<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 6, 1999
Date of earliest event reported: July 29, 1999
GILEAD SCIENCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-19731 94-3047598
(Commission File No.) (IRS Employer Identification No.)
333 LAKESIDE DRIVE
FOSTER CITY, CA 94404
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (650) 574-3000
---------------------
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 29, 1999, Gilead Sciences, Inc. ("Gilead") acquired all of the
outstanding stock of NeXstar Pharmaceuticals, Inc., a Delaware corporation
(the "Company" or "NeXstar"), pursuant to an Agreement and Plan of Merger,
dated as of February 28, 1999 (the "Merger Agreement"), among Gilead, the
Company, and a merger subsidiary wholly owned by Gilead. Pursuant to the
Merger Agreement, the Company was merged with the wholly owned subsidiary of
Gilead, with the Company as the surviving corporation (the "Merger"). As a
result of the Merger, the Company became a wholly owed subsidiary of Gilead.
In connection with the Merger, Gilead issued a total of approximately
11,212,730 shares of Gilead common stock, or 0.3786 of a share of Gilead
common stock for each share of Company common stock, to the existing
stockholders of the Company as consideration for all shares of capital stock
of the Company. In addition, holders of options and warrants outstanding at
the time of the Merger to purchase an aggregate of approximately 2,236,413
shares of Company common stock will receive, upon exercise of such options
and warrants, the same fraction of a share of Gilead's common stock per share
of Company common stock, and holders of $80,000,000 principal amount of 6
1/4% Convertible Subordinated Debentures of the Company (the "Debentures")
will now have the right to convert the Debentures into an indeterminate
number of shares of Gilead Common Stock, pursuant to a First Supplemental
Indenture dated July 29, 1999 by and among IBJ Whitehall Bank & Trust Company
("IBJ Whitehall") as Trustee, the Company and Gilead amending the Indenture
between the Company and IBJ Whitehall dated July 31, 1997. The Merger is
intended to qualify as a tax-free reorganization and to be accounted for as a
"pooling of interests." A copy of the press release announcing the closing
of the merger transaction is filed as Exhibit 99.1 to this Form 8-K.
The Company is an integrated biopharmaceutical company engaged in the
discovery, development, manufacture and marketing of proprietary
pharmaceutical products to treat life-threatening and other serious
infectious, oncological and hematalogical diseases. Gilead intends to
continue to use the assets acquired to conduct such business.
ITEM 5. OTHER EVENTS.
At Gilead's Annual Meeting of Stockholders on July 29, 1999, the stockholders
of Gilead approved an amendment to Gilead's restated certificate of
incorporation to increase the authorized shares of Gilead common stock from
60,000,000 to 100,000,000 shares.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. Financial statements of the Company.
The required financial statements of the Company have been filed
previously by the Registrant in the Registrant's Registration Statement on
Form S-4 relating to the merger transaction (File No. 333-81415), by
incorporation thereof by reference to the following Company reports filed
pursuant to Section 13 of the Securities Exchange Act of 1934, as amended
(File No.000-23012) and are hereby incorporated by reference herein:
(i) The unaudited condensed consolidated balance sheet of the Company
as of March 31, 1999, and the related unaudited condensed consolidated
statements of
<PAGE>
operations, stockholders' equity and cash flows for the three months
ended March 31, 1999 and March 31, 1998, together with the
accompanying description and explanatory notes as filed in the
Company's Form 10-Q for the quarter ending March 31, 1999.
(ii) The consolidated balance sheets of the Company as of December
31, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1998, together with
the accompanying notes and the report of independent auditors with
respect to those financial statements as filed in the Company's
Form 10-K/A for the year ending December 31, 1998.
b. Pro forma financial information.
The following required pro forma financial statements have been filed
previously by the Registrant in the Registrant's Registration Statement on
Form S-4 relating to the merger transaction (File No. 333-81415) and are
hereby incorporated by reference herein:
(i) the unaudited pro forma condensed combined statements of
operations of Gilead for the years ended December 31, 1998, 1997
and 1996, giving effect to the merger transaction under the pooling
of interests method of accounting, and the accompanying description
and explanatory notes.
