Ladies and gentlemen, thank you for standing by and welcome to the Gilead Sciences Second Quarter 2013 Earnings Conference Call. My name is Phil and I'll be your conference operator today. At this time, all participants are in a listen-only mode. And as a reminder, this conference call is being recorded. I would now like to turn the call over to Patrick O'Brien, Vice President of Investor Relations. Please go ahead.

Thank you, Phil. Good afternoon, everyone. We issued a press release this afternoon providing earnings results for the second quarter which is available on our website where you can also find detailed slides that support today's call. For our prepared remarks and Q&A, I'm joined by our Chairman and Chief Executive Officer, John Martin; our President and Chief Operating Officer, John Milligan; our Executive Vice President of Research and Development, Norbert Bischofberger; our Executive Vice President of Commercial Operations, Kevin Young; and our Chief Financial Officer, Robin Washington. Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements including plans and expectations with respect to our product candidates and financial projections, all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause our actual results to differ materially from these statements. A description of these risks can be found in our latest SEC disclosure documents and recent press releases. In addition, Gilead does not undertake any obligation to update any forward-looking statements made during this call. We will also be using non-GAAP financial measures to help you understand our underlying business performance. The GAAP to non-GAAP reconciliations are provided in our press release as well as on our website. I would now like to turn the call over to Robin Washington.

Thank you, Patrick, and thank you all for joining us. We are very pleased with our strong operating results for the second quarter, delivering product sales of $2.7 billion, an increase of 14% year-over-year and 11% sequentially and non-GAAP EPS of $0.50 per share. The U.S. contributed $1.6 billion to product sales, up 20% year-over-year driven by strong underlying demand across all therapeutic areas including the continued uptake of Complera and Stribild, our combined sales grew 11% over the previous quarter. The launch of Stribild continues to go well. Strong prescription demand was partially offset by a reduction in wholesales inventory levels as Stribild was added to our existing inventory management agreements during the second quarter. Atripla, Complera and Stribild were the number one, two and three most prescribed HIV regimens for treatment naïve patients in the U.S. Overall, major wholesaler inventory levels remain consistent quarter-over-quarter while sub-wholesaler inventories rebounded after a strong -- after a drawdown in the first quarter. ADAP purchasing was robust in the second quarter and we are encouraged by the recent communications to states for their remaining funding allocation for the 2013 ADAP fiscal year. However, we anticipate a moderating of ADAP purchasing during the second half of 2013, given sequestration and strong purchasing during the first half of the year. Turning to Europe. We executed solidly with product sales of $818 million, up 7% year-over-year excluding the effects of FX. Driven by increased demand and purchasing in advance of the summer holidays. One quarter following the launch in all big side EU markets as the player uptake continues to expand and is now the second most prescribed regimen for treatment naïve patients. On May 28, the European Commission approved Stribild and we were able to launch in the UK and Germany in the following weeks. Turning briefly to operating expenses, our combined R&D and SG&A spending were up approximately $70 million quarter over quarter. R&D spending in the first half of the year was driven predominantly by progression of clinical development activities in liver disease in oncology. We anticipate this level of spending to continue in the second half of the year. Additionally, we expect a ramp in SG&A expenses in the second half of the year as we prepare for the anticipated commercial launch of Sofosbuvir. Finally, we are reiterating full year guidance for 2013 as we remain confident in our core business and ability to continue to execute. I will now turn the call over to Norbert.

