Javascript is disabled. Please enable Javascript to log in.
Published: 2008-03-26

Copromotion Agreement - Roche Laboratories Inc. and Gilead Sciences Inc.



                                                                            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


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



         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


      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.


                                       4

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


-------------------------------------------------------------------------------
                                                                 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:


                                       5

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED



                [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.


                                        6 

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED



        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 


                                       7

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


      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 


                                       8

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


      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



      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


      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


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 


                                        12

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


      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.


                                         13

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


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.


                                        14

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


      (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 


                                        15

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


           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.


                                       16

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


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


      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


      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


      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


                           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.


                                       21

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


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


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


      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:
       ------------------------------         --------------------------------

                                       24

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED



                                      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 [        ]


                                       25

                        [ ] = CONFIDENTIAL TREATMENT REQUESTED


   (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


                             GILEAD-ROCHE FORECAST EXAMPLE



                                Factory  Hepatitis  Factory Sales   Quarterly  
           Year Quarter  Month  Sales(1)  Share(2)   (Hep)(3),(4)  Sales(4),(6)  Growth(5),(6)
           ---- -------  -----  -------- ---------  -------------  ------------  -------------
                                                           
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)



                        [ ] = CONFIDENTIAL TREATMENT REQUESTED