Gilead and GlaxoSmithKline Announce International Licensing Agreement for Investigational Chronic Hepatitis B Drug Adefovir Dipivoxil

Business Wire, April 29, 2002

Business Editors/Health & Medical Writers

FOSTER CITY, Calif.--(BUSINESS WIRE)--April 29, 2002

GSK Receives Exclusive Rights in Asia,

Latin America and Other Territories

Gilead Sciences, Inc. (Nasdaq:GILD) and GlaxoSmithKline (NYSE:GSK) today announced the signing of a licensing agreement for the rights to commercialize adefovir dipivoxil, Gilead's investigational antiviral for the treatment of chronic hepatitis B, in Asia, Latin America and other territories.

Under the agreement, Gilead will retain rights to adefovir dipivoxil in the United States, Canada, Eastern and Western Europe, Australia and New Zealand. GSK will receive exclusive rights to adefovir dipivoxil solely for the treatment of hepatitis B in all countries outside of the Gilead territories, the most significant of which include China, Korea, Japan and Taiwan. In these markets, GSK plans to develop adefovir dipivoxil for patients with chronic hepatitis B who are naive to therapy as well as for those patients who have developed lamivudine-resistant HBV.

GSK has agreed to pay Gilead an up-front licensing fee of $10 million, and Gilead is entitled to receive additional cash payments of up to $30 million upon achievement of certain milestones. GSK also will pay Gilead an undisclosed royalty on net sales of adefovir dipivoxil. GSK will have full responsibility for development and commercialization of adefovir dipivoxil in the covered territories.

"GSK will be a strong sales and marketing partner for Gilead, and we are very pleased to have completed this agreement," said John C. Martin, PhD, President and Chief Executive Officer of Gilead. "The international GSK team has made significant headway in building a HBV market and establishing customer relationships, especially in Asia where chronic hepatitis B is more prevalent than in any other region of the world. Together, Gilead and GSK can help meet the urgent unmet medical needs of patients with chronic hepatitis B by rapidly advancing the development of adefovir dipivoxil in this market."

Adefovir dipivoxil is in Phase III development by Gilead for the treatment of chronic hepatitis B. Dosed as one oral 10 mg tablet, once daily, adefovir dipivoxil belongs to a novel class of drugs called nucleotide analogues, which are designed to work by blocking HBV DNA polymerase, an enzyme involved in the replication of HBV in the body.

Gilead recently filed a New Drug Application (NDA) for adefovir dipivoxil with the U.S. Food and Drug Administration (FDA) and a Marketing Authorisation Application (MAA) with the European Medicines Evaluation Agency (EMEA). Based on the unmet medical needs of patients with chronic hepatitis B, Gilead has requested a priority, or six month, review in the United States, and anticipates the European review of its MAA to be completed in 2003. The applications are supported by data from Phase III studies in hepatitis B "e" antigen-positive patients, hepatitis B "e" antigen-negative patients and chronic hepatitis B patients with lamivudine-resistant HBV. Gilead is completing Phase I clinical trials for adefovir dipivoxil in China as part of a clinical trial program to support marketing approval there.

Data from two pivotal studies and a number of supportive studies of adefovir dipivoxil in a variety of chronic hepatitis B patient populations were presented in April at the 37th Annual Meeting of the European Association for the Study of the Liver (EASL). Presentations included data from studies of hepatitis B "e" antigen-positive patients, precore mutant (hepatitis B "e" antigen-negative) patients, those with lamivudine-resistant HBV, patients post-liver transplantation and patients co-infected with HIV. Since 1999, Gilead has provided access to adefovir dipivoxil through Study 435 to approximately 400 chronic hepatitis B patients with lamivudine-resistant HBV who are wait listed for or have received a liver transplant. Adefovir dipivoxil is an investigational compound and has not yet been determined safe or efficacious in humans.

"Adefovir dipivoxil will be a valuable addition to our portfolio," said Howard Pien, President, Pharmaceuticals International, GlaxoSmithKline. "Our experience of working with hepatologists over many years, first with vaccines and more recently with lamivudine confirms that this is a complex disease. We hope adefovir dipivoxil will offer a valuable new treatment option to physicians and will help improve the quality and duration of life of millions of hepatitis B patients across Asia, Latin America and other international areas."

GSK markets Zeffix in 50 countries worldwide, including China (as Heptodin), the United States (as Epivir-HBV) and Europe, for the treatment of chronic hepatitis B. More than 200,000 patients have been treated with Zeffix since its first launch in November 1998. With total 2001 sales of US$148 million, Zeffix is currently the only licensed oral antiviral treatment for chronic hepatitis B worldwide. The GSK vaccine unit also develops Energix-B(R) hepatitis B vaccine (Recombinant) and Twinrix(R) combined hepatitis A (inactivated virus) and hepatitis B vaccine (genetically derived surface antigen).