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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 27, 1999
REGISTRATION NO. 333-87167
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GILEAD SCIENCES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 94-3047598
(State of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>
GILEAD SCIENCES, INC.
333 LAKESIDE DRIVE
FOSTER CITY, CALIFORNIA 94404
(650) 574-3000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
MARK L. PERRY
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND GENERAL COUNSEL
GILEAD SCIENCES, INC.
333 LAKESIDE DRIVE
FOSTER CITY, CALIFORNIA 94404
(650) 574-3000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
ROBERT L. JONES, ESQ.
JULIA L. DAVIDSON, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CALIFORNIA 94306
(650) 843-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------------
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND
OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. /X/
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. / /
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. / /
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF CLASS OF SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value $.001 per share 3,033,928 shares $68.6875 $208,392,929.50 (3)
</TABLE>
(1) Pursuant to Rule 416 of the Securities Act of 1933, as amended, this
registration statement also covers such indeterminable additional shares as
may become issuable as a result of any future stock splits, stock dividends
or similar transactions.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457 under the Securities Act of
1933, as amended, based on the average of the high and low prices of Gilead
Sciences, Inc. common stock as reported on the Nasdaq National Market on
October 25, 1999.
(3) Previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION
PROSPECTUS DATED , 1999
[LOGO]
3,033,928 SHARES
COMMON STOCK
The selling stockholders and their respective future transferees, pledgees,
donees or successors may sell up to 3,033,928 shares of common stock of Gilead
Sciences, Inc. We will not receive any proceeds from the sale of shares by the
selling stockholders.
------------------------
Our common stock is listed on the Nasdaq National Market under the symbol
"GILD."
------------------------
We will not be paying any underwriting commissions or discounts in the
offering of these shares.
------------------------
Please see "Where You Can Find More Information" on page 10 for additional
information about us on file with the United States Securities and Exchange
Commission.
WE STRONGLY URGE YOU TO READ AND CONSIDER THIS PROSPECTUS CAREFULLY AND IN
ITS ENTIRETY, INCLUDING THE MATTERS REFERRED TO UNDER "RISK FACTORS" BEGINNING
AT PAGE 2.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 1999
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ABOUT GILEAD SCIENCES, INC.
THE FOLLOWING IS A SHORT SUMMARY OF THE INFORMATION CONTAINED IN THIS
PROSPECTUS. YOU SHOULD CAREFULLY READ THE "RISK FACTORS" SECTION OF THIS
PROSPECTUS AND OUR ANNUAL REPORT ON FORM 10-K/A FOR THE YEAR ENDED DECEMBER 31,
1998 FOR MORE INFORMATION ON OUR BUSINESS AND THE RISKS INVOLVED IN INVESTING IN
OUR STOCK. IN ADDITION TO THE HISTORICAL INFORMATION CONTAINED IN THIS
PROSPECTUS, THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT
THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM OUR EXPECTATIONS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES ARE DISCUSSED IN "RISK FACTORS" BEGINNING AT PAGE 2 OF THIS
PROSPECTUS AND IN "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" AND "BUSINESS" IN OUR ANNUAL REPORT.
We are an independent biopharmaceutical company that seeks to provide
accelerated solutions for patients and the people who care for them. We
discover, develop and commercialize proprietary therapeutics for important viral
diseases, including the currently marketed products AmBisome, DaunoXome and
VISTIDE-Registered Trademark- (cidofovir injection).
We were incorporated in Delaware in 1987. Our principal executive offices
are located at 333 Lakeside Drive, Foster City, California 94404; and through
our subsidiary, NeXstar, we maintain offices in Boulder, Colorado; offices and
manufacturing facilities in San Dimas, California; and marketing subsidiaries
outside of the United States. On July 29, 1999, we acquired all the outstanding
common stock of NeXstar Pharmaceuticals, Inc. and NeXstar became a wholly owned
subsidiary of Gilead. Our telephone number is (650) 574-3000, or (800) GILEAD5
(800-445-3235).
Up to 3,033,928 shares of common stock may be sold by the selling
stockholders under this prospectus from time to time. We will not receive any
proceeds from the sale of these shares.
The successful development and commercialization of our products will
require substantial and ongoing efforts at the forefront of the life sciences
industry. We are pursuing preclinical or clinical development of a number of
product candidates. Even if these product candidates appear promising during
various stages of development, they may not reach the market for a number of
reasons. Such reasons include the possibilities that the potential products will
be found ineffective or cause harmful side effects during preclinical or
clinical trials, fail to receive necessary regulatory approvals, be difficult or
uneconomical to manufacture on a commercial scale, be uneconomical to market or
be precluded from commercialization by either proprietary rights or competing
products of others.
We face significant challenges and risks in an industry undergoing rapid
change, including the risks inherent in our research and development programs,
uncertainties in obtaining and enforcing patents, the lengthy, expensive and
uncertain regulatory approval process, reliance on third party manufacturers,
intense competition from pharmaceutical and biotechnology companies, dependence
on collaborative relationships, increasing pressure on pharmaceutical pricing
from payors, patients and government agencies, and uncertainties associated with
the market acceptance of and size of the market for any of our products or
products in development.
We expect that our financial results will continue to fluctuate from quarter
to quarter and that such fluctuations may be substantial. There can be no
assurance that we will successfully develop, commercialize, manufacture and
market additional products, nor can there be assurance that we will either
achieve or sustain profitability.
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RISK FACTORS
In evaluating our business, prospective investors should carefully consider
the following risks in addition to the other information in this prospectus or
in the documents referred to in this prospectus. Any of the following risks
could materially adversely affect our business, operating results and financial
condition and result in a complete loss of your investment.
IF GILEAD AND NEXSTAR ARE NOT SUCCESSFULLY INTEGRATED, OUR BUSINESS WILL BE
ADVERSELY AFFECTED. Integrating Gilead and NeXstar, which became a wholly owned
subsidiary of Gilead on July 29, 1999, will be a complex, time-consuming and
expensive process. Before the merger, Gilead and NeXstar operated independently,
each with its own business, corporate culture, locations, employees and systems.
After the merger, Gilead and NeXstar must operate as a combined organization
utilizing common information and communication systems; operating procedures;
financial controls; and human resource practices, including benefit, training
and professional development programs.
There may be substantial difficulties, costs and delays involved in
integrating Gilead and NeXstar. These may include:
- distracting management from the business of the combined company;
- potential incompatibility of corporate cultures;
- potential inability to coordinate research and development efforts
successfully;
- costs and delays in implementing common systems and procedures; and
- operating the combined company at three sites in the United States and at
10 international sites.
Any one or all of these factors may increase operating costs or lower
anticipated financial performance. In addition, we may lose corporate partners,
distributors, suppliers, manufacturers and employees. Many of these factors are
also outside our control. Achieving anticipated synergies and the potential
benefits underlying our reasons for the merger will depend on successful
integration of the two companies. The failure to integrate Gilead and NeXstar
would have a material adverse effect on our business, financial condition and
results of operations.
