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Executives

Susan Hubbard - IR

John C. Martin, PhD - President and CEO

John F. Milligan, PhD - COO and CFO

Norbert W. Bischofberger, PhD - EVP, Research and Development and Chief Scientific Officer

Kevin Young - EVP, Commercial Operations

Analysts

Margaret Malloy - Goldman Sachs & Co.

Thomas Wei - Piper Jaffray & Co.

Mark Schoenebaum - Bear Stearns

Geoffrey Porges - Sanford C. Bernstein & Co.

Yaron Werber - Citigroup

Geoffrey Meacham - JPMorgan

Michael Aberman - Credit Suisse

William Ho - Banc of America Securities

Sapna Srivastava - Morgan Stanley

Joel Sendek - Lazard Capital Markets

William Tanner - Leerink Swann & Co.

Maged Shenouda - UBS

Phil Nadeau - Cowen & Company

M. Ian Somaiya - Thomas Weisel Partners

Michael King - Rodman & Renshaw

Gilead Sciences, Inc. (GILD) Q1 FY08 Earnings Call April 16, 2008 6:00 PM ET

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Gilead Sciences First Quarter 2008 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded today, April 16, 2008.

I will now like to turn the call over to Susan Hubbard, Vice President of Investor Relations. Please go ahead.

Susan Hubbard - Investor Relations

Welcome to Gilead's first quarter 2008 earnings conference call. We're pleased, you could join us today. We issued a press release this afternoon, providing results for the first quarter ended March 31, 2008. This press release is also available on our website, at www.gilead.com.

Joining me on today's call to discuss our results, are John Martin, President and Chief Executive Officer; John Milligan, Chief Operating Officer and Chief Financial Officer; Kevin Young, Executive Vice President of Commercial Operations; Norbert Bischofberger, Executive Vice President of Research and Development, and Chief Scientific Officer; and Matt Howe, Vice President of Finance.

John Martin will take you through the corporate highlights through the quarter. John Milligan will review the first quarter 2008 financial results. Norbert Bischofberger will discuss our research and development programs, and Kevin Young will summarize our commercial milestones and provide more color on the market dynamics surrounding our various franchises. We will then allow time at the end of this call, to answer your questions.

Before I turn the call over to John Martin for the corporate update, I would first like to remind you that we will be making statements relating to future events, expectations, trends, objectives and financial results that constitute forward-looking statements, within the meaning of the Private Securities Act of 1995. These statements are based on certain assumptions and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in any forward-looking statements. I refer to you our Form 10-K for the year ended December 31, 2007, subsequent press releases and other publicly filed SEC disclosure documents, for a detailed description of the risk factors affecting our business.

In addition, please note that we undertake no obligation to update or revise these forward-looking statements. We will also be making certain references to financial measures that are on a non-GAAP basis. We provide a reconciliation between GAAP and non-GAAP numbers on our website.

I will now turn the call over to John Martin.

John C. Martin, PhD - President and Chief Executive Officer

Thank you Susan. Good afternoon everyone and thank you for joining us today. We are pleased to summarize for you, Gilead's accomplishments during the first quarter of 2008. I will start by reviewing our corporate milestones for the quarter and our thoughts on some emerging data that may affect the HIV treatment landscape. And then turn the call over to John Milligan, who will run through the financial results for the quarter.

First, in February, our partner GlaxoSmithKline, announced that ambrisentan, with a trade name of Volibris in Europe, has received a positive opinion from the European Committee for Medicinal Products for Human Use, for the treatment of pulmonary arterial hypertension in patients classified as World Health Organizational Functional Class II and III, to improve the exercise capacity. GSK has stated that it expects approval by the European Commission in the coming weeks.

Also we announced in March that we entered into an agreement with Goldman Sachs & Company to repurchase $500 million of common stock, under an accelerated share repurchase program.

We also appointed Jay Toole to the position of Senior Vice President, Corporate Development. As many of you know, Jay is a PhD scientist and physician, who joined Gilead in 1990 and has played a leadership role in many of our key discovery and clinical research programs.

Now, I would like to take a few minutes to talk about the evolving HIV landscape. First, providing a brief background on two important data sets on GSK's abacavir, that emerged during the first quarter, mainly the DAD, the ACTG 5202 study results.

The DAD data were presented at the Conference on Retroviruses and Opportunistic Infections in February of this year and were subsequently published in The Lancet in April. The data collection on adverse events of anti-HIV drugs or DAD, is the name of a study that includes 11 cohorts of more than 33,000 HIV-infected patients in 21 countries, including many in Europe, Australia and the United States.

It was established to follow HIV patients over the long term, to assess cardiovascular-related morbidity and mortality outcomes. The data showed that the use of abacavir is associated with a 90%, almost two-fold increase in the risk of myocardial infarction or MI.

The second, ACTG 5202 is a U.S-based study, conducted by the AIDS Clinical Trial Group and sponsored by NIAID, comparing in part Truvada and Epzicom head-to-head. The study which commenced in late 2006, enrolled 1800 treatment-naïve patients who were randomized to receive one of four regimens, Truvada or Epzicom with either Sustiva or ambrisentan Letairis [ph].

The Data and Safety Monitoring Board of the Division Of AIDS met in early February and reviewed preliminary study data. The review indicated that Epzicom patients who had screening, have high viral loads of more than 100,000 copies, experienced significantly higher rates of biologic failure, and grade three and four adverse events.

These data led the ACTG to recommend to investigators that patients with high viral loads of screening, nearly half of all patients be unblinded and counseled on what the DSMB findings could mean to them, and consider switching of a regimen containing Epzicom. The study is continuing in this modified fashion.

I'm certain that there will be continued discussion about the importance and potential impact of these two data sets. But at this point, we believe it would be premature and inappropriate for us to speculate on any potential regulatory actions, either in the U.S or European Union, resulting from the study results. Gilead remains focused on our continue efforts to ensure physicians understand the profile of Truvada either as part of Atripla, or in combination with the protease inhibitor.

I would like to make a brief update on the further progress made during the quarter to increase the diagnosis and treatment of HIV in the U.S, specifically in Virginia, the State House of Delegates passed and the Governor signed a bill, eliminating written informed consent and pretest counseling requirements inline with the CDC recommendations. This brings the number of states that have taken legislative steps to reduce the barriers to testing and guidelines to nine. Additionally, similar bills have been introduced in Maryland, Massachusetts and Nebraska.

Before I turn the call over to John Milligan, I would like to say from my perspective, Gilead has never been stronger with more opportunities than ever before to continue to grow our existing marketed products, including the further roll out of Atripla throughout Europe, the anticipated introduction of aztreonam lysine for inhalation for cystic fibrosis, and Viread for HPV into market and the significant progress that we are making with our research and development programs.

