Gilead Sciences is a biopharmaceutical company headquartered in Foster City, California. It has a diverse portfolio of pharmaceutical products focused on HIV, hepatitis C, cardiovascular, and oncology. Gilead's key products include HIV drugs Atripla, Truvada, Complera, and Stribild, which accounted for over 40% of sales in 2015. Its hepatitis C drugs Sovaldi and Harvoni have been blockbuster successes, with Harvoni sales projected to reach $11.6 billion in 2015. Gilead has a strong pipeline and continues to invest heavily in research and development. It has significant cash flows and profit margins, with projected net income margins over 45% through 20

1. CALIFORNIA STATE UNIVERSITY (EAST BAY) GROUP 2
CFA INSTITUTE RESEARCH REPORT 2015
MARCH 5, 2015
RANDY ACOSTA ▪ ETIENNE BOWIE ▪ DEEPIKA KARNIK ▪ MATTHEW PHILLIPS ▪ BOHDAN STRYUK

2. Market Profile
52-Wk Price Range $63.25 - $116.83
Avg. Daily Vol. 17,196,000
Beta 0.91
Stock Price Growth 25.5% (2014)
Market Cap. 183 Billion
Shares Outstanding 1.5 Billion
EPS 7.35
P/E 13.91
ROE 87%
EBITDA $16.17 Billion
Profit Margin 65%
Institutional
Holdings
94%
Source: Team Estimates, Yahoo Finance
2
Investment Summary Product Portfolio IO AND CP Investment Risk Financial Analysis Sensitivity Analysis Conclusion
Key Performance Indicators
Company Fiscal Gross EBITDA EBIT Pretax Net
Name Period Margin Margin Margin Margin Margin
Gilead Sciences 09/30/2014 82.5% 63.4% 59.1% 56.5% 45.3%
Industry Average 73.0% 33.5% 26.2% 20.6% 16.2%
GlaxoSmithKline 09/30/2014 68.6% 29.3% 25.5% 20.9% 17.6%
Pfizer 09/28/2014 72.9% 42.5% 30.9% 27.0% 20.9%
Roche Hldg DR 12/31/2014 72.4% 34.1% 28.6% 26.4% 19.7%
AstraZeneca 09/30/2014 73.8% 27.4% 16.1% 3.9% 3.6%
AbbVie 09/30/2014 77.1% 34.2% 30.1% 24.7% 18.9%
Source: Gilead Sciences Reports
46%
48%
5% 1%
Gilead Sales by Disease HIV
Hep C
Cardiovascular
Other
Source: Team Research

3. 3
Investment Summary Product Portfolio IO AND CP Investment Risk Financial Analysis Sensitivity Analysis Conclusion
TICKER: GILD
NASDAQ
Industry: Biotechnology
Headquarters: Foster City, CA
30
50
70
90
110
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
GILD Historical Prices 2010-2015
Closing Price
Current Price
Target Price
11.86% upside
$114.78
$102.61
TARGET
PRICE $114.78
CURRENT
PRICE $102.61
Gilead Sciences Inc.
BUY
Recommendation
11.86%
UPSIDE
Market Leader in HIV Sector
Market Leader in Hepatitis Sector
Best in Class Regimens
Best in class pharmaceutical
regimens
Robust pipeline of upcoming
drugs
Globally increasing demand for
life-threatening diseases
(focusing on HIV, Hepatitis,
Oncology)
Sound financial position
COMPANY FACTS
MAIN
GROWTH DRIVERS

4. 4
Investment Summary Product Portfolio IO AND CP Investment Risk Financial Analysis Sensitivity Analysis Conclusion
1987
1992
1996
2015
Establishment of
Gilead Sciences
IPO on NYSE
Change in
Management
and Corporate
Strategy
What is happening now
and will be next?
14 Mergers and Acquisitions
Since 1999
Diversification of Portfolio of Drugs
International Expansion
ManagementTeam
John C. Martin
PhD
Chairman &
CEO
John C.
Milligan PhD
President &
COO
John
HcHutchison MD
Clinical
Research
Norbert W.
Bischofberger
VP R&D
CSO
Robin L.
Washington
Vice President
CFO
Gregg H. Alton
Vice President
Corporate and
Medical Affairs
Andrew Cheng
MD PhD
HIV Therapeutics
and Dev Ops
Paul R. Carter
Vice President
Commercial
Operations

5. FDA Approval
5
HIV PORTFOLIO
IO AND CP Investment Risk Financial Analysis Sensitivity Analysis Conclusion
Atripla
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
FDA Approval
Truvada
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
FDA Approval
Complera
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
Patent Expiration Date:
Patent Expiration Date:
Patent Expiration Date:
Investment Summary Product Portfolio
FDA Approval
Striblid
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
Patent Expiration Date:
Sales of
Product
(2015)E
Millions
FDA Approval
Viread
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
Patent Expiration Date:
$3,301
$3,540
$1,427
$1,375
$1,122
42.02%
Percent Overall
Sales 2014 (%)Atripla Truvada Complera Striblid Viread
14.17% 13.65% 5.01% 4.89% 4.30%
2019
2019
2020
2018
2018

6. FDA Approval
6
HIV PORTFOLIO
IO AND CP Investment Risk Financial Analysis Sensitivity Analysis Conclusion
Tybost
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
FDA Approval
Vitekta
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
Patent Expiration Date:
Patent Expiration Date:
Investment Summary Product Portfolio
$10.1
$8.2
Both HIV drugs were approved in Q3 2014
2029
2024
Sales of
Product
(2015) E
Millions
30.61%
32.83%
13.23%
12.76%
10.40%
0.09% 0.08%
Sales HIV Products 2015E
Atripla
Truvada
Complera
Striblid
Viread
Tybost
Vitekta
Expected
Sales
from HIV
portfolio:
$10,783 M
(2015)E

7. 7
HEPATITIS PORTFOLIO
FDA Approval
Sovaldi
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
FDA Approval
Harvoni
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
Patent Expiration Date:
Patent Expiration Date:
$6,996
$11,627
IO AND CP Investment Risk Financial Analysis Sensitivity Analysis ConclusionInvestment Summary Product Portfolio
Expected
Sales
from HEP
portfolio:
$18,623 M
(2015)E
All Other Portfolios
Harvoni
2028
2029
Sales of
Product
(2015) E
Millions
Sovaldi Highlights
• Record Sales
• Cure Rate
• Interferon/Ribavirin Complements
Harvoni Highlights
• Lowered Treatment Time
• Higher Cure Rate
• No Complements
43%
9%
48%
2014
Sovaldi
22%
37%
41%
2015E

