What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-02-23 compared with 2021-02-25 · 128 added, 142 removed, 289 unchanged (48% of the section changed)

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Our focus on innovation has allowed us to deliver marketed products across multiple therapeutic areas.

In 2020, our primary revenue-generating products and the approved indications in the United States are as follows:

In 2021, our primary revenue-generating products and the approved indications in the United States were as follows:

• Biktarvy ® is an oral formulation dosed once a day for the treatment of HIV-1 infection in certain patients.

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• Truvada ® is an oral formulation indicated in combination with other antiretroviral agents for the treatment of HIV-1 infection in certain patients.

It is a fixed-dose combination of our antiretroviral medications, TDF and emtricitabine.

Truvada is a fixed-dose combination of our antiretroviral medications, tenofovir disoproxil fumarate (“TDF”) and emtricitabine.

Truvada is also approved by FDA for a PrEP indication to reduce the risk of sexually acquired HIV-1 infection in certain at-risk patients.

• Complera ® /Eviplera ® is an oral formulation dosed once a day for the treatment of HIV-1 infection in certain patients.

The product, marketed in the United States as Complera and in Europe as Eviplera, is a single tablet regimen of a fixed-dose combination of our antiretroviral medications, tenofovir disoproxil fumarate (“TDF”) and emtricitabine, and Janssen’s rilpivirine hydrochloride.

The product, marketed in the United States as Complera and in Europe as Eviplera, is a single-tablet regimen of a fixed-dose combination of our antiretroviral medications, TDF and emtricitabine, and Janssen’s rilpivirine hydrochloride.

• Stribild ® is an oral formulation dosed once a day for the treatment of HIV-1 infection in certain patients.

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Atripla is a fixed-dose combination of our antiretroviral medications, TDF and emtricitabine, and Bristol-Myers Squibb Company (“BMS”)’s efavirenz.

• Veklury ® (remdesivir), an injection for intravenous use, is a nucleotide analog RNA polymerase inhibitor indicated for certain patients for the treatment of coronavirus disease 2019 (“COVID-19”) requiring hospitalization.

• Veklury ® (remdesivir), an injection for intravenous use, is a nucleotide analog RNA polymerase inhibitor indicated for the treatment of coronavirus disease 2019 (“COVID-19”) in certain adults and children 12 years of age and older and weighing at least 88 pounds (40 kg) who are (i) hospitalized or (ii) not hospitalized and have mild-to-moderate COVID-19, and are at high risk for progression to severe COVID-19, including hospitalization or death*.

*This indication received expedited approval by FDA in January 2022.

Liver Diseases

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• Harvoni ® is an oral formulation of a once-daily, single-tablet regimen of ledipasvir and sofosbuvir for the treatment of chronic HCV infection in:

(i) adults with genotype 1, 4, 5 or 6 without cirrhosis or with compensated cirrhosis, (ii) adults with genotype 1 infection with decompensated cirrhosis, in combination with ribavirin, (iii) adults with genotype 1 or 4 who are liver transplant recipients without cirrhosis or with compensated cirrhosis, in combination with ribavirin, or (iv) certain pediatric patients with genotype 1, 4, 5 or 6 without cirrhosis or with compensated cirrhosis.

(i) adults with genotype 1, 4, 5 or 6 without cirrhosis or with compensated cirrhosis, (ii) adults with genotype 1 with decompensated cirrhosis, in combination with ribavirin, (iii) adults with genotype 1 or 4 who are liver transplant recipients without cirrhosis or with compensated cirrhosis, in combination with ribavirin, or (iv) certain pediatric patients with genotype 1, 4, 5 or 6 without cirrhosis or with compensated cirrhosis.

In addition, we have an authorized generic version of Harvoni distributed by our separate subsidiary, Asegua Therapeutics LLC.

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Hematology/Oncology/Cell Therapy

• Yescarta ® (axicabtagene ciloleucel), a suspension for intravenous infusion, is a chimeric antigen receptor (“CAR”) T cell therapy for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma (“DLBCL”) not otherwise specified, primary mediastinal large B-cell lymphoma, high-grade B-cell lymphoma and DLBCL arising from follicular lymphoma.

• Tecartus ™ (brexucabtagene autoleucel), a suspension for intravenous infusion, is a CAR T cell therapy for the treatment of adult patients with relapsed or refractory mantle cell lymphoma.

• Yescarta ® (axicabtagene ciloleucel), a suspension for intravenous infusion, is a chimeric antigen receptor (“CAR”) T-cell therapy for the treatment of (i) adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma (“DLBCL”) not otherwise specified, primary mediastinal large B-cell lymphoma, high-grade B-cell lymphoma and DLBCL arising from follicular lymphoma, and (ii) adult patients with relapsed or refractory follicular lymphoma (“FL”) after two or more lines of systemic therapy*.

*This indication is approved under accelerated approval by FDA, and continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

• Zydelig ® (idelalisib) is an oral formulation of a kinase inhibitor for the treatment of patients with:

(i) relapsed chronic lymphocytic leukemia (“CLL”), in combination with rituximab, for whom rituximab alone would be considered appropriate therapy due to other co-morbidities, (ii) relapsed follicular B-cell non-Hodgkin lymphoma (FL) in patients who have received at least two prior systemic therapies or (iii) relapsed small lymphocytic lymphoma who have received at least two prior systemic therapies.

• Tecartus ® (brexucabtagene autoleucel), a suspension for intravenous infusion, is a CAR T cell therapy for the treatment of (i) adult patients with relapsed or refractory mantle cell lymphoma (“MCL”) and (ii) adult patients with relapsed or refractory B-cell precursor acute lymphoblastic leukemia (“ALL”).

