<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.   20549
                                           
                                           
                                      FORM 10-Q
                                           
                                           
[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
    
For the period ended         SEPTEMBER 30, 1997  
                    --------------------------------------
    
                                          OR
                                           
[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 

For the transition period from ____________  to _____________


                                 Commission File No. 
                                       0-19731
 

                                GILEAD SCIENCES, INC.
                (Exact name of registrant as specified in its charter)
                                           
                                           
           Delaware                                    94-3047598     
(State or other jurisdiction of                    (I.R.S. Employer
 incorporation or organization)                   Identification No.)

333 Lakeside Drive, Foster City, California                94404     
    (Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code:     415-574-3000


    Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
Registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.

                                  Yes     X             No
                                       --------            --------
                                           
    Number of shares outstanding of the issuer's common stock, par value 
$.001 per share, as of October 20, 1997:    29,733,935.


                                     1

<PAGE>

                                GILEAD SCIENCES, INC.
                                           
                                        INDEX
                                           
                                           

PART  I.  FINANCIAL INFORMATION                                      PAGE NO.
                                                                     --------

Item  1.    Consolidated Financial Statements and Notes

            Consolidated Balance Sheets -- September 30, 1997
            and December 31, 1996                                        3

            Consolidated Statements of Operations -- for 
            the three months and nine months ended 
            September 30, 1997 and 1996                                  4

            Consolidated Statements of Cash Flows -- for 
            the nine months ended September 30, 1997 
            and 1996                                                     5

            Notes to Consolidated Financial Statements                   6


Item  2.    Management's Discussion and Analysis of Financial
            Condition and Results of Operations                          7



PART II.  OTHER INFORMATION


Item  6.    Exhibits and Reports on Form 8-K                            10

SIGNATURES                                                              11


                                      2

<PAGE>


                            PART I. FINANCIAL INFORMATION
                                           

Item 1.  Consolidated Financial Statements and Notes

                                GILEAD SCIENCES, INC.
                             CONSOLIDATED BALANCE SHEETS
                  (in thousands, except share and per share amounts)

                                     ASSETS
                                                SEPTEMBER 30,      DECEMBER 31,
                                                    1997              1996
                                                -------------      ------------
                                                 (unaudited)          (Note)

Current assets:

    Cash and cash equivalents                    $  45,670          $ 131,984
    Short-term investments                         286,494            163,979
    Other current assets                             4,346              4,290
                                                 ---------          ---------

       Total current assets                        336,510            300,253

Property and equipment, net                         10,225              9,172
Other assets                                         1,419              1,248
                                                 ---------          ---------
                                                 $ 348,154          $ 310,673
                                                 ---------          ---------
                                                 ---------          ---------

                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:

    Accounts payable                             $   1,592          $   2,501
    Accrued clinical and preclinical expenses        7,650              5,007
    Other accrued liabilities                        5,785              4,433
    Deferred revenues                                3,304                527
    Current portion of equipment financing 
      obligations and long-term debt                 2,449              3,631
                                                 ---------           --------

       Total current liabilities                    20,780             16,099

Noncurrent portion of equipment financing 
  obligations and long-term debt                     1,570              2,914

Commitments

Stockholders' equity:
    Preferred stock, par value $.001 per share; 
      5,000,000 shares authorized;  1,133,786 
      shares of Series B issued and outstanding 
      at September 30, 1997; none at 
      December 31, 1996 (liquidation 
      preference of $40.0 million)                       1                  -
    Common stock, par value $.001 per share; 
      60,000,000 shares authorized; 29,719,035 
      shares and 28,758,165 shares issued and 
      outstanding at September 30, 1997 and 
      December 31, 1996, respectively                   30                 29
    Additional paid-in capital                     475,796            426,577
    Unrealized gains (losses) on investments, 
      net                                              362                 89
    Accumulated deficit                           (150,055)          (134,486)
    Deferred compensation                             (330)              (549)
                                                 ---------          ---------

       Total stockholders' equity                  325,804            291,660
                                                 ---------          ---------
                                                 $ 348,154          $ 310,673
                                                 ---------          ---------
                                                 ---------           --------

Note:    The consolidated  balance sheet at December 31, 1996 has been derived
         from audited financial statements at that date but does not include 
         all of the information and footnotes required by generally accepted 
         accounting principles for complete financial statements.  

                            See accompanying notes.



                                     3

<PAGE>

                            GILEAD SCIENCES, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                (unaudited)
                   (in thousands, except per share amounts)



<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED         NINE MONTHS ENDED
                                                   SEPTEMBER 30,             SEPTEMBER 30,
                                              -----------------------    ---------------------
                                                1997           1996         1997       1996
                                              -----------------------    ---------------------
<S>                                           <C>            <C>          <C>         <C>
Revenues:

    Product sales, net                        $  2,326       $  3,353     $  9,316    $  4,755
    Contract revenues                            2,347         21,301       20,438      22,884
    Royalty revenues                               264              -          374           -
                                              --------       --------     --------    --------

Total revenues                                   4,937         24,654       30,128      27,639

Costs and expenses:

    Cost of sales                                  180            447          995         548
    Research and development                    13,604         11,163       39,126      31,008
    Selling, general and administrative          6,233          7,641       18,525      19,947
                                              --------       --------     --------    --------

Total costs and expenses                        20,017         19,251       58,646      51,503
                                              --------       --------     --------    --------

Income (loss) from operations                  (15,080)         5,403      (28,518)    (23,864)

Interest income, net                             4,749          3,907       12,949      10,214
                                              --------       --------     --------    --------

Net income (loss)                             $(10,331)      $  9,310     $(15,569)   $(13,650)
                                              --------       --------     --------    --------
                                              --------       --------     --------    --------

Net income (loss) per share                     $(0.35)      $   0.30     $  (0.53)   $  (0.50)
                                              --------       --------     --------    --------
                                              --------       --------     --------    --------

Common and common equivalent
shares used in the calculation of net 
income (loss) per share                         29,406         30,549       29,147      27,500
                                              --------       --------     --------    --------
                                              --------       --------     --------    --------
</TABLE>



                            See accompanying notes.


                                     4

<PAGE>
                           GILEAD SCIENCES, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
               Increase (decrease) in cash and cash equivalents
                                (unaudited)
                               (in thousands)


<TABLE>
<CAPTION>
                                                        NINE MONTHS ENDED SEPTEMBER 30,
                                                        -------------------------------
                                                              1997           1996
                                                        ---------------  --------------
<S>                                                        <C>            <C>
Cash flows from operating activities:
    Net loss                                               $  (15,569)    $  (13,650)
    Adjustments used to reconcile net loss 
    to net cash used in operating activities:
         Depreciation and amortization                          2,277          3,718
         Changes in assets and liabilities:
              Other current assets                                (56)       (14,766)
              Other assets                                       (171)          (136)
              Accounts payable                                   (909)          (471)
              Accrued clinical and preclinical expenses         2,643          1,626
              Other accrued liabilities                         1,352          2,453
              Deferred revenues                                 2,777            792
                                                           ----------     ----------

                 Total adjustments                              7,913         (6,784)
                                                           ----------     ----------

                 Net cash used in operating activities         (7,656)       (20,434)
                                                           ----------     ----------

Cash flows from investing activities:
    Purchases of short-term investments                      (333,197)      (324,752)
    Sales of short-term investments                           163,491        201,366
    Maturities of short-term investments                       47,464        117,209
    Capital expenditures                                       (3,111)        (1,565)
                                                           ----------     ----------
                 Net cash used in investing activities       (125,353)        (7,742)
                                                           ----------     ----------

Cash flows from financing activities:
    Payments of equipment financing obligations 
         and long-term debt                                    (2,526)        (2,014)
    Proceeds from issuance of common stock                      9,221        158,813
    Proceeds from issuance of preferred stock                  40,000              -
                                                           ----------     ----------
                 Net cash provided by financing activities     46,695        156,799
                                                           ----------     ----------

Net increase (decrease) in cash and cash equivalents          (86,314)       128,623

Cash and cash equivalents at beginning of period              131,984         27,420
                                                           ----------     ----------

Cash and cash equivalents at end of period                 $   45,670     $  156,043
                                                           ----------     ----------
                                                           ----------     ----------
</TABLE>



                            See accompanying notes.


                                     5

<PAGE>

                            GILEAD SCIENCES, INC.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           
                             September 30, 1997
                                (unaudited)


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF PRESENTATION

    The information at September 30, 1997, and for the three and nine month 
periods ended September 30, 1997 and 1996, is unaudited but includes all 
adjustments (consisting only of normal recurring adjustments) which, in the 
opinion of management, are necessary to state fairly the financial 
information set forth therein in accordance with generally accepted 
accounting principles. The interim results are not necessarily indicative of 
results to be expected for the full fiscal year.  These financial statements 
should be read in conjunction with the audited financial statements for the 
fiscal year ended December 31, 1996 included in the Company's annual report 
to security holders furnished to the Securities and Exchange Commission 
pursuant to Rule 14a-3(b) in connection with the Company's 1997 Annual 
Meeting of Stockholders and the interim financial statements included in the 
previously filed quarterly report (Form 10-Q) for the three and six months 
ended March 31, 1997 and June 30, 1997.