8. 8
CARDIOVASCULAR & ONCOLOGY PORTFOLIOS
FDA Approval
Letairis
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
FDA Approval
Ranexa
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
FDA Approval
Zydelig
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
Patent Expiration Date:
Patent Expiration Date:
Patent Expiration Date:
$536
$561
$541
2015
2019
2023
Sales of
Product
(2015) E
Millions
IO AND CP Investment Risk Financial Analysis Sensitivity Analysis ConclusionInvestment Summary Product Portfolio
4.65%
Percent Overall Sales
2014 (%)
Letairis Ranexa Zydelig
2.50% 2.14% 0.01%
5.23%
Percent Overall Sales
2015E (%)
Letairis Ranexa Zydelig
1.71% 1.79% 1.73%
• GILD’s first entry into the Oncology
market
• Treats Chronic Lymphocytic Leukemia
• Effectiveness over competing drugs
• Potentially serious side-effects
Facts on Zydelig
Expected Sales from
Other portfolios: $1,638 M (2015)E

9. 9
IO AND CP Investment Risk Financial Analysis Sensitivity Analysis ConclusionInvestment Summary Product Portfolio
Pipeline Products
Vedroprevir
GS-4774
GS-9620
Tenofovir Alafenamide
Simtuzumab
Entospletinib
Momelotinib
Idelalisib
GS-4059
GS-4997
GS-6615
Simtuzumab
GS-5806
Gilead Pipeline Products
Phase III Phase II
FDA Approval
TAF
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
FDA Approval
Simtuzmab
Phase I Phase II Phase III
Pre-Approval / Clinical Stage Clinical Stage
Expected Approval:
Expected Approval:
$300
Q3 2015
3 year window
Sales of
Product
(2015) E
Millions
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
P1 to P2 P2 to P3 P3 to
NDA/BLA
NDA/BLA to
Approval
Industry Phase LOA
Gilead Phase LOA
Industry Phase Success
Gilead Phase Success

10. 10
Product Portfolio Investment Risk Financial Analysis Sensitivity Analysis Conclusion
Main Competitive Forces from the Industry
New and Superior
Drugs Entering
The Markets
Rival Drugs
Eroding Gilead’s
Profits
Bargaining Power
of Consumers
Improved and
Efficient R&D
Across the
Industry
Increasing
Diversification Into
Biologics Throughout
the Industry
Competitive
Environment
Of Gilead
Sciences Inc.
Investment Summary IO AND CP

11. 11
Product Portfolio Investment Risk Financial Analysis Sensitivity Analysis ConclusionInvestment Summary IO AND CP
Demand for Pharmaceuticals
Demand Analysis
Country Population HBV HCV HIV GDPPer Capita
United States 320,334,000 1,601,670 5,766,012 1,922,004 53,041.98
Canada 35,675,834 178,379 35,676 107,028 51,958.38
Japan 127,020,000 2,540,400 2,921,460 127,020 36,654.00
European Union 507,416,607 7,103,832 2,537,083 2,943,016 35,438.49
South Korea 50,423,955 6,050,875 857,207 50,424 33,791.00
Russia 146,270,033 7,313,502 2,925,401 1,462,700 14,611.70
Brazil 203,836,000 4,076,720 5,299,736 6,115,080 11,208.08
Mexico 121,005,815 1,210,058 847,041 242,012 10,307.28
China 1,368,040,000 164,164,800 41,041,200 1,368,040 6,807.43
India 1,266,430,000 37,992,900 22,795,740 3,799,290 1,498.87
Africa (Developed)** 359,865,000 7,197,300 7,197,300 2,159,190 1,722.92
TOTALS / AVGs 4,506,317,244 239,430,436 92,223,855 20,295,804
World Bank, IMF, CIA** This includes Libya, Mauritus, Seychelles, Tunisia, Algeria, Botsw ana,
Egypt, Gabon, South Africa, Cape Verde, Namibia, Morocco, Ghana,
Democratic Republic of Congo, Zambia, Sao Tome and Principe, Equatorial
Guinea
Infected Population

12. 12
Product Portfolio Financial Analysis Sensitivity Analysis ConclusionInvestment Summary
1. Risk in HCV Portfolio
2. Patent Expirations
3. Risks Associated with R&D
4. Risks with Foreign
Currency Exchange Rates
5. Litigation
6. Intellectual Property Risks
Probability
HIGHMIDLOW
LOW MID HIGH
Impact
Investment Risk Matrix
1
2
3
4
5
6
IO AND CP Investment Risk

