<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     March 31, 1998 
     
                                         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 April 30, 1998:  30,204,790.


<PAGE>

                               GILEAD SCIENCES, INC.
                                          
                                      INDEX
                                          


<TABLE>
<CAPTION>

PART I.   FINANCIAL INFORMATION                                  PAGE NO.
                                                                 --------
<S>       <C>                                                      <C>

Item 1.   Consolidated Financial Statements and Notes  

          Consolidated Balance Sheets--March 31, 1998 
          and December 31, 1997                                     3

          Consolidated Statements of Operations--for the three 
          months ended March 31, 1998 and 1997                      4

          Consolidated Statements of Cash Flows -- for the 
          three months ended March 31, 1998 and 1997                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                         11

SIGNATURES                                                         12
</TABLE>


                                          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)
                                          
                                          

<TABLE>
<CAPTION>
                                                                         March 31,     December 31,
                                                                           1998           1997
                                                                           ----           ----
ASSETS                                                                  (unaudited)      (Note)
<S>                                                                      <C>            <C>
Current assets:
   Cash and cash equivalents                                             $  34,313      $  31,990
   Short-term investments                                                  281,114        290,308
   Other current assets                                                     21,979         17,960
                                                                         ------------------------
      Total current assets                                                 337,406        340,258
Property and equipment, net                                                 10,506         10,313
Other assets                                                                 1,509          1,498
                                                                         ------------------------
                                                                         $ 349,421      $ 352,069
                                                                         ------------------------
                                                                         ------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                      $   3,547      $   3,303
   Accrued clinical and preclinical expenses                                12,183         12,989
   Other accrued liabilities                                                 7,125          5,705
   Deferred revenues                                                        12,628          9,541
   Current portion of equipment financing obligations and 
     long-term debt                                                          1,394          1,853
                                                                         ------------------------

     Total current liabilities                                              36,877         33,391

Non-current portion of equipment financing obligations and 
  long-term debt                                                             1,129          1,331

Commitments

Stockholders' equity:
   Preferred stock, par value $.001 per share,
     issuable in series; 5,000,000 shares authorized; 1,133,786 
     shares of Series B convertible preferred issued and outstanding 
     at March 31, 1998 and December 31, 1997 (liquidation preference 
     of $40,000)                                                                 1              1

   Common stock, par value $.001 per share; 60,000,000 shares 
     authorized; 30,183,776 shares and 30,041,584 shares issued 
     and outstanding at March 31, 1998 and December 31, 1997, 
     respectively                                                               30             30
   Additional paid-in capital                                              481,282        479,737
   Accumulated other comprehensive income                                      216            344
   Deferred compensation                                                      (251)          (286)
   Accumulated deficit                                                    (169,863)      (162,479)
                                                                         ------------------------
Total stockholders' equity                                                 311,415        317,347
                                                                         ------------------------
                                                                         $ 349,421      $ 352,069
                                                                         ------------------------
                                                                         ------------------------
</TABLE>


   Note:  The consolidated balance sheet at December 31, 1997 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
                                                               MARCH 31,
                                                          -------------------
                                                           1998         1997
                                                           ----         ----
<S>                                                      <C>          <C>
Revenues:

   Product sales, net                                    $  1,795     $  3,034
   Contract revenues                                       11,407        2,330
   Royalty revenues                                           358          102
                                                         --------     --------

Total revenues                                             13,560        5,466

Costs and expenses:

   Cost of product sales                                      230          487
   Research and development                                18,930       10,826
   Selling, general and administrative                      6,742        6,147
                                                         --------     --------

Total costs and expenses                                   25,902       17,460
                                                         --------     --------

Loss from operations                                      (12,342)     (11,994)

Interest income, net                                        4,958        4,046
                                                         --------     --------

Net loss                                                 $ (7,384)    $ (7,948)
                                                         --------     --------
                                                         --------     --------
Basic and diluted loss per common share                  $  (0.25)    $  (0.27)
                                                         --------     --------
                                                         --------     --------