• Trodelvy ® (sacituzumab govitecan-hziy), an injection for intravenous use, is a Trop-2 directed antibody and topoisomerase inhibitor conjugate indicated for the treatment of (i) adult patients with unresectable locally advanced or metastatic triple-negative breast cancer (“TNBC”) who have received two or more prior systemic therapies, at least one of them for metastatic disease, and (ii) adult patients with locally advanced or metastatic urothelial cancer who have previously received a platinum-containing chemotherapy and either programmed death receptor-1 (“PD-1”) or programmed death-ligand 1 (“PD-L1”) inhibitor*.

• Zydelig ® (idelalisib) is an oral formulation of a kinase inhibitor for the treatment of patients with relapsed chronic lymphocytic leukemia, in combination with rituximab, for whom rituximab alone would be considered appropriate therapy due to other co-morbidities.

• Letairis ® (ambrisentan) is an oral formulation of an endothelin receptor antagonist for the treatment of pulmonary arterial hypertension (“PAH”) (WHO Group I) (i) to improve exercise capacity and delay clinical worsening or (ii) in combination with tadalafil to reduce the risks of disease progression and hospitalization for worsening PAH, and to improve exercise ability.

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We sell and distribute most of our products in the United States exclusively through the wholesale channel.

During the twelve months ended December 31, 2020, approximately 92% of our product sales in the United States and approximately 68% of our total worldwide revenues were to three large wholesalers, AmerisourceBergen Corporation, Cardinal Health, Inc.

During the year ended December 31, 2021, approximately 91% of our product sales in the United States and approximately 65% of our total worldwide revenues were to three large wholesalers, AmerisourceBergen Corporation, Cardinal Health, Inc.

and McKesson Corporation.

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Our products compete with other commercially available products based primarily on efficacy, safety, tolerability, acceptance by doctors, ease of patient compliance, ease of use, price, insurance and other reimbursement coverage, distribution and marketing.

As our products mature, private insurers and government payers often reduce the amount they will reimburse patients, which increases pressure on us to reduce prices.

As our products mature, pricing pressures from private insurers and government payers often result in a reduction of the net product prices.

Further, as new branded or generic products are introduced into major markets, our ability to maintain pricing and market share may be affected.

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The development of product candidates and investigational therapies in our pipeline is subject to various risks and uncertainties.

These risks and uncertainties include our ability to enroll patients in clinical trials, the possibility of unfavorable results of our clinical trials, the need to modify or delay our clinical trials or to perform additional trials and the risk of failing to obtain regulatory approvals.

These risks and uncertainties include our ability to enroll patients in clinical trials, the possibility of unfavorable results of our clinical trials, the need to modify or delay our clinical trials, including on account of clinical holds placed by regulatory authorities, or to perform additional trials and the risk of failing to obtain regulatory approvals.

As a result, our product candidates and investigational therapies may never be successfully commercialized.

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In 2021, we continued to invest in and advance our R&D pipeline across our therapeutic areas.

Below is a summary of our product candidates that are in Phase 3 or registrational Phase 2 clinical trials or are pending marketing authorization review by FDA or European Medicines Agency (“EMA”).

Below is a summary of our product candidates that were in Phase 3 or registrational Phase 2 clinical trials or pending marketing authorization review by FDA or European Medicines Agency (“EMA”) as of the end of 2021.

Product Candidates in Viral Diseases

Product Candidates

Phase 3 or Phase 2/3

Remdesivir (injection)

Remdesivir for injection is being evaluated for the outpatient treatment of COVID-19 (expanded indication).

Lenacapavir, an HIV capsid inhibitor, is being evaluated as a component of a long-acting regimen for the treatment of HIV infection in heavily treatment-experienced people living with HIV.

Product Candidates Description

Regulatory Filings

Lenacapavir A New Drug Application and a Marketing Authorization Application have been filed with FDA and EMA, respectively, for lenacapavir, an HIV capsid inhibitor, as a component of a long-acting regimen for the treatment of HIV infection in heavily treatment-experienced people living with HIV.

It has been granted Breakthrough Therapy designation by FDA for this indication.

Bulevirtide (1)

Bulevirtide is being evaluated for the treatment of chronic hepatitis delta virus (“HDV”) infection.

It has been granted both Orphan Drug and Breakthrough Therapy designations by FDA for chronic HDV infection.

It has also been granted Breakthrough Therapy designation and PRIority MEdicines (“PRIME”) scheme eligibility by the European Commission for chronic HDV infection.

________________________________

(1) In December 2020, we entered into a definitive agreement to acquire MYR GmbH.

Upon closing, which is subject to regulatory clearances and other conditions, the acquisition will provide us with Hepcludex ® (bulevirtide), which was conditionally approved by the European Commission for the treatment for chronic HDV infection in July 2020.

Bulevirtide A Biologics License Application has been filed with FDA for bulevirtide for the treatment of chronic hepatitis delta virus (“HDV”) infection.

It has been granted both Orphan Drug and Breakthrough Therapy designations by FDA for this indication.

In Europe, Hepcludex ® (bulevirtide) has been granted Conditional Marketing Authorization by the European Commission and PRIority MEdicines (PRIME) scheme eligibility by the EMA as the first approved treatment in adults with chronic HDV infection with compensated liver disease.

Lenacapavir Lenacapavir is being evaluated for an HIV PrEP indication.

Program timeline is pending resolution of clinical hold placed by FDA on studies evaluating injectable lenacapavir.

Product Candidates in Inflammatory Diseases

Product Candidates

Regulatory Filing

A marketing authorization application has been filed with EMA for filgotinib, a JAK1 inhibitor, for the treatment of ulcerative colitis.