13. 13
Product Portfolio IO AND CP Investment Risk Sensitivity Analysis ConclusionFinancial AnalysisInvestment Summary
Gilead Sciences Inc. (GILD)
Income Statement (Actual and Forecasted)
Figures in USD Thousands 2010 2011 2012 2013 2014 2015 F 2016 F 2017 F 2018 F 2019 F 2020 F 2021 F 2022 F 2023 F 2024 F
Gilead SEC 10-K & Q: 2012, 2013, 2014
Revenue:
Product sales 7,389,921 8,102,359 9,398,371 10,803,695 24,474,000 28,901,560 30,346,638 30,650,105 30,343,604 27,885,772 26,212,625 24,901,994 23,656,894 22,474,050 21,350,347
Royalty revenues 545,970 268,827 290,523 383,849 401,216 473,800 497,490 502,464 497,440 457,147 429,718 408,232 387,821 368,430 350,008
Contract and other 13,529 14,199 13,623 14,144 14,784 17,458 18,331 18,515 18,330 16,845 15,834 15,042 14,290 13,576 12,897
Total revenues 7,949,420 8,385,385 9,702,517 11,201,688 24,890,000 29,392,818 30,862,459 31,171,084 30,859,373 28,359,764 26,658,178 25,325,269 24,059,006 22,856,055 21,713,253
Cost and Expenses:
Cost of goods sold 1,869,876 2,124,410 2,471,363 2,858,502 3,788,000 7,348,205 7,715,615 7,792,771 7,714,843 7,089,941 6,664,544 6,331,317 6,014,751 5,714,014 5,428,313
Research and development expenses 1,072,930 1,229,151 1,759,945 2,119,756 2,854,000 3,300,000 3,816,988 4,416,256 5,109,608 5,911,816 6,839,971 7,913,847 9,156,321 10,593,863 12,257,100
Selling, general, and administrative expenses 1,044,392 1,241,983 1,461,034 1,699,431 2,983,000 4,268,195 4,481,605 4,526,421 4,481,157 4,118,183 3,871,092 3,677,537 3,493,661 3,318,978 3,153,029
Total costs and expenses 3,987,198 4,595,544 5,692,342 6,677,689 9,625,000 14,916,400 16,014,208 16,735,447 17,305,608 17,119,940 17,375,608 17,922,702 18,664,733 19,626,854 20,838,441
(EBIT) Income from operations 3,962,222 3,789,841 4,010,175 4,523,999 15,265,000 13,863,128 14,556,284 14,701,847 14,554,828 13,375,887 12,573,334 11,944,667 11,347,434 10,780,062 10,241,059
Interest expense -108,961 -205,418 -360,916 -306,894 -412,000 - - - - - - - - - -
Other income (expense), net 60,287 66,581 37,279 8,886 3,000 - - - - - - - - - -
(EBT) Income before provision for income taxes 3,913,548 3,651,004 3,686,538 4,225,991 14,856,000 13,863,128 14,556,284 14,701,847 14,554,828 13,375,887 12,573,334 11,944,667 11,347,434 10,780,062 10,241,059
Provision for income taxes 1,023,799 861,945 1,038,381 1,150,933 2,797,000 2,701,861 2,836,954 2,865,324 2,836,670 2,606,900 2,450,486 2,327,962 2,211,564 2,100,986 1,995,936
Net income 2,889,749 2,789,059 2,648,157 3,075,058 12,059,000 11,161,266 11,719,330 11,836,523 11,718,158 10,768,987 10,122,848 9,616,705 9,135,870 8,679,077 8,245,123
Net loss attributable to noncontrolling interest 11,508 14,578 17,967 17,522 42,000 51,172 53,731 54,268 53,725 49,374 46,411 44,091 41,886 39,792 37,802
Net income attributable to Gilead 2,901,257 2,803,637 2,666,124 3,092,580 12,101,000 11,212,438 11,773,060 11,890,791 11,771,883 10,818,361 10,169,259 9,660,796 9,177,756 8,718,868 8,282,925
Net income per share attributable to Gilead common stockholders---basic 1.69 1.81 1.76 2.02 7.95 7.17 7.67 7.76 7.66 7.03 6.60 6.29 5.97 5.67 5.38
Shares used in per share calculation---basic 1,712,120 1,549,806 1,514,621 1,528,620 1,522,000 1,563,745 1,535,650 1,532,835 1,536,503 1,538,085 1,541,322 1,536,877 1,537,122 1,537,981 1,538,277
Net income per share attributable to Gilead common stockholders---diluted 1.66 1.77 1.68 1.82 7.35 6.80 7.22 7.25 7.13 6.58 6.19 5.88 5.58 5.30 5.04
Shares used in per share calculation---diluted 1,746,792 1,580,236 1,582,549 1,694,747 1,647,000 1,649,012 1,630,123 1,640,287 1,652,085 1,643,683 1,643,020 1,641,824 1,644,175 1,644,953 1,643,531
Depreciation and amortization expense 265,477 302,232 278,206 344,704 902,578 803,496 811,428 815,872 827,980 840,268 852,738 865,393 878,236 891,269 904,496
(EBITDA) Income from operations before interest, D & A 4,227,699 4,092,073 4,288,381 4,868,703 16,167,578 15,121,474 17,221,605 19,392,771 21,698,303 23,809,845 24,222,991 25,756,177 27,456,326 29,269,874 31,075,625
Historical Data Forecasts Data
Discounted Free Cash Flows to the Firm:
First Step:
Gilead Sciences Inc. (GILD)
Cash Flow Statement
Figures in USD Thousands 2010 2011 2012 2013 2014 2015 F 2016 F 2017 F 2018 F 2019 F 2020 F 2021 F 2022 F 2023 F 2024 F
Gilead SEC 10-K: 2012, 2013, 2014
Operating Activities:
Net income 2,889,749 2,789,059 2,573,599 3,057,286 8,597,335 10,794,144 12,423,075 13,925,133 15,191,049 16,116,317 17,097,941 18,139,355 19,244,200 20,416,340 21,659,874
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation expense 67,240 72,187 82,847 102,644 93,669 179,519 176,799 174,532 165,784 155,405 177,032 177,040 177,417 177,999 180,548
Amortization expense 198,237 230,045 195,359 242,060 680,950 588,877 592,471 590,784 603,246 616,725 622,441 631,167 640,390 650,801 660,753
Stock-based compensation expense 200,041 192,378 208,725 251,984 264,583 251,984 251,984 251,984 251,984 251,984 251,984 251,984 251,984 251,984 251,984
In-process research and development impairment charges 136,000 26,630 - - - - - - - - - - - - -
Excess tax benefits from stock-based compensation -81,620 -40,848 -114,236 -278,773 -357,928 -174,681 -193,293 -223,782 -245,691 -239,075 -215,305 -223,429 -229,457 -230,591 -227,571
Tax benefits from exercise and vesting of stock-based awards 82,086 37,231 112,629 284,655 360,336 252,540 299,177 304,018 285,245 296,147 295,136 292,176 294,486 293,933 293,532
Deferred income taxes 12,152 64,061 -39,393 -98,181 -67,061 -25,684 -33,252 -52,714 -55,378 -46,818 -42,769 -46,186 -48,773 -47,985 -46,506
Change in fair value of contingent consideration - - - 58,700 -4,119 -4,119 -4,119 -4,119 -4,119 -4,119 -4,119 -4,119 -4,119 -4,119 -4,119
Other 10,408 47,931 -1,878 47,289 54,791 10,408 47,931 -1,878 47,289 54,791 10,408 47,931 -1,878 47,289 54,791
Changes in operating assets and liabilities:
Accounts receivable, net -348,875 -375,736 197,986 -315,299 -826,970 -740,230 -851,937 -954,944 -1,041,757 -1,105,209 -1,172,525 -1,243,942 -1,319,709 -1,400,091 -1,485,369
Inventories -161,190 -200,793 -349,924 -343,143 100,828 -349,924 -402,731 -451,424 -492,463 -522,458 -554,280 -588,041 -623,857 -661,856 -702,169
Prepaid expenses and other assets -70,466 -13,959 -129,318 -170,355 -428,969 -299,662 -364,316 -331,989 -348,152 -340,070 -344,111 -342,091 -343,101 -342,596 -342,849
Accounts payable -4,453 428,944 117,485 -97,673 -74,599 -86,136 -80,368 -83,252 -81,810 -82,531 -82,170 -82,350 -82,260 -82,305 -82,283
Income taxes payable -185,733 110,771 -68,473 30,021 135,672 4,452 42,489 28,832 48,293 51,947 35,203 41,353 41,126 43,584 42,642
Accrued liabilities 120,065 300,593 386,063 311,628 1,256,505 1,124,712 1,294,440 1,450,949 1,582,853 1,679,263 1,781,545 1,890,056 2,005,177 2,127,310 2,256,882