And with Jay Toole taking the lead in our business development activities, we will continue to look at products and programs that complement our existing business units. I am very proud of the more than the 3000 employees here at Gilead, and the efforts they make everyday to improve the lives of patients suffering from life-threatening diseases worldwide.

Now to our financials. John?

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

Thank you, John. The first quarter of 2008 was another very successful quarter. Total revenues, which include products sales and royalty, contract and other revenue for the first quarter of 2008 were $1.3 billion. First quarter product sales were $1.1 billion, a 30% increase compared to the first quarter of 2007 and our second consecutive quarter surpassing $1 billion in product sale.

HIV product sales totaled $965 million for the first quarter of 2008, driven primarily by the continued strong uptake of Atripla in the United States, as well as the strong growth of Truvada in United States and Europe.

Operating expenses were $350 million, an 18% increase over the first quarter of the prior year. This reflects our commitment to investing in our pipeline and our geographic expansion, while keeping the sharp focus on overall expense management.

As we have noted in the past, we plan to continue to expand our operations in Europe and Kevin will speak to you in a few minutes, about the progress we are making in this regard. Our first quarter 2008 net income was $496 million or $0.51 per share on a fully diluted basis.

Non-GAAP net income per share for the first quarter of 2008, excluding the impact of after-tax stock-based compensation expense was $0.54 per share on a fully diluted basis, a 16% increase over the first quarter of 2007 non-GAAP diluted net income per share of $0.46 per share, which also excluded the impact of after-tax stock-based compensation expenses.

During the first quarter of 2008, we generated $557 million in operating cash flow and repurchased retired 16.5 million shares of our common stock at a cost of $816 million.

Now turning to the specific results for the first quarter. Total revenues for the first quarter of 2008 were $1.3 billion, an increase of 22% from total revenue of $1.0 billion in the first quarter of 2007. This performance is driven by a $301 million increase in our product sales, partially offset by a $71 million decrease in our royalty contract and other revenues, compared to the first quarter of 2007.

Product sales were a record $1.1 billion for the first quarter of 2008, marking four consecutive years of quarterly product sales growth. Product sales from the first quarter increased sequentially by 11%, as our HIV product sales continues to grow.

In terms of the foreign exchange impact, $37 million of our product sales increase in the first quarter of 2008 was due to the favorable foreign currency exchange, when compared to the same period in 2007 and $9 million when compared to the fourth quarter of 2007. This favorable impact takes into account our hedging activities.

Royalty, contracts, and other revenues increased from the fourth quarter of 2007 by 70%, due primarily to the increase in Tamiflu royalties.

Now turning to more specifics on product sales. HIV product sales grew to $965 million for the first quarter of 2008, up 37% from $705 million in the first quarter of 2007 and up 12% sequentially from the fourth quarter of 2007.

Atripla contributed $324 million to our first quarter HIV product sales, as demand for this product continue to increase in the U.S. Atripla sales accounted for 34% of our total HIV franchise sales in the first quarter of 2008. Efavirenz portion of Atripla, which is distributed back to BMS and reflected in the cost of goods sold line, was approximately $120 million or about 37% of Atripla sales in the first quarter of 2008.

In addition to growth in retail demand, we also observed large non-retail purchases in the fourth quarter of 2008 via small number of essentially purchasing state AID Effort Council's [ph] warehousing capability. We believe such purchases could be driven by the grant cycles of federal AID out funds rather than being completely demand driven. And therefore contemporary orders in the current quarter, given the likely increase in inventory levels in those accounts exiting the first quarter.

Truvada sales were $479 million for the first quarter of 2008, up 39% compared to the first quarter of 2007, of which approximately 6% was driven by the favorable foreign currency exchange impact when compared to the first quarter of 2007. Truvada sales for the first quarter of 2008, were up 7% sequentially from the fourth quarter of 2007, of which approximately 1% was driven by the favorable foreign currency exchange impact when compared to the fourth quarter of 2007. Truvada sales accounted for approximately half of our total HIV franchise sales in the first quarter of 2008.

In the U.S, Truvada sales were $239 million for the first quarter of 2008, up 28% compared to the first quarter of 2007. Sequentially, U.S sales were up 14%, demonstrating Truvada's continued update as the NRTI backbone of choice when used in combination with protease inhibitors. The growth of Truvada sales was also driven by our January 2008 price increase in the U.S, as well as the higher than usual non-retail purchases state AID efforts councils, as I described earlier.

In Europe Truvada sales for the first quarter of 2008 were $218 million, an increase of 50% compared to the first quarter of 2007, driven by strong sales volume growth and a favorable foreign exchange environment. Sequentially, Truvada sales in Europe increased 3%, mostly driven by the favorable foreign exchange.

As we discussed in our year-end earnings call, in response to an increased level of parallel trade activity in the region, effective December 1, 2007, the company initiated supply management system in France to manage orders of Truvada and Viread to ensure adequate and appropriate supplies of those products, commensurate with the market demand in France. Based on the results today, we currently believe that the supply management system has accomplished what we had hoped and we expect that future sales in the region will better approximate demand. We will continue to monitor parallel trade activity to ensure continued effectiveness of our supply management system.

Viread sales were a $153 million for the first quarter of 2008, down 5% in the same period in 2007, due primarily to lower sales volumes in the U.S and Europe, partially offset by a favorable foreign currency exchange impact. Viread sales for the first quarter of 2008, increased 3% compared to the fourth quarter of 2007, primarily due to favorable foreign currency exchange environment and higher pricing.

Hepsera, for the treatment of chronic Hepatitis B, generated sales of $83 million in the first quarter of 2008, up 16% compared to the first quarter of 2007, of which approximately 7% was driven by the favorable foreign currency exchange impact. Hepsera sales for the first quarter of 2008 experienced an 8% increase sequentially, driven primarily by sales volume growth in the U.S and certain European markets.

Sales of AmBisome were $71 million for the first quarter of 2008, an increase of 15% when compared to the first quarter of 2007, of which approximately 8% was driven by the driven favorable foreign currency exchange environment. AmBisome sales increased by 5% sequentially, due to primarily the increased sales volumes in certain European and international regions.

Finally, Letairis sales were $20 million for the first quarter of 2008. Letairis is approved by the FDA for the treatment of pulmonary arterial hypertension in the United States in June 2007. We are very pleased with its ramp since launch.

Our royalty contract and other revenues for the first quarter 2008, decreased by 38% compared to the same quarter of 2007 and increased by 70% over the fourth quarter of 2007, due primarily to the royalty revenues from Tamiflu sales made by Roche. The changes in Tamiflu sales in both comparative periods were due primarily to the fluctuations in sales related to the government pandemic planning initiatives worldwide.

Royalties received from Roche and recognized in our revenues for the first quarter of 2008 were $93 million. These royalties, which are paid one quarter every year [ph], reflect a royalty rate of approximately of 22% as applied to Roche's sales of Tamiflu in the first quarter of 2007. As you may be aware, Roche's scheduled to report first quarter 2008 earnings tomorrow.