Common shares used to calculate basic
  and diluted loss per common share                        30,103       28,930
                                                         --------     --------
                                                         --------     --------
</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>
                                                                   THREE MONTHS ENDED MARCH 31,
                                                                   ----------------------------
                                                                      1998             1997
                                                                    ---------       ---------
<S>                                                                  <C>            <C>
Cash flows from operating activities:
   Net loss                                                          $ (7,384)      $  (7,948)
   Adjustments used to reconcile net loss 
   to net cash provided by (used in) operating activities:
      Depreciation and amortization                                       689             753
      Changes in assets and liabilities:
         Other current assets                                          (4,019)            950
         Other assets                                                     (11)           (117)
         Accounts payable                                                 244           1,013
         Accrued clinical and preclinical expenses                       (806)            542
         Other accrued liabilities                                      1,420           1,121
         Deferred revenues                                              3,087           6,220
                                                                    ---------       ---------
            Total adjustments                                             604          10,482
                                                                    ---------       ---------

            Net cash provided by (used in)
               operating activities                                    (6,780)          2,534
                                                                    ---------       ---------
 
Cash flows from investing activities:
   Purchases of short-term investments                               (124,331)       (113,446)
   Sales of short-term investments                                     96,960          78,391
   Maturities of short-term investments                                36,438           5,785
   Capital expenditures                                                  (848)         (1,786)
                                                                    ---------       ---------
         Net cash provided by (used in)
            investing activities                                        8,219         (31,056)
                                                                    ---------       ---------

Cash flows from financing activities:
   Payments of equipment financing obligations 
      and long-term debt                                                 (660)           (823)
   Proceeds from issuance of common stock                               1,544           2,103
                                                                    ---------       ---------
         Net cash provided by financing activities                        884           1,280
                                                                    ---------       ---------

Net increase (decrease) in cash and cash equivalents                    2,323         (27,242)

Cash and cash equivalents at beginning of period                       31,990         131,984
                                                                    ---------       ---------

Cash and cash equivalents at end of period                          $  34,313       $ 104,742
                                                                    ---------       ---------
                                                                    ---------       ---------
</TABLE>



                               See accompanying notes


                                        5

<PAGE>
                               GILEAD SCIENCES, INC.

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                          
                                   March 31, 1998
                                    (unaudited)
                                          
                                          
1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The information at March 31, 1998, and for the three month periods ended 
March 31, 1998 and 1997, 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 
March 31, 1998 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, 1997 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 1998 Annual Meeting of Stockholders.

NEW ACCOUNTING STANDARD

On January 1, 1998, the Company adopted Statement of Financial Accounting 
Standards (SFAS) No. 130, REPORTING COMPREHENSIVE INCOME, which establishes 
new requirements for reporting and displaying comprehensive income and its 
components.  The adoption of SFAS No. 130 has no impact on the Company's net 
income or stockholders' equity.  This new accounting standard requires net 
unrealized gains or losses on the Company's available-for-sale securities to 
be reported as accumulated other comprehensive income on the balance sheet.  
Such amounts were previously identified separately in stockholder's equity.  
Prior year financial statements have been reclassified to conform to the 
requirements of SFAS No. 130.

During the first quarter of 1998 and 1997, the Company's total comprehensive 
loss was $7.5 million and $8.5 million, respectively.  These amounts 
represent the Company's net loss of $7.4 million and $7.9 million in the 
first quarter of 1998 and 1997, respectively, plus net unrealized losses on 
available-for-sale securities arising during each such quarter.


                                          6

<PAGE>


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 second quarter of 1997 and the third quarter of 1996, when the Company 
recognized significant revenue related to collaborations, the Company has 
incurred losses in every quarter since its inception.  Gilead expects to 
incur losses at least in 1998 and 1999, 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 (CMV) retinitis in patients with AIDS.  
Pharmacia & Upjohn (P&U) has the exclusive right to market VISTIDE outside of 
the United States and has launched the product in several European countries, 
since VISTIDE was approved for marketing in Europe by the European 
Commission, during the second quarter of 1997.  