Filgotinib is being evaluated for the treatment of Crohn’s disease.

Cilofexor, an FXR agonist, is being evaluated for the treatment of primary sclerosing cholangitis.

Product Candidate

Cilofexor Cilofexor, an FXR agonist, is being evaluated for the treatment of primary sclerosing cholangitis.

Filgotinib Filgotinib, a JAK1 inhibitor, is being evaluated for the treatment of Crohn’s disease.

Product Candidates in Oncology

Product Candidates

Regulatory Filing

Axicabtagene ciloleucel

A supplemental Biologics License Application for axicabtagene ciloleucel, a CAR T cell therapy for the treatment of relapsed or refractory indolent non-Hodgkin’s lymphoma (“iNHL”), has been filed with FDA.

It has been granted Breakthrough Therapy designation by FDA for the iNHL indication.

Brexucabtagene autoleucel

Brexucabtagene autoleucel, a CAR T cell therapy, has received accelerated approval from FDA and conditional marketing authorization from the European Commission for the treatment of adult patients with relapsed or refractory mantle cell lymphoma after two or more lines of systemic therapy, including a Bruton’s tyrosine kinase inhibitor.

Conditional marketing authorization in Europe is initially valid for one year but can be extended or converted into an unconditional authorization after the submission and assessment of additional confirmatory data.

Sacituzumab govitecan-hziy

A supplemental Biologics License Application for full approval of sacituzumab govitecan-hziy, a Trop-2 directed antibody and topoisomerase inhibitor conjugate for the treatment of patients with metastatic triple-negative breast cancer (“mTNBC”) who have received at least two prior therapies, has been filed with FDA.

It has been granted Breakthrough Therapy designation by FDA for the mTNBC indication.

Sacituzumab govitecan-hziy

A supplemental Biologics License Application for accelerated approval of sacituzumab govitecan-hziy for the treatment of heavily-pretreated patients with metastatic urothelial cancer, has been filed with FDA.

Axicabtagene ciloleucel

Axicabtagene ciloleucel is being evaluated for the treatment of second line diffuse large B cell lymphoma.

Magrolimab, an anti-CD47, is being evaluated for the treatment of myelodysplastic syndrome (“MDS”).

It has been granted Breakthrough Therapy designation by FDA and PRIME scheme eligibility by the European Commission for the MDS indication.

Sacituzumab govitecan-hziy

Sacituzumab govitecan-hziy is being evaluated for the treatment of hormone receptor positive (“HR+”), human epidermal growth factor receptor 2 negative (“HER2-”), metastatic breast cancer patients who have failed at least two prior chemotherapy regimens.

Product Candidates Description

Regulatory Filings

Yescarta (axicabtagene ciloleucel) A supplemental Biologics License Application and a Type II Variation Marketing Authorization Application have been filed with FDA and EMA, respectively, for axicabtagene ciloleucel, a CAR T cell therapy for the treatment of second-line DLBCL.

A Type II Variation Marketing Authorization Application has been filed with EMA for axicabtagene ciloleucel for the treatment of relapsed or refractory FL.

Yescarta has received accelerated approval by FDA for the treatment of adult patients with relapsed or refractory FL after two or more lines of systemic therapy.

Tecartus (brexucabtagene autoleucel) A Type II Variation Marketing Authorization Application has been filed with EMA for brexucabtagene autoleucel, a CAR T cell therapy, for the treatment of adult ALL.

Tecartus has received FDA approval for the treatment of adult patients with relapsed or refractory B-cell precursor ALL.

Sacituzumab govitecan-hziy Sacituzumab govitecan-hziy, a Trop-2 directed antibody and topoisomerase inhibitor conjugate, is being evaluated for (i) hormone receptor positive (“HR+”), human epidermal growth factor receptor 2 negative (“HER2-”), metastatic breast cancer and (ii) non-small cell lung cancer (“NSCLC”) as a second-line or third-line treatment.

Magrolimab Magrolimab, an anti-CD47, is being evaluated for (i) higher risk myelodysplastic syndrome (“MDS”) as a first-line treatment and (ii) acute myeloid leukemia (“AML”) as a first-line treatment.

Program timelines are pending resolution of partial clinical holds placed by FDA on studies evaluating magrolimab.

Zimberelimab* Zimberelimab, an anti-PD-1 monoclonal antibody, is being evaluated for NSCLC as a first-line treatment.

Domvanalimab* Domvanalimab, an Fc-silent anti-TIGIT antibody, is being evaluated for NSCLC as a first-line treatment.

Registrational Phase 2

Brexucabtagene autoleucel

Brexucabtagene autoleucel, a CAR T cell therapy, is being evaluated for the treatment of adult acute lymphoblastic leukemia (“ALL”).

It has been granted Breakthrough Therapy designation by FDA for the adult ALL indication.

Brexucabtagene autoleucel

Brexucabtagene autoleucel, a CAR T cell therapy, is being evaluated for the treatment of pediatric ALL.

It has been granted Breakthrough Therapy designation by FDA for the pediatric ALL indication.

Magrolimab is being evaluated for the treatment of diffuse large B cell lymphoma.

We also seek to add to our portfolio of products and product candidates through acquisitions, in-licensing and strategic collaborations.

In 2020, we entered into 18 strategic partnerships and acquisitions to enhance our commercial portfolio and clinical pipeline across multiple therapeutic areas.

For example, the acquisition of Immunomedics, Inc.

(“Immunomedics”) added Trodelvy and other pipeline programs to our oncology portfolio.

Brexucabtagene autoleucel Brexucabtagene autoleucel is being evaluated for the treatment of pediatric ALL.

*In collaboration with Arcus Biosciences, Inc.

Collaborations and Other Arrangements of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding this collaboration.