Now turning to product gross margin. Non-GAAP product gross margin for the first quarter of 2008, which excludes stock-based compensation expense was approximately 79.1% compared to non-GAAP product gross margin of approximately 79.9% for the same quarter of 2007, was only 9.3% for the fourth quarter 2007. The lower product gross margin when compared to the same period of last year was primarily due to the higher proportion of Atripla sales, which carries efavirenz portion at zero gross margin, partially offset by a favorable overall product mix.

Turning to expenses; non-GAAP R&D expenses, which excludes stock-based compensation expense for the first quarter 2008 were $138 million. This is an increase of 27%, from $109 million in the same period of last year, primarily as a result of increased clinical study expenses as well as higher head count related to the growth in our business.

Compared to the fourth quarter of 2007, non-GAAP R&D expenses for the first quarter of 2008 decreased 18% from a $169 million, primarily driven by the higher license payments to Gilead's collaboration partners in fourth quarter of 2007 and partially offset by the increase of clinical study expenses in the first quarter of 2008, as well as higher head count.

Non-GAAP SG&A expenses which excludes stock-based compensation expense for the first quarter of 2008 were $177 million, an increase of 33% compared to $133 million in the same period of last year due primarily to increased marketing, promotional and other expenses in support of our antiviral and cardiovascular programs as well as higher head count, especially in our cardiovascular business. The stronger yield also contributed to higher expenses in U.S dollar returns for our Euro-based operations.

On a sequential basis, non-GAAP SG&A expenses for the first quarter of 2008 increased by 7% from $165 million in the fourth quarter of 2007, due primarily to higher head count and other expenses to support the growth in our business.

In our first quarter 2008 revenues and pretax earnings, foreign currency exchange had a net favorable impact of $37 million and $20 million respectively, when compared to the same period of last year. When compared to the fourth quarter of 2007, the foreign currency exchange impact on our first quarter 2008 revenues was favorable by $9 million or the impact on our first quarter 2008 pretax earnings was not significant. These take into account the products sales and expenses generated from outside the United States, as well as our hedging activities.

Our effective tax rate for the first quarter of 2008 was 28.0%. Our effective tax rate for the full year of 2007 was 28.9%. The lower effective tax rate in the first quarter of 2008 compared to full year 2007, was primarily driven by increased earnings in favorable tax jurisdictions.

Next, I would like to turn to our operating cash flow performance for the quarter and finally, our net cash position at the end of the first quarter. In the first quarter of 2008, we generated $577 million in operating cash flow. Our balance sheet at March 31, 2008 shows cash, cash equivalents and marketable securities of $2.6 billion, a decrease of $133 million when compared to the balance of approximately $2.7 billion, at December 31, 2007.

We also repurchased 16.5 million shares of our common stock at a cost of $816 million this quarter, under our $3 billion share repurchase program. This includes a $500 million of common stock that we repurchased on the accelerated share repurchase agreement that we entered into in March, with Goldman Sachs & Co. As of March 31, 2008, we had approximately $2.2 billion remaining under this share repurchase program, which will expire at the end of 2010.

We continue to actively evaluate strategic ways to use our cash and investments, including continuing our efforts to pursue opportunities to in-license or acquire products to complement our own internal efforts. We are also committed to returning cash to our stockholders as is evidenced by the ongoing share repurchase program.

Now, I would like to turn to our financial guidance for the full year 2008. You can locate all of our guidance for the 2008 year on Gilead's corporate website. The only metric that we will be updating for our guidance we provided to you in January is the effective tax rate for the full year 2008, which we now expect to be in the range of 28% to 29% compared to our previous guidance of 29% to 30%. The decrease in effective tax rate guidance is primarily related to increased revenues in favorable tax jurisdictions.

For all other metrics we are reiterating our previous guidance. We are very pleased with a sequential quarter-over-quarter growth in our product revenues, particularly HIV franchise. As I discussed previously however, we saw larger than usual purchases of our HIV products by a small number of U.S. states which we believe may be related to their ADAD budgetary cycle, which could result in significant lower orders in the second quarter based on their current estimated inventory levels.

In addition, the exact timing of anticipated pricing approvals and subsequent launches of Atripla in European countries is still uncertain, and will have an impact on our product revenues. And finally, foreign exchange rates remain extremely volatile due to macroeconomic factors and it's difficult to predict at this point, whether current rates are sustainable, and how future fluctuations in these foreign exchange rates could affect our revenues and expenses for the remainder of the year.

Therefore, I am reiterating the guidance of $4.7 billion to $4.8 billion in the net product revenues for 2008. This is for direct product builds only and does not include royalty contracts or other revenues. As a remainder, expense guidance we are reiterating today will be non-GAAP, which excludes the impact of stock-based compensation expense.

We are reiterating our full year non-GAAP gross margin guidance in the range of 77% to 79%. We are also reiterating our full year expense guidance of $610 million to $630 million for the non-GAAP R&D expenses, and $710 million to $730 million for non-GAAP SG&A expenses. And finally, regarding after-tax stock-based compensation expense, we are reiterating the 2008 fully diluted EPS impact to be in the range of $0.12 to $0.14 per share.

In conclusion, our solid operating performance continues to be a validation of the significant efforts made by the more than 3000 Gilead employees, remain committed to driving performance to our shareholders by working to improve the lives of patients around the world.

At this point, I'd like to turn the call over the Norbert, who will discus or research and development highlights for the quarter. Norbert?

Norbert W. Bischofberger, PhD - Executive Vice President, Research and Development and Chief Scientific Officer

Thank you John. In the first quarter of this year, Gilead achieved several significant research and development milestones, further advancing our pipeline programs. As you know, we now a more robust pipeline of product candidates than ever before. So I'm going only to focus on those that have made significant advancements during the quarter.

On the antiviral front starting with HIV, I am very pleased to provide you an update on our elvitegravir program. First, with FDA's consent we are nearing completion of the design of the Phase III program for elvitegravir. As we have previously communicated, we will be conducting two non-inferiority studies evaluating elvitegravir versus Merck's ratelgravir [ph].

Because of the clean safety profile of the highest dose of elvitegravir study in the Phase II trial, the FDA requested that we consider evaluating two doses of elvitegravir in the Phase III studies, a 150 and a higher dose 300 milligrams with the thought that the 300 milligram dose could provide greater efficacy for patients with more advanced disease.

Based on recently obtained PK data demonstrating that the 300 milligram dose does not provide substantially higher exposure than the 150 milligram dose, we will no longer be required to evaluate the 300 milligram dose and the planned Phase III studies will only have two arms. The two studies will enroll patients in the U.S. and in Europe and the primary endpoint will be the proportion of patients that achieve and maintain HIV RNA less than 50 copies per mill at week 48.