WE DEVELOP DRUGS TO TREAT AIDS AND AIDS-RELATED CONDITIONS, AND THEREFORE WE
CAN BE ADVERSELY AFFECTED BY CHANGES IN THE REGULATORY AND COMMERCIAL
ENVIRONMENT FOR AIDS THERAPIES. Several of our products and products in
development address AIDS or AIDS-related conditions. These products include
VISTIDE (cidofovir injection) for CMV retinitis, adefovir dipivoxil for HIV and
AIDS, PMPA for HIV and AIDS, and DaunoXome for HIV-associated Kaposi's sarcoma.
The medical, regulatory and commercial environment for AIDS therapies changes
quickly and often in ways that we are unable to accurately predict. We develop
our AIDS products based upon current policy and the current marketplace for AIDS
therapies, as well as our prediction of future policy and the future marketplace
for these therapies. Our business will be subject to substantial risk because
these policies and markets change quickly and unpredictably and in ways that
could have a material adverse impact on our ability to obtain regulatory
approval and commercial acceptance of our AIDS-related products.
ANY SIGNIFICANT REDUCTION IN AMBISOME SALES WOULD SIGNIFICANTLY REDUCE OUR
OPERATING INCOME, AND COULD REQUIRE US TO SCALE BACK OUR MANUFACTURING
OPERATIONS AND REDUCE OUR SALES FORCE. AmBisome sales for the year ended
December 31, 1998 exceeded $100 million. During the same period, sales of our
other two marketed products, VISTIDE and DaunoXome, were approximately
$6.1 million and $6.5 million, respectively. Accordingly, in the near term, we
will rely on sales of AmBisome to support our existing manufacturing and sales
infrastructure and to provide operating income to offset a significant portion
of our administrative and research and development expenditures. Any significant
reduction in sales of AmBisome, whether as a result of the introduction of
competitive products or otherwise, would therefore have a material adverse
effect on us, including the possibility that we would
2
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have to scale back our manufacturing operations and reduce our sales force.
There are several products on the market that compete with AmBisome and are
generally priced lower than AmBisome. In addition, there are other potentially
competitive products in clinical development by major pharmaceutical companies.
WE MAY NOT RECEIVE APPROVAL FOR EXPANDED INDICATIONS FOR EXISTING PRODUCTS
OR APPROVAL OF ADDITIONAL PRODUCTS. Additional regulatory approvals will be
needed to expand the indications for which AmBisome may be marketed in the
countries where it is already approved, and those approvals may or may not be
obtained. Similarly, to the extent that the combined company seeks to expand the
indications for VISTIDE beyond CMV retinitis and the indications for DaunoXome
beyond Kaposi's sarcoma, the drugs may not be effective for the treatment of
other diseases, and we may never obtain additional regulatory approvals.
OUR OPERATIONS DEPEND ON COMPLIANCE WITH COMPLEX FDA AND COMPARABLE
INTERNATIONAL REGULATIONS. FAILURE TO OBTAIN BROAD APPROVALS ON A TIMELY BASIS
OR TO ACHIEVE CONTINUED COMPLIANCE COULD DELAY COMMERCIALIZATION OF OUR PRODUCTS
AND ADVERSELY AFFECT US. The products that we will develop and sell must be
approved and will be subject to extensive regulation by the FDA and comparable
agencies in other countries. We filed an application for marketing approval of
adefovir dipivoxil for HIV and AIDS with the FDA in the second quarter of 1999
and with the European Medicines Evaluation Agency in the fourth quarter of 1999.
We also filed an application for marketing approval of an oral suspension
formulation of adefovir dipivoxil for HIV with the FDA in the fourth quarter of
1999. In addition, Hoffmann-La Roche, our corporate partner for the development
and commercialization of TAMIFLU-Registered Trademark- (oseltamivir phosphate),
filed applications for marketing approval of TAMIFLU to treat influenza in the
second quarter of 1999. We are continuing clinical trials for both AmBisome and
DaunoXome for currently approved and additional indications. We are also
conducting clinical trials for five other products, adefovir dipivoxil for
hepatitis B infection, PMPA, MiKasome, NX211 and NX1838. We anticipate that we
will conduct a variety of clinical trials and file for marketing approval of
additional products over the next several years. These products may fail to
receive marketing approval on a timely basis, or at all. In addition, these
products may receive marketing approvals that place limitations on their uses.
These failures, delays or limitations, as well as other regulatory changes,
actions and recalls, could delay commercialization of any products and adversely
affect our results of operations.
In addition, even after our products are marketed, the products and their
manufacturers are subject to continual review. Later discovery of previously
unknown problems with our products, our own manufacturing or the production by
third-party manufacturers may result in restrictions on our products or the
manufacture of our products, including withdrawal of the products from the
market.
RESULTS OF CLINICAL TRIALS AND APPROVAL OF PRODUCTS ARE UNCERTAIN, AND WE
MAY BE DELAYED IN OR PROHIBITED FROM SELLING OUR PRODUCTS. We have a number of
potential products that have reached the development stage. These potential
products include adefovir dipivoxil for HIV and AIDS, TAMIFLU, adefovir
dipivoxil for HBV, PMPA, MiKasome, NX211 and NX1838. We will be required to
demonstrate the safety and effectiveness of these and any other products we
develop in each intended use through extensive preclinical studies and clinical
trials in order to obtain regulatory approval of these products. The results
from preclinical and early clinical studies do not always accurately predict
results in later, large-scale clinical trials for several reasons, including:
- preliminary results may not be indicative of effectiveness;
- further clinical trials may not achieve the desired result; and
- further clinical trials may reveal unduly harmful side effects or may show
the drugs to be less effective than other drugs or delivery systems for
the desired indications.
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Even successfully completed large-scale clinical trials may not result in
marketable products for several reasons, including:
- the potential products are not shown to be safe and effective;
- regulatory authorities disagree with the results of our studies and
trials;
- required regulatory approvals are not obtained;
- the potential products are too difficult to develop into commercially
viable products; or
- the potential products do not obtain market acceptance.
A number of companies in our industry have suffered significant setbacks in
advanced clinical trials despite promising results in earlier trials. In the
end, we may be unable to develop marketable products.
DELAYS IN PATIENT ENROLLMENT FOR CLINICAL TRIALS COULD INCREASE COSTS AND
DELAY REGULATORY APPROVALS. The rate of completion of our clinical trials will
depend on the rate of patient enrollment. There will be substantial competition
to enroll patients in clinical trials for our drugs in development. This
competition has delayed our clinical trials in the past. In addition, recent
improvements in existing drug therapy, particularly for AIDS, HBV and certain
cancers, may make it more difficult for us to enroll patients in our clinical
trials as the patient population may choose to enroll in clinical trials
sponsored by other companies or choose alternative therapies. Delays in planned
patient enrollment can result in increased development costs and delays in
regulatory approvals.