    PER SHARE DATA

    Net income per share is computed using the weighted average number of 
common shares and dilutive common equivalent shares attributable to 
convertible preferred stock and stock options outstanding during the period.  
Net loss per share is computed using the weighted average number of common 
shares outstanding during the period.  Common stock equivalents relating to 
convertible preferred stock and stock options are excluded from the 
computation of net loss per share as their effect is antidilutive.

    In February 1997, the Financial Accounting Standards Board issued 
Statement No. 128, "Earnings Per Share" (EPS).  The Statement is effective 
for both interim and annual financial statements for periods ending after 
December 15, 1997.  Under the Statement, primary EPS computed in accordance 
with Accounting Principle Board Opinion No. 15 will be replaced with a new 
simpler calculation called "basic EPS" and Gilead will be required to restate 
comparative EPS amounts for all prior periods.  Under the new requirements, 
basic EPS for the three and nine month periods ended September 30, 1997 and 
the nine month period ended September 30, 1996 will be unchanged from primary 
EPS as disclosed.  Basis EPS for the three month period ended September 30, 
1996 is $0.33 per share as compared to $0.30 per share under the primary EPS 
method.  Fully diluted EPS will not change significantly but has been renamed 
"diluted EPS".  Gilead plans to implement the Statement in the fourth quarter 
of 1997.

2.  INVESTMENTS

    Management determines the appropriate classification of debt securities 
at the time of purchase and reevaluates such designation as of each balance 
sheet date.  The Company's debt securities, which consist primarily of U.S. 
Treasury Securities, corporate commercial paper, bonds and notes of domestic 
corporations and asset-backed securities, are classified as 
available-for-sale and are carried at estimated fair value in cash 
equivalents and short-term investments. Unrealized gains and losses are 
reported as a separate component of stockholders' equity.  The amortized cost 
of debt securities in this category is adjusted for amortization of premiums 
and accretion of discounts to maturity. Such amortization is included in 
interest income.  Realized gains and losses on available-for-sale securities 
are included in interest income and expense.  The cost of securities sold is 
based on the specific identification method. 


                                     6

<PAGE>

Interest and dividends on securities classified as available-for-sale are 
included in interest income.  At September 30, 1997, the contractual 
maturities of the debt securities do not exceed three years.


I
tem 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

OVERVIEW

    Since its inception in June 1987, Gilead has devoted the substantial 
portion of its resources to its research and development programs, with 
significant expenses relating to commercialization beginning in 1996. With 
the exception of the third quarter of 1996 and the second quarter of 1997, 
when the Company recognized significant license fees and milestone payments 
related to two collaboration agreements, the Company has incurred losses in 
every quarter since its inception.  Gilead expects to incur losses for the 
next several years due primarily to its research and development programs, 
including preclinical studies, clinical trials and manufacturing, as well as 
marketing and sales efforts in support of VISTIDE-Registered Trademark- 
(cidofovir injection) and other potential products.  

    Gilead is independently marketing VISTIDE in the United States for the 
treatment of cytomegalovirus retinitis in patients with AIDS.  P&U has the 
exclusive right to market VISTIDE outside of the United States, and recently 
launched the product in several European countries after receipt of marketing 
authorization from the European Commission.  The financial contribution from 
VISTIDE sales and royalties has been modest to date, and the Company does not 
anticipate achieving sustained profitability without significant revenue 
contribution from other products in development, supplemented by contract 
revenue.  The Company expects that its financial results will continue to 
fluctuate from quarter to quarter and that such fluctuations may be 
substantial. There can be no assurance that the Company will successfully 
develop, commercialize, manufacture and market additional products or achieve 
sustained profitability.  As of September 30, 1997, the Company's accumulated 
deficit was approximately $150.1 million.

    The successful development and commercialization of the Company's 
products will require substantial and ongoing efforts at the forefront of the 
life sciences industry.  The Company is pursuing preclinical or clinical 
development of a number of additional product candidates. Even if these 
product candidates appear promising during various stages of development, 
they may not reach the market for a number of reasons. Such reasons include 
the possibilities that the potential products will be found ineffective or 
unduly toxic during preclinical or clinical trials, fail to receive necessary 
regulatory approvals, be difficult to manufacture on a large scale, be 
uneconomical to market or be precluded from commercialization by proprietary 
rights of others.

    As a company in an industry undergoing rapid change, the Company faces 
significant challenges and risks, including the risks inherent in its 
research and development programs, uncertainties in obtaining and enforcing 
patents, the lengthy and expensive regulatory approval process, intense 
competition from pharmaceutical and biotechnology companies, increasing 
pressure on pharmaceutical pricing from payors, patients and government 
agencies, and uncertainties associated with the market performance of VISTIDE 
and the market acceptance of any of the Company's products in development 
that reach the market.  These risks are discussed in greater detail in the 
Company's Annual Report on Form 10-K for the year ended December 31, 1996.  
Stockholders and potential investors in the Company should carefully consider 
these risks in evaluating the Company and should be aware that the 
realization of any of these risks could have a dramatic and negative impact 
on the Company's stock price.

FORWARD-LOOKING STATEMENTS

    This report contains forward-looking statements relating to clinical and 
regulatory developments, marketing and sales matters, future expense levels 
and financial results.  These statements involve inherent risks and 
uncertainties. The Company's actual results may differ significantly from the 
results discussed in the forward-looking statements.  Factors that might 
cause such a difference include, but are 


                                     7

<PAGE>

not limited to, the risks  discussed in the Company's Annual Report on Form 
10-K for the year ended December 31, 1996, particularly those relating to the 
development, regulatory approval and marketing of pharmaceutical products.

RESULTS OF OPERATIONS

REVENUES

    The Company had total revenues of $4.9 million and $24.7 million for the 
quarters ended September 30, 1997 and 1996, respectively.  Total revenues 
included net product sales of $2.3 million and $3.4 million from the sale of 
VISTIDE for the quarters ended September 30, 1997 and 1996, respectively.  
This decrease in product sales reflects an overall decrease in the demand for 
drugs which treat cytomegalovirus retinitis in patients with AIDS that has 
resulted from the increasing general availability of more effective therapies 
for AIDS.  

    Total revenues for the nine month periods ended September 30, 1997 and 
1996 were $30.1 million and $27.6 million, respectively, which included net 
product sales of $9.3 million and $4.8 million for the same periods. Revenues 
of approximately $13.0 million for the nine month period ended September 30, 
1997 resulted from milestone payments under the Company's collaborative 
agreements with P&U and F. Hoffmann-La Roche Ltd. ("Roche").  Revenues 
totaling $20.3 million were recognized in the nine month period ended 
September 30, 1996 related to two initial license fees under the Company's 
agreements with these two partners. In addition, revenues in the first nine 
months of 1997 included $4.9 million of contract revenue from Roche related 
to the collaboration agreement to develop and commercialize therapies for the 
treatment and prevention of viral influenza.  Revenues of approximately $2.3 
million in each of the nine month periods ended September 30, 1997 and 1996 
resulted from the Company's collaborative research and development agreement 
with Glaxo Wellcome.

OPERATING COSTS AND EXPENSES

    The Company's cost of sales was $0.2 million and $0.4 million for the 
quarters ended September 30, 1997 and 1996,  respectively.  Cost of sales 
resulted from the Company's sale of VISTIDE, which was launched in June 1996. 
Cost of sales for the nine month periods ended September 30,  1997 and 1996 
was $1.0 million and $0.5 million, respectively.  The Company's cost of sales 
has decreased as a percentage of product sales because of reserves for 
inventory obsolescence in 1996 which were not required in 1997.

    For the quarter ended September 30, 1997, the Company's research and 
development expenses increased 21.9% to $13.6 million from $11.2 million for 
the same period in 1996.  Research and development expenses for the nine 
month periods ended September 30, 1997 and 1996 were $39.1 million and $31.0 
million, respectively.  These increases were due primarily to expansion in 
the scope and number of clinical trials for several product candidates and a 
related increase in research and development staffing and manufacturing. The 
Company expects its research and development expenses will increase in the 
fourth quarter and increase significantly throughout 1998, reflecting 
anticipated increased expenses related to clinical trials for several product 
candidates as well as related increases in staffing, preclinical studies and 
manufacturing.