Thank you, Robin. I’m pleased with the rapid progress across all our R&D programs and the high level of productivity. A large number of clinical development candidates are now being advanced from IND to Phase 1, 2 and 3 clinical development. First, a quick update on HIV. The two phase 3 studies evaluating TAF, Gilead’s novel product of Tenofovir are consequently 50% enrolled. These two studies are identical in design, evaluating Stribild through a single tablet regimen of elvitegravir, cobi, emtricitabine and TAF in in treatment naïve for HIV infected patients. We expect to complete enrolment of these two studies by the end of this year. In our cardiovascular clinical development program, a number of datasets from various Phase 3 clinical tries will mature over the next 12 months, including three studies evaluating the efficacy and safety of Ranolazine in Type 2 diabetes, a study evaluating the use of Ranolazine to decrease the rate of revascularization and hospital readmission following Percutaneous Coronary Intervention, and the ambition study which evaluates the utility of upfront combination therapy for PAH with Letairis and Tadalafil compared to mono-therapy with Letairis or Tadalafil alone. We look forward to sharing these data with you as they become available. I will focus my remaining remarks on our hematology and hepatitis C development activities. Starting with hepatitis C. New drug applications for Sofosbuvir have now been filed in the United States, Canada, the European Union, Switzerland, Turkey and Australia. We received notification from US FDA that the Sofosbuvir application has been assigned priority review with a PDUFA date of December 8. More recently, we were also informed that Sofosbuvir will be discussed at the Antiviral Drugs Advisory Committee Meeting scheduled for October 25. Following approximately one year behind the Sofosbuvir single agent is the Sofosbuvir Ledipasvir fixed-dose combination…

(Operator Instructions). Your first question comes from line of Geoff Meacham from JPMorgan. Please proceed. Geoffrey Meacham – JPMorgan: Related on the Japan agreement, does the agreement for hep C speak to the review speed or the pace of reimbursement? And then related to that, I notice you guys are doing a similar study in India. So, just checking to see what other regions you expect to do -- if you expect other regions to have a country specific study? Thanks.

So, Geoff, your first question has to do whether the agreement has anything to do review times. Was that the question, the answer is no. We simply got agreement on (indiscernible) a Phase 3 strategy, and as I said this Phase 3 strategy in genotype 1 is a single-arm study of 12-weeks duration. Sofosbuvir and ribavirin agreement on genotype 1. This is a two-arm study of the fixed dose combination both with and without ribavirin for 12-weeks. We're looking a number of other geographies that require clinical studies, one of which we are actively enrolling that's Russia. and the other country we are looking at is China. So those are the only two. In China, we have not made the final decision as to what to do. And, Kevin, you had a question about reimbursement in Japan.

Yeah, Geoff, right now any of the timelines don't include any reference to what we do from a reimbursement point of view. So, all of Norbert's comments were relating to very healthy and positive descriptions we've had with PMDA, and we're now starting to build out our own organization in Japan. Our intention would be to launch Sofosbuvir as Gilead with our own team and not requiring a partnership there.

Your next question comes from the line of Mark Schoenebaum from ISI Group. Please proceed.

Maybe I'll ask Kevin a question and ask the four if I might. And that is, how many patients, and I haven't been able to get an answer to it yet which is why I'm re-asking it, but how many patients in the U.S. and Europe do you estimate, hep C patients, excuse me, under the active care of hepatitis C specialists right now. And if I can just get latest -- if you won't answer that perhaps I could get comments from Robin or John on your perspective on use of cash right now. I know your balance sheet continues to improve, post Pharmasset deal there is a lot movement in press reports in the biotech landscape right now of M&A. I think it would be a nice time to get your updated thoughts on how Gilead plans to use the cash and your view on larger deals.

Hey, Mark, it's Kevin. Yes, we are still essentially fine tuning the number that you are looking for. We are building sort of Ipsos like HIV database. It's based on a much smaller number of charts than we normally get per quarter relative to HIV. But we think once we've seen a couple of quarters and it looks solid and it looks reproducible that we will be able to share that number. So, I think we are getting there. We want to have something that is not chopping and changing every quarter. There wasn't a database there. Don't forget that it's taken us ten years really to get something as good as what we have got in HIV. So, we wanted to start this in the right way and try to give you a solid number that is going to have credibility. So, later in the year I think, and round about the launch of the product, I think we will be able to say that with some conviction.

And Mark I'll go ahead and answer your second question. As we saw in the report, we are very close on a rounded basis to our 1.5 debt-to-EBITDA ratio. So as a result of that we will be resuming during the second half of 2013 our share repurchase program again focused primarily on dilution. I think regarding our overall capital strategy there has really been no change to that. We talked about focusing on debt, we'll continue to invest in our pipeline and we'll be selective relative to licensing and M&A opportunities focused on Phase 2, Phase 3 assets, as appropriate. And as mentioned, we'll be returning cash back to shareholders via share buybacks at this point in time.