OUR PRODUCT DEVELOPMENT EFFORTS MAY NOT YIELD MARKETABLE PRODUCTS DUE TO
RESULTS OF STUDIES OR TRIALS, FAILURE TO ACHIEVE REGULATORY APPROVALS OR MARKET
ACCEPTANCE, PROPRIETARY RIGHTS OF OTHERS OR MANUFACTURING ISSUES. Our success
depends on our ability to successfully develop and obtain regulatory approval to
market new pharmaceutical products. A significant portion of the research that
we will conduct will involve new and unproven technologies. Development of a
product requires substantial technical, financial and human resources even if
the product is not successfully completed. Our potential products may appear to
be promising at various stages of development yet fail to reach the market for a
number of reasons, including:
- lack of efficacy or unacceptable toxicity during preclinical studies or
clinical trials;
- failure to receive necessary regulatory approvals;
- existence of proprietary rights of third parties; and
- inability to develop manufacturing methods that are efficient,
cost-effective and capable of meeting stringent regulatory standards.
WE MAY UNDERESTIMATE DEVELOPMENT COSTS, ADVERSELY AFFECTING OUR
BUSINESS. Due to uncertainties that are part of the development process, we may
underestimate the costs associated with the development of a potential product.
Delays or unanticipated increases in costs of development or failure to obtain
regulatory approval or market acceptance for our products could adversely affect
our operating results. In addition, the combination of Gilead's and NeXstar's
research and development organizations may result in greater competition for
resources and elimination of development programs that might otherwise be
successfully completed.
WE DEPEND ON RELATIONSHIPS WITH OTHER COMPANIES FOR RESEARCH FUNDING,
CLINICAL DEVELOPMENT, SALES AND MARKETING PERFORMANCE AND REVENUES. FAILURE TO
MAINTAIN THESE RELATIONSHIPS WOULD NEGATIVELY IMPACT OUR BUSINESS. We rely on a
number of significant collaborative relationships with major pharmaceutical
companies for our research funding, clinical development and/or sales and
marketing performance. These include collaborations with Bausch & Lomb, Fujisawa
USA Inc., Glaxo Wellcome, Hoffmann-La
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Roche, Pharmacia & Upjohn, Schering AG and Sumitomo Pharmaceuticals Co. Inc.
Reliance on collaborative relationships poses a number of risks, including:
- we will not be able to control whether our corporate partners will devote
sufficient resources to our programs or products;
- disputes may arise in the future with respect to the ownership of rights
to technology developed with corporate partners;
- disagreements with corporate partners could lead to delays in or
termination of the research, development or commercialization of product
candidates, or result in litigation or arbitration;
- contracts with our corporate partners may fail to provide significant
protection or may fail to be effectively enforced if one of these partners
fails to perform;
- corporate partners have considerable discretion in electing whether to
pursue the development of any additional products and may pursue
alternative technologies or products either on their own or in
collaboration with our competitors; and
- corporate partners with marketing rights may choose to devote fewer
resources to the marketing of our products than they do to products of
their own development.
Given these risks, there is a great deal of uncertainty regarding the
success of our current and future collaborative efforts. If these efforts fail,
our product development or commercialization of new products could be delayed or
revenue from existing products could decline.
INABILITY TO ESTABLISH FUTURE SUCCESSFUL COLLABORATIVE RELATIONSHIPS MAY
IMPAIR OUR FINANCIAL RESULTS. We may seek future collaborative relationships
with corporate partners to fund some of our research and development expenses
and to develop and commercialize some of our potential products. For example, we
are in discussions with several potential corporate partners about collaborative
development and commercialization of adefovir dipivoxil for HBV, particularly in
Asian territories. Further, we anticipate that our revenues from collaborative
agreements will continue to be affected by existing agreements, as well as by
the timing of drug development programs of our corporate partners. We may not be
able to negotiate acceptable collaborative arrangements in the future, and any
arrangements we do negotiate may not be successful. If we fail to establish
additional collaborative relationships, we will be required to undertake
research, development, marketing and manufacturing of our proposed products at
our own expense.
WE HAVE A HISTORY OF LOSSES, EXPECT TO OPERATE AT A LOSS FOR THE FORESEEABLE
FUTURE AND MAY NEVER BE PROFITABLE. We have never been profitable on a
full-year basis. We may never become profitable. At December 31, 1998, prior to
the merger, Gilead's accumulated deficit was $218.6 million and NeXstar's
accumulated deficit was $159.0 million. Our losses have resulted principally
from expenses associated with our research and development programs and, to a
lesser extent, from sales, general and administrative expenses. Our product
sales and royalty revenues are derived from sales of AmBisome, VISTIDE and
DaunoXome and royalty arrangements related to AmBisome and VISTIDE.
OUR EXISTING PRODUCTS AND PRODUCTS UNDER DEVELOPMENT MAY NOT BE ACCEPTED BY
PHYSICIANS, INSURERS AND PATIENTS. Many of our products in development, if
approved for marketing, would have no established market. The ability of these
products to achieve and sustain market acceptance will depend on the receipt and
scope of regulatory approvals and whether or not government authorities and
managed care organizations will adequately reimburse patients who use these
products.
In addition, we need to convince the medical and patient advocacy community
of:
- the effectiveness of these products in treating disease;
- the safety of these products when administered to patients; and
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- the advantages of these products over competitive products.
Physicians, patients, patient advocates, payors and the medical community in
general may not accept and use any products that we may develop. If our products
are not accepted, our results of operations will suffer.
OUR RIGHTS TO MARKET AMBISOME IN THE UNITED STATES AND CANADA ARE LIMITED BY
AN AGREEMENT WITH FUJISAWA. FAILURE OF FUJISAWA TO EFFECTIVELY MARKET AMBISOME
MAY REDUCE REVENUES. Our rights to market AmBisome in the United States and
Canada are subject to an agreement with Fujisawa Healthcare, Inc. Under the
terms of this agreement, we have the marketing rights to AmBisome in all
countries except the United States and Canada, but must pay royalties in
connection with sales in most significant Asian markets, including Japan. We
co-promote AmBisome with Fujisawa in the United States. We manufacture AmBisome
for sale in the United States and Canada and sell AmBisome to Fujisawa at cost.
Fujisawa collects all revenues from AmBisome sales in the United States and pays
us 20% of the gross profits from such sales. The success of AmBisome in the
United States will be dependent primarily on the efforts of Fujisawa. If
Fujisawa fails in its efforts, potential revenues from the sale of AmBisome in
the United States may be substantially reduced.
MANY OTHER COMPANIES ARE TARGETING THE SAME DISEASES AND CONDITIONS AS WE
ARE. COMPETITIVE PRODUCTS FROM OTHER COMPANIES COULD SIGNIFICANTLY REDUCE THE
MARKET ACCEPTANCE OF OUR PRODUCTS. Our products and development programs target
a number of diseases and conditions, including viral infections, fungal
infections, bacterial infections and cancer. There are many commercially
available products for these diseases. Certain of these products are well
established therapies and have generated substantial sales. In addition, a large
number of companies and institutions are conducting well-funded research and
development activities directed at developing treatments for these diseases.
Products currently on the market and those under development by our competitors
could make our technology and products obsolete or noncompetitive. We expect
that competition for the treatment of these diseases will increase in the future
as new products enter the market and advanced technologies become available. We
will also be competing to license or acquire technology from other companies.