Deferred revenues -29,728 -29,484 23,245 22,145 12,310 19,233 17,896 16,480 17,870 17,415 17,255 17,513 17,394 17,388 17,432
Net cash provided by operating activities 2,833,913 3,639,010 3,194,716 3,104,988 9,797,333 11,545,432 13,216,248 14,638,610 15,924,243 16,899,715 17,873,664 18,958,416 20,019,020 21,257,084 22,527,572
Investing Activities:
Purchases of marketable securities -5,502,687 -5,127,790 -1,244,898 -256,700 -1,532,426 -2,732,900 -2,178,943 -1,589,173 -1,658,028 -1,938,294 -2,019,468 -1,876,781 -1,816,349 -1,861,784 -1,902,535
Proceeds from sales of marketable securities 3,033,893 8,649,752 527,712 494,117 477,152 2,636,525 2,557,052 1,338,512 1,500,671 1,701,982 1,946,948 1,809,033 1,659,429 1,723,613 1,768,201
Proceeds from maturities of marketable securities 683,927 788,395 44,813 77,655 26,582 324,274 252,344 145,134 165,198 182,706 213,931 191,863 179,766 186,693 190,992
Purchases of other investments - - -25,000 - - - - - - - - - - - -
Acquisitions, net of cash acquired -91,000 -588,608 -10,751,635 -378,645 - - - - - - - - - - -
Capital expenditures -61,884 -131,904 -397,046 -190,782 -389,549 -460,022 -483,023 -487,853 -482,975 -443,854 -417,222 -396,361 -376,543 -357,716 -339,830
Net cash used in investing activities -1,937,751 3,589,845 -11,846,054 -254,355 -1,418,241 -232,122 147,430 -593,381 -475,134 -497,459 -275,811 -272,247 -353,697 -309,194 -283,172
Financing Activities:
Proceeds from debt financing, net of issuance costs 2,962,500 4,660,702 2,144,733 - 3,965,446 2,746,676 2,703,511 2,312,073 2,345,541 2,814,650 2,584,490 2,552,053 2,521,762 2,563,699 2,607,331
Proceeds from convertible note hedges - 36,148 213,856 2,774,402 1,629,483 930,778 1,116,933 1,333,090 1,556,937 1,313,444 1,250,237 1,314,128 1,353,567 1,357,663 1,317,808
Proceeds from sale of warrants 155,425 - - - - - - - - - - - - - -
Proceeds from issuances of common stock 221,223 211,737 466,283 313,079 275,074 297,479 312,730 332,929 306,258 304,894 310,858 313,534 313,695 309,848 310,566
Purchases of convertible note hedges -362,622 - - - -26,249 - - - - - - - - - -
Repurchases of common stock -4,022,593 -2,383,132 -667,041 -582,358 -3,348,477 -2,200,720 -1,836,346 -1,726,988 -1,938,978 -2,210,302 -1,982,667 -1,939,056 -1,959,598 -2,006,120 -2,019,549
Repayments of debt and other long-term obligations -500,000 -686,135 -1,837,139 -4,439,891 -2,859,872 -2,064,607 -2,377,529 -2,715,808 -2,891,541 -2,581,871 -2,526,271 -2,618,604 -2,666,819 -2,657,022 -2,610,118
Payments to settle warrants - - - -1,039,695 -4,092,758 -1,026,491 -1,231,789 -1,478,146 -1,773,776 -1,920,592 -1,486,159 -1,578,092 -1,647,353 -1,681,194 -1,662,678
Repayments of other long-term obligations -5,786 -1,562 -2,186 -77 - -1,922 -1,149 -1,067 -843 -996 -1,196 -1,050 -1,030 -1,023 -1,059
Excess tax benefits from stock-based compensation 81,620 40,848 114,236 278,773 357,928 174,681 193,293 223,782 245,691 239,075 215,305 223,429 229,457 230,591 227,571
Payment of contingent consideration - - - - -98,346 - - - - - - - - - -
Contributions from (distributions to) noncontrolling interest 131,523 -115,037 130,604 151,826 -61,105 47,562 30,770 59,931 45,797 24,591 41,730 40,564 42,523 39,041 37,690
Net cash provided by (used in) financing activities -1,338,710 1,763,569 563,346 -2,543,941 -4,258,876 -1,096,564 -1,089,574 -1,660,203 -2,104,913 -2,017,107 -1,593,672 -1,693,094 -1,813,798 -1,844,517 -1,792,437
Effect of exchange rate changes on cash 77,469 -16,526 7,909 2,420 -23,962 9,462 -4,139 -1,662 -3,576 -4,776 -938 -3,018 -2,794 -3,021 -2,909
Cash and cash equivalents at end of period -365,079 8,975,898 -8,080,083 309,112 4,096,254 10,226,207 12,269,964 12,383,363 13,340,620 14,380,373 16,003,244 16,990,057 17,848,732 19,100,353 20,449,052
Cash and cash equivalents at beginning of period 1,272,958 907,879 9,883,777 1,803,694 2,112,806 7,685,878 10,342,623 12,333,710 12,454,501 13,424,268 14,478,147 16,092,072 17,073,657 17,936,538 19,191,559
Net change in cash and cash equivalents 907,879 9,883,777 1,803,694 2,112,806 6,209,060 2,540,329 1,927,341 49,653 886,119 956,105 1,525,097 897,985 775,075 1,163,814 1,257,493
Supplemental disclosure of cash flow information:
Interest paid, net of amounts capitalized 15,748 62,180 249,358 238,325 - - - - - - - - - - -
Income taxes paid 1,129,577 621,025 1,101,241 1,050,588 - - - - - - - - - - -
Historical Data Forecasts Data
Growth Rates: 2010 2011 2012 2013 2014 Geo Mean Arth. Mean
1 One-Year Growth Rate (Sales) 6.6% 9.6% 16.0% 15.0% 126.5% 18.1% 34.8%
2 CAGR (5-years) 27.0% 18.9% 15.9% 12.8% 33.3% 18.9% 21.6%
Profitability Ratios: 2010 2011 2012 2013 2014 Geo Mean Arth. Mean
3 Gross Margin 76.5% 74.7% 74.5% 74.5% 84.8% 76.9% 77.0%
4 EBIT Margin 49.8% 46.8% 41.3% 40.4% 61.3% 47.4% 47.9%
5 Net Margin 36.4% 33.3% 27.3% 27.5% 48.4% 33.8% 34.6%
6 Return on Assets (ROA) 20.6% 15.3% 13.7% 11.7% 35.2% 17.8% 19.3%
7 Return on Equity (ROE) 47.2% 40.6% 27.8% 26.2% 87.0% 41.4% 45.8%
8 Return on Invested Capital (ROIC) 32.3% 19.8% 17.5% 21.0% 54.8% 26.4% 29.1%
9 Pre-Tax Return on Invested Capital 43.6% 25.7% 23.6% 28.1% 67.1% 34.6% 37.6%
Efficiency Ratios: 2010 2011 2012 2013 2014 Geo Mean Arth. Mean
10 Asset Turnover 1.3 0.6 0.5 0.5 0.8 0.7 0.7
11 Net Working Capital Turnover 11.1 1.1 1.3 -168.5 4.4 2.5 -30.1
12 Fixed Assets Turnover 10.5 10.5 8.5 9.3 14.6 10.5 10.7
13 Days in Inventory (Days) 117.6 222.8 231.5 242.7 165.8 189.5 196.1
14 Inventory Turnover 2.9 1.6 1.6 1.5 2.2 1.9 2.0
15 Collection Period (Days) 31.0 57.3 51.2 46.3 35.8 43.2 44.3
16 Receivables Turnover 8.4 4.5 5.1 5.6 7.3 6.0 6.2
17 Days' Sales in Cash (Days) 44.8 445.3 70.0 71.4 171.9 111.4 160.7
18 Payable Period (Days) 156.8 207.2 196.0 160.4 114.0 163.4 166.9
Liquidity Ratios: 2010 2011 2012 2013 2014 Geo Mean Arth. Mean
19 Current Ratio 2.3 5.5 1.5 1.1 3.2 2.3 2.7
20 Quick Ratio 0.9 4.5 0.8 0.7 2.1 1.4 1.8
21 Cash Ratio 0.4 3.9 0.4 0.3 1.9 0.8 1.4
22 Defensive Interval Measure 231.6 940.0 228.0 230.3 612.9 370.7 448.5
Leverage Ratios: 2010 2011 2012 2013 2014 Geo Mean Arth. Mean
23 Debt Ratio 31.7% 52.6% 42.5% 25.1% 36.4% 36.5% 37.7%
24 Debt to Equity Ratio 46.4% 110.8% 73.9% 33.5% 57.2% 59.2% 64.4%
25 Equity to Assets Ratio 52.8% 39.7% 44.9% 52.2% 39.1% 45.4% 45.7%
26 Times-Interest Earned 36.4 18.4 11.1 14.7 37.1 21.0 23.5
27 Times-Interest Earned (Cash Flow) 38.8 19.9 11.9 15.9 39.2 22.5 25.1
28 Times-Burden Covered 5.2 18.3 2.6 1.5 8.1 5.0 7.2
Risk Ratios: 2010 2011 2012 2013 2014 Geo Mean Arth. Mean
29 Fixed to Variable Costs 1.1 1.2 1.3 1.3 1.5 1.3 1.3
30 Sales to Fixed Costs 3.1 3.3 2.9 2.8 4.2 3.2 3.3
31 Contribution Margin 0.7 0.7 0.7 0.7 0.8 0.7 0.7
