8-KMaterial AgreementsExhibits & Filings

GILEAD SCIENCES, INC. 8-K Report, Material Agreement (Dec 22, 2010)

Filed December 22, 2010For Securities:GILD

Summary

Gilead Sciences, Inc. (GILD) filed an 8-K on December 22, 2010, detailing two significant corporate actions. The company's Irish subsidiary entered into a multi-year manufacturing supply agreement for bulk tenofovir disoproxil fumarate, the active ingredient in key Gilead products like Viread, Truvada, and Atripla. This agreement, spanning 2011 through 2013, ensures the supply of a crucial component for Gilead's established antiviral therapies. Furthermore, Gilead announced an Agreement and Plan of Merger to acquire Arresto Biosciences, Inc., a privately held, development-stage biotechnology company. The acquisition is valued at $225 million in cash, with potential future milestone payments tied to sales performance. This strategic move suggests Gilead is expanding its pipeline and investing in future growth opportunities, with the transaction expected to close in the first quarter of 2011.

Key Highlights

  • 1Gilead Sciences, Inc. entered into a manufacturing supply agreement with Ampac Fine Chemicals LLC for bulk tenofovir disoproxil fumarate for the years 2011-2013.
  • 2The supply agreement ensures the availability of the active pharmaceutical ingredient for key Gilead drugs: Viread, Truvada, and Atripla.
  • 3Gilead announced an Agreement and Plan of Merger to acquire development-stage biotechnology company Arresto Biosciences, Inc.
  • 4The acquisition of Arresto Biosciences is valued at $225 million in cash.
  • 5The deal includes potential future payments to Arresto based on achieving certain sales levels.
  • 6Gilead will assume Arresto's outstanding stock options, converting them into options for Gilead common stock.
  • 7The acquisition is expected to close in the first quarter of 2011 and does not require Gilead shareholder approval.

Frequently Asked Questions

The supply agreement is significant because it secures the supply of bulk tenofovir disoproxil fumarate, a critical active pharmaceutical ingredient for Gilead's widely used antiviral drugs such as Viread, Truvada, and Atripla. This agreement, covering 2011 through 2013, provides assurance for the continued production and availability of these important medications.

Arresto Biosciences, Inc. is a privately held, development-stage biotechnology company. While the filing does not specify Arresto's exact stage or pipeline, its acquisition suggests Gilead is looking to enhance its product pipeline and invest in future growth opportunities, likely through Arresto's research and development assets.

Gilead will acquire Arresto Biosciences for $225 million in cash. A portion of this amount will be held in escrow to cover potential indemnity claims. Additionally, there are provisions for potential future payments to Arresto contingent upon the achievement of specific sales targets, indicating a performance-based component to the deal.

Gilead currently expects the acquisition of Arresto Biosciences to close in the first quarter of 2011, subject to the satisfaction or waiver of customary closing conditions outlined in the merger agreement.