Most of our competitors and potential competitors have substantially greater
resources than we do. Those resources include superior product development
capabilities and financial, scientific, manufacturing, marketing, managerial and
human resources. These competitors may achieve superior patent protection,
obtain key technology, receive regulatory approval or achieve product
commercialization earlier than us.
THE SIGNIFICANTLY GREATER RESOURCES OF THE MARKETING ORGANIZATIONS OF LARGE
PHARMACEUTICAL COMPANIES COULD HINDER OUR ABILITY TO COMPETE SUCCESSFULLY. Our
products compete, and the products we may develop are likely to compete, with
products of other companies that currently have extensive and well-funded
marketing and sales operations. Because these companies are capable of devoting
significantly greater resources to their marketing efforts, our marketing or
sales efforts may not compete successfully against the efforts of these other
companies.
OUR EXISTING PRODUCTS ARE SUBJECT TO REIMBURSEMENT FROM GOVERNMENT AGENCIES
AND OTHER THIRD PARTIES. PHARMACEUTICAL PRICING AND REIMBURSEMENT PRESSURES MAY
REDUCE PROFITABILITY. Successful commercialization of our products depends, in
part, on the availability of governmental and third-party payor reimbursement
for the cost of such products and related treatments. Reimbursement is generally
provided by government health administration authorities, private health
insurers and other organizations. Government authorities and third-party payors
increasingly are challenging the price of medical products and services,
particularly for innovative new products and therapies. This has resulted in
lower average sales prices. For example, a majority of our sales of AmBisome,
VISTIDE and DaunoXome are subject to reimbursement by government agencies,
resulting in significant discounts from list price and rebate obligations. We
expect that several of our products in development,
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particularly for AIDS indications will have a similar reimbursement profile, if
they receive regulatory approval. Even if reimbursement is available,
reimbursement policies may adversely affect our ability to sell our products on
a profitable basis.
In addition, in many international markets, governments control the prices
of prescription pharmaceuticals. In these markets, once marketing approval is
received, pricing negotiation can take another six to twelve months or longer.
Product sales, attempts to gain market share or introductory pricing programs of
our competitors could require us to lower our prices in these countries, which
could adversely affect our results of operations.
MOST OF OUR PRODUCT SALES ARE MADE IN EUROPE, AND CURRENCY FLUCTUATIONS MAY
IMPAIR OUR FINANCIAL RESULTS. A majority of our product sales are made in
Europe, with 53% of our product sales for the year ending December 31, 1998
occurring in the United Kingdom, Germany, Italy and Spain. In most significant
European markets, we sell AmBisome and DaunoXome in the currency of the country
in which they are sold. Accordingly, the prices of these products in U.S.
dollars will vary as the value of the U.S. dollar fluctuates against these
foreign currencies or the Euro. Increases in the value of the U.S. dollar
against foreign currencies may reduce our U.S. dollar return on the sale of our
products. In addition, although we implement hedging techniques with respect to
our foreign currency accounts receivable, these techniques do not eliminate the
effects of foreign currency fluctuations with respect to anticipated revenues.
Therefore our future results will continue to be affected by foreign currency
fluctuations.
WE MAY NOT BE ABLE TO OBTAIN EFFECTIVE PATENTS TO PROTECT OUR TECHNOLOGIES
FROM USE BY COMPETITORS, AND PATENTS OF OTHER COMPANIES COULD REQUIRE US TO STOP
USING OR PAY FOR THE USE OF REQUIRED TECHNOLOGY. Our success will depend to a
significant degree on our ability to:
- obtain patents and licenses to patent rights;
- preserve trade secrets; and
- operate without infringing on the proprietary rights of others.
We have rights to United States and foreign issued patents and have filed
and will continue to file patent applications in the United States and abroad
relating to our technologies. There is a risk, however, that patents may not
issue from any of these applications or that the patents will not be sufficient
to protect our technology. Patent applications in the United States are
confidential until a patent is granted. As a result, we would not know if our
competitors filed patent applications for technology covered by our pending
applications. We also cannot be certain that we were the first to invent the
technology that is the subject of our patent applications. Competitors may have
filed patent applications or received patents and may obtain additional patents
and proprietary rights that block or compete with our patents.
We do not have patent filings covering adefovir dipivoxil in China or in
certain other Asian countries, although we do have an application pending in
Japan. Asia is a major market for hepatitis B therapies, one of the potential
indications for adefovir dipivoxil. We may obtain patents for certain products
many years before marketing approval is obtained for those products. Because
patents have a limited life, which may begin to run prior to commercial sale,
the commercial value of the product may be limited.
Our competitors may file patent applications covering our technology. If so,
we may have to participate in interference proceedings or litigation to
determine the right to a patent. Litigation and interference proceedings are
expensive even if successful. In August 1998, we were served with a patent
infringement lawsuit filed by Chiron Corporation alleging that our research
infringes Chiron's patents covering the hepatitis C protein and gene sequences
and their use in screening for potential hepatitis C therapeutics.
7
<PAGE>
Our success depends in large part on our ability to operate without
infringing upon the patents or other proprietary rights of third parties. If we
infringe patents of others, we may be prevented from commercializing products or
may be required to obtain licenses from these third parties. We cannot be
certain that we would be able to obtain alternative technologies or any required
license. Even if we were to obtain such technologies or licenses, we cannot be
certain that the terms would be reasonable. If we fail to obtain such licenses
or alternative technologies, we may be unable to develop some or all of our
products.
In addition, we use significant proprietary technology and rely on
unpatented trade secrets and proprietary know-how to protect certain aspects of
our production and other technologies. Our trade secrets may become known or
independently discovered by our competitors.
MANUFACTURING PROBLEMS COULD DELAY PRODUCT SHIPMENTS AND REGULATORY
APPROVALS. For VISTIDE, adefovir dipivoxil, PMPA and TAMIFLU, we rely on third
parties for the manufacture of bulk drug substance and final drug product for
clinical and commercial purposes. We depend on these third parties to perform
their obligations effectively and on a timely basis. If these third parties fail
to perform as required, our clinical trials or submission of products for
regulatory approval may be delayed. These delays could impair our ability to
deliver commercial products on a timely basis and could impair our competitive
position.
We manufacture AmBisome and DaunoXome at NeXstar's facilities in San Dimas,
California. Our only formulation and manufacturing facilities are in San Dimas,
California; although we own a manufacturing facility in Ireland that performs
certain quality control testing, labeling and packaging, and we use third
parties to fill and lyophilize (freeze dry) certain batches of product as
alternate contract suppliers. In the event of a natural disaster, including an
earthquake, equipment failure, strike or other difficulty, we may be unable to
replace this manufacturing capacity in a timely manner and would be unable to
manufacture AmBisome and DaunoXome to meet market needs.