In 2021, we also received regulatory approvals or authorizations from FDA and the European Commission to expand the indications of our products, including:

Product Regulatory Approval or Authorization

Biktarvy FDA approved a new low-dose tablet dosage form of Biktarvy for pediatric patients weighing at least 14 kg to less than 25 kg who are virologically suppressed or new to antiretroviral therapy.

Epclusa FDA approved an expansion of the pediatric indication of Epclusa for the treatment of chronic HCV infection to include pediatric patients 3 years of age and older, regardless of HCV genotype or liver disease severity.

Veklury European Commission approved a variation to the Conditional Marketing Authorization for Veklury to include adults who do not require supplemental oxygen and are at an increased risk of progressing to severe COVID-19.

Yescarta FDA granted accelerated approval of Yescarta for the treatment of adult patients with relapsed or refractory FL.

Tecartus FDA approved Tecartus for the treatment of adult patients with relapsed or refractory B-cell precursor ALL.

Trodelvy FDA granted full approval of Trodelvy for adult patients with unresectable locally advanced or metastatic TNBC.

FDA granted accelerated approval of Trodelvy for use in adult patients with locally advanced or metastatic UC.

European Commission granted marketing authorization for Trodelvy as a monotherapy indicated for the treatment of adult patients with unresectable or metastatic TNBC who have received two or more prior systemic therapies, at least one of them for advanced disease.

In addition, we seek to enhance our commercial portfolio and clinical pipeline across multiple therapeutic areas through acquisitions, in-licensing and strategic collaborations.

For example, in October 2021, we entered into a clinical trial collaboration with Merck Sharp & Dohme, Corp., a subsidiary of Merck & Co., Inc.

(“Merck”), to evaluate Trodelvy in combination with Merck’s Keytruda in patients with first-line metastatic TNBC.

In November 2021, we expanded our research collaboration with Arcus and exercised our options to three programs in Arcus’s clinical-stage portfolio, including domvanalimab, which is in Phase 2 and 3 studies in NSCLC.

Our strategic business development activity reflects our commitment to focus on transformative science, build a sustainable and diverse portfolio and position ourselves for the near-, medium- and long-term growth of our business.

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Viral Diseases:

Bulevirtide (1)

Inflammatory Diseases:

Filgotinib 2030 2030

Axicabtagene ciloleucel

1 unchanged sentence

Sacituzumab govitecan-hziy

Magrolimab 2031 2031

Zimberelimab (3)

Domvanalimab (3)

_______________________________

(1) In December 2020, we entered into a definitive agreement to acquire MYR GmbH.

Upon closing, which is subject to regulatory clearances and other conditions, the acquisition will provide us with bulevirtide.

(1) The composition of matter patent has expired in the European Union.

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Regulatory exclusivity in the United States expires in 2032.

(3) In collaboration with Arcus.

The following table shows the actual or estimated expiration dates (including patent term extensions, supplementary protection certificates and/or pediatric exclusivity where granted) in the United States and the European Union for the primary (typically compound) patents for our principal products.

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Complera/Eviplera

Hepcludex (8)

These estimated expiration dates do not include any potential additional exclusivity (e.g., patent term extensions, supplementary protection certificates or pediatric exclusivity) that has not yet been granted.

1 unchanged sentence

(1) In 2013, Gilead and Lupin Limited reached an agreement to settle a patent litigation matter related to Ranexa.

(2) In 2014, Gilead and Teva Pharmaceuticals (“Teva”) reached an agreement to settle the patent litigation concerning patents that protect emtricitabine in our Truvada and Atripla products, pursuant to which Teva was permitted to launch generic fixed-dose combinations of emtricitabine and TDF and generic fixed-dose combinations of emtricitabine, TDF and efavirenz in the United States on September 30, 2020.

(3) Supplementary protection certificates (“SPC”s) have been granted in several European countries.

The validity of these SPCs has been challenged by several generic manufacturers, many of whom launched their competing products in 2017.

(2) Applications for patent term extensions are pending in the United States and/or SPCs are pending in one or more countries in the European Union for these products.

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Regulatory exclusivity in the United States expires in 2032.

(8) In December 2020, we entered into a definitive agreement to acquire MYR GmbH.

Bulevirtide has not been approved by FDA for any use, and its safety and efficacy have not been established.

Patent Protection and Certain Challenges

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Competitors may have filed patent applications or received patents and may obtain additional patents and proprietary rights that block or compete with our products.

In addition, if competitors file patent applications covering our technology, we may have to participate in interference/derivation proceedings or litigation to determine the right to a patent.

Litigation and interference/derivation proceedings are unpredictable and expensive, such that, even if we are ultimately successful, our results of operations may be adversely affected by such events.

In addition, if competitors file patent applications covering our technology, we may have to participate in litigation, post-grant proceedings before the U.S.

Patent and Trademark Office or other proceedings to determine the right to a patent or validity of any patent granted.

Such litigation and proceedings are unpredictable and expensive, and could divert management attention from other operations, such that, even if we are ultimately successful, we may be adversely impacted.

Patents relating to pharmaceutical, biopharmaceutical and biotechnology products, compounds and processes such as those that cover our existing compounds, products and processes and those that we will likely file in the future, do not always provide complete or adequate protection.

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Commitments and Contingencies of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

See also Item 1A.

Risk Factors “Our success depends to a significant degree on our ability to obtain and defend our patents and other intellectual property rights both domestically and internationally, and to operate without infringing upon the patents or other proprietary rights of third parties.”

See also Item 1A Risk Factors “Our success depends to a significant degree on our ability to obtain and defend our patents and other intellectual property rights both domestically and internationally, and to operate without infringing upon the patents or other proprietary rights of third parties.”