Valuation Ratios: 2010 2011 2012 2013 2014 Geo Mean Arth. Mean
32 Earnings Per Share (EPS) 1.80 1.55 1.46 1.65 6.54 2.13 2.60
33 Dividend Per Share 0.00 0.00 0.00 0.00 0.00 0.00 0.00
34 Price/Earnings (P/E) Ratio 10.1 13.2 25.2 45.5 14.4 18.6 21.7
35 Price/Book Value (P/B) Ratio 5.0 4.6 6.0 10.1 10.4 6.8 7.2
36 Dividend Payout Ratio 0.0 0.0 0.0 0.0 0.0 0.0 0.0
37 Stock Price (Year-end) 18.12 20.47 36.72 75.10 94.26 39.52 48.93
38 Stock Price Growth -16.3% 13.0% 79.4% 104.5% 25.5% 40.7% 41.2%
39 Average # of Shares Outstanding 1,603,996 1,506,212 1,519,163 1,534,414 1,499,000 1,532,102 1,532,557
40 Book Value 5,863,729 6,738,856 9,309,739 11,369,067 13,564,709 8,928,255 9,369,220
41 Book Value Per Share 3.66 4.47 6.13 7.41 9.05 5.83 6.14
Create projected
financial
statements based
on six years of
historic financial
data (2009-14)
Gilead Sciences Inc. (GILD)
Working Capital Projection CAGR
($ in Thousands) 2010 2011 2012 2013 2014 (10-14') 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Sales 7,949,420 8,385,385 9,702,517 11,201,688 24,890,000 33.0% 29,392,818 30,862,459 31,171,084 30,859,373 28,359,764 26,658,178 25,325,269 24,059,006 22,856,055 21,713,253
% growth 14.7% 5.5% 15.7% 15.5% 122.2% 18.1% 5.0% 1.0% -1.0% -8.1% -6.0% -5.0% -5.0% -5.0% -5.0% Adjustible
EBITDA 4,227,699 4,092,073 4,288,381 4,868,703 16,167,578 39.8% 19,092,434 15,373,059 15,590,625 15,821,194 15,027,933 13,562,583 12,910,840 12,322,313 11,761,871 11,182,132 Revenue
% margin 53.2% 48.8% 44.2% 43.5% 65.0% 50.4% 49.8% 50.0% 51.3% 53.0% 50.9% 51.0% 51.2% 51.5% 51.5% Growth
Depreciation & Amortization 265,477 302,232 278,206 344,704 902,578 966,861 1,015,204 1,025,356 1,015,102 932,879 876,906 833,061 791,408 751,838 714,246 Rate
% sales 3.3% 3.6% 2.9% 3.1% 3.6% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3%
EBIT 3,962,222 3,789,841 4,010,175 4,523,999 15,265,000 40.1% 6,121,332 14,556,284 14,701,847 14,554,828 13,375,887 12,573,334 11,944,667 11,347,434 10,780,062 10,241,059
% margin 49.8% 45.2% 41.3% 40.4% 61.3% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2%
Taxes 25.8% 22.7% 25.9% 25.4% 18.3% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1%
EBIAT 2,938,423 2,927,896 2,971,794 3,373,066 12,468,000 43.5% 12,792,550 13,432,178 13,566,500 13,430,835 12,342,937 11,602,361 11,022,243 10,471,131 9,947,574 9,450,195
Plus: Depreciation & Amortization 265,477 302,232 278,206 344,704 902,578 966,861 803,496 1,025,356 1,015,102 932,879 876,906 833,061 791,408 751,838 714,246
Less: Capital Expenditures -61,884 -131,904 -397,046 -190,782 -389,549 -460,022 -483,023 811,428 -482,975 -443,854 -417,222 -396,361 -376,543 -357,716 -339,830
Less: Increase in Net Working Capital -1,562,923 14,388,121 -12,357,109 10,197,838 -2,115,974 624,097 411,193 -1,645,539 -592,092 -183,108 485,663 -162,559 -183,474 -344,258 1,192,235
Unlevered Free Cash Flow 13,923,486 14,163,844 13,757,745 13,370,870 12,648,854 12,547,708 11,296,383 10,702,521 9,997,438 11,016,845
WACC 13.26%
Discount Period 1 2 3 4 5 6 7 8 9 10
Discount Factor 0.8829 0.7795 0.6883 0.6077 0.5365 0.4737 0.4182 0.3693 0.3260 0.2879
Present Value of Free Cash Flow 12,293,269 11,041,293 11,734,177 8,844,871 6,983,025 5,483,897 4,860,692 4,087,729 3,484,079 2,484,989
Cumulative Present Value of FCF 71,298,022 Enterprise Value 216,665,742 Terminal Year Free Cash Flow (2024F) 11,182,132
Less: Total Debt 7,933,040 WACC 13.26%
Terminal Value Less: Preferred Securities 0 Terminal Value 134,185,588
Terminal Year EBITDA (2024E) 11,182,132 Less: Noncontrolling Interest 51,172
Exit Multiple 12.0x Plus: Cash and Cash Equivalents 7,685,878 Implied Perpetuity Growth Rate 4.93%
Terminal Value 134,185,588
Discount Factor 0.29 Implied Equity Value 216,367,408
Present Value of Terminal Value 205,483,610 Enterprise Value 216,665,742
% of Enterprise Value 94.8% Fully Diluted Shares Outstanding 1,635,005 LTM 2/09/15 EBITDA 19,092,434
Enterprise Value 216,665,742 Implied Share Price 132.33
Implied EV/EBITDA 11.3x
216,665,742 11.0x 11.5x 12.0x 12.5x 13.0x Target Capital Structure
12.00% 208,904,280 214,495,346 219,639,127 225,677,478 231,268,544 Debt-to-Total Capitalization 41.0%
12.50% 207,516,708 213,107,774 218,251,555 224,289,907 229,880,973 Equity-to-Total Capitalization 59.0%
13.26% 205,486,355 211,077,421 216,221,202 222,259,553 227,850,619
13.50% 204,864,174 210,455,240 215,599,021 221,637,372 227,228,439 Cost of Debt
14.00% 203,596,119 209,187,185 214,330,966 220,369,317 225,960,383 Cost of Debt 3.40%
Tax Rate 18.30%
After-tax Cost of Debt 2.78%
4.93% 11.0x 11.5x 12.0x 12.5x 13.0x
12.00% 2.9% 3.3% 3.6% 4.0% 4.3% Cost of Equity
12.50% 3.4% 3.8% 4.1% 4.5% 4.8% Risk-Free Rate 3.07%
13.26% 4.2% 4.6% 4.9% 5.3% 5.6% Market Risk Premium 17.49%
13.50% 4.4% 4.8% 5.1% 5.5% 5.8% Levered Beta 0.91
14.00% 4.9% 5.3% 5.6% 6.0% 6.3% Size Premium 1.53%
Cost of Equity 20.55%
WACC 13.26%
Terminal Value 134,185,588
Terminal Year EBITDA (2024F) 11,182,132
WACC 13.26%
Impllied Exit Multiple 12.8x
Historical Period Forecast Period
Enterprise Value Implied Equity Value and Share Price Implied Perpetuity Growth Rate
Implied Exit Multiple
Implied Perpetuity Growth Rate
Exit Multiple
WACC
Implied EV/EBITDA
WACC
Exit Multiple
Enterprise Value
WACC Calculation
Second Step:
After calculating
the beta and RE,
Assumptions based
on our research
were put into the
FCFF model.
Third Step:
We completed the
analysis with a
robust sensitivity
analysis including
exit multiples,
growth rates, and
Monte Carlo
simulation.
.
216,665,742 11.0x 11.5x 12.0x 12.5x 13.0x
12.00% 208,904,280 214,495,346 219,639,127 225,677,478 231,268,544
12.50% 207,516,708 213,107,774 218,251,555 224,289,907 229,880,973
13.26% 205,486,355 211,077,421 216,221,202 222,259,553 227,850,619
13.50% 204,864,174 210,455,240 215,599,021 221,637,372 227,228,439
14.00% 203,596,119 209,187,185 214,330,966 220,369,317 225,960,383
4.93% 11.0x 11.5x 12.0x 12.5x 13.0x
12.00% 2.9% 3.3% 3.6% 4.0% 4.3%
12.50% 3.4% 3.8% 4.1% 4.5% 4.8%
13.26% 4.2% 4.6% 4.9% 5.3% 5.6%
13.50% 4.4% 4.8% 5.1% 5.5% 5.8%
14.00% 4.9% 5.3% 5.6% 6.0% 6.3%
Implied Perpetuity Growth Rate
Exit Multiple
WACCWACC
Exit Multiple
Enterprise Value
Sensitivity Analysis
Terminal Year Free Cash Flow (2024F) 11,182,132
WACC 13.26%
Terminal Value 134,185,588
Implied Perpetuity Growth Rate 4.93%
Enterprise Value 216,665,742
LTM 2/09/15 EBITDA 19,092,434
Implied EV/EBITDA 11.3x
Implied Perpetuity Growth Rate
Implied EV/EBITDA
Terminal Value 134,185,588
Terminal Year EBITDA (2024F) 11,182,132
WACC 13.26%
Impllied Exit Multiple 12.8x
Implied Exit Multiple
0
12
24
36
48
60
72
84
96
108
120
132
144
156
168
180
192
204
216
228
240
252
264
Probability
Stock Price
Monte Carlo Method
$102.61 Current Price
$114.78 Projected Price