WE MAY NOT BE ABLE TO OBTAIN MATERIALS NECESSARY TO MANUFACTURE OUR
PRODUCTS. Many of the materials that we utilize in our operations are made at
only one facility. For example, we depend on single suppliers for high quality
amphotericin B, daunorubicin HC1 and high quality cholesterol, each of which is
used in the manufacture of our liposome products. We have qualified only one
supplier with the FDA for the bulk drug substance used in VISTIDE and one
different supplier for the final drug product. A shutdown in any of these
facilities due to technical, regulatory or other problems, resulting in an
interruption in supply of these materials, could have an adverse impact on our
financial results. While we have established a second source of bulk drug
substance supply for VISTIDE, we have not yet qualified this source with the FDA
and cannot be certain that the FDA will approve this second source. Because the
suppliers of key components and materials must be named in the New Drug
Application filed with the FDA for a product, significant delays can occur if
the qualification of a new supplier is required. If supplies from our suppliers
were interrupted for any reason, we could be unable to ship AmBisome, VISTIDE or
DaunoXome, or supply any of our products in development for clinical trials.
WE HAVE LIMITED EXPERIENCE MANUFACTURING PRODUCTS AND COULD BE ADVERSELY
AFFECTED IF WE FAIL TO DEVELOP MANUFACTURING CAPACITY. For some of our
potential products, we will need to develop further our production technologies
for use on a larger scale in order to conduct clinical trials and produce such
products for commercial sale at an acceptable cost. We cannot be certain that we
will be able to implement any of these developments successfully.
The manufacturing process for pharmaceutical products is highly regulated,
and regulators may shut down manufacturing facilities that they believe do not
comply with regulations. The FDA's current Good Manufacturing Practices are
extensive regulations governing manufacturing processes, stability testing,
record-keeping and quality standards. Similar regulations are in effect in other
countries.
8
<PAGE>
OUR BUSINESSES MAY GIVE RISE TO PRODUCT LIABILITY CLAIMS NOT COVERED BY
INSURANCE OR INDEMNITY AGREEMENTS. The testing, manufacturing, marketing and
use of AmBisome, VISTIDE and DaunoXome, as well as products in development,
involve substantial risk of product liability claims. These claims may be made
directly by consumers, healthcare providers, pharmaceutical companies or others.
Although we maintain product liability insurance, a single product liability
claim could exceed the coverage limits, and multiple claims are possible. If
that happens, the insurance coverage we have may not be adequate. A successful
product liability claim in excess of our coverage could require us to pay
substantial amounts. This could adversely affect our results of operations.
Moreover, the amount and scope of any coverage may be inadequate to protect us
in the event of a successful product liability claim. In the future such
insurance may not be renewed at an acceptable cost or at all. If liability
insurance becomes unobtainable, our ability to clinically test and to market our
products could be significantly impaired.
Additionally, we are required by governmental regulations to test our
products even after they have been sold and used by patients. As a result of
such tests, we may be required to, or may determine that, we should recall
products already in the market. Subsequent testing and product recalls may
increase our potential exposure to product liability claims.
OUR USE OF HAZARDOUS MATERIALS, CHEMICALS, VIRUSES AND RADIOACTIVE COMPOUNDS
EXPOSES US TO POTENTIAL LIABILITIES. Our research and development involves the
controlled use of hazardous materials, chemicals, viruses and various
radioactive compounds. Although we believe that our safety procedures for
handling and disposing of such materials comply with the standards prescribed by
state and federal regulations, we cannot completely eliminate the risk of
accidental contamination or injury from these materials. In the event of such an
accident, we could be held liable for significant damages or fines.
IF WE OR THIRD-PARTY SUPPLIERS AND BUSINESS PARTNERS FAIL TO ADEQUATELY
ADDRESS YEAR 2000 ISSUES, OUR BUSINESS COULD BE ADVERSELY AFFECTED. We have
been implementing a program designed to address the issue of computer software
and hardware correctly processing dates through and beyond the Year 2000. Due to
the uncertainty inherent in the Year 2000 problem, as well as complications that
may arise from integrating Gilead's and NeXstar's separate systems, there can be
no assurance that Year 2000 failures will not have a material impact on the
combined company's operations, operating results or financial condition. In
addition, we cannot predict with any certainty whether our critical third-party
suppliers and business partners will achieve Year 2000 compliance, or whether
the failure of any third party to do so would have a material effect on our
business.
9
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the United States Securities and Exchange Commission. We have
filed with the SEC a registration statement on Form S-3 to register the common
stock offered by this prospectus. However, this prospectus does not contain all
of the information contained in the registration statement and the exhibits and
schedules to the registration statement. We strongly encourage you to carefully
read the registration statement and the exhibits and schedules to the
registration statement. You may read and copy any document filed by Gilead at
the SEC's public reference facilities. Please call the SEC at 1-800-SEC-0330 for
further information about its public reference facilities. These SEC filings are
also available to the public at the SEC's web site at http://www.sec.gov.
This proxy statement/prospectus incorporates certain documents by reference.
You can obtain copies of the documents, without charge, by contacting the Gilead
Investor Relations department at:
Gilead Sciences, Inc.
333 Lakeside Drive
Foster City, California 94404
(650) 574-3000
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
the SEC which means that we can disclose important information to you by
referring you to these documents. The information incorporated by reference is
considered to be part of this prospectus. Information in this prospectus
supersedes information incorporated by reference that we filed with the SEC
prior to the date of this prospectus, while information that we file later with
the SEC will automatically update and supersede this information.
We incorporate by reference the documents listed below, and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 prior to the termination of the offer
described in this prospectus.
The Gilead documents we incorporate by reference are its:
- Current report on Form 8-K filed
with the SEC on October 22, 1999
- Current report on Form 8-K filed
with the SEC on September 15, 1999
- Current report on Form 8-K filed
with the SEC on August 4, 1999
- Quarterly report on Form 10-Q for the
quarter ended June 30, 1999
- Quarterly report on Form 10-Q for the
quarter ended March 31, 1999
- Current report on Form 8-K filed
with the SEC on March 9, 1999
- Annual report on Form 10K/A for the
fiscal year ended December 31, 1998
- Current report on Form 8-K filed
with the SEC on November 21, 1994
- The description of Gilead common
stock which is contained in a registration statement on Form 8-A filed
under the Exchange Act including any amendment or report filed for the
purpose of updating such description.
Our common stock is quoted on the Nasdaq National Market under the symbol
"GILD." The last reported sales price of the common stock on the Nasdaq National
Market on October 26, 1999 was $64.6875 per share. Reports, proxy statements and
other information concerning Gilead can be inspected at the Nasdaq National
Market, Operations, 1735 K Street, N.W., Washington, D.C. 20006.
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS. WE HAVE AUTHORIZED NO ONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THE
DOCUMENT.
10
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered by the
selling stockholders.
DIVIDEND POLICY
We have never paid any cash dividends on our capital stock. We currently
intend to use future earnings to finance the growth and development of our
business and do not anticipate paying any cash dividends in the foreseeable
future.