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

I suppose I inevitably have to ask, have you seen any LFT elevations in any of the patients experiences with supposed to -- given what's happened with what might have been your slimming competitor? And then presuming that the answer to that is no, could I just get a comment on the -- Norbert, what's the real role of 5816 given how quickly and broadly you're going with this [ledipasvir]? Thanks.

Hi Jeff. So I can't say that we have not seen any LFT elevations because as you know they are part of Hepatitis C disease. But what I can say is that there is no evidence right now that we have seen anything that's related to either sofosbuvir or the sofosbuvir/ledipasvir fixed dose combination that could be ascribed to either an adverse event or a laboratory abnormality. The second question has 5816. So Jeff, we are currently as you might know, doing this study of the fixed dose combination that contains 5885, in genotype 3 patients and we don't really know whether 5885 will not work in genotype 3. But based on the biology that we have looked at, I would expect it should not be optimal. So at least the 5816 compound will be a fixed dose combination non- ribavirin contained for genotype 3. But our intent is to really launch it more broadly as just a fixed-dose combination for anybody or everybody regardless of genotype. I’m sure you also know that the genotype assay is fairly straightforward to come by, but it’s an extra test that I think if I remember correctly costs $400. So if could get rid of that and simply see you don't have to really worry about which genotype you are, we have one combination that works for all genotypes, that would be our strategy and that's what we're going to -- though if the Phase II data look supportive of that.

Your next question comes from line of Matthew Roden from UBS securities. Please proceed. Matthew Roden – UBS Securities: Congrats on all the recent progress, especially the early filing in NHL and CLL. The question here I think maybe is for Kevin. Last month the U.S. Preventive Services taskforce took a more positive stance on screening in Hep C with a grade of B in all patients in both cohorts. Obviously that's a positive step, but the analysis is still based on the current triple therapy standard of care. So is it reasonable to expect that once the next waves of products come out in Hep C, that that analysis will be revisited and improved up to an A? And if so, can you maybe draw on any of your inferences from your experience in HIV as to what the implications could be in terms of finding the patients diagnosis rates and over what timeframe would you expect it to manifest? Thanks.

That's great question, Matt. Thank you very much. I have absolutely no doubt that as our new treatments come through, that we're going to see more and more calls for screening of HCV and treatment of HCV. Very interesting this week, in other parts of the world, in Germany we saw one of their leading opinion leaders on national news talking about how much Hepatitis C there was in Germany and the need to be screening patients and treating particularly in that baby boomer age bracket. Actually I think we did quite well to move from the original C category to B. So I have to say Matt, I don't think we have an expectation it's going to be raised to an A in the immediate future. The good news was I think a lot of opinion leaders mount the challenge and lobbied that it should go from the C to the B. We’ve had some recent advisory boards in this area. And I think they were strongly of the opinion that the Hepatitis C test should get reimbursed and that's why a B category helps that. So I've no doubt that as we bring sofosbuvir and eventually all oral to the market that there is going to be a drive to be screening the older population and potentially treating hepatitis C. Matthew Roden – UBS Securities: Would it be a reach to infer anything from your experience in HIV in terms of the extent to which this can help capture or identify patients and over what timeframe?

I think it tends to be the longer timeframe. I think we have done well in hepatitis C but it's a progressive --HIV, but it's a progressive thing, Matt. These things all help and they all buildup. Obviously, we've got to go and be talking to the payers, we got to be talking to perhaps some of the companies that are supplying the hepatitis C tests. It's work that we have good experience from HIV and I think we'll be launching into that in and around the launch of Sofosbuvir.

Your next question comes from the line of Rachel McMinn from Bank of America Merrill Lynch.

I wanted to ask about oncology. You highlighted you are going to be filing for Idelalisib and maybe even in CLL after the initial NHL filing. How do you view the big picture competitive landscape with Ibrutinib filed before you and obviously there's very strong clinical data out there? Do you think you need to have positive [SEC combo] data for this franchise to really take off or do you think Idelalisib on its own can be competitive? Thank you.