14. 14
Product Portfolio IO AND CP Investment Risk Sensitivity Analysis ConclusionFinancial AnalysisInvestment Summary
Important Updates (in millions $000) Jan 2014 Jan 2013 Change (%)
Net Product Revenues 24,474 10,804 127%
Antiviral Products 22,791 9,342 144%
HCV 12,410 139 99%
HIV and Other Antiviral 10,381 9,203 13%
Other Products 1,683 1,462 15%
Cost and Expenses 8,306 6,214 32%
Cost of Goods Sold (COGS) 2,964 2,709 9%
Product Gross Margin 88% 75%
R&D 2,585 1,948 33%
SG&A 2,757 1,557 77%
EBIT (Operating) Margin 67% 45%
Net Income $13,314 $3451 286%
Diluted EPS $8.09 $2.04 297%

15. 15
Product Portfolio IO AND CP Investment Risk Sensitivity Analysis ConclusionFinancial AnalysisInvestment Summary
Forecasted Changes (in millions $000) Jan 2015 E Jan 2014 Change (%)
Net Product Revenues 31,344 24,474 28%
Antiviral Products 29,706 22,791 30%
HCV 18,623 12,410 50%
HIV and Other Antiviral 11,083 10,381 7%
Other Products 1,638 1,683 Δ < 1%
Cost and Expenses 14,916 8,306 79%
Cost of Goods Sold (COGS) 7,348 2,964 148%
Product Gross Margin 75% 88%
R&D 3,300 2,585 27%
SG&A 4,268 2,757 68%
EBIT (Operating) Margin 47% 67%
Net Income $11,161 $13,314 -16%
Diluted EPS $6.78 $8.09 -16%