Trade Secrets

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In the case of employees, the agreements provide that all inventions made by an individual while employed by us will be our exclusive property.

We cannot be certain that these parties will comply with these confidentiality agreements, that we have adequate remedies for any breach or that our trade secrets will not otherwise become known or be independently discovered by our competitors.

We cannot be certain that these parties will comply with these confidentiality agreements, that we have adequate remedies for any breach or that our trade secrets, internal know-how or technological innovation will not otherwise become known or be independently discovered by our competitors.

Under some of our R&D agreements, inventions become jointly owned by us and our corporate partners and in other cases become the exclusive property of one party.

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We own or lease manufacturing facilities to manufacture and distribute certain products and API for clinical and/or commercial uses.

These facilities are located in Foster City, San Dimas, La Verne, Oceanside and El Segundo, California;

Morris Plains, New Jersey;

Dublin and Cork, Ireland;

Hoofddorp, Netherlands;

and Edmonton, Canada.

These facilities include:

• Foster City, California:

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We utilize the facility for clinical and commercial manufacturing and processing of our cell therapy products.

• Frederick, Maryland:

We utilize the facility for clinical manufacturing and processing of our cell therapy products.

• Morris Plains, New Jersey:

We utilize the facility for commercial manufacturing and process optimization of our antibody drug conjugate products.

We utilize the facility for manufacturing for monoclonal antibody intermediate and process optimization of our antibody drug conjugate products.

• Cork and Dublin, Ireland:

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We have agreements with these third-party manufacturers that are intended to restrict them from using or revealing this technology, but we cannot be certain that these third-party manufacturers will comply with these restrictions.

For more information about our third-party manufacturers, see Item 1A.

Risk Factors “We may face manufacturing difficulties, delays or interruptions, including at our third-party manufacturers and corporate partners.”

For more information about our third-party manufacturers, see Item 1A Risk Factors “We may face manufacturing difficulties, delays or interruptions, including at our third-party manufacturers and corporate partners.”

Regulation of Manufacturing Process

The manufacturing process for pharmaceutical products is highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations.

We, our third-party manufacturers and our corporate partners are subject to current Good Manufacturing Practices, which are extensive regulations governing manufacturing processes, stability testing, record keeping and quality standards as defined by FDA and the European Medicines Agency.

The manufacturing process for pharmaceutical products is highly regulated and regulators may shut down manufacturing facilities that they observe do not comply with regulations.

We, our third-party manufacturers and our corporate partners are subject to current Good Manufacturing Practices (“GMP”), which are extensive regulations governing manufacturing processes, stability testing, record keeping and quality standards as defined by FDA and the EMA.

Similar regulations are in effect in other jurisdictions.

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We attempt to manage the risks associated with our supply chain by inventory management, relationship management and evaluation of alternative sources when feasible.

For more information, see Item 1A.

Risk Factors “We may not be able to obtain materials or supplies necessary to conduct clinical trials or to manufacture and sell our products, which could limit our ability to generate revenues.”

For more information, see Item 1A Risk Factors “We may not be able to obtain materials or supplies necessary to conduct clinical trials or to manufacture and sell our products, which could limit our ability to generate revenues.”

Human Capital

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Gilead’s key priorities for human capital management include inclusion and diversity, health and safety, total rewards, employee development and engagement.

Our Board’s Compensation and Talent Committee oversees our overall human capital management.

The Compensation and Talent Committee of our Board of Directors oversees our overall human capital management.

Inclusion & Diversity

Inclusion is a Gilead core value.

We are committed to advancing inclusion and diversity (“I&D”) in our workforce and have established a Global Diversity Council responsible for governance of these matters, tracking progress on our goals and promoting a culture of inclusion.

The Global Diversity Council is chaired by our Chairman and Chief Executive Officer.

In 2020, Gilead implemented multiple programs to train managers on I&D topics to build awareness and drive inclusive behaviors.

Our employee resource groups (“ERGs”) support diverse employees and aim to raise awareness of different cultures within the workplace, cultivate diversity as a business strength and support Gilead’s talent acquisition strategy to source, attract and recruit diverse candidates.

Inclusion is a Gilead core value, and we believe building an inclusive and diverse workforce is critical to enabling Gilead’s mission.

Our Global Inclusion and Diversity Council is responsible for governance of these matters, tracking progress on our goals and promoting a culture of inclusion.

The Global Inclusion and Diversity Council is chaired by our Chairman and Chief Executive Officer and includes members of our leadership team.

In 2020, we introduced our Advancing Black Leadership Strategy, a multi-year initiative that outlines our commitments to create internal and external pipelines for diverse talent and to build awareness, capabilities and accountability among our people managers.

As part of this strategy, we set clear targets for representation within our overall workforce and executive populations, including goals to increase the percentage of female, Black and Hispanic employees with well-defined annual targets through 2025.

Gilead also implemented multiple programs to train managers on inclusion and diversity topics, and created strategies and initiatives focused on attracting, developing and retaining diverse talent and driving an inclusive culture in our workplace, which organizational leaders were required to regularly review starting in 2021.

In addition, our employee resource groups (“ERGs”) support diverse employees and aim to raise awareness of different cultures within the workplace, cultivate diversity as a business strength and support Gilead’s talent acquisition strategy to source, attract and recruit diverse candidates.

Executive sponsors and leaders of our ERGs contribute to the advancement of our inclusion and diversity commitments through service on our Global Inclusion and Diversity Council.

We believe Gilead’s inclusive and diverse workforce is the foundation for innovation and productivity.

Gilead’s commitment to equal employment opportunity furthers its efforts to cultivate and celebrate an equitable culture of belonging.