Due to the work we did to revolve the need to evaluate the 300 milligram dose, we now anticipate initiating these studies in the third quarter of this year. I am also very pleased for the first time to provide you with the details on our PK enhancer program. As you know elvitegravir requires that it be boosted with 100 milligrams ritonavir in order to be dosed once a day.

Because of the benefit of simplified and convenient therapies to patients as exemplified by our own Atripla, it is our goal to also coformulate elvitegravir into a one pill, once daily complete regimen. The incorporation of ritonavir, however, presents a challenge, because of the requirement for specialized formulation. Though our strategy has been to develop a proprietary boosting agent, one which is devoid of HIV activity, can easily be manufactured and can be given at relatively low dose so that coformulation with elvitegravir and dose of Truvada is a possibility. We now have that candidate with GS-9350, which appears to fit all of these criteria.

In fact, a pilot formulation study demonstrated that we can coformulate 9350 with elvitegravir and Truvada into one single pill. We have filed the IND and we are currently preparing to evaluate the safety, tolerability, and metabolic profile of GS-9350 in healthy volunteers. If the results are positive, we could then move the compound into HIV infected individuals, evaluating safety and efficacy as a boosting agent versus ritonavir. We look forward to keeping you posted on the progress we make with this compound.

On the HCV front following submission of data to FDA, we have now resumed screening patients in the continuation of the Phase Ib Study of GS-9190, our novel HCV polymerase inhibitor. We will continue the evaluation of the 40 milligram dose, which based on a pilot QTC study in healthy volunteers, appear to have QTcF prolongations that were small and clinically manageable. We will now finish enrolling patients in the Phase Ib study to establish the safety and efficacy of the 40 milligram dose in a sufficient number of patients to allow us to go forward into Phase II studies.

With regards to 9450, our caspase inhibitor in-licensed last year, the compound is currently being evaluated as a hepatoprotectant in an ongoing Phase Ia study in HCV infected individuals. We have recently added U.S. sites to this study which will accelerate the enrollment of patients, and we anticipate data from this trial by the end of the year. We believe that this molecule may also have utility in other diseases such as fatty liver disease or NASH.

On the respiratory front, aztreonam lysine for inhalation was Gilead's unique drug formulation specifically designed to achieve high lung antibiotic concentrations with a short duration of administration. The U.S. NDA was filed on November 16, 2007 and we had PDUFA date of September 16 of this year. In order to make the product available to CF patients in need prior to its commercial availability, we opened up an expanded access program and now have more than 100 patients enrolled in the program.

Ahead of schedule, we announced that we filed a marketing authorization application in the European Union on March 7, and we have since also filed in Canada where the submission was granted a priority review. We are preparing to conduct a head-to-head open label study versus TOBI in the EU to support registration and plan to initiate the study shortly. The study will not need to be completed in... completed in order to get an approval in the EU but it will support a conditional approval strategy.

We will also be initiating in the second quarter of 2008 a study called the mild study that will evaluate the quality of life of aztreonam lysine for inhalation in patients whose lung function is risk less compromised than patient who were enrolled in our Phase III pivotal studies.

Quality of life will be accessed by CFQ-R, a patient's reported outcome tool used to measure health-related quality of life for people with CF. If the outcome from this study is positive, aztreonam lysine would be the only inhaled antibiotic with demonstrated benefit in earlier diseased CF patients with pseudomonas infections.

With regards to our cardiovascular franchise, the Phase III studies for darusentan and resistant hypertensions, our progress in terms of enrollment in both the DAR-311 and DAR-312 studies which were approximately 58% and 25% enrolled respectively. The darusentan data monitoring committee met recently and recommended that the studies be continued. We believe we are on track to complete enrollment and receive data from these studies in 2009.

I am very pleased with the progress Gilead has made in the first quarter and look forward to informing you on further advancements of our pipeline candidates through the remainder of this year.

With that... next, Kevin will review our commercial highlights for the quarter. Kevin?

Kevin Young - Executive Vice President, Commercial Operations

Thank you, Norbert and good afternoon everyone. The first quarter of 2008 was an extraordinary quarter with multiple significant events occurring. I am referring to the results from the DAD data and the AC... ACTG 5202 study which John Martin previously discussed.

The treatment communities' ongoing discussion and decisions around the potential impact of these data sets along with our anticipated new product launches will continue to make 2008 a very exciting year. However, we believe this data did not have any impact on product revenues for the first quarter.

Before turning to our commercial performance for the quarter, I would like to remind you that the analysis of our HIV and HBV market share data in the U.S. and Europe, we rely on the most up-to-date third party data available to us in each market. This data lags our financial results by one quarter.

I would first like to discuss the performance of our antiviral franchise which is comprised of our HIV and HBV marketed products. Our U.S. HIV franchise performance remained the best in the industry in Q4 of 2007, and the gap between Gilead and our closet competitors continued to widen.

Atripla, built on its leadership position in the U.S., has approximately 28% of the estimated 538,000 patients treated with antiretrovirals or just over 150,000 patients were on Atripla therapy. Atripla, together with Truvada, when prescribed as an alternative therapy with protease inhibitors, continue to account for approximately 8 out of 10 treatment-naïve patients.

In patients switching to Atripla from other therapies, over 50% were from non-

Gilead-based regimens. Patients previously on Combivir continue to dominate switch patients compromising... comprising 29% of the total patients who switch to Atripla.

Truvada continued to be the backbone of choice for antiviral therapy in the U.S. with an estimated 169,000 patients receiving Truvada. This represented an impressive 31% of all patients treated with antiretrovirals.

Notably 68% of all U.S. patients or 365,000 received the tenofovir molecule during the fourth quarter of 2007 in one of its three forms, namely Atripla, Truvada or Viread, an increase from 64% from the third quarter of 2007. We continue to make excellent progress with our HIV products in Europe and believe that with the continued rollout of Atripla as well as further responses to the DAD data and the ACTG 5202 study, we will continue to build upon our strong position.

As you know, we and our partner Bristol Myers-Squibb received European approval for Atripla in late December 2007. The launch is well underway in the UK, Germany and Austria. And just last week, I'm pleased to announce that we launched in Greece.

In addition, pricing negotiations are progressing well with France, Italy, Portugal and Spain. And we believe we are on track to have those finalized before the end of the third quarter, with other European Union countries rolling out over the course of the year.

The market opportunity in the big five countries continued to show robust growth, and it was estimated that as of the fourth quarter 2007, 256,000 patients were treated with antiretrovirals within these five markets. This represents a 9% year-over-year growth rate and is comparable to the rate of growth achieved in the U.S.

Truvada has continued to build on a strong base throughout the EU and was the number one brand throughout the big five markets, while tenofovir was the leading molecule in France, Spain, Germany and the UK during the same period. We anticipate that we will achieve the same position in Italy, during the current quarter. Truvada plus Sustiva continued to extend their lead as the combination of choice for treatment of naïve patients, growing to 27% of treatment naïve patients, which is more than double the next closest regimen of Truvada plus Kaletra up 13%.