So, Rachel, I'm actually a little bit surprised that the public doesn't seem to be appreciating the data that we have on Idelalisib as much as they should. So first of all let me say something about Ibrutinib. It's a very good product and they have excellent data (inaudible). But if I look at the data in CLL, the NEJM paper that was just published, it's not too different from what we get in CLL from the study that Jennifer Brown presented at ASCO. And the other thing, let me just point somebody else out. The other study that Susan O'Brien presented at ASCO, so the upfront treatment naïve in elderly with 97% response rate and their progression-free survival estimated at 24 weeks of 93%, let me just make a comparison. GA101, which as you know there was a press release yesterday by Roche, very nice improved efficacy over rituximab. But if you look at their study, it was GA101 with chlorambucil, ours was rituximab plus Idelalisib. They had a progression-free survival, median progression-free survival of 23 months. So at 23 months, half of the patients have progressed. In our study, at 24 months, 93 have not progressed, 93%. So, and in addition, we have now -- this is a non-chemotherapy, non-alkylating therapy. I mean, this is I think huge progress and I think there is going to be a big role for this compound in the CLL market even in treatment naïve patients. I mean, that has to wait of course until we have done the Phase 3 studies. The initial indication will be for relapsed refractory. You know the other -- let me make another comment if I may, you know the other thing, I don't think in disease like CLL or NHL you can look at market share. Because patients will live longer and longer with more therapies coming along and I think over time the model should more be that all of them will circle through most of the drugs. So, it's not so much a question of a fixed view of this is the percent market share, but more as people live longer that more and more of these drugs will be used. That's what has happened in multiple myeloma. As you know the survival was 2 years, now it's more like ten years. And so more and more patients circle through the drugs. So I am sorry about my long winded answer but I had to say this. Kevin, do you have any...?

And, Rachel, just to say that we are going to be very committed commercially to this launch. We will build a business unit for oncology. We already have a very nice group of people here at Gilead who have got good experience in sales and marketing oncology. We are now running our analysis on the right size of field force. We want to be ready obviously by the middle of next year. That's about the right timeline based on the fourth quarter NHL submission and we see this as a strong long-term commitment to the world of oncology.

Your next question comes from the line of Yaron Werber from Citi. Please proceed. Yaron Werber – Citi: So if you don't mind, I just wanted to sneak in a couple of questions. One, both Hep C related, one, just Norbert, help us understand a little bit the -- increasingly there’s a correlation that SVR4 is correlated with SVR12. Is there any chance you can start a rolling NVA based on SVR4 and maybe file at some point in Q1? And then Kevin, a question for you, about a third of the Hep-C patients or sitting in potentially some kind of a prison. There’s not really good reimbursement right now for those patients. Is that anything that Gilead can do to help access these patients?

So Yaron, I want to take the first question. I think that thought, I don't even want to entertain because I think the FDA gave the world a big gift when they said you can file with SVR12 instead of SVR24. That was a big step forward. And remember the other thing is that you can't necessarily conclude from one drug to the other. So if we see a high correlation of SVR12 with SVR12 with sofosbuvir/ribavirin or sofosbuvir peg-interferon ribavirin, you can necessarily conclude from that that the same correlation would hold with our fixed-dose combination. So no, our regulatory endpoint is SVR12. That's what we were working towards and we have not even had any conversations with any regulatory agencies of potentially filing with SVR4. So I think that will be asked for too much.

Hey Yaron, it's Kevin. We've had a lot of conversations advisory boards with payors and providers, private, Medicaid, Medicare, VA, corrections. So we've gone across the board from the point of view of the opportunities and the need for sofosbuvir. Certainly in the correctional setting, long-term interferon is very, very difficult just because of people with multiple other comorbidities and psychological problems and obviously transition potentially from the correctional setting back into society. So we’ve had productive discussions. I think we’re going to see some uptake. However, I do think it's going to be a little bit slower, then obviously we'll see a very healthy uptake we believe in the private commercial market, and the other target really for us, which is the VA setting. So I think in terms of prioritization, we're looking at the opportunity to really run programs with the VA as a higher priority than the correctional setting. But we have a correctional team. It's something that we're going to be working on. We’ve had success with HIV and it's certainly in our plans.