11
<PAGE>
SELLING STOCKHOLDERS
All of the shares of our common stock offered by this prospectus are held by
the selling stockholders listed in the table below. The shares are being
registered to permit public secondary trading of the shares, and the selling
stockholders may offer the shares for resale from time to time. The selling
stockholders may sell the shares offered through this prospectus from time to
time at prevailing prices in the over-the-counter market or in
privately-negotiated transactions; however, our registration of the shares of
common stock does not necessarily mean that the selling stockholders will sell
all or any of the shares. We agreed to prepare and file such amendments and
supplements to the registration statement of which this prospectus is a part as
may be necessary to keep the registration statement effective until the earlier
of: (1) July 29, 2001, (2) the date on which each selling stockholder may,
taking into account any applicable aggregation requirement, sell all of its
shares under Rule 144 or Rule 145 during any 90 day period, or (3) the date on
which the selling stockholders no longer own any shares.
The following table sets forth certain information regarding the beneficial
ownership of the common stock by each of the selling stockholders as of the date
of this prospectus and the number of shares that may be offered by this
prospectus. This information is based upon information provided to us by the
selling stockholders. Except as otherwise disclosed below, none of the selling
stockholders has, or within the past three years has had, any position, office
or other material relationship with Gilead (or any of its predecessors or
affiliates). Because the selling stockholders may sell all or some portion of
the shares of common stock beneficially owned by them, we cannot estimate the
number of shares of common stock that will be beneficially owned by the selling
stockholders after this offering. In addition, the selling stockholders may have
sold, transferred or otherwise disposed of, or may sell, transfer or otherwise
dispose of, at any time or from time to time since the date on which they
provided the information regarding the shares of common stock beneficially owned
by them, all or a portion of the shares of common stock beneficially owned by
them in transactions exempt from the registration requirements of the Securities
Act of 1933.
Beneficial ownership is determined in accordance with Rule 13d-3(d)
promulgated by the Commission under the Securities Exchange Act of 1934, as
amended. Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to shares, subject to community
property laws where applicable. Shares not outstanding but deemed beneficially
owned by virtue of the right of a person or group to acquire them within
60 days are treated as outstanding only for purposes of determining the number
of and percent owned by such person or group. Applicable percentages are based
on 43,760,681 shares outstanding on September 1, 1999, adjusted as required by
rules promulgated by the SEC.
12
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES BENEFICIALLY
COMMON STOCK
BENEFICIALLY OWNED OWNED AFTER THE
PRIOR TO THE OFFERING OFFERING(2)
----------------------- SHARES --------------------------
SELLING STOCKHOLDERS(1) SHARES(5) PERCENT OFFERED(2)(5) SHARES PERCENT
- ----------------------------------------------------------- ---------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
Warburg, Pincus Capital Partners Liquidating Trust(4)...... 1,363,259 3.1% 1,363,259 0 0%
Warburg, Pincus Investors, L.P.(3)(4)...................... 1,670,669 3.8% 1,670,669 0 0%
Warburg, Pincus & Co....................................... 736,359 1.7% 736,359 0 0%
The Northern Trust Company, as Trustee of the Lucent
Technologies Inc. Master Pension Trust................... 173,229 * 173,229 0 0%
The Chase Manhattan Bank, N.A., as Directed Trustee for the
IBM Retirement Plan Trust................................ 150,600 * 150,600 0 0%
Kingsway PT Limited Partnership............................ 150,600 * 150,600 0 0%
New York State Common Retirement Fund...................... 150,600 * 150,600 0 0%
Trustees of General Electric Pension Trust................. 117,910 * 117,910 0 0%
Leeway & Co................................................ 109,429 * 109,429 0 0%
Warburg, Pincus Partners, LLC.............................. 100,803 * 100,803 0 0%
California Public Employees' Retirement Systems............ 75,300 * 75,300 0 0%
California State Teachers' Retirement System............... 75,300 * 75,300 0 0%
Mellon Bank, N.A., as Trustee for the Bell Atlantic Master
Trust.................................................... 75,300 * 75,300 0 0%
First Chicago Investment Corporation....................... 70,746 * 70,746 0 0%
PNC Venture Corp........................................... 67,269 * 67,269 0 0%
The Johns Hopkins University............................... 58,459 * 58,459 0 0%
United States Steel & Carnegie Pension Fund................ 54,694 * 54,694 0 0%
Northern Trust Company as Trustee,
The Bristol-Myers Squibb Company Defined Benefit Master
Trust.................................................... 47,164 * 47,164 0 0%
General Reinsurance Corporation............................ 45,180 * 45,180 0 0%
Ameritech Pension Trust by State Street Bank & Trust
Company as Trustee....................................... 37,650 * 37,650 0 0%
Bankers Trust Company as Trustee for the GTE Service Corp.
Plan for Employees' Pension.............................. 37,650 * 37,650 0 0%
Coller International Partners II, LLC...................... 37,650 * 37,650 0 0%
The Sumitomo Trust and Banking Company, Limited............ 37,650 * 37,650 0 0%
Commonwealth General Corporation........................... 35,373 * 35,373 0 0%
Lexington Capital Partners III, L.P........................ 31,112 * 31,112 0 0%
Virginia Retirement System................................. 30,120 * 30,120 0 0%
NTP Partners............................................... 27,347 * 27,347 0 0%
Wenonah Development Company................................ 27,347 * 27,347 0 0%
State Street Bank & Trust Co. as the successor trustee of
Baxter International Subsidiaries Savings Trust and
Pension Trust............................................ 23,582 * 23,582 0 0%
E.M. Warburg, Pincus & Co., Inc............................ 23,582 * 23,582 0 0%
International Bank for Reconstruction and Development on
behalf of its Staff Retirement
Plan..................................................... 23,582 * 23,582 0 0%
US Venture Pte. Ltd........................................ 22,590 * 22,590 0 0%
Wilmington Trust Company, as Trustee for E.I. duPont
deNemours & Co. Pension Fund............................. 18,866 * 18,866 0 0%
Chemical Bank Retirement Plan.............................. 18,866 * 18,866 0 0%
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES BENEFICIALLY
COMMON STOCK
BENEFICIALLY OWNED OWNED AFTER THE
PRIOR TO THE OFFERING OFFERING(2)
----------------------- SHARES --------------------------
SELLING STOCKHOLDERS(1) SHARES(5) PERCENT OFFERED(2)(5) SHARES PERCENT
- ----------------------------------------------------------- ---------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
Meridian Properties A N.V.................................. 18,866 * 18,866 0 0%
Chase Manhattan Trust Company of California, N.A. Trustee
of Ronald Family Trust C................................. 18,825 * 18,825 0 0%
Phemus Corporation......................................... 18,825 * 18,825 0 0%
Trustees of Dartmouth College.............................. 17,914 * 17,914 0 0%
Frau Friede Springer....................................... 16,036 * 16,036 0 0%
The Andrew W. Mellon Foundation............................ 15,060 * 15,060 0 0%
Trust U/W/O Theresa Pincus................................. 15,060 * 15,060 0 0%
C.F. Kettering, Inc........................................ 14,704 * 14,704 0 0%
BB Company................................................. 14,149 * 14,149 0 0%
Venvest, Inc............................................... 14,149 * 14,149 0 0%
Valquest Partners #2, L.P.................................. 13,742 * 13,742 0 0%
Ameritas Life Insurance Corp............................... 13,198 * 13,198 0 0%
Assur Investments LLC...................................... 11,295 * 11,295 0 0%
Howard Hughes Medical Institute............................ 11,295 * 11,295 0 0%
The Trustees of The Cheyne Walk Trust...................... 11,295 * 11,295 0 0%
Adam Hochschild............................................ 10,939 * 10,939 0 0%
Other selling stockholders (51 persons or entities, each
holding less than 10,000 shares, or in the aggregate less
than 0.50%, of our common stock)......................... 207,516 * 207,516 0 0%
Total...................................................... 3,033,928 6.9% 3,033,928 0 0%
</TABLE>
- ------------------------
* Less than one percent.