At December 31, 2020, Gilead had approximately 13,600 employees, and Gilead’s global workforce was approximately 52% female and 48% male.

As of December 31, 2021, Gilead had approximately 14,400 employees, and Gilead’s global workforce was approximately 52% female and 48% male.

Additionally, women represented 34% of Gilead’s leadership (defined as vice president level and above).

In the U.S., based on our employees’ voluntary self-identification, our workforce was 41% White, 38% Asian, 11% Hispanic, 6% Black and 4% Other.

In the United States, based on our employees’ voluntary self-identification, our workforce was 40% White, 38% Asian, 11% Hispanic, 7% Black and 4% Other.

Health and Safety

Gilead is committed to providing a safe, healthy and secure workplace for its employees.

We have an environmental health and safety policy and maintain various compliance programs to support this commitment.

Gilead is committed to providing a workplace for its employees that promotes health, safety, wellness and productivity.

We have a workplace safety, training and security program together with various compliance protocols to support this commitment.

We routinely train and educate our employees on workplace safety and security.

During 2020, due to the COVID-19 pandemic, most Gilead sites required flexible location employees to work from home, while employees who needed to be physically present for their positions (such as laboratory technicians) continued to work at Gilead sites.

We implemented site enhancements and risk protocols, including health screenings, COVID-19 testing, reconfiguration of work and common spaces to allow for social distancing, in our effort to support the safe occupancy of our sites.

In response to the COVID-19 pandemic, most Gilead sites required flexible location employees to work from home, while employees who needed to be physically present for their positions (such as laboratory technicians) continued to work at Gilead sites.

In the fourth quarter of 2021, Gilead transitioned to a return-to-site phase for our U.S.

flexible location employees.

During the pandemic, we implemented job site enhancements and risk protocols, including health screenings, COVID-19 testing and vaccine requirements, reconfiguration of work and common spaces to allow for physical distancing, in our effort to support the safe occupancy of our sites.

Gilead also maintains a robust contact tracing and notification process for any employee who reports COVID-19 infection.

To date, we have not identified any cases of viral transmission of COVID-19 in our workplace.

We continue to monitor the state of the pandemic and we remain committed to maintaining a work environment that promotes the health, safety and productivity of our workforce.

Total Rewards

Gilead’s compensation and benefits programs are designed to help attract, cultivate and retain the industry’s most talented workforce.

Our Total Rewards program (which varies by country) includes competitive base salary and incentive compensation, stock awards, an employee stock purchase plan, a 401(k) savings plan with a company match that vests immediately, health and welfare and other valuable benefits, such as flexible spending accounts, paid time off, family leave, family care resources, adoption and surrogacy assistance, employee assistance programs, global wellness reimbursement and tuition assistance, among many others.

Gilead’s compensation and benefits programs are designed to help attract, develop and retain the industry’s most talented workforce.

Our Total Rewards program (which varies by country) includes competitive base salary and incentive compensation, stock awards, an employee stock purchase plan, a 401(k) savings plan with a company match that vests immediately, health and welfare and other valuable benefits, such as flexible work arrangements, flexible spending accounts, paid time off, family leave, family care resources, fertility, adoption and surrogacy assistance, student loan repayment and tuition assistance, employee assistance programs, global wellbeing reimbursement and tuition assistance, among many others.

Each year, we reassess our Total Rewards package to confirm whether it offers benefits and incentives that align with our total reward philosophy.

In 2020, in response to the COVID-19 pandemic, we implemented a number of temporary COVID-19-specific benefits, such as cost reimbursements for essential home office equipment, monthly reimbursements for childcare and home-schooling costs, and a special pay enhancement for our physical location dependent workers who are required to be onsite at Gilead due to the nature of their role, to support our workforce during the unique challenges presented by the pandemic.

We are committed to address pay equity.

We are a pay-for-performance company and are committed to addressing pay equity.

Our employee salaries are informed by market-based ranges and are assessed annually through performance and career development reviews.

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Employee Development and Engagement

Gilead offers a number of professional, management and leadership development training programs to help our employees develop cross-functional skills and tools to grow their careers.

Employee development and engagement maximizes the potential and performance of each member of our workforce and is critical to achieving our business goals.

Gilead offers a number of internal and external professional, management and leadership development training programs to help our employees develop technical, cross-functional and leadership skills and tools to grow their careers.

In addition, employees can receive reimbursement for tuition expenses incurred while pursuing undergraduate, graduate or certificate courses at an accredited college or university.

As we make changes to pursue our ambition of becoming an employer of choice in our industry, it is important that we consider the input of employees.

Our listening strategy helps to gather employee input and measure our progress.

During 2020, we conducted several global surveys to assess and improve employee retention and engagement, gather feedback and take actions to address areas of employee concern.

Employee responses from these surveys were key to determining meaningful benefits related to the COVID-19 pandemic as well as the direction of our culture going forward.

As we strive to be the employer of choice in our industry, our listening strategy gathers input from our employees to shape our engagement strategies and programs and measure our progress.

In addition to ongoing internal and external data collection, we conducted a large-scale review of the employee experience in 2021 with an employee survey.

The results of this survey played a key role in determining the direction of our culture as well as the company’s broader response to the continuing COVID-19 pandemic, including the meaningful benefits we provided to employees and our approach to flexible work arrangements.

We believe our flexible work program positions us to be competitive for talent and support employee well-being while also creating the collaborative environment and connections that fuel innovation.

Environmental, Social and Governance (“ESG”)

Gilead has also built a corporate social responsibility program to continue to execute its mission of providing lifesaving medicines in areas of unmet need.

Additional information about this program and ESG highlights are available in Gilead’s 2019 year in review under Gilead’s website at https://www.gilead.com/news-and-press/annual-report/year-in-review-2019.