    Selling, general and administrative expenses were $6.2 million and $7.6 
million for the quarters ended September 30, 1997 and 1996, respectively, 
representing a decrease of 18.4%. Selling, general and administrative 
expenses were $18.5 million and $19.9 million in the nine month periods 
ending September 30, 1997 and 1996, respectively. This decrease for the three 
and nine month periods resulted from VISTIDE product launch-related expenses 
incurred in 1996 which were not incurred in 1997.  The Company expects its 
selling, general and administrative expenses to increase during the remainder 
of 1997 and to increase significantly in 1998 in connection with the ongoing 
sales and marketing activities related to the sale of VISTIDE and other 
potential products as well as continued support of expanded 


                                     8

<PAGE>

research an development activities.   In particular, the Company anticipates 
expanding its sales and marketing capacity during 1998 in anticipation of a 
possible launch of PREVEON-TM- (adefovir dipivoxil) for the treatment of HIV 
and AIDS, although no assurance can be given that such product will receive 
regulatory approval or be successfully launched.

NET INTEREST INCOME

    The Company had net interest income of $4.7 million and $3.9 million for 
the quarters ended September 30, 1997 and 1996, respectively, representing an 
increase of 21.6%.  Net interest income was $12.9 million and $10.2 million 
for the nine month periods ended September 30, 1997 and 1996, respectively.  
Net interest income increased in the third quarter of 1997 primarily due to 
the Company's higher average cash and cash equivalents and short-term 
investment balances.

LIQUIDITY AND CAPITAL RESOURCES

    Cash and cash equivalents and short-term investments totalled $332.2 
million at September 30, 1997 compared to $296.0 million at December 31, 
1996. The increase is due to cash proceeds from stock issuances and milestone 
payments during 1997 offset by cash used in operations and to fund capital 
acquisitions. During the remainder of 1997 and for 1998, the Company expects 
to incur research and development and selling, general and administrative 
expenses significantly in excess of amounts incurred in prior periods.

    Net cash used in operations was $7.7 million and $20.4 million for the 
nine month periods ended September 30, 1997 and 1996, respectively.  Cash 
used in operations during the 1996 period included an outstanding receivable 
related to the Company's collaborative agreements.  No such receivable was 
outstanding at September 30, 1997.  The Company believes that its existing 
capital resources, supplemented by net product revenues and contract 
revenues, will be adequate to satisfy its capital needs for the foreseeable 
future.  The Company's future capital requirements will depend on many 
factors, however, including the progress of the Company's research and 
development, the scope and results of preclinical studies and clinical 
trials, the cost, timing and outcomes of regulatory reviews, the rate of 
technological advances, determinations as to the commercial potential of the 
Company's products under development, the commercial performance of VISTIDE 
and any of the Company's products in development that receive marketing 
approval, administrative and legal expenses, the status of competitive 
products, the establishment of manufacturing capacity or third-party 
manufacturing arrangements, the expansion of sales and marketing 
capabilities, possible geographic expansion and the establishment of 
additional collaborative relationships with other companies.

    The Company may in the future require additional funding, which could be 
in the form of proceeds from equity or debt financings or additional 
collaborative agreements with corporate partners.  If such funding is 
required, there can be no assurance that it will be available on favorable 
terms,  if at all.


                                     9

<PAGE>


 
                        PART II.  OTHER INFORMATION



Item 6.  Exhibits and Reports on Form 8-K.

(a) Exhibits

    10.45   Amended and Restated Copromotion Agreement between Registrant and
            Roche Laboratories, Inc. dated September 12, 1997 with
            certain confidential information deleted.

(b) Reports on Form 8-K

    There were no reports on Form 8-K filed for the Quarter ended September 
30, 1997.


                                     10

<PAGE>


                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                 GILEAD SCIENCES, INC.
                                 -----------------------------
                                 (Registrant)





Date:    October 30, 1997        /s/ JOHN C. MARTIN  
                                 -----------------------------
                                 John C. Martin
                                 President and Chief Executive Officer




Date:    October 30, 1997        /s/ MARK L. PERRY   
                                 -----------------------------
                                 Mark L. Perry
                                 Vice President, Chief Financial Officer
                                 and General Counsel
                                 (Principal Financial and Accounting Officer)


                                    11





<PAGE>

                                                                   EXHIBIT 10.45

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY 
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND 
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES AND EXCHANGE ACT 
OF 1934, AS AMENDED.
                                           
                                 AMENDED AND RESTATED
                                 COPROMOTION AGREEMENT
                                           
    This Amended and Restated Agreement (this "Agreement") made this 12th day 
of September, 1997 by and between Roche Laboratories Inc.,  a New Jersey 
corporation having its principal place of business at 340 Kingsland Street, 
Nutley, New Jersey 07110 (hereinafter referred to as "ROCHE") and Gilead 
Sciences Inc., a Delaware corporation having a principal place of business at 
333 Lakeside Drive, Foster City, California 94404 (hereinafter referred to as 
"GILEAD"), amends and restates in its entirety the Copromotion Agreement 
between the parties dated September 27, 1996.

                                     WITNESSETH
                                           
    WHEREAS,  Genentech, Inc. ("GENENTECH") is presently marketing the 
product Roferon-Registered Trademark--A (Interferon alfa-2a, recombinant) for 
certain cancer indications and ROCHE and GILEAD are copromoting this product 
for treating hepatitis C; and

    WHEREAS, ROCHE and GILEAD wish to continue their copromotion arrangement 
but amend
 certain terms of this Agreement.

    NOW, THEREFORE, for and in consideration of the mutual covenants 
contained herein, ROCHE and GILEAD hereby agree as follows:

                                ARTICLE 1-DEFINITIONS
                                           
1.01  In the terms defined herein, the singular shall include the plural and  
      vice versa.

1.02  The effective date of this Agreement shall be September 27, 1996.


                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

1.03  The term "Call" shall mean a visit by a professional sales 
      representative to a physician licensed to prescribe, dispense or 
      administer legend drugs, which visit is for the purpose of making a 
      Primary Presentation on the Product and involving no more than two 
      other product presentations.  Such physician shall be selected from a 
      target audience defined by the Committee (as hereinafter defined).

1.04  The term "Calendar Year" shall mean a one year period commencing on 
      January 1.  For instance, the first Calendar Year shall mean the period 
      from January 1, 1997 to December 31, 1997.  The second Calendar Year 
      shall mean the period from January 1, 1998 to December 31, 1998.

1.05  The term "Factory Sales" shall mean Gross Sales less the following 
      deductions (i) returns (including withdrawals and recalls); (ii) 
      chargebacks; (iii) sales and other taxes directly linked to and 
      included in the Gross Sales amount and (iv) invoice corrections; 
      provided, however, that solely for purposes of calculating the payments 
      due to GILEAD for sales in the first Calendar Year (1997) pursuant to 
      Paragraph 3.02, returns as described in clause (i) above shall not be 
      deducted from Gross Sales in calculating Factory Sales.

1.06  The term "Field" shall mean the treatment of hepatitis C.

1.07  The term "Gross Sales" shall mean the amount invoiced by ROCHE and its 
      sublicensees for sales of Product in the Territory to third parties.

1.08  The term "Net Sales" shall mean Factory Sales less the following 
      deductions (i) rebates (price reductions, including Medicaid and 
      similar types of rebates); (ii) volume (quantity) discounts and 
      discounts granted at the time of invoicing; and (iii) a lump sum 
      deduction of [                 ] of Factory Sales for those 
      sales-related deductions which are not accounted for on a 
      product-by-product basis (for example, without limitation, outward 
      freight, transportation insurance, packaging materials for dispatch of 
      goods, customs duties, discounts granted later than at the time of 
      invoicing, cash discounts and product liability insurance).


                                       2

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

         All of the deductions from Gross Sales to Factory Sales to Net Sales 
      shall be allocated on a pro rata basis to Product sold for the 
      Hepatitis C indication and to Roferon-Registered Trademark--A 
      (Interferon alfa-2a, recombinant) sold for all other indications, 
      pursuant to the allocation methodology set forth in Paragraph 3.08; 
      such deductions shall not be applied differentially to Hepatitis C 
      sales relative to sales for other indications.

1.09  The term "Primary Presentation" shall mean a full Product presentation 
      during which key product attributes are verbally presented; provided, 
      however, that no more than one  presentation in any Call shall be 
      considered a Primary Presentation, which shall be the presentation on 
      which the most time is spent during the Call.

1.10  The term "Product" shall mean Roferon-Registered Trademark--A 
      (Interferon alfa-2a, recombinant)  for use in the Field.

