that we earned varies.

We have some that are tax-exempt and some that are taxable but on average it ranged between about 4% and 6%.

I can't predict for 2009.

I mean we are where everybody else is, I can't really predict that.

Okay, thanks for taking the question.

Our next question comes from the line of Michael Aberman with Credit Suisse.

Go ahead.

I was going to ask you if you could predict the interest rate, if you could predict the stock market.

Yes, exactly.

(Laughter)

I guess that's my job.

So I have a question I am going to try sneak into about the pipeline.

First, can you comment on the Reyataz boosting marketing, and what a potential pathway could be?

And also, I think you may have said this before, could you remind us what is the viral kinetics in Phase I for 9190 with the dosing moving forward in Phase II?

Michael, just to clarify you said the Reyataz - you mean that Retonavir-boosting market?

Well, you mentioned Reyataz but maybe you can just talk about the boosting market in general, including what would be use with Reyataz?

Maybe I can first make a comment, Mike, on the development question that you had.

First of all, the dose that we are using with our booster is very similar to Retonavir, so on a milligram to milligram comparison we are getting similar boosting effects as we get with Retonavir.

So the dose will probably be between 75mg and 150mg, 100 is a good guess, that's what we are currently testing in the PK bioequivalence study.

Secondly, with regard to the Reyataz booster studies, so the first study would simply be the PK study but after that we are thinking about doing a clinical study comparing the Retonavir-boosted Reyataz to Gilead-boosted Reyataz, and the reason for that is that would be a controlled head-to-head study of our booster versus Retonavir, and we will get some safety and efficacy information.

And then Kevin will - do you want to -

I don't have the exact numbers of told patients on Reyataz-boosted in the U.S., but I do know that Truvada plus Reyataz is the second biggest regimen here in the U.S.

It's slightly below half the percentage of patients taking Atripla, it's about 12.5% of antiretroviral-treated patients.

I think that's an important metric.

We are getting - over half the patients are now going on Atripla in the United States, about 55%, which means the other 45% are probably going on protease inhibitors.

So it's still an important component.

Michael, the one thing I did want to say, we spend a little bit of time with people talking about what a booster-replacing Retonavir might look like.

From a patient perspective it's pretty interesting, about half the patients in the United States, or over a quarter million, are currently taking Retonavir either on its own or in the form of Kaletra, and about 120,000 to 125,000 in Europe, so it's pretty big numbers of patients.

What that market would look like and how competitive we could be with Retonavir is uncertain, but it is something that we are certainly considering as you go through the development pathway for this molecule.

Norbert, I think he had a question about 9190.

Yes, just the dose and the Hepatitis C viral connections you saw in -

The 9190, so the dosage is a [40mg] BID, and that's the only dose they are taking for this.

Because as you remember at the higher doses, we tested 80 and 120, we saw [QT] effects, and that QT effect we believe is clinically very manageable at the 40mg dose.

So that's the reason to take only the 40mg BID dose.

And the [log] reduction you saw, I'm sorry?

The log reduction, it depended on the genotype, it was about one log [genotype] 1A, and about 1.5, 1.6 in genotype 1B.

Thank you very much.

Our next question comes from the line of Geoffrey Meacham with JP Morgan.

Congratulations on a good quarter.

I want to ask Norbert a question.

Is it fair to say for the Quad that you guys could have the Phase II data in treatment-experienced patients by, let's say, year-end '09?

And then can you talk about the Phase II and Phase III paths for the Quad in treatment-naive patients, what you're thinking there?

I want to make one correction, we are not looking at the Quad in treatment-experienced patients.

We've [said] before so we could have treatment-experienced patients by ends of '09, we are only looking at the Quad in treatment-naive patients at this point.

So we will do a Phase II study in treatment-naive patients starting sometime towards the middle of next year, and then we need some data out of that study, some safety and efficacy information in a limited number of individuals, and then we would be immediately able to go into Phase III.

And what we are looking at as a Phase III study is simply comparing all Gilead Quad to the standard of care that could [formed] with Atripla or it could be Atripla protease-containing regimen with Truvada.

Okay, thank you.

Our next question comes from the line of Maged Shenouda with UBS.

Go ahead.

Sure.

Hi, congratulations on a good quarter.

I just have a question on Truvada in the U.S.

It continues to surprise on the upside, and I was just wondering if you could speak to what's driving this and how long you expect above HIV market growth for the product?

I think we always felt that Truvada had a very strong position on its own.

If you think about it, there are new agents coming to market, a lot of interest, a lot of clinical studies with Truvada always as the backbone, so you actually have got quite a number of companies promoting the protease inhibitors, or in the case of Raltegravir in the [salvage] setting promoting an integrate inhibitor.