The following pro forma financial information is filed as part of this
report beginning on the page following the signature page:
(ii) The unaudited pro forma condensed combined balance sheet of
Gilead as of June 30, 1999 and the unaudited pro forma condensed
combined statements of operations of Gilead for the six months
ended June 30, 1999 and 1998, giving effect to the merger
transaction under the pooling of interests method of accounting,
and the accompanying description and explanatory notes.
c. EXHIBITS
2.1 (1) Agreement and Plan of Merger, dated as of February 28,
1999, among the Registrant, Gazelle Acquisition Sub,
Inc. and NeXstar Pharmaceuticals, Inc.
3.1 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 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
99.1 Press Release dated July 29, 1999.
(1) Filed as an exhibit to the Registrant's Current Report on
Form 8-K filed on March 9, 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 Pharmaceuticals, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended June 30,
1997 and incorporated herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GILEAD SCIENCES, INC.
Dated: August 6, 1999 By: /s/ Mark L. Perry
-------------------------------------
Mark L. Perry
Senior Vice President, Chief Financial
Officer and General Counsel
Exhibits Index
2.1 (1) Agreement and Plan of Merger, dated as of February 28,
1999, among the Registrant, Gazelle Acquisition Sub,
Inc. and NeXstar Pharmaceuticals, Inc.
3.1 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 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
99.1 Press Release dated July 29, 1999.
(1) Filed as an exhibit to the Registrant's Current Report on
Form 8-K filed on March 9, 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.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF JUNE 30, 1999
(IN THOUSANDS)
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
GILEAD NEXSTAR ADJUSTMENTS COMBINED
---------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 45,339 $ 70,609 $ $ 115,948
Marketable securities 195,195 10,882 206,077
Accounts receivable, net (126) 43,333 43,207
Inventories 5,611 12,276 17,887
Prepaid expenses and other 9,430 7,210 16,640
---------------------------------------------------------
Total current assets 255,449 144,310 --- 399,759
Property, plant and equipment, net 12,460 38,850 51,310
Investment in unconsolidated affiliate --- 6,507 6,507
Patent and trademark costs, net --- 5,176 5,176
Other noncurrent assets, net 4,211 2,704 6,915
---------------------------------------------------------
Total assets $ 272,120 $ 197,547 $ --- $ 469,667
---------------------------------------------------------
---------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,558 $ 4,214 $ $ 7,772
Accrued clinical and preclinical expenses 9,336 945 10,281
Accrued compensation and employee benefits 3,396 5,395 8,791
Accrued litigation settlement and related
expenses due within one year --- 2,240 2,240
Accrued interest payable --- 2,083 2,083
Other accrued expenses 6,139 5,136 9,000(4) 20,275
Deferred revenue 3,813 143 3,956
Long-term obligations due within one year 776 3,851 4,627
---------------------------------------------------------
Total current liabilities 27,018 24,007 9,000(4) 60,025
Accrued litigation settlement expenses due
after one year --- 7,361 7,361
Long-term obligations due after one year 207 6,639 6,846
Convertible subordinated debentures --- 80,000 80,000
Stockholders' equity:
Preferred stock 1 --- 1
Common stock and additional paid-in capital 495,829 235,962 731,791
Deferred compensation (97) (40) (137)
Accumulated other comprehensive loss (1,462) (1,095) (2,557)
Accumulated deficit (249,376) (155,287) (9,000)(4) (413,663)
---------------------------------------------------------
Total stockholders' equity 244,895 79,540 (9,000)(4) 315,435
---------------------------------------------------------
Total liabilities and stockholders' equity $ 272,120 $ 197,547 $ --- $ 469,667
---------------------------------------------------------
---------------------------------------------------------
</TABLE>
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
GILEAD NEXSTAR ADJUSTMENTS COMBINED
-----------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Product sales, net $ 2,906 $ 63,124 $ 66,030
Contract revenue 9,514 1,389 10,903
Royalty revenue, net 1,197 3,685 4,882
-----------------------------------------------------------
Total revenues 13,617 68,198 --- 81,815
-----------------------------------------------------------