1.11  The term "The Term of this Agreement" shall mean the period specified 
      in Paragraph 7.01.

1.12  The term "Territory" shall mean the United States and its 
      territories, possessions and commonwealths.

                         ARTICLE 2 - GRANTS AND OBLIGATIONS
                                           
2.01  ROCHE hereby grants to GILEAD during the Term of this Agreement and 
      under the conditions herein imposed the right to promote and detail 
      jointly with ROCHE the Product under the trademark "ROFERON-A" for use 
      in the Field in the Territory.  ROCHE shall not enter into any other 
      copromotion or similar arrangement with a third party regarding the 
      Product for use in the Field in the Territory during the Term of this 
      Agreement.  This provision shall not preclude ROCHE from using contract 
      personnel to detail the Product.  During the term of this Agreement, 
      GILEAD shall not enter into any other copromotion or similar 
      arrangement with a third party in the Field and within the 


                                       3

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      Territory nor shall GILEAD market any other product in the Field and 
      within the Territory.

2.02  Subject to the provisions of and during the Term of this Agreement, 
      each party shall use its best efforts consistent with accepted business 
      practices and legal requirements to deploy its sales force to promote 
      and detail the Product for use in the Field in the Territory in such 
      manner and with such expedition as the party itself would have adopted 
      in launching, promoting and detailing a major pharmaceutical Product of 
      its own invention. In this regard, GILEAD will provide a qualified 
      field sales staff for detailing and promoting the Product resulting in 
      at least the number of Calls required pursuant to Paragraph 2.03.

2.03  During each calendar year, GILEAD shall make at least [            ] 
      Calls and ROCHE shall make at least [    ] Calls.  At the end of the 
      third quarter of each Calendar Year, ROCHE and GILEAD shall discuss the 
      number of calls each party is required to make in the subsequent 
      Calendar Year.  In the event that the number of Calls which either 
      party is required to make changes, then the parties will agree on an 
      appropriate adjustment to the compensation structure provided in this 
      Agreement.

                                ARTICLE 3 - PAYMENTS
                                           
3.01  ROCHE has paid GILEAD a one time, nonrefundable fee of [            ] 
      as compensation for its sales efforts during calendar year 1996.

3.02  ROCHE shall pay GILEAD a royalty on Net Sales from the first Calendar 
      Year through the third Calendar Year according to the following three 
      tiers of Factory Sales. Factory Sales falling within each tier shall 
      first be converted to Net Sales, against which the appropriate royalty 
      shall be applied.


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

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- -------------------------------------------------------------------------------
                                                                 ROYALTY AS
                                                                 % OF NET SALES
- -------------------------------------------------------------------------------
Factory Sales from [   ] of base Factory 
Sales forecast                                                   [    ]
- -------------------------------------------------------------------------------
Factory Sales from [   ] of base Factory 
Sales forecast                                                   [    ]
- -------------------------------------------------------------------------------
Factory Sales greater than [   ] of base Factory 
Sales forecast                                                   [    ]
- -------------------------------------------------------------------------------

      The parties have agreed to base Factory Sales forecasts for Product of 
      [             ] in the first Calendar Year.  The base Factory Sales 
      forecast for the second Calendar Year for Product, shall be, at 
      GILEAD's option, the lesser of  [             ] or the forecast which 
      ROCHE finalizes for use by ROCHE's field force as a target for Product 
      in the second Calendar Year.   A base Factory Sales forecast for the 
      third Calendar Year shall be calculated as described in the following 
      sentences and equation:

      At the end of the third quarter of second Calendar year, the Committee 
      shall determine a base Factory Sales forecast for the third Calendar 
      Year.   In summary, the 1999 base Factory Sales forecast shall be 
      calculated as follows:


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

                [Actual Year to Date 1998 Factory Sales of Product(1)
                        (1,2,3Q 1998 Factory Sales of Product)
                                            
                                          +
                                            
                   Estimated 4Q 1998 Factory Sales of Product
       [1998 Year-to-Date Growth Rate(2) + (4Q97 Growth Rate(3)- Average of 
          1,2,3Q 1997 Growth Rate(4))] x (3Q98 Factory Sales of Product)]
                                            
                                          X
                                            
                          1998 Roferon-A (Hepatitis) Growth
       Growth rate(5) of (full year Estimated 1998 Factory Sales of Product) 
                   over (full year 1997 Factory Sales of Product)
                                            
                                          =
                                            
                      Year 3 (1999) base Factory Sales Forecast
                                            
     
      By way of example, if in 1997 Factory Sales of Product are 
      [             ] then the royalty payable to GILEAD shall be calculated 
      as follows:
     
     -  1997 base Factory Sales forecast  = [               ]
     -  [    ] of 1997 base Factory Sales forecast  = [               ]
     -  Net sales are assumed to be [   ] of Factory Sales.

- ----------------
(1) Factory Sales of Product: Roferon-A Hepatitis C Factory Sales calculated 
by applying the Roferon-A hepatitis ratio from the Sales Tracking Study to 
total Roferon-A Factory Sales.

(2) YTD Growth Rate: {[(1Q98 Factory Sales of Product-4Q97 Factory Sales of
Product)/4Q97 Factory Sales of Product] + [(2Q98 Factory Sales of Product-1Q98
Factory Sales of Product)/1Q98 Factory Sales of Product] + [(3Q98 Factory Sales
of Product -2Q98 Factory Sales of Product)/2Q98 Factory Sales of Product]}/3.

(3) 4Q97 Growth Rate: (4Q97 Factory Sales of Product-3Q97 Factory Sales of
Product)/3Q97 Factory Sales of Product.

(4) 1,2,3Q 1997 Growth Rate: {[(1Q97 Factory Sales of Product-4Q96 Factory 
Sales of Product)/4Q96 Factory Sales of Product] + [(2Q97 Factory Sales of
Product-1Q97 Factory Sales of Product)/1Q97 Factory Sales of Product] + [(3Q97
Factory Sales of Product-2Q97 Factory Sales of Product)/2Q97 Factory Sales of
Product]}/3.

(5) Growth Rate: (1998 Factory Sales of Product-1997 Factory Sales of
Product)/1997 Factory Sales of Product.


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


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        Factory Sales       Net Sales          Royalty Rate        Royalty Due
        -------------       ---------          ------------        -----------
        [        ]       [        ]               [   ]            [         ]
        Next [     ]     [        ]               [   ]            [         ]
        Next [     ]     [        ]               [   ]            [         ]
        ------------     ----------                                -----------
        Total [    ]     [        ]                                [         ]

     An example for the determination of the base Factory Sales forecast for
     1999 is attached as Exhibit A.

3.03  ROCHE will have no liability with respect to payments due GILEAD under 
      Paragraph 3.02 which might have been earned on the Product by GILEAD 
      but were not earned, or for any damage of any nature incurred by GILEAD 
      in anticipation of Net Sales which might have been earned but were not 
      earned, if, for any reason, including the negligence (but not the 
      willful misconduct) of ROCHE: (a) ROCHE is unable to ship the Product 
      in the Territory, (b) the Product is withdrawn from the market in the 
      Territory, (c) sales of the Product in the Territory do not reach a 
      level reasonably expected by previous sales, or any level or (d) Force 
      Majeure as set forth in Article 8.  In the event that any of the 
      foregoing occur, excluding (c), in such a way that the financial 
      assumptions underlying this Agreement are no longer valid, then the 
      parties will renegotiate the terms of this Agreement in good faith.

3.04  Within [                    ] after the close of each [               ]
      during the Term of this Agreement, ROCHE shall submit to GILEAD a 
      statement showing: (i) the amount of Gross Sales, Factory Sales and Net 
      Sales, itemizing the deductions provided for in Paragraphs 1.05 and 
      1.08 during such [       ]and on a cumulative basis year-to-date, and 
      (ii) the calculation of payments to GILEAD pursuant to Paragraph 3.02. 
      The calculations provided for herein shall be subject to audit pursuant 
      to Paragraph 4.15.

3.05  For the one year period commencing upon the expiration of this 
      Agreement ("Residual Year"), ROCHE shall pay GILEAD 
      [                   ] of the total amount paid to 


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      GILEAD for the previous calendar year pursuant to paragraph 3.02. The 
      payment for the Residual Year shall be made in equal [        ] 
      installments within [                  ] after the end of each 
      [            ] of the Residual Year.

3.06  Under the provisions of this Agreement, all sums due to GILEAD for 
      sales of the Product for use in the Field within the Territory 
      hereunder will be payable by ROCHE in U.S. Dollars via wire transfer  
      to GILEAD's account at the following address:

                         Wells Fargo Bank, N.A.
                         444 Market Street, 7th Floor
                         San Francisco, CA 94163
                         Attn: Ellie Yi

                         ABA # 121000 248
                         Dept. # 068
                         Acct. # 4068-000769
                         Acct. Name: Gilead Sciences, Inc.

      or any other place or bank account as GILEAD may designate to ROCHE in 
      writing. A copy of relevant report upon which said payment was based 
      will also be sent by ROCHE to GILEAD at the following address:

                         Gilead Sciences, Inc.
                         333 Lakeside Drive
                         Foster City, CA 94404
                         Attn: Chief Financial Officer
                         (415) 574-3000

3.07  Notwithstanding anything in this Agreement to the contrary, in the 
      event that ROCHE's actual Net Sales in the Territory are reduced, due 
      to credits, refunds, voluntary or government mandated recalls for any 
      reason at any time within six (6) months after the completion of any 
      Calendar Year for which Net Sales have been accrued pursuant to the 
      terms of this Agreement, then the Net Sales for the Calendar Year in 
      which such credits, refunds, recalls, etc. occur shall be reduced 
      accordingly and GILEAD shall return to ROCHE within sixty (60) days of 
      receipt of a notice from ROCHE requesting such return, any dollar 
      amounts which were paid to GILEAD in respect of Net Sales during 


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      such Calendar Year which are in excess of the dollar amounts which 
      would have been paid to GILEAD if the Net Sales for such period 
      reflected the Net Sales actually obtained by ROCHE  taking into account 
      such credits, recalls, refunds or other deductions.