So you've got that very strong positioning alongside third agents outside of Sustiva.

You also have a great positioning for Truvada as a follow on to Atripla when a patient comes off Atripla normally for the CNF side effects of Sustiva.

Almost 70% of patients who come off Atripla go on to a Truvada-based regimen, so that's a very good position to be in.

So whether it be in the naive setting alongside agents outside the NNRTI class, or whether it be as follow-on to Atripla, Truvada has a very, very strong positioning in its own right.

Okay.

But you saw a dropoff in Viread after the introduction of Truvada.

I'm just wondering why the dynamics wouldn't be comparable here?

Because really all Viread is essentially going to Truvada.

Truvada has already been paired up with the protease inhibitors, and there are patients on longstanding treatments.

So there was never that full driver, if you like, for all patients to flip across.

Okay.

Thank you.

Our next question comes from the line of Bill Tanner with Leerink Swann.

Go ahead.

Thanks for taking the question.

For you, Norbert, just on Darusentan it seems pretty likely that these trials are going to be effective in terms of efficacy, and just curious how comfortable you guys are with the safety profile.

I know, I guess, in the Phase II trial you saw peripheral edema.

But just given the mechanism of action is there - would LFT's have been observed already?

And as you look at the trials, or as we look at it, I guess the age range is pretty broad.

Is there any contemplation or do you think that there may be some differential side effects ,and then how that might play into the actual target market, the average age of people that are multidrug refractory?

So you are exactly right.

None of us has any concerns about the efficacy of Darusentan, because essentially the Phase III study is the same design, the same patient population as we had in Phase II, where we saw a [1250]-millimeter decrease in blood pressure when Darusentan was added on to background therapy that included three (inaudible), including a diuretic.

And you are exactly right, the issue of Darusentan, particularly in treatment of hypertension, has to be with safety.

I am not concerned about LFT elevations because I - we personally at Gilead do not believe it's a class effect.

I would like to remind you that with Ambrisentan, during the 12 weeks of the placebo-controlled studies there were more LFT on placebo than they were on Ambrisentan, so that's clearly an indication that Ambrisentan doesn't cause LFT elevation.

So you're exactly right, the issue could be edema.

But we have done a very careful job to exclude patients that are at risk for congestive heart failure.

Obviously those would not be candidates for Darusentan, and we just have to see how the data will come out.

But I am confident that Darusentan will get approved.

The question is what kind of a label is it going to have, and that really depends on really what the safety data is going to look like.

But unless and until we have unblinded the Phase III studies, we really don't know.

So then if you were to size the market based on the exclusion criteria that you've put in in the Phase III, what would that number approach in the U.S., ballpark?

I think, Bill, that's something that we would probably hold back on right now.

We real do want to see the data, see the full profile, and I just think it's a little bit too early to comment on that.

But Bill, I want to just in a quantitative way say that the exclusion criteria that we have in our Phase III studies do not in any way diminish the market size.

It's simply means that high-risk patients are at this point not being treated with Darusentan.

We can always address that small patient population in the follow-on study.

Just keeping the trial simpler, I guess, in design.

All right.

Thank you.

Our next question comes from the line of Phil Nadeau with Cowen & Company.

Go ahead.

Good evening.

Thanks for taking my question.

My question is actually on Atripla.

I believe Sustiva goes off patent in 2013.

Is there any opportunity for you to put generic Sustiva into the Atripla molecule and keep all of the revenue, essentially increasing your gross margin once Sustiva does go generic?

So Phil, there are some provision in the contract that allow us to have, certainly in the United States, greater control of the price and a greater percentage of the economics, and that changes over about a three-year period, so there's sort of a tail period where Bristol Myers still gets a piece.

And then beyond that, we have the flexibility to do what we want.

Europe is a little more complicated, but I guess it's fair to say that ultimately we could do such a thing and although I can't - off the top of my head I don't remember the exact timeframe from Europe, so we'll have to get back to you on that.

But it does become economically more profitable to us once Sustiva goes off patent.

Okay, and have you ever disclosed how much more profitable it becomes?

We have not.

That's confidential.

Okay.

Thank you.

Our next question comes from the line of Bret Holley with Oppenheimer.

Go ahead.

Thanks for taking my question.

Norbert, I was just wondering what some of the key technical challenges were for the development of the next-generation boosting agent, and what insight did Gilead bring to the table that other companies perhaps didn't have?

I'm sorry, can you say that first part of the sentence again?

The technical challenges with the development of the next-generation boosting agents?

And basically, why hadn't someone else done this before you did it with 9350?

Well, I don't think I can answer the last question, why nobody has ever done it, but I want to tell you we were - we finally decided this is something we wanted to do because we came to the realization that regulatory authorities would not be very favorable towards using Elvitegravir boosted with Retonavir in treatment-naive, because - simply because of the fear that when you feel that regimen you have resistance not only to the integrates class but also to protease inhibitors.