Your next question comes from the line of Brian Abrahams from Wells Fargo Securities. Please proceed. Brian Abrahams – Wells Fargo Securities: I was wondering if you could give us a little bit more granularity on the idelalisib regulatory discussions, in terms of how the views on the bar for potential filing and approval on Phase 2 data may differ, if at all, between U.S. and Europe, what initial label you plan to seek? And then what your feedback has been from clinicians since the delta data were reported in terms of how they're expecting to use the drug initially? Thanks.

So Brian, the discussions were actually -- so we talked to four European regulatory agencies and the U.S. FDA and actually to my surprise the feedback was very uniform. All the agencies said, absolutely, you have enough data to file for the iNHL indication and the label that would almost certainly read, that would represent the study population which is [doubly] refractory to both rituximab and alkylating-agent. The discussions that we had where opinions were divided a little bit is on CLL and Sharon still had to do Brian that -- you know the study that Susan O'Brien presented at ASCO, the end was 64, but this was also a dose -- it was a number of different doses. So at the dose which we're seeking to register which is the 150 mg BID, we actually only had 11 patients on that experience. And just like FDA data of 11 patients is really not enough and I have to in a way agree with them. But again, the discussion then became move to study 116, that's what I said today. There will be an interim analysis done that certainly has enough patients. And if that interim analysis turns out positive then we would use those data either to file a new NDA in the U.S. or to update the file during the review in Europe. That's the current plan. And, Kevin, was there another question.

No, I think answered your question, right, Brian?

Yes. Thanks very much.

Your next question comes from the line of Michael Yee from RBC Capital Markets.

Just a philosophical question on how we are thinking about the commercial launch of 7977 which is obviously somewhat around the corner. A lot of people are looking at what Vertex and Merck did in their opening quarters and it was like $500 million combined or so per quarter which was a pretty big annual run rate. But presumably you would do at least that and there is a difference in price and then certainly you have a different efficacy and safety profile. So, how should we be thinking about that relative to what the competitors were doing a couple of years ago? Is there something that we should be thinking about both positively or negatively there?

I think you can take some insights and some proxies from the launch of the protease inhibitors but other things you can't. Let's not forget that there was quite a lot of pent-up demand for the PIs whatever their profile was turned out to be, there was a lot of pent-up demand over the years until they came out. Clearly, I think physicians have been underwhelmed and have the challenges with the protease inhibitors. If you look at the sort of annualized treatment rates, it's coming down and we expect it to be back at the pre-protease inhibitor levels for the launch of Sofosbuvir. But there's likely to be some patients waiting, but it probably isn't at the levels that we're waiting at the time of the protease inhibitors because there hasn’t been that cumulative number of years. Having said that, we have a very, very exciting profile and our expectation is that over two to three year timeframe, that the levels of treatment can go back to if not exceed the levels in the heyday of the pegylated interferons, which was a treatment rate of approximately 150,000 patients per year. So, I certainly think we can get back to those type of levels because of the very strong profile that we have. So, those would be the comments that I would have on the sort of a comparison with the protease inhibitors.

Your next question comes from Robyn Karnauskas from Deutsche Bank. Please proceed.

Quick question on the panel. So what do you think we should really be thinking about as far as the discussion points for the panel? What do you think the key issues will be that actually you will ask the panel to that? And then I just want to make sure, I may have missed this, what is triggering an interim for 116, at what point would you have the interim analysis? Thanks.

So, Robyn, I will answer the second question first, because it's fairly straightforward. It's event driven. As you know the endpoint is PFS, and once we have the requisite number of either progressions or deaths, we will do an interim analysis and then look at where the -- is it on the placebo arm, on the Idelalisib arm. And if there is a highly statistically significant P value then the protocol would call for stopping the study because we've answered the question. By the way, this is not dissimilar to what was disclosed yesterday by Roche with GA101 program. And then the other question you asked is a good one because we had the same question internally. The only thing I could think of the unanswered question in the NDA submission was really what's the optimal treatment for genotype 3? As you know, we have done this study with 12 and 16 week duration. 12 was okay. 16 week was better. So the question becomes, would 24 be even better than 16? Obviously, we don't have data in the NDA. And the other question, would genotype 3 be easier treated with the neutrino regimen which is 12 weeks of pegylated interferon/ ribavirin with sofosbuvir. And actually FDA asked us to answer this question and do a randomized study. So we're initiating a study. We're randomizing patients to even sofosbuvir, 16 weeks of sofosbuvir and riba – sofosbuvir and ribavirin 16, telaprevir/ribavirin 24, and sofosbuvir for patients that (inaudible) ribavirin 12. That will answer the question again. But again the panel will have the challenge of dealing with the existing data that was submitted and make a recommendation as to what should show up in the label I think. But that's the only thing I can think of that’s substantive.