(1) The address of each selling stockholder listed on the table
is: c/o E.M. Warburg, Pincus & Co., LLC, 466 Lexington Avenue, New York, New
York 10017.
(2) Assumes that each selling stockholder will sell all of the shares set forth
above under "Shares Offered." The selling stockholders may offer all, some
or none of their shares.
(3) Includes 47,325 shares issuable upon exercise of warrants held by this
selling stockholder.
(4) Both Warburg, Pincus Investors, L.P. and Warburg, Pincus Capital Partners
Liquidating Trust were affiliates of NeXstar.
(5) For each selling stockholder other than Warburg Pincus Capital Partners
Liquidating Trust and Warburg Pincus Investors, L.P., represents the selling
stockholder's allocable interest in Warburg Pincus Capital Partners
Liquidating Trust and Warburg Pincus Investors, L.P., as applicable, and the
maximum number of shares that may be offered by each selling stockholder by
this prospectus. The actual number of shares that may be offered by a
selling stockholder may be less than the number of shares reflected as being
offered by such selling stockholder on this table. In no event will the
maximum number of shares offered by all selling stockholders exceed
3,033,928 shares.
14
<PAGE>
PLAN OF DISTRIBUTION
Under a Registration Rights Agreement between us and the selling
stockholders, dated July 29, 1999, we agreed to register the shares held by the
selling stockholders. Our registration of the shares of common stock does not
necessarily mean that the selling stockholders will sell all or any of the
shares they hold or may acquire upon exercise of the warrants.
We will pay substantially all expenses incurred in the offering and sale of
the common stock to the public, other than any commissions, concessions and
discounts of underwriters, dealers or agents. These expenses (excluding such
commissions and discounts) are estimated to be $145,000.00. These expenses
include the SEC's filing fees and fees under state securities or "blue sky"
laws. The Registration Rights Agreement provides for cross-indemnification of
the selling stockholders and us for losses, claims, damages, liabilities and
expenses arising, under certain circumstances, out of any registration of the
common stock.
The shares of common stock may be sold from time to time by selling
stockholders in one or more transactions at fixed prices, at market prices at
the time of sale, at varying prices determined at the time of sale or at
negotiated prices. The selling stockholders may offer their shares of common
stock in one or more of the following transactions:
- on any national securities exchange or quotation service on which the
common stock may be listed or quoted at the time of sale, including the
Nasdaq National Market,
- in the over-the-counter market,
- in block trades in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction,
- in sales to a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus,
- in ordinary brokerage transactions and transactions in which the broker
solicits purchasers,
- in private transactions,
- through options,
- by pledge to secure debts and other obligations, or
- a combination of any of the above transactions.
If required, we will distribute a supplement to this prospectus to describe
material changes in the terms of the offering.
The shares of common stock described in this prospectus may be sold from
time to time directly by the selling stockholders. Alternatively, the selling
stockholders may from time to time offer shares of common stock to or through
underwriters, broker/dealers or agents. The selling stockholders and any
underwriters, broker/dealers or agents that participate in the distribution of
the shares of common stock may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933. Any profits on the resale of shares of common
stock and any compensation received by any underwriter, broker/dealer or agent
may be deemed to be underwriting discounts and commissions under the Securities
Act of 1933.
Any shares covered by this prospectus which qualify for sale pursuant to
Rule 144 or Rule 145 under the Securities Act of 1933 may be sold under
Rule 144 or Rule 145, respectively rather than pursuant to this prospectus. The
selling stockholders may transfer, devise or gift such shares by other means not
described in this prospectus.
15
<PAGE>
To comply with the securities laws of certain jurisdictions the common stock
must be offered or sold only through registered or licensed brokers or dealers.
In addition, in certain jurisdictions, the common stock may not be offered or
sold unless they have been registered or qualified for sale or an exemption is
available and complied with.
Under the Securities Exchange Act of 1934, any person engaged in a
distribution of the common stock may not simultaneously engage in market-making
activities with respect to the common stock for five business days prior to the
start of the distribution. In addition, each selling stockholder and any other
person participating in a distribution will be subject to the Securities
Exchange Act of 1934 which may limit the timing of purchases and sales of common
stock by the selling stockholders or any such other person. These factors may
affect the marketability of the common stock and the ability of brokers or
dealers to engage in market-making activities.
LEGAL MATTERS
Cooley Godward LLP, Palo Alto, California will give its opinion that the
shares offered in this prospectus have been, or will be upon exercise of the
warrants, validly issued and are, or will be upon exercise of the warrants,
fully paid and non-assessable.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K/A for the year
ended December 31, 1998 and our supplemental consolidated financial statements
and schedule included in our current report on Form 8-K filed September 15,
1999, as set forth in their reports, which are incorporated by reference in this
prospectus. Our consolidated financial statements and supplemental consolidated
financial statements and schedule are incorporated by reference in reliance on
Ernst & Young LLP's reports, given on their authority as experts in accounting
and auditing.
16
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WE HAVE AUTHORIZED NO ONE TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS THAT ARE NOT CONTAINED IN THIS PROSPECTUS. YOU SHOULD RELY ONLY
ON THE INFORMATION INCORPORATED BY REFERENCE OR PROVIDED IN THIS PROSPECTUS. YOU
MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION.
THIS PROSPECTUS DOES NOT OFFER TO SELL OR BUY ANY SHARES IN ANY JURISDICTION
WHERE IT IS UNLAWFUL. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS
DOCUMENT.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ABOUT GILEAD SCIENCES, INC................................................ 1
RISK FACTORS.............................................................. 2
WHERE YOU CAN FIND MORE INFORMATION....................................... 10
USE OF PROCEEDS........................................................... 11
DIVIDEND POLICY........................................................... 11
SELLING STOCKHOLDERS...................................................... 12
PLAN OF DISTRIBUTION...................................................... 15
LEGAL MATTERS............................................................. 16
EXPERTS................................................................... 16
</TABLE>
3,033,928 SHARES
[LOGO]
COMMON STOCK
---------------------
PROSPECTUS
---------------------
, 1999
<PAGE>
- -------------------------------------------
- -------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, if any, all of which will be paid by the
registrant, in connection with the distribution of the Common Stock being
registered. All amounts are estimated, except the SEC registration fee and the
Nasdaq National Market additional listing fee:
<TABLE>
<S> <C>
SEC registration fee....................................... $71,840.86
Nasdaq additional listing fees............................. 7,500.00
Accounting fees............................................ 15,000.00
Legal fees and expenses.................................... 30,000.00
Miscellaneous.............................................. 5,000.00
Printing and engraving..................................... 15,000.00
----------
TOTAL.................................................. $144,340.86
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law allows for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Securities Act"). The registrant's
Certificate of Incorporation and Bylaws provide for indemnification of the
registrant's directors, officers, employees and other agents to the extent and
under the circumstances permitted by the Delaware General Corporation Law. The
registrant has also entered into agreements with its directors and officers that
will require the registrant, among other things, to indemnify them against
certain liabilities that may arise by reason of their status or service as
directors to the fullest extent not prohibited by law. In addition, the
registrant carries director and officer liability insurance.