COSTS AND EXPENSES:
Cost of product sales 187 12,889 13,076
Research and development 34,026 19,511 53,537
Selling, general and administrative 15,724 24,566 40,290
Merger related expenses 1,327 1,785 3,112
Litigation settlement and related expenses --- 988 988
-----------------------------------------------------------
Total costs and expenses 51,264 59,739 --- 111,003
Income (loss) from operations (37,647) 8,459 --- (29,188)
Interest income 6,877 1,792 8,669
Interest expense (52) (3,063) (3,115)
-----------------------------------------------------------
Income (loss) before provision for income taxes
and equity in loss of unconsolidated affiliate (30,822) 7,188 --- (23,634)
Provision for income taxes --- 408 408
Equity in loss of unconsolidated affiliate --- (3,101) (3,101)
-----------------------------------------------------------
Net income (loss) $ (30,822) $ 3,679 --- $(27,143)
-----------------------------------------------------------
-----------------------------------------------------------
Net income (loss) per share:
Basic $ (1.00) $ 0.13 $ (0.65)
Diluted $ (1.00) $ 0.12 $ (0.65)
Shares used in computing net income (loss)
per share:
Basic 30,958 28,997 (18,019)(3) 41,936
Diluted 30,958 29,667 (18,689)(3) 41,936
</TABLE>
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
GILEAD NEXSTAR ADJUSTMENTS COMBINED
---------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Product sales, net $ 3,393 $ 50,047 $ 53,440
Contract revenue 16,089 4,350 20,439
Royalty revenue, net 1,114 1,809 2,923
---------------------------------------------------------
Total revenues 20,596 56,206 - 76,802
---------------------------------------------------------
COSTS AND EXPENSES:
Cost of product sales 344 10,161 10,505
Research and development 37,260 26,507 63,767
Selling, general and administrative 15,186 22,731 37,917
Litigation settlement and related expenses - 557 557
---------------------------------------------------------
Total costs and expenses 52,790 59,956 - 112,746
Loss from operations (32,194) (3,750) - (35,944)
Interest income 10,089 1,502 11,591
Interest expense (124) (3,390) (3,514)
---------------------------------------------------------
Loss before provision for income taxes (22,229) (5,638) (27,867)
Provision for income taxes - 295 295
---------------------------------------------------------
Net loss $ (22,229) $ (5,933) - $ (28,162)
---------------------------------------------------------
---------------------------------------------------------
Basic and diluted net loss per share $ (0.74) $ (0.21) $ (0.69)
Shares used in computing basic and
diluted net loss per share 30,199 27,696 (17,210)(3) 40,685
</TABLE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE 1.
On a combined basis, there were no material transactions between Gilead and
NeXstar (the "Combined Company") during any period presented.
There are no material differences between the accounting policies of Gilead
and NeXstar.
The pro forma combined provisions for income taxes do not represent the
amount that would have resulted had Gilead and NeXstar filed consolidated
income tax returns during the periods presented. Any unrecognized future
deductible temporary differences will be evaluated on a quarterly basis based
upon the income tax attributes of the Combined Company.
NOTE 2. PRO FORMA CONDENSED COMBINED BALANCE SHEET
The Pro Forma Condensed Combined Balance Sheet reflects a credit balance in
accounts receivable for Gilead. This balance of $(0.1) million primarily
represents the remaining balance of $(0.3) million from aggregate provisions for
product returns of $(0.8) million recorded since December 31, 1998 in accordance
with the Company's sales return policy. This $(0.3) million remaining allowance
for product returns, along with previously recorded reserves for cash discounts,
government discounts and rebates, and bad debts, exceeded gross outstanding
accounts receivable of $0.5 million as of June 30, 1999.
NOTE 3. PRO FORMA COMBINED EARNINGS (LOSS) PER SHARE
Under the merger agreement, each share of NeXstar common stock converted
into the right to receive 0.3786 of a share of Gilead stock (the "Exchange
Ratio"). The Exchange Ratio was used in computing share and per share amounts
in the accompanying unaudited pro forma condensed combined financial
statements.
NOTE 4. MERGER COSTS
The Pro Forma Condensed Combined Balance Sheet at June 30, 1999 reflects an
adjustment of $9 million for direct merger-related transaction costs, primarily
consisting of professional and registration fees.