Your next question comes from the line of Ian Somaiya from Piper Jaferry. Please proceed. Ian Somaiya – Piper Jaferry: Just wanted to follow up on Brian's question on the regulatory view on Phase 2 approvals. Would your approval in NHL and potentially pharmaceutical approval for Ibrutinib in CLL, will that preclude another company from coming in and filing and potentially getting approval on Phase 2 data on either of these indications? Was that even a consideration?

Ian, I'm trying to understand what you are getting at, because no. If another company has another agent that shows efficacy in some unmet need population, I don't think it would preclude them from getting approval. Ian Somaiya – Piper Jaferry: I guess the question is more specific to a similar patient population. If another company were to come in and file for the same patients population that you’re seeking approval, different drug, potentially slightly different data, would the regulatory body be accepting of that application or willing to review it?

It cannot. The devil is in the detail and it depends, but I would on the one hand say yes. On the other hand since there are new agents now going to be available, maybe if everything works out, Ibrutinib and idelalisib, those are going to be players. And you will probably have to show that those that the patient population is refractory to those as well. That's what I would think would happen. Ian, the population that we study, the indolent NHL refractory to Rituximab, refractory to an alkylating agent, refractory to the last regimen, refractory to the most common regimens and they were 54 years old on the average. There is maybe nothing left for them. Normally you would say bone marrow transplantation, but you don't do bone marrow transplantation. There is too much morbidity in that older population. So there is really nothing available currently on the market. So that's the rationale for FDA to accept the file and review the data and hopefully approve it. Ian Somaiya – Piper Jaferry: And just a housekeeping question, Robin or Kevin. I don't know which one is more appropriate for. Just Stribild was a little bit light this quarter. I might have missed some of the earlier comments you made related to it. Can you just tell us if there's a one-off event or one-time event?

Hey Ian, it's Kevin. Thanks for the question. Basically with a new product, it tends to float outside our inventory management agreements. Our major wholesalers like to have enough supply, never quite know how a drug is being taken up. Same with Complera, as it was with Stribild. It will be the same with sofosbuvir. So typically, after about nine months, we agree that it's time for the drug to go within the inventory management agreements, because there is a clear trend and we're able to discuss that with the major wholesaler and that's what's happened. So there was a little burn off of major wholesaler inventory, and that's what clicked Stribild down. I would say Ian, that we're really pleased with the uptake of Stribild. If you look at some of the prescription volumes quarter-over-quarter, Q2 grew by 52% over Q1. The actual dollars for Stribild were 50% higher than Complera, the equivalent quarter post-launch. So, we're pretty satisfied that the underlying trend for Stribild is very, very sound. So we think things are going very well.

Your next question comes from Phil Nadeau from Cowen. Please proceed. Phil Nadeau - Cowen & Company: Kevin, it's for you. You briefly mentioned some of the work you're doing in advance of the Sofosbuvir launch. Could you provide us more details what work you're doing with insurance companies and physicians to prepare them for Sofosbuvir today? And then also, in regards to the VA, what work you're doing there? That's a market that we've seen to be price sensitive in the past. Is there some way that you can make them be less price sensitive and strictly sofosbuvir even if lower price competitors were launched after you? Thanks.