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

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 summarized 
below and described in more detail in the Company's Annual Report on Form 
10-K for the year ended December 31, 1997, particularly those relating to the 
development, regulatory approval and marketing of pharmaceutical products.

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 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 acceptance of and size 
of the market for VISTIDE or any of the Company's products in development. 

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 


                                         7

<PAGE>

develop, commercialize, manufacture and market additional products or achieve 
sustained profitability. As of March 31, 1998, the Company's accumulated 
deficit was approximately $169.9 million.

These risks are discussed in greater detail in the Company's Annual Report on 
Form 10-K for the year ended December 31, 1997.  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.

RESULTS OF OPERATIONS

REVENUES

The Company had total revenues of $13.6 million and $5.5 million for the 
quarters ended March 31, 1998 and 1997, respectively.  In the 1998 period, 
total revenues include net product sales and royalties of $1.8 million and 
$0.4 million, respectively.  In the 1997 period, total revenues include net 
product sales and royalties of $3.0 million and $0.1 million, respectively.  
These net product sales and royalties result primarily from sales of VISTIDE. 
The overall decline in VISTIDE-related revenues reflects a decline in the 
incidence of CMV retinitis as a result of more effective human 
immunodeficiency virus (HIV) therapies.  In future periods, VISTIDE product 
sales revenues and royalties are expected to continue to be modest.

Also included in total revenues are contract revenues of $11.4 and $2.3 
million for the quarters ended March 31, 1998 and 1997, respectively.  Of the 
1998 amount, $10.7 million was received from F. Hoffmann-La Roche Ltd. 
(Roche) as reimbursement for expenses associated with the research and 
development of GS 4104, an oral compound in Phase II/III development for the 
treatment and prevention of influenza infection.  This revenue included $5.2 
million attributable to research and development expenses incurred in the 
fourth quarter of 1997, which were subject to Roche's approval as of December 
31, 1997.  Such expenses were approved for reimbursement in the first quarter 
of 1998.  Contract revenues for the three months ended March 31, 1997, 
include $1.6 million recognized under this agreement with Roche.  In both the 
1998 and 1997 periods, contract revenues included approximately $0.8 million 
recognized under the Company's collaborative research and development 
agreement with Glaxo Wellcome Inc. related to the Company's code blocker 
program.

OPERATING COSTS AND EXPENSES

The Company's cost of product sales relates to VISTIDE and was $0.2 million 
and $0.5 million for the quarters ended March 31, 1998 and 1997,  
respectively.  The Company's cost of sales increased as a percentage of 
product sales in the first quarter of 1998 because of reserves for potential 
inventory obsolescence.

Research and development (R&D) expenses for the first quarter of 1998 were 
$18.9 million compared to $10.8 million for the same period in 1997.  This 
74.9 percent increase in R&D expenses is primarily due to expenses associated 
with the advancement of four therapeutic drug candidates into later stages of 
clinical development.  The Company expects its R&D expenses to continue to 
increase significantly throughout 1998 over 1997 amounts, reflecting 
anticipated increased expenses related to clinical trials for several product 
candidates as well as related increases in staffing and manufacturing.


                                         8

<PAGE>

Selling, general and administrative (SG&A) expenses were $6.7 million and 
$6.1 million for the quarters ended March 31, 1998 and 1997, respectively, 
representing an increase of 9.7 percent.  The increase in SG&A expenses in 
1998 compared to the same quarter in 1997 relates to expenses incurred to 
support an increasing level of R&D activities.  The Company expects its SG&A 
expenses will continue to increase significantly over 1997 expense levels, 
primarily to support the increased level of R&D activities, as well as to 
support the expansion of sales and marketing capacity in anticipation of the 
potential launch of PREVEON-TM-, an investigational reverse transcriptase 
inhibitor currently being studied to treat HIV.