<PAGE>
Exhibit 3.1
CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION OF
GILEAD SCIENCES, INC.
JOHN C. MARTIN and MARK L. PERRY hereby certify as follows:
ONE: The name of the corporation is Gilead Sciences, Inc.
TWO: The Restated Certificate of Incorporation of Gilead Sciences,
Inc. was filed with the Secretary of State of the State of Delaware on
January 29, 1992.
THREE: That they are the duly elected and acting President and
Secretary, respectively, of Gilead Sciences, Inc., a Delaware corporation.
FOUR: The Board of Directors of Gilead Sciences, Inc., acting in
accordance with the provisions of Sections 141 and 242 of the General
Corporation Law of the State of Delaware, adopted resolutions to amend its
Restated Certificate of Incorporation as follows:
Article V shall be amended and restated to read in its
entirety as follows:
"V.
A. The Corporation is authorized to issue two classes of stock
to be designated, respectively, "Common Stock" and "Preferred
Stock." The total numbers of shares which the corporation is
authorized to issue is one hundred five million (105,000,000)
shares. One hundred million (100,000,000) shares shall be
designated Common Stock, each having a par value of one-tenth of
one cent ($0.001). Five million (5,000,000) shares shall be
designated Preferred Stock, each having a par value of one-tenth of
one cent ($0.001).
B. The Preferred Stock may be issued from time to time in one
or more series. The Board of Directors is hereby authorized, by
filing a certificate pursuant to the Delaware General Corporation
Law, to fix or alter from time to time the designation, powers,
preferences and rights or the shares of each such series and the
qualifications, limitations or restrictions thereof, including
without limitation the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including
sinking fund provisions), redemption price or prices, and the
liquidation preferences of any wholly unissued series of Preferred
Stock, and to establish from time to time the number of shares
constituting any such series and the designation thereof, or any of
them (a "Preferred Stock Designation"); and to increase or decrease
the number of shares of that series then outstanding. In case the
number of shares of any series shall be decreased in accordance
with the foregoing sentence, the shares constituting such
<PAGE>
decrease shall resume the status that they had prior to the adoption
of the resolution originally fixing the number of shares of such
series."
FIVE: Thereafter, pursuant to a resolution of the Board of
Directors, this Certificate of Amendment was submitted to the stockholders of
the Corporation for their approval, and was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware.
SIX: All other provisions of the Restated Certificate of
Incorporation shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, Gilead Sciences, Inc. has caused this
Certificate of Amendment to be signed by its President and attested to by its
Secretary this 29th day of July, 1999.
/s/ John C. Martin
--------------------------------------
John C. Martin
President
/s/ Mark L. Perry
--------------------------------------
Mark L. Perry
Secretary
<PAGE>
Exhibit 4.4
NEXSTAR PHARMACEUTICALS, INC.,
GILEAD SCIENCES, INC.
AND
IBJ WHITEHALL BANK & TRUST COMPANY, AS TRUSTEE
- --------------------------------------------------------------------------------
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF JULY 29, 1999
TO
INDENTURE
DATED AS OF JULY 31, 1997
- --------------------------------------------------------------------------------
RELATING TO
NEXSTAR PHARMACEUTICALS, INC.
