<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       JUNE 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 July 15, 1997:  29,262,538.


<PAGE>

                             GILEAD SCIENCES, INC.
                                       
                                     INDEX
                                       


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


Item  1.    Consolidated Financial Statements and Notes

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

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

            Consolidated Statements of Cash Flows -- for the
            six months ended June 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


<TABLE>
<CAPTION>
                                                        JUNE 30,      DECEMBER 31,
                                                          1997           1996
                                                      -----------     -----------
                                                      (unaudited)       (Note)
<S>                                                   <C>             <C>
Current assets:

  Cash and cash equivalents                            $  138,961     $  131,984
  Short-term investments                                  198,393        163,979
  Other current assets                                      4,684          4,290
                                                      -----------     ----------
     Total current assets                                 342,038        300,253

Property and equipment, net                                10,458          9,172
Other assets                                                1,464          1,248
                                                      -----------     ----------
                                                       $  353,960     $  310,673
                                                      -----------     ----------
                                                      -----------     ----------

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

  Accounts payable                                     $    2,288       $  2,501
  Accrued clinical and preclinical expenses                 6,078          5,007
  Other accrued liabilities                                 5,846          4,433
  Deferred revenues                                         4,260            527
  Current portion of equipment financing obligations
    and long-term debt                                      3,054          3,631
                                                      -----------     ----------
     Total current liabilities                             21,526         16,099

Noncurrent portion of equipment financing obligations
    and long-term debt                                      1,828          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 June 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; 29,234,238 shares and
   28,758,165 shares issued and outstanding at
   June 30, 1997 and December 31, 1996, respectively           29             29
  Additional paid-in capital                              470,709        426,577
  Unrealized gains (losses) on investments, net               (21)            89
  Accumulated deficit                                    (139,723)      (134,486)
  Deferred compensation                                      (389)          (549)
                                                      -----------     ----------
     Total stockholders' equity                           330,606        291,660
                                                      -----------     ----------
                                                       $  353,960      $ 310,673
                                                      -----------     ----------
                                                      -----------     ----------

</TABLE>


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.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (unaudited)
                   (in thousands, except per share amounts)
                                       

<TABLE>
<CAPTION>

                                                  THREE MONTHS ENDED             SIX MONTHS ENDED
                                                       JUNE 30,                      JUNE 30,
                                               -----------------------      ------------------------
                                                 1997           1996           1997           1996
                                               -----------------------      ------------------------
<S>                                            <C>          <C>             <C>            <C>
Revenues:

  Product sales, net                           $  3,956      $   1,403      $   6,990      $   1,403
  Other revenues                                 15,770            803         18,201          1,582
                                               --------      ---------      ---------      ---------
Total revenues                                   19,726          2,206         25,191          2,985

Costs and expenses:

  Cost of sales                                     328            101            815            101
  Research and development                       14,696         10,563         25,522         19,846
  Selling, general and administrative             6,146          7,440         12,292         12,305
                                               --------      ---------      ---------      ---------

Total costs and expenses                         21,170         18,104         38,629         32,252
                                               --------      ---------      ---------      ---------

Loss from operations                             (1,444)       (15,898)       (13,438)       (29,267)

Interest income, net                              4,155          3,740          8,201          6,307
                                               --------      ---------      ---------      ---------

Net income (loss)                              $  2,711      $ (12,158)     $  (5,237)     $ (22,960)
                                               --------      ---------      ---------      ---------
                                               --------      ---------      ---------      ---------

Net income (loss) per share                    $   0.09      $   (0.43)     $   (0.18)     $   (0.85)
                                               --------      ---------      ---------      ---------
                                               --------      ---------      ---------      ---------

Common and common equivalent
shares used in the calculation of net
income (loss) per share                         31,057         28,330         29,018         26,999
                                               --------      ---------      ---------      ---------
                                               --------      ---------      ---------      ---------

</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>
                                                             SIX MONTHS ENDED JUNE 30,
                                                           ----------------------------
                                                               1997           1996
                                                           -----------   --------------
<S>                                                        <C>           <C>
Cash flows from operating activities:
  Net loss                                                 $  (5,237)    $   (22,960)
  Adjustments used to reconcile net loss
  to net cash used in operating activities:
    Depreciation and amortization                              1,539           2,883
    Changes in assets and liabilities:
      Other current assets                                      (394)         (3,214)
      Other assets                                              (216)             58
      Accounts payable                                          (213)         (1,270)
      Accrued clinical and preclinical expenses                1,071           1,353
      Other accrued liabilities                                1,413           1,251
      Deferred revenues                                        3,733           1,542
                                                           ---------     -----------

        Total adjustments                                      6,933           2,603
                                                           ---------     -----------

        Net cash provided by (used in)
           operating activities                                1,696         (20,357)
                                                           ---------     -----------

Cash flows from investing activities:
  Purchases of short-term investments                       (164,242)       (225,523)
  Sales of short-term investments                            105,715         128,250
  Maturities of short-term investments                        24,003         117,210
  Capital expenditures                                        (2,665)         (1,124)
                                                           ---------     -----------
        Net cash provided by (used in)
           investing activities                              (37,189)         18,813
                                                           ---------     -----------