NET INTEREST INCOME

The Company had net interest income of $5.0 million and $4.0 million for the 
quarters ended March 31, 1998 and 1997, respectively, representing an 
increase of 22.5 percent.  This increase is due to several factors, including 
a modest increase in the Company's portfolio of cash, cash equivalents and 
short-term investments between the respective periods, a slightly higher 
level of investment returns in the 1998 period and a decrease in interest 
expense between the 1997 and 1998 periods, which corresponds to the Company's 
lower level of debt in 1998.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents and short-term investments totaled $315.4 million 
at March 31, 1998, compared to $322.3 million at December 31, 1997.  The 
decrease is primarily due to the net use of cash to fund operations, and the 
uses of cash to purchase property and equipment items and repay debt 
obligations.  Such uses of cash were offset in part by cash received from 
exercises of employee stock options.  During the remainder of 1998, the 
Company expects to incur R&D and SG&A expenses significantly in excess of 
amounts incurred in prior periods.

The Company believes that its existing capital resources, supplemented by net 
product revenues and contract and royalty revenues, will be adequate to 
satisfy its capital needs for the foreseeable future.  The Company's future 
capital requirements will depend on many factors, 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.

IMPACT OF YEAR 2000

The Company believes that with upgrades of existing software and conversions 
to new software, both of which are readily available in the market, the Year 
2000 issue will not pose significant operational problems for its internal 
computer systems.  All required modifications and conversions of computer 


                                        9

<PAGE>

systems that are critical to the Company's business operations are expected 
to be completed not later than December 31, 1998, which is prior to the 
estimated occurrence of any Year 2000 issues.  The Company has initiated 
formal communications with its significant suppliers, service providers and 
large customers to determine the extent to which the Company's interface 
systems are vulnerable to those third parties' failure to remediate their own 
Year 2000 issues.  There is no guarantee that the systems of other companies 
on which the Company's systems rely will be timely converted and would not 
have an adverse impact on the Company's systems. The Company estimates that 
the cost of required upgrades and conversions will not have a significant 
impact on its results of operations.


                                         10

<PAGE>


P
ART II.  OTHER INFORMATION



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

(a)  Exhibits

     No. 27--Financial Data Schedule    

(b)  Reports on Form 8-K

     There were no reports on Form 8-K filed during the quarter ended March 31,
1998.


                                          11

<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:     May 11, 1998            /s/ John C. Martin
                                  -----------------------------
                                  John C. Martin
                                  President and Chief Executive Officer




Date:     May 11, 1998            /s/ Mark L. Perry
                                  -----------------------------
                                  Mark L. Perry
                                  Senior Vice President, Chief 
                                  Financial Officer and General Counsel
                                  (Principal Financial and Accounting Officer)


                                       12





<TABLE> <S> <C>


<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-START>                             JAN-01-1998
<PERIOD-END>                               MAR-31-1998
<CASH>                                          34,313
<SECURITIES>                                   281,114
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                               337,406<F1>
<PP&E>                                          10,506<F2>
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 349,421
<CURRENT-LIABILITIES>                           36,877
<BONDS>                                          1,129
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          1
<COMMON>                                            30
<OTHER-SE>                                     311,384
<TOTAL-LIABILITY-AND-EQUITY>                   349,421
<SALES>                                          1,795
<TOTAL-REVENUES>                                13,560
<CGS>                                              230
<TOTAL-COSTS>                                   25,902
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                                (7,384)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                            (7,384)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   (7,384)
<EPS-PRIMARY>                                   (0.25)
<EPS-DILUTED>                                   (0.25)
<FN>
<F1>CURRENT ASSETS INCLUDES OTHER CURRENT ASSETS, WHICH INCLUDES INVENTORY AND A/R
<F2>PP&E IS NET OF ACCUMULATED DEPRECIATION
</FN>
        

</TABLE>