Investing in corporate responsibility is core to our business strategy and reflects our values of accountability, inclusion, teamwork, excellence and integrity.

This is in service to our mission to advance global health by providing innovative therapeutics in areas of unmet need in a way that is socially responsible and environmentally sustainable.

Gilead’s ESG programs reflect this commitment to our stakeholders.

ESG strategy and performance are overseen by the Nominating and Corporate Governance Committee of its Board of Directors, and managed by a Corporate Responsibility Committee comprised of leaders from key departments across our company.

The Corporate Responsibility Committee is responsible for reviewing material ESG issues and integrating them into our overall business strategy and operations.

Additional information about this program and ESG highlights are available in Gilead’s 2020 year in review under Gilead’s website at www.gilead.com/news-and-press/annual-report/year-in-review-2020.

Our ESG goals are aspirational and may change.

Statements regarding these goals and related initiatives are not guarantees or promises that they will be met.

Seasonality of Operations

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Several other factors, including government budgets, annual grant cycles for federal and state funds, the COVID-19 pandemic, and other buying patterns, also could impact the product sales recorded in a particular quarter.

For more information, see Item 1A.

Risk Factors “We face challenges in accurately forecasting sales because of the difficulties in predicting demand for our products and fluctuations in purchasing patterns or wholesaler inventories.”

For more information, see Item 1A Risk Factors “We face challenges in accurately forecasting sales because of the difficulties in predicting demand for our products and fluctuations in purchasing patterns or wholesaler inventories.”

Government Regulation

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Any legal and regulatory changes may impact our operations in the future.

A country’s regulatory agency, such as FDA in the United States and the European Medicines Agency and European Commission for the European Union, as well as the national authorities of the European Union Member States, must approve a drug before it can be sold in the respective country or countries.

A country’s regulatory agency, such as FDA in the United States and the EMA and European Commission for the European Union, as well as the national authorities of the European Union Member States, must approve a drug before it can be sold in the respective country or countries.

The general process for drug approval in the United States is summarized below.

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These three phases, which are subject to considerable regulation, are as follows:

The drug candidate is given to a small number of healthy human control subjects or patients suffering from the indicated disease, to test for safety, dose tolerance, pharmacokinetics, metabolism, distribution and excretion.

The drug candidate is given to a limited patient population to determine the effect of the drug candidate in treating the disease, the best dose of the drug candidate, and the possible side effects and safety risks of the drug candidate.

The drug candidate is given to a small number of healthy human control subjects or patients suffering or at risk from the indicated disease, to test for safety, dose tolerance, pharmacokinetics, metabolism, distribution and excretion.

The drug candidate is given to a limited patient population to determine the effect of the drug candidate in treating or preventing the disease, the best dose of the drug candidate, and the possible side effects and safety risks of the drug candidate.

It is not uncommon for a drug candidate that appears promising in Phase 1 clinical trials to fail in the more rigorous and extensive Phase 2 clinical trials.

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FDA Approval Process

When we believe that the data from our clinical trials show an acceptable benefit-risk profile, we submit the appropriate filing, usually in the form of a New Drug Application (“NDA”), Biologics License Application (“BLA”) or supplemental application, with FDA seeking approval to sell the drug candidate for a particular use.

When we believe that the data from our clinical trials show an acceptable benefit-risk profile, we submit the appropriate filing, usually in the form of a New Drug Application, Biologics License Application or supplemental application, with FDA, seeking approval to sell the drug candidate for a particular use.

At FDA’s discretion, FDA may hold a public hearing where an independent advisory committee of expert advisors asks additional questions and makes recommendations regarding the drug candidate.

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If FDA agrees that the drug has met the required level of safety and efficacy for a particular use, it will approve the application and allow us to sell the drug in the United States for that use.

It is not unusual, however, for FDA to decline to approve an application because it believes that the drug candidate is not safe enough or efficacious enough (i.e.

does not have an appropriate benefit versus risk profile) or because it does not believe that the data submitted is reliable or conclusive.

At any point in this process, the development of a drug candidate can be stopped for a number of reasons including safety concerns and lack of treatment benefit.

It is not unusual, however, for FDA to decline to approve an application because it believes that the drug candidate is not safe enough or efficacious enough (i.e., does not have an appropriate benefit-risk profile) or because it does not believe that the data submitted is reliable or conclusive.

At any point in this process, the development of a drug candidate can be stopped for a number of reasons, including safety concerns, lack of treatment benefit or manufacturing issues.

We cannot be certain that any clinical trials that we are currently conducting or any that we conduct in the future will be completed successfully or within any specified time period.

We may choose, or FDA may require us, to delay or suspend our clinical trials at any time if it appears that patients are being exposed to an unacceptable health risk or if the drug candidate does not appear to have sufficient treatment benefit.

FDA may also require Phase 4 non-registrational studies to explore scientific questions to further characterize safety and efficacy during commercial use of our drug.

Even after approving a drug, FDA may also require Phase 4 non-registrational studies to explore scientific questions to further characterize safety and efficacy during commercial use of our drug.

FDA may also require us to provide additional data or information, improve our manufacturing processes, procedures or facilities or may require extensive surveillance to monitor the safety or benefits of our product candidates if it determines that our filing does not contain adequate evidence of the safety and benefits of the drug.

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In 2014, the EU legislator adopted Regulation (EU) No 536/2014 to replace Directive 2001/20/EC and to introduce a coordinated procedure for authorization of clinical trials.

This Regulation is expected to apply in 2021 or 2022.