6-1/4% CONVERTIBLE SUBORDINATED DEBENTURES
DUE 2004
<PAGE>
FIRST SUPPLEMENTAL INDENTURE (the "FIRST SUPPLEMENTAL INDENTURE"), dated
as of July 29, 1999, by and among NEXSTAR PHARMACEUTICALS, INC., a Delaware
corporation (the "COMPANY"), GILEAD SCIENCES, INC., a Delaware corporation
("GILEAD"), and IBJ WHITEHALL BANK & TRUST COMPANY, a New York banking
corporation, formerly known as IBJ Schroder Bank & Trust Company (the
"TRUSTEE").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly issued its 6-1/4% Convertible Subordinated
Debentures Due 2004 (the "SECURITIES") in the initial aggregate principal
amount of $80,000,000, pursuant to an Indenture (the "INDENTURE"), dated as
of July 31, 1997, between the Company and the Trustee; and
WHEREAS, Gilead, Gazelle Acquisition Sub, Inc., a Delaware corporation
and a wholly owned subsidiary of Gilead ("MERGER SUB"), and the Company have
entered into an Agreement and Plan of Merger, dated as of February 28, 1999
(the "MERGER AGREEMENT"), pursuant to which Merger Sub will merge with and
into the Company and the Company will be the surviving corporation and will
become a wholly owned subsidiary of Gilead (such events being referred to as
the "MERGER"); and
WHEREAS, pursuant to the Merger each outstanding share of Common Stock,
par value $0.01 per share, of the Company (the "NEXSTAR COMMON STOCK") will
be converted into 0.3786 fully paid and nonassessable shares of the Common
Stock, par value $0.001 per share, of Gilead (the "GILEAD COMMON STOCK")
(such fraction being referred to as the "EXCHANGE RATIO"), and cash in lieu
of fractional shares; and
WHEREAS, in the case of any merger of another Person into the Company,
Section 1311 of the Indenture requires that the Person resulting from such a
merger shall execute and deliver to the Trustee a supplemental indenture
providing for certain conversion rights to the holders of the Securities; and
WHEREAS, Section 901(5) of the Indenture provides that the Company and
Trustee may, when authorized by a Board Resolution, without the consent of
any holders of Securities, enter into a supplemental indenture to make
provision with respect to the conversion rights of Holders pursuant to the
requirements of Section 1311 of the Indenture; and
WHEREAS, in accordance with Section 102 and 801 of the Indenture, the
Company has delivered to the Trustee an Officers' Certificate and an Opinion
of Counsel, each stating that all conditions precedent provided in the
Indenture relating to the proposed Merger have been complied with, and in
addition, the Opinion of Counsel referenced in the immediately preceding
sentence, in accordance with Section 903 of the Indenture, states that the
execution of the First Supplemental Indenture is authorized or permitted by
the Indenture; and
WHEREAS, all acts and proceedings required by law and under the Indenture
to constitute this First Supplemental Indenture a valid and binding agreement
for the uses and purposes set forth herein, in accordance with its terms,
have been done and taken, and the execution and
1.
<PAGE>
delivery of this First Supplemental Indenture have been in all respects duly
authorized by the Company; and
WHEREAS, the foregoing recitals are made as representations of fact by
the Company and not by the Trustee.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, Gilead and the Trustee hereby agree as follows:
1. For purposes of this First Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the capitalized terms and expressions used herein shall have the same
meanings as corresponding terms and expressions used in the Indenture and
(ii) the words "herein," "hereof" and "hereby" and other words of similar
import used in this First Supplemental Indenture shall refer to this First
Supplemental Indenture as a whole and not to any particular section thereof.
2. From and after the effective time of the Merger, the Holder of each
Security then outstanding shall have the right thereafter, during the period
such Security shall be convertible as specified in Section 1301 of the
Indenture, to convert such Security then Outstanding only into the number of
shares of common stock of Gilead and cash, if any, receivable upon the Merger
by a holder of the number of shares of Common Stock into which such Security
might have been converted immediately prior to the Merger, assuming such
holder of NeXstar Common Stock (i) is not a Person into which the Company
merged or which merged into the Company (a "CONSTITUENT PERSON"), or an
Affiliate of a Constituent Person and (ii) failed to exercise his rights of
election, if any, as to the kind or amount of Common Stock and cash in lieu
of fractional shares, receivable upon the Merger is not the same for each
share of NeXstar Common Stock held immediately prior to the Merger by others
than a Constituent Person or an Affiliate thereof and in respect to which
such rights of election shall not have been exercised ("NON-ELECTING SHARE"),
then for the purposes of Section 1311 of the Indenture, the number of shares
of common stock of Gilead, and cash, if any, receivable upon the Merger shall
be deemed to be the kind and amount so receivable per share by a plurality of
the Non-Electing Shares (the "DEBENTURE MERGER CONSIDERATION"). For events
subsequent to the date of this First Supplemental Indenture, adjustments to
the Debenture Merger Consideration shall be made as nearly equivalent as may
be practicable to the adjustments to the Common Stock provided in Article 13
of the Indenture (the "CONVERSION ADJUSTMENTS"). The provisions of Section
1311 of the Indenture shall similarly apply to successive consolidations,
mergers, sales or transfers.