16. 16
Product Portfolio IO AND CP Investment Risk Sensitivity Analysis ConclusionFinancial AnalysisInvestment Summary
Products Price 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E NPV
Atripla $24,960 3,470 3,301 3,103 2,885 2,698 2,496 - - - - - 13,035
Viread $ 9,500 1,058 1,121 1,043 1,012 971 - - - - - - 3,790
Ranexa N/A 510 561 606 630 635 600 - - - - - 2,711
TAF $ 9,000-10,000 300 966 1,140 1,277 1,430 1,559 1,668 1,784 1,856 1,930 11,002
Sovaldi $ 84,000 10,283 6,996 7,031 6,423 6,339 6,206 6,014 5,773 5,600 5,376 5,107 50,390
Harvoni $ 94,500 2,127 11,627 12,429 12,462 12,699 12,737 12,610 12,231 11,803 11,331 10,821 103,682
Striblid $16,650 1,197 1,375 1,512 1,616 1,679 - - - - - - 5,619
Truvada $14,000 3,340 3,540 3,682 3,792 3,830 3,792 - - - - - 16,666
Tybost $15,000 - 10 20 44 75 109 125 138 151 163 173 778
Vitekta $26,000 - 8 16 36 62 89 103 113 124 136 150 644
Complera N/A 1,228 1,426 1,568 1,676 1,741 1,776 1,794 - - - - 8,736
Zydelig $ 86,400 23 541 964 1,070 1,167 1,248 1,323 1,403 1,487 1,576 - 8,783
NPV of sales $ 225,833
stock price (based of gross margins) $ 123.91