3.08  ROCHE, GENENTECH and GILEAD have agreed to an appropriate methodology 
      including the selection of an independent third party source to 
      determine total sales of the Product in the Field within the Territory 
      and market share relative to all interferon products sold for the 
      treatment of Hepatitis C.  The establishment of sales and market share 
      data described in this Paragraph shall be at the expense of ROCHE.

3.09  If the difference between the Factory Sales of Product and the Net 
      Sales of Product is more than [                    ] of the Gross Sales 
      of Product for any given quarter, then the parties will renegotiate in 
      good faith the terms of this Agreement.
                                           
                ARTICLE 4 - COOPERATION, RIGHTS AND RESPONSIBILITIES
                                           
      It is among the objectives of the parties to promote and detail the 
      Product for use in the Field within the Territory in the most effective 
      and efficient fashion. To achieve this and other objectives, the 
      parties agree as follows:

4.01  The parties shall each appoint an authorized representative 
      ("Coordinator") with whom communications between the parties relating 
      to marketing and sales of the Product will be directed. Each party 
      will notify the other as to the name of the individual so appointed. 
      Each party may replace its Coordinator at any time, upon written notice 
      to the other party.

4.02  (a) The Coordinators shall establish a Committee directed by the Roche 
      Coordinator and consisting of an equal number of representatives of 
      each party which will meet at least quarterly, at mutually agreeable 
      times and locations, to discuss and coordinate the joint promotion and 
      detailing of the Product for use in the Field in the Territory and the 
      strategies and programs that should be developed to maximize Net Sales. 
      Illustratively, the Committee shall (i) coordinate the launch of the 
      Product for use in the Field in the 


                                       9

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

      Territory and (ii) guide all continuing joint promotion and detailing 
      efforts with respect to the Product for use in the Field in the 
      Territory.  Although the parties intend to work cooperatively, ROCHE 
      will have authority and final responsibility for developing marketing 
      strategies and tactics including but not limited to detailing 
      strategies with respect to the Product.

      (b) The Committee shall develop and formulate  marketing plans for 
      specified periods (collectively the "Marketing Plan") which shall set 
      forth marketing strategies and tactics relating to the Product. ROCHE, 
      however, shall have the final responsibility for, and control over, the 
      development and content of the Marketing Plan. 

      (c) Efforts will be made at the sales territory level to coordinate the 
      Calls by the ROCHE sales force with the Calls by the GILEAD sales force 
      to ensure the most effective coverage of the target audiences and to 
      minimize non-productive efforts.

      (d) A party shall have the right to comment upon and make 
      recommendations to the other party regarding the other party's 
      activities under this Agreement, which recommendations the other party 
      shall thoroughly evaluate and consider.

      (e) Each party shall bear its own costs associated with its 
      participation in the Committee and its activities performed under this 
      Agreement.

4.03  (a) During the Term of and subject to any other provision of this 
      Agreement, each party will provide the other with all information 
      relevant to the detailing and promotion of the Product for use in the 
      Field within the Territory within a reasonable time after such 
      information becomes known to the party, provided such information is 
      not received from an independent third party under a secrecy 
      obligation.  Specifically, the sales force of each party will receive 
      the same information at the same time with respect to the Product.

      (b) During the Term of this Agreement, each party shall promptly notify 
      the other party of all information coming into its possession 
      concerning unexpected side effects, injury, 


                                       10

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      toxicity or sensitivity reaction including unexpected incidence and 
      severity thereof associated with commercial or clinical uses, studies, 
      investigations or tests with the Product (animal or human), throughout 
      the world, whether or not determined to be attributable to the Product 
      ("Adverse Reaction Reports").  In the case of Adverse Reaction Reports 
      within the scope of 21 CFR 314.80(c)(iii), GILEAD shall transmit such 
      Adverse Reaction Reports so that they are received by ROCHE within 
      three (3) business days after receipt by GILEAD, or such other 
      reporting period as may be required by law.  ROCHE shall transmit 
      Adverse Reaction Reports to GILEAD on a periodic basis, but no less 
      often than once every three (3) months; provided, however, that ROCHE 
      shall promptly notify GILEAD of any Adverse Reaction Report requiring 
      the alteration of detailing activities by the GILEAD sales force.  All 
      such communications shall be held in the strictest confidence by GILEAD 
      and shall be subject to the terms of Paragraph 4.14.

4.04  GILEAD warrants and represents that it will maintain records of Calls 
      made by its sales force and that these records will accurately 
      represent the number of Calls made and the relative emphasis given to 
      each Product during a Call.  For all Calendar Years covered by this 
      Agreement,  GILEAD shall issue reports to ROCHE within 
      [                  ] after the end of [              ]of such Calendar 
      Year showing the number of Calls made to each audience and the relative 
      emphasis assigned to the Product in such Calls.  ROCHE shall be 
      entitled to audit the source data and documents used to compile such 
      reports pursuant to the provisions of  Paragraph 4.15 of this Agreement.
     
4.05  ROCHE retains and shall retain all proprietary rights and proprietary 
      interests in the Product until the point of sale and in all supporting 
      sales and promotional and educational material. GILEAD will not have 
      nor represent that it has any control or proprietary or property 
      interests in the Product. Nothing contained herein shall be deemed to 
      grant GILEAD, either expressly or implied by a license or other right 
      or interest in any patent, trademark, copyright or other similar 
      property of ROCHE except as may be necessary for GILEAD to promote and 
      detail the Product as provided for in this Agreement.


                                       11

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

4.06  (a) During the Term of this Agreement, at ROCHE's cost, ROCHE shall 
      create and develop all sales and promotional materials relating to the 
      Product for distribution for use in the Field. ROCHE shall provide 
      GILEAD with such materials, in amounts which are reasonable under the 
      terms of the Marketing Plan. Other than with the advice and consent of 
      ROCHE, GILEAD shall not create or develop sales, promotional or other 
      similar materials relating to the Product for distribution to 
      independent third parties.

      All sales and promotion material for distributing the Product for use 
      in the Field which is prepared primarily through a printing technique 
      (except for memo pads and the like) shall be supplied by ROCHE, free of 
      all charge, to GILEAD. 

      All sales and promotional materials relating to the distribution of the 
      Product for use in the Field which are multi-dimensional in form, 
      including memo pads and the like, and materials which are prepared 
      primarily by techniques other than printing shall be supplied to GILEAD 
      by ROCHE in accordance with paragraph 4.07 of this Agreement.

      (b) GILEAD shall not be required to distribute any sales and 
      promotional material prepared after the date of this Agreement which 
      (i) does not present GILEAD to the medical and paramedical communities 
      and to the trade as joining with ROCHE in the detailing and promotion 
      of the Product, (ii) does not mention the Product, or (iii) includes 
      reference to another ROCHE pharmaceutical in addition to the Product. 
      At ROCHE's request, and at GILEAD's sole option, GILEAD may distribute 
      sales and promotion material of the type identified in this 
      subparagraph (b). Should GILEAD elect to so distribute such material, 
      it shall be supplied to GILEAD by ROCHE free of all charge. In no event 
      shall ROCHE be required to distribute any material which contains a 
      reference (i) to GILEAD (other than in connection with the joint 
      detailing and promotion of the Product in accordance with this 
      Agreement) or (ii) any GILEAD pharmaceutical.

4.07  To achieve the objectives of this Agreement, it may be necessary to 
      distribute multi-dimensional sales and promotional materials, including 
      memo pads and the like and/or materials which are prepared primarily by 
      techniques other than printing (all of 


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      these materials being hereinafter identified as "Materials") to health 
      care personnel and the trade on an ongoing basis ("Program"). If in 
      ROCHE's sole judgment it determines that such a Program is best to 
      achieve these objectives, ROCHE shall provide GILEAD, free of charge, 
      with all of GILEAD's reasonable requirements for Materials. ROCHE shall 
      cause the production of all Materials and shall ship GILEAD's 
      requirements of Materials to such GILEAD's facilities as GILEAD may 
      designate, F.O.B., the ROCHE distribution site. Materials shall be 
      allotted on a per capita basis to the ROCHE sales force and the GILEAD 
      sales force as modified by the expected amount of time and effort to be 
      used by each sales force in detailing and promoting the Product for use 
      in the Field. All Materials delivered to GILEAD shall be packaged in 
      the same form and be of the same quality as those which ROCHE normally 
      distributes to health care personnel or to the trade in the Territory.