3. Gilead has no responsibility for the correctness of the recitals of
fact herein contained which shall be taken as the statements of the Company
and makes no representations as to the validity or sufficiency of this First
Supplemental Indenture and shall incur no liability or responsibility in
respect to the validity thereof. Gilead is a party to this First
Supplemental Indenture solely for the purposes of agreeing, under paragraphs
1 and 2 above, that from and after the time of the Merger, for the purposes
of Article 13 of the Indenture, (x) the Holder of each Security then
Outstanding shall have the right thereafter, during the period such Security
shall be convertible as specified in Section 1301 of the Indenture, to
convert such Security then Outstanding only into the Debenture Merger
Consideration (subject to paragraph 2 hereof and
2.
<PAGE>
the Conversion Adjustments) and (y) Gilead shall deliver the Debenture Merger
Consideration (as so adjusted) to such Holder upon any such conversion.
4. The Trustee has no responsibility for the correctness of the
recitals of fact herein contained which shall be taken as the statements of
the Company and makes no representations as to the validity or sufficiency of
this First Supplemental Indenture and shall incur no liability or
responsibility in respect to the validity thereof.
5. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed, and all the terms, conditions and provisions thereof
shall remain in full force and effect.
6. This First Supplemental Indenture shall form a part of the Indenture
for all purposes, and every holder of Securities heretofore or hereafter
authenticated shall be bound hereby.
7. This First Supplemental Indenture may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original, and all of such counterparts shall together constitute one and the
same instrument.
8. This First Supplemental Indenture shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
governed by and construed in accordance with such laws.
3.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this First Supplemental
Indenture to be duly executed; all as of the day and year first above written.
NEXSTAR PHARMACEUTICALS, INC.
By: /s/ Mark L. Perry
----------------------------------
Name: Mark L. Perry
Title: Secretary
GILEAD SCIENCES, INC.
By: /s/ Mark L. Perry
----------------------------------
Name: Mark L. Perry
Title: Senior Vice President, Chief
Financial Officer and General
Counsel
IBJ WHITEHALL BANK & TRUST COMPANY
By: /s/ Luis Perez
----------------------------------
Name: Luis Perez
Title: Assistant Vice President
4.
<PAGE>
Exhibit 99.1
CONTACTS: SUSAN HUBBARD
INVESTOR RELATIONS
(650) 522-5715
SHERYL MEREDITH
MEDIA RELATIONS
(650) 522-5505
FOR IMMEDIATE RELEASE
GILEAD ACQUISITION OF NEXSTAR COMPLETED
NEW COMPANY POISED TO BECOME A GLOBAL LEADER
IN INFECTIOUS DISEASE & ONCOLOGY
FOSTER CITY, CA, JULY 29, 1999 - Gilead Sciences, Inc. (Nasdaq: GILD) and
NeXstar Pharmaceuticals, Inc. (Nasdaq: NXTR) today announced that the
stockholders of Gilead and NeXstar approved the merger transaction between
the two companies. The transaction closed today following approval by the
stockholders.
Under the terms of the agreement first announced on March 1, 1999, Gilead
acquired all of NeXstar's outstanding stock in a tax-free, stock-for-stock
transaction. NeXstar stockholders will receive 0.3786 of a share of Gilead
common stock for each share of NeXstar common stock. The exchange ratio of
0.3786 was based on the average closing price of Gilead Sciences common stock
from June 28 to July 26, 1999. Valued at $550 million in Gilead Sciences
stock, the transaction will be accounted for as a pooling of interests.
"The merger with NeXstar is a critical step in establishing an international
organization committed to providing accelerated treatment solutions for
infectious diseases and cancer," said John C. Martin, Ph.D., President and
Chief Executive Officer of Gilead Sciences. "We not only gain a new drug
delivery platform of proven liposomal technology, but the international
resources to fully realize the commercial potential of future products in our
combined pipeline. We look forward to the rapid and successful integration of
the NeXstar people, products and technology."