In connection with this offering, the selling stockholders have agreed to
indemnify the registrant, its directors and officers and each such person who
controls the registrant, against any and all liability arising from inaccurate
information provided to the registrant by the selling stockholders and contained
herein.
ITEM 16. EXHIBITS.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
3.1 (1) Certificate of Amendment to Restated Certificate of Incorporation of the Registrant
3.2 (2) Amended and Restated Certificate of Incorporation of the Registrant
3.3 (3) Bylaws of the Registrant, as amended and restated March 30, 1999
4.1 Reference is made to Exhibits 3.1, 3.2, and 3.3
4.2 (4) Rights Agreement dated as of November 21, 1994, between Registrant and First Interstate Bank, with
exhibits
4.3 (4) Form of letter sent to Gilead Sciences, Inc. stockholders, dated December 14, 1994
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
--------- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
4.4 (1) First Supplemental Indenture dated July 29, 1999 among IBJ Whitehall Bank & Trust Company, NeXstar
Pharmaceuticals, Inc. and the Registrant to the Indenture dated July 31, 1997 between IBJ Whitehall
Bank & Trust Company and NeXstar Pharmaceuticals, Inc.
4.5 (5) Indenture dated July 31, 1997 between IBJ Whitehall Bank & Trust Company and NeXstar
Pharmaceuticals, Inc. for NeXstar's 6 1/4% Convertible Subordinated Debentures
4.6 (6) Amended and Restated Rights Agreement dated as of October 21, 1999, between Registrant and
ChaseMellon Shareholder Services, L.L.C., with exhibits
5.1* Opinion of Cooley Godward LLP
23.1 Consent of Ernst & Young LLP, independent auditors
23.2* Consent of Cooley Godward LLP
24.1* Power of Attorney
</TABLE>
- ------------------------
*Previously filed.
(1) Filed as an exhibit to Registrant's Current Report on Form 8-K filed on
August 6, 1999 and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Registration Statement on Form S-8 (No.
33-46058) and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1998 and incorporated herein by reference.
(4) Filed as an exhibit to Registrant's Current Report on Form 8-K filed on
November 22, 1994 and incorporated herein by reference.
(5) Filed as an exhibit to NeXstar Pharmaceutical, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended June 30, 1997 and incorporated herein by
reference.
(6) Filed as an exhibit to Registrant's Current Report on Form 8-K filed on
October 22, 1999 and incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
this offering.
(4) That, for purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new
II-2
<PAGE>
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Foster City, California, on October 27, 1999.
<TABLE>
<S> <C> <C>
GILEAD SCIENCES, INC.
By: /s/ JOHN C. MARTIN
-----------------------------------------
John C. Martin
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
President and Chief
/s/ JOHN C. MARTIN Executive Officer,
- ------------------------------ Director (Principal October 27, 1999
John C. Martin Executive Officer)
Senior Vice President,
/s/ MARK L. PERRY Chief Financial Officer
- ------------------------------ and General Counsel October 27, 1999
Mark L. Perry (Principal Financial and
Accounting Officer)
/s/ DONALD H. RUMSFELD*
- ------------------------------ Chairman of the Board of October 27, 1999
Donald H. Rumsfeld Directors
/s/ PAUL BERG*
- ------------------------------ Director October 27, 1999
Paul Berg
/s/ ETIENNE F. DAVIGNON*
- ------------------------------ Director October 27, 1999
Etienne F. Davignon
/s/ JAMES M. DENNY, SR.*
- ------------------------------ Director October 27, 1999
James M. Denny, Sr.
/s/ GORDON E. MOORE*
- ------------------------------ Director October 27, 1999
Gordon E. Moore
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
/s/ GEORGE P. SHULTZ*
- ------------------------------ Director October 27, 1999
George P. Shultz
<C> <S> <C>
*By /s/ MARK L. PERRY
- ------------------------------
(Mark L. Perry,
Attorney-in-Fact)
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
3.1 (1) Certificate of Amendment to Restated Certificate of Incorporation of the Registrant
3.2 (2) Amended and Restated Certificate of Incorporation of the Registrant
3.3 (3) Bylaws of the Registrant, as amended and restated March 30, 1999
4.1 Reference is made to Exhibits 3.1, 3.2, and 3.3
4.2 (4) Rights Agreement dated as of November 21, 1994, between Registrant and First Interstate Bank, with
exhibits
4.3 (4) Form of letter sent to Gilead Sciences, Inc. stockholders, dated December 14, 1994
4.4 (1) First Supplemental Indenture dated July 29, 1999 among IBJ Whitehall Bank & Trust Company, NeXstar
Pharmaceuticals, Inc. and the Registrant to the Indenture dated July 31, 1997 between IBJ Whitehall
Bank & Trust Company and NeXstar Pharmaceuticals, Inc.
4.5 (5) Indenture dated July 31, 1997 between IBJ Whitehall Bank & Trust Company and NeXstar
Pharmaceuticals, Inc. for NeXstar's 6 1/4% Convertible Subordinated Debentures
5.1 Opinion of Cooley Godward LLP
23.1 Consent of Ernst & Young LLP, independent auditors
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this Registration Statement
24.1 Power of Attorney is contained on the signature pages
</TABLE>
- ------------------------
(1) Filed as an exhibit to Registrant's Current Report on Form 8-K filed on
August 6, 1999 and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Registration Statement on Form S-8 (No.
33-46058) and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1998 and incorporated herein by reference.
(4) Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994 and incorporated herein by reference.
(5) Filed as an exhibit to NeXstar Pharmaceutical, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended June 30, 1997 and incorporated herein by
reference.
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<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-87167) and
related Prospectus of Gilead Sciences, Inc. for the registration of 3,033,928
shares of its common stock and to the incorporation by reference therein of our
reports (a) dated January 21, 1999, with respect to the consolidated financial
statements of Gilead Sciences, Inc. included in its Annual Report (Form 10-K/A)
for the year ended December 31, 1998 filed with the Securities and Exchange
Commission, and (b) dated March 1, 1999, except for Note 2, as to which the date
is July 29, 1999, with respect to the supplemental consolidated financial
statements and related supplemental financial statement schedule of Gilead
Sciences, Inc. included in the current report on Form 8-K of Gilead Sciences,
Inc. filed with the Securities and Exchange Commission on September 15, 1999.
/s/ ERNST & YOUNG LLP
Palo Alto, California
October 27, 1999