Cash flows from financing activities:
  Payments of equipment financing obligations
    and long-term debt                                        (1,663)         (1,355)
  Proceeds from issuance of common stock                       4,133         158,397
  Proceeds from issuance of preferred stock                   40,000               -
                                                           ---------     -----------
        Net cash provided by
           financing activities                               42,470         157,042
                                                           ---------     -----------

Net increase in cash and cash equivalents                      6,977         155,498
 
Cash and cash equivalents at beginning of period             131,984          27,420
                                                           ---------     -----------

Cash and cash equivalents at end of period                 $ 138,961      $  182,918
                                                           ---------     -----------
                                                           ---------     -----------

</TABLE>

                            See accompanying notes.

                                      5

<PAGE>

                             GILEAD SCIENCES, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                 June 30, 1997
                                  (unaudited)
                                       
                                       
1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION

     The information at June 30, 1997, and for the three and six month periods
ended June 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 months ended March 31, 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 six month periods ended June 30, 1997 and 1996 will
be unchanged from primary EPS as disclosed.  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.

     PREFERRED STOCK

     In June 1997, the Company issued 1,133,786 shares of Series B Convertible
Preferred Stock to  Pharmacia & Upjohn S.A. ("P&U") for approximately $40
million, or $35.28 per share. The shares are convertible into common stock on a
one-for-one basis and have a liquidation value equal to the purchase price.

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 


                                     6

<PAGE>

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. 
Interest and dividends on securities classified as available-for-sale are 
included in interest income.  At June 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.  The
Company achieved profitability in the second quarter ended June 30, 1997
primarily due to milestone payments under collaboration agreements with P&U and
F. Hoffmann-La Roche Ltd. ("Roche").  With the exception of the third quarter
of 1996, when the Company entered into two collaborations with significant
initial license fees, the Company has otherwise incurred losses 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 June 30, 1997, the Company's accumulated
deficit was approximately $139.7 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.


                                      7


<PAGE>

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 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 and marketing of pharmaceutical
products.

RESULTS OF OPERATIONS

REVENUES

     The Company had total revenues of $19.7 million and $2.2 million for the
quarters ended June 30, 1997 and 1996, respectively.  Total revenues included
net product sales of $4.0 million and $1.4 million from the sale of VISTIDE for
the quarters ended June 30, 1997 and 1996, respectively.  Total revenues for
the six month periods ended June 30, 1997 and 1996 were $25.2 million and $3.0
million, respectively, which included net product sales of $7.0 million and
$1.4 million for the same periods. Revenues of approximately $13.0 million for
the three and six month periods ended June 30, 1997 resulted from the milestone
payments under the Company's collaborative agreements with P&U and Roche.   In
addition, revenues in the first six months of 1997 included $3.6 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 $1.5 million in each of the six month
periods ended June 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 $0.3 million and $0.1 million for the
quarters ended June 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 six month periods ended June 30,  1997 and 1996 was $0.8 million
and $0.1 million, respectively.

     For the quarter ended June 30, 1997, the Company's research and
development expenses increased 39% to $14.7 million from $10.6 million for the
same period in 1996.  Research and development expenses for the six month
periods ended June 30, 1997 and 1996 were $25.5 million and $19.8 million,
respectively.  These increases were due primarily to expansion in the Company's
ongoing 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 grow in the remainder of 1997,
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 $6.1 million and $7.4
million for the quarters ended June 30, 1997 and 1996, respectively,
representing a decrease of 17%. Selling, general and administrative expenses
were $12.3 million in both six month periods ending June 30, 1997 and 1996.
This decrease for the quarter 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 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 research and development activities.


                                       8

<PAGE>

NET INTEREST INCOME

     The Company had net interest income of $4.2 million and $3.7 million for
the quarters ended June 30, 1997 and 1996, respectively, representing an
increase of 11%.  Net interest income was $8.2 million and $6.3 million for the
six month periods ended June 30, 1997 and 1996, respectively.  Net interest
income increased in the second quarter of 1997 primarily due to the Company's
higher average cash and cash equivalents and short-term investment balance.


LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash equivalents and short-term investments were $337.4 million
at June 30, 1997 compared to $296.0 million at December 31, 1996.  During the
remainder of 1997, the Company expects to incur research and development and
selling, general and administrative expenses in excess of amounts incurred in
1996 for the equivalent period.

     Net cash provided by operations was $1.7 million for the six months ended
June 30, 1997 as compared to net cash used in operations of $20.4 million for
the six months ended June 30, 1996.  Cash provided by operations during the
1997 period resulted from payments received for the Company's collaborative
agreements, some of which are deferred until they are earned, as well as
product revenues. 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 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 4.  Submission of Matters to a Vote of Security Holders

     At the Company's Annual Meeting of Stockholders on May 13, 1997, the
stockholders elected seven directors to serve until the next annual meeting,
and ratified selection of Ernst & Young LLP as independent auditors of the
Company for its fiscal year ending December 31, 1997 ("Selection of Auditors").