An important potential driver to solidifying this regimen's first line position is that the British HIV Association was the first committee to react to the DAD data and the ACTG study, by recently publishing revised UK HIV treatment guidelines for consultation.

If these guidelines are finalized at the end of the consultation period, on May, the 16th and remain unchanged, Truvada plus Sustiva will become the preferred regimen for patients in frontline use in the UK. Of all treatment initiations on to Truvada during the fourth quarter of 2007, 60% came from treatment naïve patients, whilst 40% have switched from other products. Of the patients that switched to Truvada, approximately half have been on a Combivir base regimen

In the NRTI market, Truvada continued to outperform Kivexa, known in the U.S as Epzicom with a Truvada, versus Kivexa market share ratio of 2.3:1. This will be an important metric for us to watch, as we monitor the impact of the launch of Atripla, as well as the response to the DAD data and ACTG 5202 study. And finally on the HIV front, approximately 55% of all patients for initiated therapy began on a regimen that contains Truvada.

Turning briefly to our hepatitis franchise. During the first quarter of 2008, in the United States Hepsera continued to be the leading antiviral agent for the treatment of chronic hepatitis B. As of the end of February 2008, Hepsera maintained its place as market leader, with a total prescription market share of approximately 44%. In the Gilead territories outside the U.S, Hepsera's market share remained relatively stable, despite strong competition.

Turning to Viread for HPV; in late March, we were very pleased to have received our first approval of Viread for this indication in Turkey and we are currently awaiting reimbursement authorization prior to launching the product. With an estimated 350,000 chronically infected HPV patients, Turkey represents an important market and is a country in which we have established a direct Gilead presence.

Also in March, the Committee for Medicinal Products for Human Use of the European Medicines Agency issued a positive opinion on the approval of Viread for HPV throughout the EU. And we currently anticipate approval in the second quarter. As we prepare for the anticipated European approval of Viread for HPV this quarter, we are excited about the timing of the European Association for the Study of the Liver Conference taking place next week in Milan, Italy. This event will pull together key thought leaders in HPV from throughout Europe and will allow us to showcase the attributes of our HPV portfolio, particularly Viread for HPV.

There will be presentations from 10 Gilead sponsored abstracts, five of which are oral presentations. In reviewing our commercial readiness to support a successful launch of Viread for HPV in the EU, as well as potentially the U.S later this year, we are far along in our pre-launch preparations. And feel we are well positioned to support a successful rollout with our existing commercial infrastructure in both of these markets.

Now turning to our cardiovascular franchise; and Letairis for the treatment of pulmonary arterial hypertension or PAH. In an effort to share additional details on the Letairis launch on the PAH market, we conducted a survey of approximately 100 prescribing physicians responsible for more than 10,000 PAH patients in late March of this year. We are in the process of refining a robust dataset in cooperation with a third party source that we hope to use in coming quarters. Until such time that we feel that data is reliable and indicative of market trends, we will continue to conduct our own market research for use on our earnings calls.

We are very pleased with the recent performance of Letairis as well as the market dynamics, we have been seeing. During the first quarter, we have recorded $20 million of Letairis sales, which very much in line with our expectations at this point in the launch. We now have approximately 3600 physicians enrolled in our Letairis Education and Access Program, otherwise known as LEAP. Of these physicians, approximately 25% represent the main treatment providers for PAH. The remaining 75% are an important part of the referral base and their continued education is essential to our efforts to expand awareness and diagnosis of this disease.

Letairis has an approximate 15% share of ERA-treated PAH patients, as of our March Gilead conducted survey. Importantly, in the PAH centers, which accounted for approximately 60% of all the Letairis patients, that share was approximately 20%. Letairis captured approximately 24% of newly diagnosed patients treated with an ERA during this period, according to our survey data

Since the launch of Letairis, patients have come from three primary sources. Patients new to therapy, patients who have switched to Letairis from other PAH treatments, namely the sentan and PDE5 inhibitors and finally patients, who have had Letairis added to their existing therapy. Monotherapy currently comprises of approximately 60% of PAH-treated patients, with the use of combination therapy at approximately 40%.

On the reimbursement front, access barriers have been minimal and manageable since the launch of Letairis, with comparable coverage to the sentan on most formal risk. Letairis is covered on virtually all of the top managed care plans as well as on virtually all state Medicaid plans.

We are very encouraged with the physicians' feedback we've been receiving. As their experience grows, physicians are gaining additional comfort in expanding the number of patients to whom they prescribe Letairis. We believe, we are well positioned to build upon the early success of Letairis. And to further support the product, we'll be initiating our Athena 1 Phase IV program shortly. In this study, we will evaluate Letairis in patients who are poor responders to sildenafil monotherapy.

Importantly, at the upcoming American Thoracic Society Meeting taking place in Toronto, on May of the 16th through May of the 21st, we will update different four studies of Gilead products, two for Letairis, one from our ARIES-E study and one from our ARIES 1 study. We will also have a poster presentation on aztreonam lysine for inhalation from the interim data from the open-label study, and one poster from our Phase I study in CF Patients of GS 9310, 9311, of phosphomycin, tobramycin antibiotic combination therapy.

As Norbert mentioned earlier, we have a producer date of September, the 16th for aztreonam lysine with the FDA, and have already begun our launch preparedness. We believe, we are in excellent position to launch this product, without major additions to our existing sales force.

In closing, I am pleased with the commercial progress we have made in the first quarter, and believe we have led a strong foundation for growth, of the remainder of 2008 and into 2009. I will now turn the call over to the operator to begin the question-and-answer portion of the call. Operator?

Question And Answer

Operator

Today's question-and-answer session will be conducted electronically. [Operator Instructions]. And your first question come from the line of Meg Malloy with Goldman Sachs. Please proceed.

Margaret Malloy - Goldman Sachs & Co.

Thanks very much. I guess, I'd just open up with John Milligan. Could you quantify if possible the amount of non-retail HIV demand that you think, might not surface going forward?

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

So, Meg your question is how much?

Margaret Malloy - Goldman Sachs & Co.

Yes, I didn't ask it well. But what was the anomaly in terms of dollars, as best you could measure in Q1?

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

Yes, it's very tough to quantify that because we have observed now for the last couple of years larger sales, especially in places like Florida and Texas ADAPs where they buy centrally and they do have warehousing capability. So we don't have complete insight into demand, so we don't know exactly what that number is. So frankly I can't quantify it for you. We did see in... if you look back historically in '06, Q4 '06 a little bit into Q1 '07, we did see a bump up in non-retail there, and we did see some bump up here.

We don't have the March data in yet. So we don't know exactly what that looks like, that's another factor that leads me to conclude that I shouldn't give a specific number. I can tell you that ADAPs is a typical historical percentage for our overall sales right around on 25%, and that Texas and Florida are a subset of that. So that's about all I can say, and that's 25%, of U.S sales per month.