17. 17
Product Portfolio IO AND CP Investment Risk Sensitivity Analysis ConclusionFinancial AnalysisInvestment Summary
βf = 0.907
βr = 0.906
22 years
Historical Data
Jan1992 - Jan2015
-0.60
-0.40
-0.20
0.00
0.20
0.40
0.60
0.80
1.00
1.20
-0.20 -0.10 0.00 0.10 0.20 0.30
GileadRiskPremium
Market Risk Premium
Market Risk Premium Line Fit Plot
Gilead Risk
Premium
Predicted
Gilead Risk
Premium
Beta Calculations
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
2010 2011 2012 2013 2014
Gross Margin EBIT Margin Net Margin
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
2010 2011 2012 2013 2014
CAGR (5-years) One-Year Growth Rate (Sales)

18. 18
Product Portfolio IO AND CP Investment Risk Sensitivity Analysis ConclusionFinancial AnalysisInvestment Summary
Gilead Sciences Inc. (GILD) Historical Period Forecast Period
Working Capital Projection CAGR
($ in Thousands) 2010 2011 2012 2013 2014 (10-14') 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Sales 7,949,420 8,385,385 9,702,517 11,201,688 24,890,000 33.0% 29,392,818 30,862,459 31,171,084 30,859,373 28,359,764 22,120,616 20,129,760 19,727,165 19,135,350 17,030,462
% growth 14.7% 5.5% 15.7% 15.5% 122.2% 18.1% 5.0% 1.0% -1.0% -8.1% -22.0% -9.0% -2.0% -3.0% -11.0%Adjustable
EBITDA 4,227,699 4,092,073 4,288,381 4,868,703 16,167,578 39.8% 19,092,434 15,373,059 15,590,625 15,821,194 15,027,933 11,254,058 10,262,166 10,103,672 9,847,173 8,770,537Revenue
% margin 53.2% 48.8% 44.2% 43.5% 65.0% 50.4% 49.8% 50.0% 51.3% 53.0% 50.9% 51.0% 51.2% 51.5% 51.5%Growth
Depreciation & Amortization 265,477 302,232 278,206 344,704 902,578 966,861 1,015,204 1,025,356 1,015,102 932,879 727,646 662,158 648,914 629,447 560,208Rate
% sales 3.3% 3.6% 2.9% 3.1% 3.6% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3%
EBIT 3,962,222 3,789,841 4,010,175 4,523,999 15,265,000 40.1% 6,121,332 14,556,284 14,701,847 14,554,828 13,375,887 10,433,192 9,494,205 9,304,321 9,025,191 8,032,420
% margin 49.8% 45.2% 41.3% 40.4% 61.3% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2% 47.2%
Taxes 25.8% 22.7% 25.9% 25.4% 18.3% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1% 20.1%
EBIAT 2,938,423 2,927,896 2,971,794 3,373,066 12,468,000 43.5% 12,792,550 13,432,178 13,566,500 13,430,835 12,342,937 9,627,491 8,761,017 8,585,796 8,328,223 7,412,118
Plus: Depreciation & Amortization 265,477 302,232 278,206 344,704 902,578 966,861 1,015,204 1,025,356 1,015,102 932,879 727,646 662,158 648,914 629,447 560,208
Less: Capital Expenditures -61,884 -131,904 -397,046 -190,782 -389,549 -460,022 -483,023 -487,853 -482,975 -443,854 -346,206 -315,047 -308,746 -299,484 -266,541
Less: Increase in Net Working
Capital 1,516,366 12,825,198 2,031,012 -2,159,271 13,174,659 682,365 561,965 -1,558,407 -529,884 -109,814 642,366 -60,118 -117,060 -275,089 1,289,209
Unlevered Free Cash Flow 12,617,025 13,402,394 15,662,410 14,492,846 12,941,776 9,366,565 9,168,245 9,043,025 8,933,274 6,416,576
WACC 11.15%
Discount Period 1 2 3 4 5 6 7 8 9 10
Discount Factor 0.8997 0.8094 0.7282 0.6552 0.5895 0.5303 0.4771 0.4293 0.3862 0.3475
Present Value of Free Cash Flow 11,351,417 10,848,474 11,406,121 9,495,683 7,628,859 4,967,515 4,374,598 3,882,029 3,450,237 2,229,640
Target Capital Structure
Debt-to-Total Capitalization 41.0%
Equity-to-Total Capitalization 59.0%
Cost of Debt
Cost of Debt 3.40%
Tax Rate 18.30%
After-tax Cost of Debt 2.78%
Cost of Equity
Risk-Free Rate 3.07%
Market Risk Premium 13.57%
Levered Beta 0.91
Size Premium 1.53%
Cost of Equity 17.0%
WACC 11.15%
WACC Calculation
Cumulative Present Value of FCF 69,634,573
Terminal Value
Terminal Year EBITDA (2024E) 8,770,537
Exit Multiple 12.0x
Terminal Value 104,895,618
Discount Factor 0.35
Present Value of Terminal Value 174,530,191
% of Enterprise Value 95.2%
Enterprise Value 183,300,728
Enterprise Value
0
5
10
15
20
25
30
35
Millions
Sales Projections
Sales

19. 19
Product Portfolio Investment Risk Financial Analysis ConclusionInvestment Summary IO AND CP Sensitivity Analysis
Terminal Value 104,895,618
Terminal Year EBITDA (2024F) 8,770,537
WACC 11.1%
Impllied Exit Multiple 12.6x
Implied Exit Multiple
Terminal Year Free Cash Flow (2024F) 8,770,537
WACC 11.1%
Terminal Value 104,895,618
Implied Perpetuity Growth Rate 2.8%
Implied Perpetuity Growth Rate
Enterprise Value 183,300,728
LTM 2/09/15 EBITDA 19,092,434
Implied EV/EBITDA 9.6x
Implied EV/EBITDA

20. 20
Product Portfolio Investment Risk Financial Analysis ConclusionInvestment Summary IO AND CP Sensitivity Analysis
2.79% 11.0x 11.5x 12.0x 12.5x 13.0x
10.00% 0.9% 1.3% 1.6% 2.0% 2.3%
10.50% 1.4% 1.8% 2.1% 2.5% 2.8%
11.15% 2.1% 2.5% 2.8% 3.1% 3.5%
11.50% 2.4% 2.8% 3.1% 3.5% 3.8%
12.00% 2.9% 3.3% 3.6% 4.0% 4.3%
WACC
Implied Perpetuity Growth Rate
Exit Multiple
183,300,728 11.0x 11.5x 12.0x 12.5x 13.0x
10.00% 177,967,881 182,353,149 186,387,596 191,123,686 195,508,954
10.50% 176,598,366 180,983,635 185,018,082 189,754,171 194,139,440
11.15% 174,879,285 179,264,553 183,299,000 188,035,090 192,420,358
11.50% 173,981,215 178,366,484 182,400,930 187,137,020 191,522,289
12.00% 172,730,479 177,115,747 181,150,194 185,886,284 190,271,552
Enterprise Value
Exit Multiple
WACC

21. 21
Product Portfolio Investment Risk Financial Analysis ConclusionInvestment Summary IO AND CP Sensitivity Analysis
0
8
16
24
32
40
48
56
64
72
80
88
96
104
112
120
128
136
144
152
160
168
176
184
192
200
208
216
224
232
240
248
256
264
More
Probability
Stock Price
Monte Carlo Method
$102.61 Current Price
$114.78 Projected Price
Mean $109.50
Standard Error 11.0%
Standard Deviation $34.79
Price Frequency 2500/100000
This gives our price chance:
65.5%

22. 22
Product Portfolio Investment Risk Financial Analysis Sensitivity AnalysisInvestment Summary IO AND CP Conclusion
Target Price
$114.78
Upside Potential
11.86%
Keep in Mind:
• Possible increase in
competition
• Litigation outcomes
• Market risks
associated with
healthcare reform
• Possible intellectual
property issues
Best in class drugs
(HIV, HEP, Oncology)
Robust Pipeline of
Upcoming drugs
Globally increasing
demand for life-threating
diseases
Sound financial
positioning

23. RANDY ACOSTA ▪ ETIENNE BOWIE ▪ DEEPIKA KARNIK ▪ MATTHEW PHILLIPS ▪ BOHDAN STRYUK
THANK YOU

24. 24
Product Portfolio IO AND CP Investment Risk Sensitivity Analysis ConclusionFinancial AnalysisInvestment Summary