     Of the 29,031,249 shares of Common Stock of the Company outstanding as of
the March 31, 1997 record date for the Annual Meeting (the "Outstanding
Shares"), the votes regarding the election of directors were as follows:

                                                                    Votes
                                                   Votes          Against or
                                                    For            Withheld
                                                 ----------       ----------

Etienne F. Davignon                              25,701,593         31,268
James M. Denny, Sr.                              25,702,713         30,148
John C. Martin                                   25,702,893         29,968
Gordon E. Moore                                  25,702,693         30,168
Michael L. Riordan                               25,702,713         30,148
Donald H. Rumsfeld                               25,702,509         30,352
George P. Shultz                                 25,696,687         36,174

     Of the Outstanding Shares,  25,553,026 shares were voted for the
ratification of the Selection of Auditors; 20,565 shares were voted against or
were withheld; 159,266 shares abstained; and 3,298,392 shares were broker non-
votes.



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

(a)     Exhibits

        11.1 Computation of per share earnings

(b)     Reports on Form 8-K

        There were no reports on Form 8-K filed for the Quarter ended 
        June 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:  July 25, 1997               /s/ John C. Martin
                                   -------------------------------------
                                   John C. Martin
                                   President and Chief Executive Officer




Date: July 25, 1997                /s/ Mark L. Perry
                                   -------------------------------------
                                   Mark L. Perry
                                   Vice President, Chief Financial Officer
                                   and General Counsel
                                   (Principal Financial and Accounting Officer)



                                    11






<PAGE>
                                                       EXHIBIT 11.1



                                GILEAD SCIENCES, INC.

                    COMPUTATION OF EARNINGS (LOSS) PER SHARE
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED          SIX MONTHS ENDED
                                                                  JUNE 30,                     JUNE 30,
                                                         ------------------------      ------------------------
                                                            1997          1996           1997           1996
                                                         ------------------------      ------------------------
<S>                                                      <C>           <C>             <C>           <C>
PRIMARY EARNINGS PER SHARE

Weighted average common and common                         29,169         28,330         29,018         26,999
  equivalent shares outstanding during the period

Adjustment for dilutive effect of
  outstanding stock options                                 1,888              -              -              -
                                                         ---------    -----------      ---------    ----------

Weighted average common and
  common equivalent shares used for
  primary earnings (loss) per share                        31,057         28,330         29,018         26,999
                                                         ---------    -----------      ---------    ----------
                                                         ---------    -----------      ---------    ----------

NET INCOME (LOSS)                                          $2,711       ($12,158)       ($5,237)      ($22,960)
                                                         ---------    -----------      ---------    ----------
                                                         ---------    -----------      ---------    ----------

NET INCOME (LOSS) PER SHARE                                 $0.09         ($0.43)        ($0.18)        ($0.85)
                                                         ---------    -----------      ---------    ----------
                                                         ---------    -----------      ---------    ----------


FULLY DILUTED EARNINGS PER SHARE

Weighted average common and common                         29,169         28,330         29,018         26,999
  equivalent shares outstanding during the period

Adjustment for dilutive effect of
  outstanding stock options                                 1,945              -              -              -
                                                         ---------    -----------      ---------    ----------

Weighted average common and
  common equivalent shares used for
  fully diluted earnings (loss) per share                  31,114         28,330         29,018         26,999
                                                         ---------    -----------      ---------    ----------
                                                         ---------    -----------      ---------    ----------

NET INCOME (LOSS)                                          $2,711       ($12,158)       ($5,237)      ($22,960)
                                                         ---------    -----------      ---------    ----------
                                                         ---------    -----------      ---------    ----------

NET INCOME (LOSS) PER SHARE                                 $0.09         ($0.43)        ($0.18)        ($0.85)
                                                         ---------    -----------      ---------    ----------
                                                         ---------    -----------      ---------    ----------

</TABLE>








<TABLE> <S> <C>


<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF OPERATION FOUND ON PAGES 3 AND 4 OF THE COMPANY'S
FORM 10-Q AT 6/30/97 AND FOR THE 3 MONTH AND 6 MONTH PERIODS ENDED 6/30/97 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-START>                              JAN-1-1997
<PERIOD-END>                               JUN-30-1997
<CASH>                                         138,961
<SECURITIES>                                   198,393
<RECEIVABLES>                                    4,684<F1>
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                               342,038
<PP&E>                                          10,458<F2>
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 353,960
<CURRENT-LIABILITIES>                           21,526
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          1
<COMMON>                                            29
<OTHER-SE>                                     330,576
<TOTAL-LIABILITY-AND-EQUITY>                   353,960
<SALES>                                          6,990
<TOTAL-REVENUES>                                25,191
<CGS>                                              815
<TOTAL-COSTS>                                      815
<OTHER-EXPENSES>                                25,522
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                                (5,237)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                            (5,237)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   (5,237)
<EPS-PRIMARY>                                   (0.18)
<EPS-DILUTED>                                        0
<FN>
<F1>Balance includes all "other current assets".
<F2>Balance is net of depreciation.
</FN>
        

</TABLE>