Margaret Malloy - Goldman Sachs & Co.

I just saw on that though, so it doesn't sound like this bump is atypical, it sounds seasonal. So is that a fair statement?

John C. Martin, PhD - President and Chief Executive Officer

We think it's likely to be a seasonal pattern, unless something changes within the government.

Margaret Malloy - Goldman Sachs & Co.

Okay, thanks a lot.

Operator

Your next question come from the line of Thomas Wei with Piper Jaffray, please proceed.

Thomas Wei - Piper Jaffray & Co.

Thanks. I wanted to ask about the abacavir situation just in terms of how much of the share, and how quickly you think that might be able to be taken by Truvada [ph]. How should we think about that?

Kevin Young - Executive Vice President, Commercial Operations

Hi Thomas, this is Kevin. I'll have a go and then probably John will add to it. As I said, we felt there was really no impacts of DAD and 5202 in these first quarter results. Certainly from what we've said back on a qualitative basis, I think it's going to be an impact first on new patient prescribing. I think that's where the change will start to happen. But I think we'll have to wait and see what happens in terms of switching Epzicom or Kivexa patients. Just to give you a type of quantity, in the U.S. there are just over 50,000 Epzicom patients and total abacavir if you add in Trizivir and Ziagen would be just over 100,000. So clearly I think first and foremost it has a potential to affect Epzicom in the U.S. and Kivexa patients in Europe.

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

Thomas, it's a little bit hard to quantify the patients. I mean a lot of things are happening. You also have to remember that this is an ageing population. And so as HIV patients gets older their cardiovascular risk naturally increases which could have a knock-on effect. But doctors and people in the guidelines realize as they're just trying to get their arms around these data to try to figure our exactly what they mean right now. But we really can't quantify that.

Kevin Young - Executive Vice President, Commercial Operations

But I think Thomas the... the beaver change which was fairly speedy is quite a significant I think stake in the ground around the recommendation of using Truvada plus Sustiva as first line.

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

And just for the transcript that's the British HIV Association is what he's referring to.

Operator

Your next question comes from the line of Mark Schoenebaum with Bear Stearns. Please proceed.

Mark Schoenebaum - Bear Stearns

Okay, great. And just for the transcript that's Mark Schoenebaum. Well anyway I got to say, I mean, definitely great quarter results obviously, huge growth for you guys. I just had a question and I don't... I just want to understand what was happening in Europe. Did I hear you correctly that the sequential Truvada, Viread sales of 3% that was FX? Was there demand growth sequentially in Europe? And do you think there's vogue [ph] of your situation will affect European positions differently than U.S.?

John C. Martin, PhD - President and Chief Executive Officer

Mark, let me take it... I'll take the second part first. I think it has probably more potential to affect Europe, in advance of the U.S. Again I... the British HIV guideline changes and that they are very well held, not only in the UK but across Europe, there are national guidelines that there are in each country. And we'll have to see how they change. Of course DAD was a study coming out of Europe. It was multi- national, but it did come out of Europe. So I think, I think there's been a high level of resonance and I just said in the scripts we have a lower Truvada to Kivexa ratio. So we have the potential to move that towards the type of ratio that we have in the U.S.

So yes, I do think that there is the potential to, if you like to stop that... potential gradual change in Europe.

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

Mark, your question was about sequential growth in Europe. If you look at just on a dollar basis quarter-over-quarter we grew 10% in Europe. And so there are a couple of factors in there. One, of course, we alluded in the script which is the situation in France where there was a drawdown in inventory associated with the management plan we put in place, so that's number one.

The second part, of course, is we're launching Atripla. So we had a slight over $14 million in sales so far even in those early countries. And again we presume that, that's all switching based on the label in Europe. So that certainly would have an impact on the Truvada, Viread growth rates as well.

Mark Schoenebaum - Bear Stearns

Okay, thank you for correcting me. Thank you.

Operator

Your next question comes from the line of Geoff Porges with Sanford & Bernstein. Please proceed.

Geoffrey Porges - Sanford C. Bernstein & Co.

Okay, that was close. Just a quick question follow-up on Europe. Kevin, you gave us the numbers for the U.S. for total tenofovir emtricitabine penetration, and I think you said 68% tenofovir and by implication about 59% for emtricitabine. Could you give us the comparable numbers for tenofovir and emtricitabine at this point in Europe for the most recent data you have?

Kevin Young - Executive Vice President, Commercial Operations

I probably have to fish those out and --

Susan Hubbard - Investor Relations

Yes, we'll follow up if you on that.

Kevin Young - Executive Vice President, Commercial Operations

Give those later if you don't mind, Geoff.

Geoffrey Porges - Sanford C. Bernstein & Co.

So 59% right in the U.S.

Susan Hubbard - Investor Relations

For tenofovir molecule?

Geoffrey Porges - Sanford C. Bernstein & Co.

Foremtricitabine.

Kevin Young - Executive Vice President, Commercial Operations

Emtricitabine.

Susan Hubbard - Investor Relations

Yes, I have to... we'll get back if you on that Geoff.

Geoffrey Porges - Sanford C. Bernstein & Co.

Okay, thanks.

Operator

Your next question comes from the line of Yaron Werber with Citi. Please proceed.

Yaron Werber - Citigroup

: Hi thanks. I asked you guys last time kind of the three-part question, and I then got hammered. So I'll ask you just one question this time. Can we switch the topics to aztreonam and just give us a little bit of sense as to how big is the market patient wise, do you think it bodes [ph] as wise in the U.S. and maybe a little bit of a sense as to what kind of pricing or perhaps your competition is kind of... what's the current pricing of your competition? And perhaps why how would you stack according... relative to that given your data?

Kevin Young - Executive Vice President, Commercial Operations

It's Kevin. Just in terms of patients, there's about equal number of patients U.S. to Europe to the main comes in Europe. That's about 30,000 patients in each region. So you've got about a total of 60,000 patients. But what you do have is somewhat a different treatment approach. Obviously the main step treatment is TOBI tobramycin here in the U.S. Whereas you've got... you've got TOBI in Europe but you also have colistin as a treatment option that is used by European clinicians. So it's somewhat of a way different treatment picture.

In terms of TOBI, the WAC is about $3,500 per month of therapy... so, of the cost of therapy and that's a month's costs. So it does depend on how the colistin is typically using TOBI in terms of the severity of the disease with the patients, obviously more cycles used for most severe patients. But there will always be the optimum pintable because of the avoidance of resistance.

Yaron Werber - Citigroup

But in Europe the prices are a lot lower. Is that correct with TOBI?

Kevin Young - Executive Vice President, Commercial Operations

Again I'd have to give you an exact price of follow-up on that.