4.08  Each party shall contribute facilities, supplies, personnel (including 
      management and sales representatives) and other resources without 
      charge or expense to the other as each party, in its absolute 
      discretion, believes necessary for the proper performance of terms of 
      this Agreement, and each party shall bear its own costs incurred in the 
      performance of any obligations hereunder.  Neither party shall have any 
      responsibility for the firing or compensation of the other party's 
      employees or for any employee benefits.  No employee or representative 
      of a party shall have any authority to bind or obligate the other party 
      to this Agreement for any sum or in any manner whatsoever, or to create 
      or impose any contractual or other liability on the other party without 
      said party's authorized written approval. For all purposes, and 
      notwithstanding any other provision of this Agreement to the contrary, 
      GILEAD's legal relationship under this Agreement to ROCHE shall be that 
      of independent contractor.

4.09  ROCHE shall have the sole responsibility for the manufacture and 
      distribution of Product in the Territory.  ROCHE shall also be 
      responsible for insuring that sufficient stock of the Product will be 
      available in its inventory to promptly fill orders in the Territory 
      from the trade except for Force Majeure as defined in Article 8.


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

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4.10  (a) With respect to the Product,  ROCHE and GILEAD shall both employ 
      the Trademark "Roferon-Registered Trademark--A"  on all promotional 
      literature relating to the Product for use in the Territory such as 
      detailing aids and advertising directed to the Product. All such 
      promotional literature shall identify the Product as being promoted by 
      ROCHE/GILEAD. At ROCHE's discretion, all literature which sets forth 
      the Product and sets forth with at least equal emphasis to the Product, 
      one or more other Products distributed or sold by ROCHE need not set 
      forth or identify the Product as being promoted by ROCHE/GILEAD but can 
      simply identify the Product as a ROCHE Product without the name of 
      GILEAD appearing on said literature.

      (b) ROCHE will provide GILEAD, free of charge, with reasonable 
      quantities of training materials which have been created and developed 
      by ROCHE relating to the Product and its use in the Field. During the 
      term of this Agreement, GILEAD will not permit any of its sales 
      personnel to promote the Product unless such sales personnel have been 
      qualified under criteria and/or tests supplied by ROCHE, which either 
      will be the same as those used to qualify ROCHE sales personnel or will 
      be approved by ROCHE. The costs of training the GILEAD sales training 
      personnel incurred by GILEAD shall be borne by GILEAD.

      (c) Neither party shall distribute or have distributed any such 
      information, except for promotional literature prepared by ROCHE under 
      subparagraph (a) of this paragraph, which bears the name of the other 
      without the prior written approval of the other, which approval shall 
      not be unreasonably withheld. The Product shall be represented solely 
      as a ROCHE Product. When packaged, the Product will bear the trademark 
      and label of ROCHE only. All promotional materials or other information 
      regarding the Product, if any, which is distributed other than to 
      medical or paramedical communities or trade, will not be required to 
      identify GILEAD's involvement in the detailing or promotion of the 
      Product, but may so identify said involvement if ROCHE in its sole 
      discretion deems it appropriate to do so.


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

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      (d) (i) ROCHE at its option may issue press releases or other public 
      announcements relating to the Product or the arrangement contemplated 
      by this Agreement, provided however, that ROCHE shall not issue a press 
      release or public announcement which relates to the arrangement 
      contemplated by this Agreement, except for references to GILEAD and the 
      relationship created by this Agreement in ROCHE's annual and quarterly 
      reports and other SEC documents, without the prior written approval of 
      GILEAD, which approval shall not be unreasonably withheld.  
     
      (ii) GILEAD at its option may issue press releases or other public 
      announcements relating to the Product or the arrangement contemplated 
      by this Agreement, provided however, that GILEAD shall not issue a 
      press release or public announcement which relates to the arrangement 
      contemplated by this Agreement, except for references to ROCHE and the 
      relationship created by this Agreement in GILEAD's annual and quarterly 
      reports and other SEC documents, without the prior written approval of 
      ROCHE, which approval shall not be unreasonably withheld.

4.11  (a) ROCHE shall have the sole right and responsibility, and shall bear 
      all costs related thereto, to take such actions with respect to the 
      Product as would normally be done in accord with accepted business 
      practices and legal requirements to obtain and maintain the 
      authorization and/or ability to market a major pharmaceutical Product 
      in the Territory, including, without limitation, the following:

      (1)  responding to Product and medical complaints relating to the 
           Product. GILEAD agrees that it shall refer any such complaints 
           which it receives to ROCHE as soon as reasonably practicable;

      (2)  handling all returns of the Product. If the Product is returned to 
           GILEAD, it shall be shipped to ROCHE's nearest facility, with any 
           reasonable or authorized shipping or other documented direct cost 
           to be paid by ROCHE. GILEAD shall incur no liability of any nature 
           in the handling of such returns. GILEAD, if 


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

           requested, shall advise the customer who made the return that the 
           Product has been returned to ROCHE;

      (3)  handling all recalls of the Product. At ROCHE's request and 
           GILEAD's option, GILEAD will assist ROCHE in receiving the 
           recalled Product and any direct documented costs incurred by 
           GILEAD, with respect to participating in such recall shall be 
           reimbursed by ROCHE;

      (4)  communicating with any governmental agencies and satisfying their 
           requirements regarding the authorization and/or continued 
           authorization to market the Product in commercial quantities in 
           the Territory;
     
      (5)  reporting Adverse Reaction Reports to U.S. regulatory authorities 
           as required by applicable U.S. law or regulation;

      (6)  handling Product distribution, inventory and receivables.
     
      (b) Each party shall respond to medical questions or inquiries relating 
      to the Product directed to such party. ROCHE shall use its best efforts 
      to keep current the reasonably necessary information provided to GILEAD 
      which would enable GILEAD to respond properly and promptly to any such 
      questions or inquiries. All such information shall be held in the 
      strictest confidence by GILEAD and shall be subject to the terms of 
      Section 4.13 hereof except with regard to providing the proper response 
      to medical questions or inquiries relating to Product. GILEAD and ROCHE 
      shall coordinate responses to anticipated inquiries and questions.

4.l2  Notwithstanding the Marketing Plan or any other provision herein to the 
      contrary, ROCHE will have the sole right and responsibility for 
      establishing and modifying the terms and conditions with respect to the 
      sale of the Product, including the price at which the Product will be 
      sold, any discount attributable to payments on receivables, 
      distribution of the Product and the like.


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

4.13  If, for any reason, GILEAD should receive orders for the Product, 
      GILEAD shall use its best efforts to forward such orders to ROCHE as 
      soon as practicable.

4.14  Any information provided to GILEAD by ROCHE (or by anyone who was under 
      a non-disclosure obligation to ROCHE) under this Agreement, except that 
      information:

      (a) which becomes public through no fault of GILEAD; or

      (b) which was known by GILEAD prior to its disclosure to GILEAD by 
      ROCHE; or

      (c) which is lawfully obtained by GILEAD from a third party which is 
      independent of ROCHE and said third party is in lawful possession of 
      said information; or
      
      (d) which is required to be disclosed by applicable law or regulation; 
      or

      (e) which is intended for distribution to the trade: 
      shall be treated with the strictest confidence and GILEAD shall not use 
      any such information for any purposes other than that provided in this 
      Agreement.

      GILEAD shall keep such information in a special file which shall be 
      solely under the direction and control of the GILEAD Coordinator. 
      GILEAD shall not distribute any such information except to its 
      employees who have a need to know such information. Any GILEAD employee 
      who receives such information shall be advised of the confidential 
      nature thereof and the prohibitions contained in this section. The 
      Coordinator will use best efforts to keep a record of those individuals 
      who have received copies of the information or any portions thereof, 
      and all copies or any portions thereof will be identified by GILEAD as 
      confidential. Upon termination of this Agreement, and upon the request 
      of ROCHE, GILEAD shall return or destroy all such information and 
      copies thereof in its possession, except that GILEAD may keep one copy 
      of such information in GILEAD's Law Department files solely for 
      archival purposes. Such archival copy will be 


                                         17

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      deemed to be the property of ROCHE, and will not be copied or 
      distributed in any manner without the express prior written permission 
      of ROCHE. The prohibitions contained herein shall survive the 
      termination of this Agreement and last for a period of ten (10) years 
      from the date of termination of this Agreement.