Great questions, Phil. Let me try and just give you a little bit of a color on where we are with the kind of readiness. First things I'd say [fairly] is that we've hired now all our field based teams. So, that's our medical scientists, national account managers, and we've hired our new HCV sales team. We've sized that team in a very robust way. This is for today's treaters, for treaters that have dropped off but we believe can come back to treat HCV, and we sized it for future HCV treaters. So, we believe we've got the sizing right. That team of sales representatives are beginning sales training and that will be a very rigorous and very intensive three months of sales training. Our medical scientists and national account managers are actually currently involved in disease awareness education. And as I said earlier, we've been conducting quite a number of advisory boards across all our customer segments physician, nurse practitioner, managed care areas, the VA and corrections. And the last thing before I talk a little bit more about the payer, we have now settled on what will be our supply chain, what wholesalers and what specialty pharmacists will be involved in the distribution and supply of Sofosbuvir. We've done a lot of work on the payer fronts. Clear insight is that the payer was really quite dissatisfied and upset with the introduction of the protease inhibitors. I don't think they were expecting the cost and certainly they were not expecting the poor value in and around the inability for the patient to take the therapy or finish the course of therapy. The payer clearly is looking at efficacy as the number one criteria, the SVR rates, but really want products that are very assured in terms of getting patients through therapy and curing patients. So, around value. We certainly expect that the current prior authorization to the label for HCV treatments will remain in place with Sofosbuvir. The good news is that the officers are very familiar with the prior authorization step, and they can easily do it via computer or via the phone. So, we are expecting that there will be very good payer coverage and that the profile of Sofosbuvir certainly will get very good support from a payer point of view. In terms of the VA, we think Sofosbuvir whether it would be for GT 2 or the shortened duration of interferon for GT 1, will be a nice profile for VA. As we are going in with that profile, we think that will be very supportive of a healthy pricing position. We obviously want to leave as much of the decision around using Sofosbuvir in the hands of the prescriber and on occasions that does require some discounting with selective payers, but we'll be ready for that. So I'm very positive about the possibilities of healthy uptake in the VA setting.

Your next question comes from the line of Brian Skorney from Robert Baird. Please proceed. Brian Skorney – Robert W. Baird: Congrats on a really great quarter. I have two quick ones if I can. I just want to -- assuming that the PI3K Phase 2 combo progresses, wondering if you could just give us an idea of your general thoughts on how you view pivotal combination development. It strikes me that given the efficacy that you see with Idelalisib as a single agent, it could be very difficult to show a benefit by the combination rule on something like PFS or OS when you add the SIC inhibitor, particularly in earlier lines of therapy, where you could probably argue that's theoretically where this type of regimen could be most useful. Have you started thinking about that or discussing with regulators what flexibility they have around the Phase 3 trial designs or any idea what we can think about in terms of a pivotal design for the combo?

Hi Brian. No. So we have not had any conversations with regulators and obviously it really depends on what we’re seeing in the Phase 2 studies. But the SIC PI3K combination, I don't know if you’re familiar with all the data in-vitro, there's synergy. We’ve actually seen synergy in humans when you look at base of an activation assay. So it's a really promising combination, which in fact we now see in Phase 2 what the combination shows and based on that we will go into Phase 3. But to give you some -- one example, for DLBCL for instance will be something where -- it seems like our compact – we don't have enough data yet. We have to study, but Idelalisib may not be completely satisfactory. And as you know, neither is Ibrutinib, particularly in the larger terminal center subset and the APC subset that seems to be working. So I’m sure there will be an immediate place for a combination in one of these subsets of B-cell hematological malignancies where the single agents won't work. But again that will all be guided by Phase 2 data. Brian Skorney – Robert W. Baird: Norbert, just to jump quickly to Hep C as a follow-up to Jeff's question, I know you were looking at 5885, 7977 in GT3 patients and in an ARM and ELECTRON. Have you got data from that yet? You didn't mention in response to his question about 5885.

Brian, those data will probably be at AASLD assuming the abstract gets accepted. But to make a long story short, the numbers particularly in genotype 3 were too small to make any definitive conclusions. And that's why we have now expanded or enrolled another cohort in genotype 3 that's 50 patients. So those 50 patients will then really give us the answer where the response rate is. The thing with small numbers, so we have a total of eight genotype 3 patients and the confidence intervals with whatever results you get goes from perfect to miserable. The answer is one of those or something in between. We can only enter it if we have larger numbers. We should get those data towards -- in the fourth quarter of this year.

(Operator instructions). Your next question comes from the line of Howard Liang from Leerink. Please proceed. Howard Liang – Leerink: Is your filing for Idelalisib for indolent NHL in the first quarter, would that be for accelerated approvals or full approval?