That was our main incentive to say we need our own booster.

Now the technical challenges, we just need a minimal number of safety and efficacy data, of course, but other than that I don't see a particular challenge to develop the booster.

How the booster - if the booster is stand-alone as just a booster, that's a conversation we have to do with the agency, because there aren't a lot of precedents for drugs that are just used for pharmacological enhancement of other agents, and so the agency just has to think about what do they want from a labeling perspective, what would that look like?

I think it's fairly straightforward.

Thanks.

Congratulations on the quarter.

Our next question comes from the line of Sapna Srivastava with Morgan Stanley.

Go ahead.

Thanks.

Most of my questions have been answered.

Just a quick one.

When considering your balance sheet and the depressed asset valuations, I mean should we expect an acceleration in business development activities over the next few quarters?

Should we expect more business development activities in the coming quarters, as I understood it, because of the balance sheet?

No, you know, our activities in business development are really driven by business need and the opportunities as they arise.

As we mentioned earlier, we have a very full pipeline with many things to work on.

In fact, we can keep our hurdle bar higher than we have in the past, thinking about that.

So we will certainly be opportunistic where things are available but we don't feel as a team that we need to do anything at the moment.

So we will be very cautious and only do the right thing for the company.

Thank you.

Our next question comes from the line of Joel Sendek with Lazard Capital Markets.

Go ahead.

Thanks.

I have a question on Atripla in France.

You mentioned that the reimbursement discussions will finish sometime in the first half.

Will that translate into a launch in the first half?

And I was wondering what's taking so long, and if you can just describe what the percentage of the market that France represents in Europe?

Thanks.

Joe, it's Kevin.

Just to explain a little bit about the process here.

You obviously get your EMEA approval, and then there's really two steps to go through in France.

You go to the Transparency Committee, that's almost like a technical review.

They give you a grading of your product, which then leads to the Pricing Committee giving you the actual price.

So it's like a two-step process.

We are right now with the longer of the processes, which is the Transparency Committee.

So I think we are having a very productive active discussion with them.

We do see that politically they kind of changed their stance and probably tightened and are more challenging in terms of a process than they have been in the past.

I don't have the exact percentage of where France sits with regards to HIV, but it is our second biggest market outside the U.S., so it is the biggest of the European markets.

Our rankings for HIV and Europe are France number one, Spain number two and Italy and the U.K.

about the same.

Okay.

Thank you.

Our next comes from the line of William Ho with Banc of America.

Go ahead.

Hey, guys, just wanted to say great job and really congratulations on the quarter.

Just want to follow up on a question about your comments about nonretail sales.

Just quickly, is there any risk of additional fluctuations next quarter due to the impact of Hurricane Ike or any of the tropical storms that may have hit either Florida or Texas, those large buying centers that you mentioned?

We've seen a little bit like we saw with Hurricane Katrina but I think things are getting up and running fairly quickly, so we haven't heard from the field that that's going to have a major impact on Q4 or Q1.

Great.

Thanks again.

Our final question comes from the line of Jason Kantor with RBC Capital Markets.

Go ahead.

Thanks for squeezing me in here at the end of the call, and congratulations as well.

In terms of penetration in the HIV market in the U.S.

you are - you say you are at about 85% penetration into first line.

How high do you think realistically that can go?

And then how much pull through to the entire HIV market would that have over time, in terms of what your likely peak penetration could be with your current products?

Jason, it's John Milligan.

Just to be clear, what we said about - the 85% relates to patients who come on to therapy in the most recent quarter measured, which was the second quarter of last year, so we are getting, you know, 8.5 out of 10 in that quarter.

Overall, about 57% of U.S.

patients across Truvada, Atripla and Viread, so we are getting two-thirds of patients.

I think if that 85% holds, in fact with a little luck we can move that up, we should be able to continue to grow that market share in the U.S.

along those lines.

Because patients are staying on for extremely long periods of time, on either Atripla or, as Kevin and Norbert mentioned, when they switch to Truvada.

In Europe it's about 55%, so there is clearly a long growth rate for Europe as we continue to focus on our launch of Atripla and continue to move Truvada up.

At this point, we have run out of time for additional questions.

Thank you, Operator, and thank you all for joining us today.

We appreciate your continued interest in Gilead, and look forward to providing you with updates on our future progress.

We will all be back in our offices shortly, and more than happy to take your follow-up questions, because I am sure there are many.

Thank you very much.

Ladies and gentlemen, thank you for your participation in today's conference.

That does conclude the presentation.

You may disconnect.

Have a wonderful day.