4.15  Each party shall keep, and shall cause its Affiliates and sublicensees 
      to keep, complete and accurate records pertaining to the Calls (by 
      GILEAD or ROCHE) or sale or other disposition of Product and of the 
      Royalty and other amounts payable under this Agreement in sufficient 
      detail to permit the other party to confirm the accuracy of all Calls 
      completed and payments due hereunder. At either party's request, the 
      other party will cause its independent certified public accountants to 
      prepare abstracts of its relevant business records for review by the 
      other party's independent certified public accountants.  If, based on a 
      review of such abstracts, a party reasonably believes that a full audit 
      of said business records would be necessary for the confirmation of the 
      accuracy of all Calls and payments due hereunder, that party's 
      independent certified public accountants shall have full access to 
      review all work papers and supporting documents pertinent to such 
      abstracts, and shall have the right to discuss such documentation with 
      the other party's independent certified public accountants. [






                                        ]  Such audit rights may be exercised 
      no more often than once a year, within three (3) years after the 
      payment period to which such records relate, upon notice to the party 
      being audited and during normal business hours.  The party requesting 
      such audit will bear the full cost of such audit 


                                       18

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      unless such audit discloses an underpayment of more than five percent 
      (5%) from  the amount of Calls made or royalties due.  The terms of 
      this Paragraph shall survive any termination or expiration of this 
      Agreement for a period of three (3) years.

4.16  Each party will utilize its own sales force to promote and detail the 
      Product. During the Term of this Agreement, neither party will recruit 
      or employ any sales representative of the other party who has been 
      involved in promotion of the Product in the Territory.  In addition, 
      neither party will recruit any sales representative of the other party 
      without prior consultation with the other party.

                      ARTICLE 5 - WARRANTIES AND INDEMNIFICATION
                                           
5.01  Each party warrants and represents to the other that it has the full 
      right and authority to enter into this Agreement, and that it is not 
      aware of any impediment that would inhibit its ability to perform its 
      obligations under this Agreement.

5.02  ROCHE warrants and represents that it has no knowledge of the existence 
      of any U.S. patent owned or controlled by anyone other than ROCHE which 
      would prevent ROCHE from making, using or selling the Product for use 
      in the Field within the Territory or would prevent GILEAD and ROCHE 
      from jointly promoting or detailing the Product for use in the Field 
      within the Territory.

5.03  ROCHE will defend, indemnify and hold harmless GILEAD and its 
      directors, officers, employees and agents against all losses, expenses, 
      claims and liabilities, known and unknown, of any kind, including all 
      costs and expenses relating thereto arising at any time as a result of 
      any assertion relating to the manufacture, handling, use or 
      distribution of Products by ROCHE,  or their sublicensees except to the 
      extent that they result from acts or omissions of acts of GILEAD, its 
      directors, officers, employees or agents.

5.04  GILEAD will defend, indemnify and hold harmless ROCHE and its 
      directors, officers, employees and agents against all losses, expenses, 
      claims and liabilities, known and 


                                       19

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      unknown, of any kind, including all costs and expenses relating thereto 
      arising at any time as a result of any assertion relating to the 
      promotion of Products by GILEAD, except to the extent that they result 
      from acts or omissions of acts of ROCHE, its directors, officers, 
      employees or agents

5.05  Regarding the indemnity and hold harmless under Paragraph 5.03, GILEAD 
      shall give prompt written notice to ROCHE of the commencement of  any 
      action, suit or proceeding for which indemnification may be sought, and 
      ROCHE shall assume the defense thereof; provided, however, that GILEAD 
      shall be entitled to participate in any such action, suit or proceeding 
      with counsel of its own choice, but at its own expense. If ROCHE fails 
      to assume the defense within a reasonable time, GILEAD may assume such 
      defense and the reasonable fees and expenses of its attorneys will be 
      covered by the indemnity provided for in Paragraph 5.03 above. No such 
      action, suit or proceeding shall be compromised or settled in any 
      manner which might adversely affect the interests of ROCHE without 
      prior written consent of ROCHE which consent shall not be unreasonably 
      withheld.  ROCHE agrees to consult with GILEAD with respect to any 
      proposed compromise or settlement which would adversely affect the 
      interests of GILEAD.

                   ARTICLE 6 - PATENTS AND TRADEMARK INFRINGEMENT 
                                           
      GILEAD shall advise ROCHE promptly upon its becoming aware of any 
      infringement by a third party of a patent or trademark owned by ROCHE 
      and respectively covering or identifying the Product in the Territory. 
      If warranted in the opinion of ROCHE, ROCHE shall promptly take such 
      legal action as is required to restrain such infringement. GILEAD shall 
      cooperate fully with and as requested by ROCHE, at ROCHE's expense, in 
      ROCHE's attempt to restrain such infringement. GILEAD may be 
      represented by counsel of its own selection at its own expense in any 
      suit or proceeding brought to restrain such infringement but ROCHE 
      shall have the right to control the suit or proceeding.


                                       20

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

                           ARTICLE 7 - TERM AND TERMINATION
                                           
7.01  The term of this Agreement shall commence on the effective date of this 
      Agreement and continue, unless terminated sooner in accordance with the 
      subsequent provisions of this Article, until December 31, 1999.

      Upon termination of this Agreement for any reason or purpose, all 
      rights to The Product including but not limited to regulatory 
      submissions and trademarks become or remain the property of ROCHE.

      Paragraphs 3.05, 3.06, 4.05, 4.10(d), 4.11(a), 4.14, 4.15, 5.03 and 
      5.04 shall survive expiration or termination of this Agreement for any 
      reason.

7.02  Either party may terminate this Agreement for Good Cause (as defined in 
      Paragraph 7.03 below), effective at any time after providing sixty (60) 
      days written notice and, if applicable, an opportunity to cure during 
      such sixty (60) day period (if such cure is effected, such notice with 
      respect to such Good Cause shall be null and void). If the Agreement is 
      so terminated by either party for Good Cause, ROCHE shall pay to GILEAD 
      all dollar amounts due to it under Sections 3.02 and 3.05 through the 
      effective date of such termination.

7.03  "Good Cause" shall include the failure of the other party to comply 
      with any of its material obligations contained in this Agreement 
      (including the failure to detail the Product).

7.04  Termination of this Agreement for Good Cause, shall be without 
      prejudice to (a) any remedies which any party may then or thereafter 
      have hereunder or at law; and (b) GILEAD's right to receive any payment 
      accrued under the Agreement prior to the termination date but which 
      became payable thereafter;  and (c) either party's right to obtain 
      performance of any obligations provided for in this Agreement which 
      survive termination by their terms or by a fair interpretation of this 
      Agreement.


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

7.05  Either party may terminate this Agreement for any reason, effective as 
      of January 1, 1999, by delivering written notice to the other party on 
      or prior to October 31, 1998.

                             ARTICLE 8 - FORCE  MAJEURE
                                           
      If either party shall be delayed, interrupted in or prevented from the 
      performance of any obligation hereunder by reason of an act of God, 
      fire, flood, earthquake, war (declared or undeclared), public disaster, 
      strike or labor differences, governmental enactment, rule or 
      regulation, or any other cause beyond such party's control, such party 
      shall not be liable to the other therefor; and the time for performance 
      of such obligation shall be extended for a period equal to the duration 
      of the contingency which occasioned the delay, interruption or 
      prevention.
     
      Within 15 days of the beginning of the Force Majeure, the party 
      invoking its Force Majeure rights must, by registered letter notify the 
      other party of this fact. The termination of the Force Majeure must 
      also be notified to the other party by registered letter within 15 days 
      of such termination. If the Force Majeure renders either of the 
      required notifications impossible, notification must be given as soon 
      as possible.
     
                              ARTICLE 9 - MISCELLANEOUS
                                           
9.01  This Agreement supersedes all prior agreements and understandings, both 
      written and oral between the parties with respect to the subject matter 
      hereof. This Agreement cannot be amended, changed or supplemented, 
      except in writing signed by each of the parties hereto.

9.02  This Agreement may be executed in several counterparts, each of which 
      shall be deemed to be an original.


                                       22

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

9.03  All notices which are required or may be given pursuant to this 
      Agreement shall be sufficient upon receipt, if given in writing and 
      delivered by hand, by electronic media, or by registered or prepaid 
      addressed as follows:

             TO GILEAD:    Gilead Sciences, Inc.
                           333 Lakeside Drive
                           Foster City, CA 94404
                           Attn:  General Counsel
                           Phone: (415) 574-3000
                           Fax: (415) 572-6622

             TO ROCHE:     Roche Laboratories Inc.
                           340 Kingsland Street
                           Nutley, New Jersey 07110
                           Attention: Corporate Secretary
                           Phone: (201) 235-2165
                           Fax: (201) 235-3500

      The address of either party set forth above may be changed from time to 
      time by written notice in the manner prescribed herein from the party 
      requesting the change. A notice sent by ordinary mail or a notice not 
      given in writing shall be effective upon receipt,  but only if 
      acknowledged in writing by a duly authorized representative of the 
      party to whom it was sent or given or otherwise upon clear evidence of 
      receipt.