Marketing authorization holders, manufacturers, importers, wholesalers and distributors of medicinal products placed on the market in the EU are required to comply with a number of regulatory requirements including pharmacovigilance, Good Manufacturing Practices compliance and the requirement to obtain manufacturing, import and/or distribution licenses issued by the competent authorities of the EU Member States.

This Regulation entered into application in January 2022.

Marketing authorization holders, manufacturers, importers, wholesalers and distributors of medicinal products placed on the market in the EU are required to comply with a number of regulatory requirements including pharmacovigilance, GMP compliance and the requirement to obtain manufacturing, import and/or distribution licenses issued by the competent authorities of the EU Member States.

Failure to comply with these requirements may lead to the imposition of civil, criminal or administrative sanctions, including suspension of marketing or manufacturing authorizations.

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Government health authorities, private health insurers and other organizations generally provide reimbursement.

In the United States, the European Union and other significant or potentially significant markets for our products and product candidates, government authorities and private payers are increasingly attempting to limit or regulate the price of medical products and services.

In the United States, the European Union and other significant or potentially significant markets for our products and product candidates, government authorities and third-party payers are increasingly attempting to limit or regulate the price of medical products and services.

A significant portion of our sales of the majority of our products are subject to substantial discounts from their list prices, including rebates we may be required to pay to Medicaid agencies or discounts we may be required to pay to 340B covered entities.

As a result, the price increases we implement from time to time on certain products may have a limited effect on our product sales in certain markets.

As a result, the price increases we implement from time to time on certain products may have a limited effect on our net product sales in certain markets.

In addition, standard reimbursement structures may not adequately reimburse for innovative therapies.

As our products mature, private insurers and government payers often reduce the amount they will reimburse providers, which increases pressure on us to reduce prices.

As our products mature, pricing pressures from private insurers and government payers often result in a reduction of the net product prices.

Further, as new branded or generic products are introduced into major markets, our ability to maintain pricing and market share may be affected.

For more information, see Item 1A.

Risk Factors “Our existing products are subject to reimbursement pressures from government agencies and other third parties, required rebates and other discounts on our products and other pricing pressures” and “We face challenges in accurately forecasting sales because of the difficulties in predicting demand for our products and fluctuations in purchasing patterns or wholesaler inventories.”

Patient Assistance Programs

Recently, there has been enhanced scrutiny of company-sponsored patient assistance programs, including co-pay assistance programs and manufacturer donations to third-party charities that provide such assistance.

There has also been enhanced scrutiny by governments on reimbursement support offerings, clinical education programs and promotional speaker programs.

If we, or our agents and vendors, are deemed to have failed to comply with laws, regulations or government guidance in any of these areas, we could be subject to criminal and civil sanctions.

Any similar violations by our competitors could also negatively impact our industry reputation and increase scrutiny over our business and our products.

For more information, see Item 1A Risk Factors “Our existing products are subject to reimbursement pressures from government agencies and other third parties, required rebates and other discounts on our products and other pricing pressures.” and “We face challenges in accurately forecasting sales because of the difficulties in predicting demand for our products and fluctuations in purchasing patterns or wholesaler inventories.”

Health Care Fraud and Abuse Laws;

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False claims laws generally prohibit anyone from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment by federal and certain state payers (including Medicare and Medicaid), or knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim.

Due to the breadth of the statutory provisions and the attention being given to them by law enforcement authorities, our sales, marketing, patient support and medical activities may be subject to scrutiny under these laws.

In addition, the FDA regulates written and verbal communications about our products.

In addition to federal law, states also have consumer protection and false claims laws.

Due to the breadth of the statutory provisions and the attention being given to them by law enforcement authorities, our sales, marketing, patient support, medical, clinical and public affairs activities may be subject to scrutiny under these laws.

For example, recently there has been enhanced scrutiny by government enforcement authorities of company-sponsored patient assistance programs, including co-pay assistance programs and manufacturer donations to third-party charities that provide such assistance, reimbursement support offerings, clinical education programs and promotional speaker programs.

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Violations of fraud and abuse laws or anti-bribery laws may be punishable by criminal and/or civil sanctions, including fines and civil monetary penalties, as well as the possibility of exclusion from federal health care programs (including Medicare and Medicaid).

Violations can also lead to the imposition of a Corporate Integrity Agreement or similar government oversight program.

Violations can also lead to the imposition of a Corporate Integrity Agreement or similar government oversight program, even if we disagree with the government’s perspective that we have violated any rules or guidance.

Any similar violations by our competitors could also negatively impact the reputation of our industry and increase governmental and public scrutiny over our business and our products.

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federal and state governments continue to propose and pass legislation designed to regulate the healthcare industry, including legislation that seeks to indirectly or directly regulate pharmaceutical drug pricing.

For more information, see Item 1A.

Risk Factors “We are impacted by evolving laws, regulations and legislative or regulatory actions applicable to the health care industry.”

For more information, see Item 1A Risk Factors “We are impacted by evolving laws, regulations and legislative or regulatory actions applicable to the health care industry.”

We are subject to a number of laws and regulations that require compliance with federal, state, and local regulations for the protection of the environment.

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Therefore, we file periodic reports, proxy and information statements and other information with the SEC.

The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

The mailing address of our headquarters is 333 Lakeside Drive, Foster City, California 94404, and our telephone number at that location is 650-574-3000.

The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

Our website is www.gilead.com.

Through a link on the “Investors” page of our website (under “SEC Filings” section), we make available the following filings free of charge as soon as reasonably practicable after they are electronically filed with or furnished to the SEC:

Through a link on the “Investors” page of our website (under the “SEC Filings” section), we make available the following filings free of charge as soon as reasonably practicable after they are electronically filed with or furnished to the SEC:

our Annual Reports on Form 10-K;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business