The combined organization will operate under the name Gilead Sciences, with
NeXstar subsidiaries operating at existing sites in the United States, Europe
and Australia. Gilead's current Board of Directors will serve as the board
for the merged company.
NEW SENIOR MANAGEMENT STRUCTURE
The senior management team for the combined company will be comprised of
eight individuals, reporting directly to John Martin. Two are from NeXstar:
Crispin G. S. Eley, Vice President, Pharmaceutical Operations; and Nicole
Onetto, Vice President, Medical Affairs. They join six members from Gilead:
Jeffrey W. Bird, Senior Vice President, Business Operations; Norbet W.
Bischofberger, Senior Vice President, Research; Howard S. Jaffe, Senior Vice
President, Drug Development; William A. Lee, Vice President, Pharmaceutical
Product Development; Mark L. Perry, Senior Vice President, Chief Financial
Officer and General Counsel; and Marsha Roberts, Vice President, Human
Resources.
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Now that the merger is complete, Larry M. Gold, Ph.D., Chairman and Chief
Scientific Officer of NeXstar, and Michael E. Hart, Vice President and Chief
Financial Officer of NeXstar, will be leaving the Company to pursue other
opportunities. "I would like to commend Larry Gold and Mike Hart for the
significant role they each played in building NeXstar into a fully-integrated
pharmaceutical company with international operations," said Dr. Martin.
COMBINED COMPANY HAS PROVEN COMMERCIAL PRODUCTS AND BROAD PIPELINE
With the addition of two products from the NeXstar portfolio, Gilead Sciences
now has three products on the market worldwide. The combined portfolio
includes AmBisome-Registered Trademark- (liposomal amphotericin B), an
injectable treatment for serous fungal infections; DaunoXome-Registered
Trademark- (daunorubicin citrate liposome injection), an anticancer agent
approved for the treatment of Kaposi's sarcoma in people with AIDS; and
VISTIDE-Registered Trademark- (cidofovir injection), an antiviral agent used
to treat cytomegalovirus (CMV) retinitis in people with AIDS.
Gilead has further strengthened its pipeline through the merger with NeXstar,
resulting in a portfolio that now includes seven investigational compounds in
various stages of clinical development. In June of this year, Gilead filed a
New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for
adefovir dipivoxil 60 mg for the potential treatment of human
immunodeficiency virus (HIV). Also currently in review with the FDA is the
NDA for Tamiflu-TM- (oseltarnivir phosphate) (formerly known as GS 4104) for
the treatment of influenza. F. Hofmann-La Roche Ltd, Gilead's worldwide
development and marketing partner for this potential product, has also
recently filed for marketing authorization of Tamiflu in the European Union
under the centralized procedure. Additional candidates in human testing
include adefovir dipivoxil for hepatitis B virus infection (Phase III),
tenofovir disoproxil fumarate (formerly known as PMPA) for the treatment of
HIV (Phase II), MiKasome-Registered Trademark- (liposomal amikacin) for
serious bacterial infections (Phase I/II), NX 1838 for age-related macular
degeneration (Phase II) and NX211 (liposomal lurtotecan) for ovarian and lung
cancer (Phase I).
INTERNATIONAL BUSINESS EXPANDS GILEAD'S REACH
As a result of the merger, Gilead now has a proven international development
and commercialization team located in Europe and Australia, focused on the
distribution, marketing and sales of AmBisome and DaunoXome. This
organization is well positioned to market Gilead's future drug candidates in
Europe and Australia. NeXstar's U.S. sales and marketing team contributes
significant cancer and HIV experience to the combined company, in advance of
Gilead's potential launch of adefovir dipivoxil for HIV.
Gilead Sciences, headquartered in Foster City, CA, is an independent
biopharmaceutical company that seeks to provide accelerated treatment
solutions for patients and the people who care for them. The company
discovers, develops, manufactures and commercializes proprietary therapeutics
for challenging infectious diseases (viral, fungal and bacteria infections)
and cancer. Gilead maintains research, development or manufacturing
facilities in Foster City, CA, Boulder, CO, San Dimas, CA and Cambridge, UK,
and sales and marketing organizations in the United States, Europe and
Australia. Gilead common stock is traded on The Nasdaq Stock market under the
symbol GILD.