9.04  None of the parties hereto may assign any part or all of this Agreement 
      or the benefit thereof or any right or obligation thereunder to any 
      other entity or individual without prior written consent of the other 
      party. Any purported assignment in violation of the preceding sentence 
      shall be void.

9.05  This Agreement shall be construed, regulated and administered and 
      governed in all respects under and in accordance with the law of the 
      State of New Jersey.

9.06  Except to  the extent that a party may have otherwise agreed in 
      writing, no waiver by such party of any breach by any other party of 
      any of the other party's obligations, agreements or covenants hereunder 
      shall be deemed to be a waiver by such first party of 


                                       23

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

      any subsequent or other breach of the same or any other obligation, 
      agreement or covenant; nor shall any forbearance by a party to seek a 
      remedy for any breach by another be deemed a waiver by said party of 
      its rights or remedies with respect to such breach or of any subsequent 
      or other breach of the same or any other obligation, agreement or 
      covenant.

9.07  This Agreement shall be binding upon and inure to the benefit of the 
      parties to this Agreement and their respective successors.

9.08  Headings as used in this Agreement are for convenience only and are not 
      to be construed as having any substantive effect by way of limitation 
      or otherwise.

9.09  If one or more of the provisions of this Agreement shall, by any court 
      or under any provision of law, be found to be void or unenforceable, 
      the Agreement as a whole shall not be affected thereby, and the 
      provisions in question shall be replaced by an interpretation in 
      conformity with law which comes closer to effecting the parties' 
      original intention.

    IN WITNESS WHEREOF, the parties have caused this Agreement to be executed 
by their duly authorized officers effective as of the date first above 
written.
    
GILEAD SCIENCES, INC.                    ROCHE LABORATORIES INC.


By:    /s/  MARK L. PERRY                By:    /s/  STEPHEN G. SUDOVAR
       -------------------------------          ------------------------------
       Mark L. Perry                            Stephen G. Sudovar

Title: Vice President, Chief Financial   Title: Senior Vice President
       -------------------------------          ------------------------------
       Officer and General Counsel

Date:  9/12/97                           Date:
       ------------------------------         --------------------------------

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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

                                      EXHIBIT A
                                           
Attached Example
- ----------------

The attached spreadsheet uses fictitious numbers to demonstrate how the 
formula described in Section 3.02 of this Agreement is used.  Each component 
of the spreadsheet is described below, using numbers to identify the section 
being referred to in the spreadsheet.

   (1)  Column, FACTORY SALES:
        January through September 1998 Roferon-A actual factory sales.
     
   (2)  Column, HEPATITIS SHARE:
        The Sales Tracking Study's 1998 first, second, and third quarterly
        reports would give us the share of Hepatitis sales for each quarter.
     
   (3)  Column, FACTORY SALES (HEP):
        The ratios would be applied to 1998 factory sales by quarter; i.e.
        FACTORY SALES is multiplied by HEPATITIS SHARE.
     
   (4)  Column, FACTORY SALES (HEP):
        This would give us January through September 1998 Roferon A
        (Hepatitis) factory sales dollars.
     
   (5)  Column, QUARTERLY SALES,
        Column, GROWTH:
        To annualize these dollars:
     
   (6)  Column, QUARTERLY SALES,
        Column, GROWTH
        Row, 4Q97 Incremental Growth Rate:
        The average growth rate of 1997's first, second, and third quarter
        factory sales would be subtracted from 4Q97's growth.
     
   (7)  Row, YTD '98 Average Quarterly Growth Rate,
        Row, Incremental + YTD '98 Growth Rate:
        This incremental growth rate [        ] would be added to 1998
        year-to-date average quarterly growth rate [        ]


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                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>
   (8)  Row, ANNUALIZED;
        Column, GROWTH:
        This new growth rate [     ] would be applied to 3Q98 sales [        ]
     
   (9)  Row, ANNUALIZED;
        Column, QUARTERLY SALES:
         
         
         
        This would give us a forecast for 4Q98 factory sales: [            ]
     
   (10) Row, ANNUALIZED;
        Column, FACTORY SALES (HEP):
        A summation of actual 1998 and annualized quarterly factory sales will
        give us total 1998 Roferon-A (Hepatitis) factory sales: [            ]
         
   (11) Row, ANNUALIZED:
        Roferon-A's growth rate would be calculated [full year 1997 factory
        sales (Hep) vs. Full year 1998 factory sales (Hep)] [         ]
         
   (12) Row, FACTORY SALES FORECAST:
        Total 1998 Roferon-A (Hepatitis) factory sales would be multiplied by
        Roferon-A's growth rate [         ] [full year 1997 factory sales
        (Hep) vs. Full year 1998 factory sales (Hep)].  This would give us
        1999 Roferon-A (Hepatitis) forecasted factory sales [                ]


                                       26

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

                             GILEAD-ROCHE FORECAST EXAMPLE


<TABLE>
<CAPTION>
                                Factory  Hepatitis  Factory Sales   Quarterly  
           Year Quarter  Month  Sales(1)  Share(2)   (Hep)(3),(4)  Sales(4),(6)  Growth(5),(6)
           ---- -------  -----  -------- ---------  -------------  ------------  -------------
<S>        <C>       <C> <C>    <C>       <C>         <C>              <C>         <C>
Actuals    1997      Q1  Jan-97 [     ]   [     ]     [     ]    
                         Feb-97 [     ]   [     ]     [     ]    
                         Mar-97 [     ]   [     ]     [     ]          [    ]      [  ]
                     Q2  Apr-97 [     ]   [     ]     [     ]    
                         May-97 [     ]   [     ]     [     ]    
                         Jun-97 [     ]   [     ]     [     ]          [    ]      [  ]
                     Q3  Jul-97 [     ]   [     ]     [     ]    
                         Aug-97 [     ]   [     ]     [     ]    
                         Sep-97 [     ]   [     ]     [     ]          [    ]      [  ]
                     Q4  Oct-97 [     ]   [     ]     [     ]    
                         Nov-97 [     ]   [     ]     [     ]    
                         Dec-97 [     ]   [     ]     [     ]          [    ]      [  ]
                          Total                       [     ]    
           1998      Q1  Jan-98 [     ]   [     ]     [     ]    
                         Feb-98 [     ]   [     ]     [     ]    
                         Mar-98 [     ]   [     ]     [     ]          [    ]      [  ]
                     Q2  Apr-98 [     ]   [     ]     [     ]    
                         May-98 [     ]   [     ]     [     ]    
                         Jun-98 [     ]   [     ]     [     ]          [    ]      [  ]
                     Q3  Jul-98 [     ]   [     ]     [     ]    
                         Aug-98 [     ]   [     ]     [     ]    
                         Sep-98 [     ]   [     ]     [     ]          [    ]      [  ]
                                                                                   [  ] 4Q97 Incremental Growth Rate(6)
                                                                                   [  ] YTD '98 Average Quarterly Growth Rate(7)
                                                                                   [  ] Incremental + YTD '98 Growth Rate(7)
Annualized                                                       
 (8),(9)             Q4  Oct-98                       [     ]    
                         Nov-98                       [     ]    
                         Dec-98                       [     ]          [    ]      [  ]
                          Total                       [     ]    
                           (10)
                                                                                    [  ] 1998 vs. 1997 Growth Rate(11)
Factory                                 
 Sales                                  
 Forecast                               
 (12)      1999           Total                       [     ]
                           (10)
</TABLE>



                        [ ] = CONFIDENTIAL TREATMENT REQUESTED



<TABLE> <S> <C>


<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON
PAGES 3 AND 4 OF THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-START>                             JUL-01-1997
<PERIOD-END>                               SEP-30-1997
<CASH>                                          45,670
<SECURITIES>                                   286,494
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                 4,346
<PP&E>                                          10,225<F1>
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 348,154
<CURRENT-LIABILITIES>                           20,780
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          1
<COMMON>                                            30
<OTHER-SE>                                     325,773
<TOTAL-LIABILITY-AND-EQUITY>                   325,804
<SALES>                                          9,316
<TOTAL-REVENUES>                                30,128
<CGS>                                              995
<TOTAL-COSTS>                                      995
<OTHER-EXPENSES>                                39,126
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                 398
<INCOME-PRETAX>                               (15,569)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                           (15,569)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                  (15,569)
<EPS-PRIMARY>                                   (0.53)
<EPS-DILUTED>                                        0
<FN>
<F1>PROPERTY, PLANT AND EQUIPMENT IS NET OF ACCUMULATED DEPRECIATION.
</FN>
        

</TABLE>