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

Yes the couple of differences between in the U.S. and Europe for one there is a lot more use of just locally formulated tobramycin so that takes up the part of that market. And also they use a drug called colistin or colomycin which is often used... again compound of our local pharmacies. So the sales of TOBI itself have never been as large in Europe as they have been in the United States. The other thing to say is Kevin mentioned there's 30,000 patients. Really that's about 30,000 cystic fibrosis suffers, and obviously the subset of patients. And I think that's closer to 12,000 annually most of whom take a sort of mild and even some whom are more severe disease. So that changes the revenue numbers. I wouldn't use 30,000 as your basis for thinking of those who would be on treatment.

Operator

Your next question comes from the line of Geoffrey Meacham with JPMorgan. Please proceed.

Geoffrey Meacham - JPMorgan

That was close as well. Question for you for Kevin on Letairis. You mentioned a 24% indirect [ph] share. Can you give us that number for year end? And then why you think... why isn't this a little higher given the label? And the last part to this is what impact if any do you guys see on the ERAs going to a tier 4 and some parts of the private payroll?

Kevin Young - Executive Vice President, Commercial Operations

Let me try and remember those questions Geoff. First of all, it's important to say that the figure I quoted was not a prescription. Basically it's from our survey. It's not even a patient record survey. It's basically a questionnaire that we asked 100 physicians to complete. So it's their judgment on how much ERPD-5 and their brands that they are using. So it's important to qualify that. It's essentially a survey that we did in the month of March, so as a point in time.

So, in terms of having any retrospective data, we just don't have that. So, it was essentially a survey that we felt necessary we had to do, because we are still waiting to have a third party produce a high quality type of data set that we get for all synovate in HIV. I can remember the third party we questioned. I still think the ERAs are very valuable in terms of their role in treating PAH. I certainly met with quite a number of PAH specialists and they do consider ERAs as a first line option, and I think generally they can get those products approved from their payers. So my expectation is that I think for the foreseeable future, they're going to stay at tier 2 and tier 3.

Operator

Your next question comes from the line of Michael Aberman, with Credit Suisse, please proceed.

Michael Aberman - Credit Suisse

Hey guys, thanks. I am wondering if I could turn to the pipeline for a second. And I wasn't really clear on 9350 development plan. Maybe can you clarify and go a little bit beyond if those data are positive? What stage you can put them in into HIV patients concurrent with development [indiscernible]?

John C. Martin, PhD - President and Chief Executive Officer

So Mike our... maybe I should start that where we ultimately want to go. We want to have a coformulated single tablet. They can be given once daily that is a complete regimen similar to Atripla. In order to get there, that single tablet will contain elvitegravir and our booster. So with our PK enhancer, what we have to do first of course is to find out healthy volunteers whether it indeed boosts nearly four substrates. And that we have five IND and we are initiating those studies shortly.

If then we confirm that stats indeed the case, and we also accumulate some safety information in a limited number of individuals, we could then go into HIV infected individuals. And really hopefully even with the single pill and initiate the Letairis study that will ultimately get us approval of elvitegravir plus the PK enhancer coformulated with Truvada.

I also want to tell you of course in parallel we're also developing elvitegravir for treatment to experienced patients. And those are those two Phase III studies that I talked about that we are initiating in the third quarter of this year. Was this clear, Mike that... have I answered your question?

Operator

Your next question actually comes from the line of William Ho with Banc of America, please proceed.

William Ho - Banc of America Securities

Hi guys, thanks for taking my question. I guess my questions related to aztreonam lysine in cystic fibrosis. I guess in choosing to run a head-to-head trial against TOBI, are you looking for non-inferiority or superiority? And what are the potential risks to your market share depending on the outcome?

Norbert W. Bischofberger, PhD - Executive Vice President, Research and Development and Chief Scientific Officer

Yes, so, we... the study of design as a non-inferiority study versus TOBI and just to make clear, this is a... so we filed in the European Union under a special provision that will get us approval. But ultimately the Europeans in order to get full approval will want a head-to-head study against the standard of care which is TOBI.

The threat to our business, I think, is minimum... the threat to our business, I think, is minimal, that's my opinion. Because it is clear that TOBI, when it is repeatedly used, has very minimal efficacy. We have seen that in our own study in 006 and we have also seen that in the TOBI studies, whereas patients that have not seen aztreonam, they will have a much better response. That's why we feel very comfortable to do a head-to-head study versus TOBI.

Kevin Young - Executive Vice President, Commercial Operations

And I also believe... I'll also add that if you believe in the profile of your product, you should be prepared to a comparative study just like we did with study 934 in HIV and just like we are doing with our new study as Norbert said, in the mild cystic fibrosis setting which again is another advance in terms of the science of developing the profile of the drug.

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

So, it's like... one of the things is we think that this provides some potential upside to the product especially in Europe where we're going to have to show a difference in order to the considered a credible alternative to TOBI and I think we have the drug to do that.

Operator

Your next question comes from line of Sapna Srivastava. Please proceed.

Sapna Srivastava - Morgan Stanley

Yes, hi. Just one question on the inventory level. You had mentioned in the fourth quarter that it was a lower level of the contractual band. Could you just comment where it is now for the HIV franchise?

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

Sapna, it has come off about the couple of days. So it has... there was an increase in inventory. And so we're a little bit on the low end of sort of the mid range.

Operator

Your next question comes from the line of Joel Sendek with Lazard Capital Markets. Please proceed.

Joel Sendek - Lazard Capital Markets

Hi, thanks a lot. Just a follow up question on the guidance. So, I understand the three reasons you laid out as to why you're not increasing. It still seems top me a little inconsistent with the DAD and ACTG results, that was an upside surprise. And I'm wondering if what I'm missing is maybe it'll little take longer for that to have an impact or is there another answer?

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

We are not certain how long it's going to take have an impact. We're pretty confident it will have an impact because these are important data sets and there are data sets are maturing as well including the ACTG's studies and ongoing studies. So, additional things will come out of it. Full data set hasn't been represented. So very few people even know what the results were of that interim look, and we won't probably see that until later on this year. So the ability to have data sets and discussions and for physicians and patients to make decisions is going to take sometime to flow through. Obviously the prevailing wind is quite favorable to us, but the specifics aren't out there yet. So it's difficult us to predict the impact on sales across the world.

Unidentified Company Representative

Yes, I would concur with John and that, it does take time to go from those high docile, opinion leader type of positions down to the lower, we have seen that with the combivir switch. And I think really DAD and ACTG is just starting to percolate down the docile. So it will take time.

Operator

Your next question comes from the line Bill Tanner with Leerink Swann. Please proceed.

William Tanner - Leerink Swann & Co.

Thanks. Norbert, just a question on elvitegravir. Obviously if the PK enhancer works and that would help you overcome a major obstacle of using low dose ritonavir in treatment naïve patients. So I am just curious, what would need to be done to begin to look at those patients in terms of smaller, earlier stage clinical trials and at what point of time, what time line do you think you could actually be in pivotals working at elvitegravir plus 9340 combo in treatment naïve patients?