Howard, that has been a debate and the answer is we don’t know. You could make an argument, we should get full approvals because there is no -- it's a progression. There is an ORR in the PSA same point and those are not sold at the endpoint. So it shouldn't be accelerated approval. It should be full approved, but that's obviously a review issue and ultimately an FDA decision.

Your next question comes from the line of Terence Flynn from Goldman Sachs. Please proceed. Terence Flynn – Goldman Sachs: Two for me. I was just wondering if you can update us on plans for TAF protease inhibitor combo and when we might hear about plans to go forward there. And then anything on the arbitration front with Roche regarding 7977? Thanks a lot.

So, in terms of the TAF, the (inaudible) combination is still in Phase 2. As you may remember the response rates that you typically get with protease inhibitors are not as fast as they are with NNRTIs and they are certainly not as fast as they are with integrase inhibitors. So, if you look at the proportion and you take the global time at week 24, it's not the maximum yet. So we really have to go to 48 weeks to ascertain what the real end-point is. And we should get those data sometime in the third quarter of this year. John, do you want to?

It's John Milligan. So the question about the Roche arbitration, there is really nothing to report. It's going along fairly much as scheduled so we really don't expect anything to happen this year as we go through the process of discovery and moving along the process as to finding the contract. So there is nothing new to report here today.

Your next question comes from the line of Joel Sendek from Stifel. Please proceed.

I know it might be a little bit premature to ask this question but just what you think about pricing, pretty much all your new drugs, whether it's sofosbuvir or idelalisib. Is there any thought to may be thinking differently in pricing for cure as opposed to the traditional way of pricing just individually per patient as it becomes more difficult to get full reimbursement?

Hey, Joel, it's Kevin. I think we look at it always. Obviously with something like, for example genotype 1 HCV, today you got telaprevir and then you've got varying time periods for your peg riba. So you've got the individual PI, you've got the complete therapy and you've got cost to cure. So I think we look at it in all of those different directions and we are going through all of those deliberations right now for Sofosbuvir. I think ultimately, Joel, honestly, I am a bit of a traditionalist and you can look at all of those ways and often companies use sort of, I would say, elaborate ways of pricing because of challenges around the profile of the drug. I think ultimately you do come down to a (inaudible) list price and I think that's where we will be solidly, very clearly, when we come to the launch of Sofosbuvir. So, I think you will see a very clear and a very straightforward way of pricing Sofosbuvir.

Joel, I'd like to add something. Ultimately, as we optimize the treatment modality, particularly the fixed dose combination in 5816 that comes behind it, price per cure and price per treatment should actually be the same because each treatment equals a cure. As I have said in the LONESTAR study, it's difficult to treat PI failures half of which were cirrhotic, we had 95% cure rate. So, that ultimately I hope it won't be an issue.

Mr. O'Brien, we have time for one more question coming from the line of Jason Kolbert from Maxim. Please proceed.

Just want to ask you same type of question only about Japan and pricing? What is the cost for the standard of care in Japan today and how do the Japanese look at pricing versus how the Americans look at pricing. So, can you give us a feel for where the value of a patient cure is in Japan?

Hey, Jason, this is Kevin. I see, it's a very simple question you have asked but it's quite difficult to answer because the age of the patients, 43% of Japanese patients are over the age of 65 and they are in advanced stage of their disease, they have had it for a long time. A lot of them are in significant cirrhosis moving to carcinoma. They just are ineligible to the current standard. So, pegylated interferon ribavirin is extremely difficult. And that's why the Japanese opinion leaders and the Japanese patients are very much looking forward to, for example, entry with GT 2, which is just having sofosbuvir and ribavirin. So, I think in terms of pricing in some ways you cannot wipe the slate clean, and you’re going with these new therapies. And the traditional approach is not a great pegging of price. Typically the Japanese markets do have a discount to the U.S. market. So I think that will be still applicable with sofosbuvir. But I think we’re really starting fresh with these new treatments and the very high need of the typical -- and the profile that the Japanese patient has.

Thanks, Phil, and thanks everyone for joining us today on the call. We appreciate your continued interest in Gilead and the team here looks forward to providing you with updates on our future progress. Cheers.