Norbert W. Bischofberger, PhD - Executive Vice President, Research and Development and Chief Scientific Officer

Well so, we would need... you need a certain safety database for people to become comfortable to expose a larger number of individuals in a Phase III study. And what that number is depends on of course what the that the preclinical talk says and the preliminary clinical experience. One thing that makes me feel comfortable about the PK enhancer is that we think it will end up to be a fairly low dose similar to ritonavir or hopefully lower. And so I think, the danger of having big safety events will somewhat diminish if you use that low dose.

But you know with elvitegravir we also need a certain safety database, in order to go into Phase III studies and that safety database will be accumulated in large parts in the treatment experienced patient studies that we are initiating right now. So I am not prepared at this point to give you timelines, simply because we are still thinking through this internally. But I think I have given you a flavor of how you could construct them or think about them.

Operator

Your next question comes from the line of Maged Shenouda with UBS. Please proceed.

Maged Shenouda - UBS

Sure. Hi thanks. So my question has to do with darusentan. Can your remind us of the design of the ongoing Phase III trials and how are you ensuring that you are getting real resistant hypertension patients in this process?

John F. Milligan, PhD - Chief Operating Officer and Chief Financial Officer

Yes, that's a very good question. So the way that the protocol is designed, these have to be patients that are resistant... that have resistant hypertension as defined by the JNC-7, the Joint National Committee and that defines, resistant hypertension as not being ongoing blood pressure, which is 140/90 in hypertensives, 130/80 if you have chronic kidney disease or diabetes. Despite being on three full doses of anti-hypertensives which has to include a diuretic. So in other words, all our patients are at least on three full doses of anti-hypertensives. And by the way a full dose, is defined as either maximum labeled dose or something lesser, if there is a medical reason for it. So it's completely documented, it's completely consistent with a definition and that's why we feel comfortable that adding on darusentan to that patient population if you can show... if we can repeat the observation from the Phase II study, where we saw about that in addition of 10 mm decrease in systolic-diastolic blood pressure, then I think we would have a very strong package for... to send to FDA for approval.

Operator

Your next question comes from the line of Phil Nadeau with Cowen & Company. Please proceed.

Phil Nadeau - Cowen & Company

Good afternoon, and thanks for taking my question. Kevin you made the remark, I think in response to Thomas' question that the effects of the DAD and ACTG studies were first to be seen in new patients prescribing. Could you give us some idea of the proportion of patients... naïve patients were started on back of your regimens, say as of a few months ago and what percent of those patients are not already contraindicated against tenofovir?

Kevin Young - Executive Vice President, Commercial Operations

Basically in new patients, essentially approximately about 9% of naïve patients start on... start on Epzicom. Now you'd have to add in there is very, very small amounts that still might be there for something like a Trizivir. But basically I think Epzicom is the product to concentrate on. So it is quite a small number, but obviously a lot bigger in the... in Europe. Our ratio of Epzicom to Truvada in the U.S. is about 4.4 prescriptions to 1 in our favor, and as I said in the call it's 2.3 to 1 in Europe. So there is that... we feel there is the upside for us. Obviously it's a smaller pool, antiretroviral treated patients in Europe, but I think in terms of market share versus Kivexa/Epzicom, there is a high potential there in Europe.

John C. Martin, PhD - President and Chief Executive Officer

And Phil, I would like to add you asking question how many of those patients are contraindicated to tenofovir. Our contraindication statement in the U.S. say they reach severe or hypersensitive to tenofovir or any components in the formulation then you're contraindicative. So we've really don't have a contraindication per se. In the warning section and it says that have to be careful with a very low creatinine clearance, but those patients are very rare.

Operator

Your next question comes from the line of Ian Somaiya with Thomas Weisel Partners. Please proceed.

M. Ian Somaiya - Thomas Weisel Partners

Thanks and let me add my congratulations. Just a question for Norbert on 9350 your PK enhancer. I mean clearly we can see use for that drug beyond elvitegravir. I don't know if there any products that you might have showed in the past may be HIV protease inhibitor or ones that are available in the marketplace that you could potentially move forward using the PK enhancer. Is there an opportunity there?

Norbert W. Bischofberger, PhD - Executive Vice President, Research and Development and Chief Scientific Officer

Ian that's a very good question and that's a question we've asked ourselves as well and we're currently going through the thought process. But clearly as you know, there are lot of opportunities for PK enhancers that go beyond elvitegravir and they are not only in HIV, they are also in hepatitis C and we are looking at some of those... you know the use of a PK enhancer in other areas. But I am... at this point we haven't made specific decisions and are not prepared to give you any specific answers.

M. Ian Somaiya - Thomas Weisel Partners

If I may, just had a unrelated question... I'll be honest about that. Can you just show what is your expectations for the darusentan data and what do you do with that drug if the data is positive in terms of marketing the molecule?

Norbert W. Bischofberger, PhD - Executive Vice President, Research and Development and Chief Scientific Officer

What so I can speak to the data. With respect to two studies that we are doing right now, the two Phase III studies are very similar to the Phase II study that was done, the 211 study that was presented at a previous meeting. And as I said we added on darusentan to existing antihypertensive drugs. All of the patients were on three, some of were on four antihypertensive medications and we saw about a 10 millimeter both systolic and diastolic decreased in blood pressure. So we feel very... I personally feel very confident that we will replicate those data in our Phase III studies. And I think on that Kevin is going to add.

Kevin Young - Executive Vice President, Commercial Operations

And in terms of the sort of early thoughts on commercialization here, I think there is two critical questions really that we're working through right now in quite some detail is, what type of results will we require to launch this? And I think, it's going to require not only some focus on specialists, but also some focus into some section of the primary care market. Then secondly, I think the other question will be what type of risk map will be, because across an ERA it will have a risk map, and the question then will be the risk map appropriate for our product profile and appropriate for this type of market? So that will I think evolve as we get to know both the market, as well as we see what the data from the Phase III studies. And of course discussions with the FDA.

Operator

Your next question come from the line of Mike King, with Rodman & Renshaw. Please proceed.

Michael King - Rodman & Renshaw

All right. Good afternoon, let me add my congratulations. My question is on hep B. First just simply, I confirm is the August 8, sorry August 11, the producer date for Viread HPV in the U.S? Are you giving any specific producer --

Kevin Young - Executive Vice President, Commercial Operations

Yes, it is right [Multiple Speakers]. Yes, it is Mike.

Operator

Ms. Hubbard, at this time we have run out time for additional questions.

Susan Hubbard - Investor Relations

Thank you Operator. Thank you all for joining us today. We appreciate your continued interest in Gilead and we look forward to providing you with updates on our future progress.

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Source: Gilead Sciences, Inc. Q1 2008 Earnings Call Transcript
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