Roche and Gilead end dispute on influenza drug Tamiflu

Strong commitment of both companies to further enhance collaboration

Gilead and Roche today announced the companies have ended their dispute related to the companies’ 1996 Development and License Agreement. Under the terms of the amended agreement, Roche and Gilead will establish a joint committee to oversee the coordination of global manufacturing – including the consideration of third party licenses for manufacturing – and a joint committee to coordinate the commercialization of Tamiflu for seasonal sales in the most important markets including the United States. Gilead will also have the option to co-promote Tamiflu in specialised areas in the United States.

William M. Burns, CEO Roche Pharmaceuticals Division, commented: “The redefined agreement with Gilead is an important step. Together, Roche and Gilead will be able to focus their efforts even more on making sure that the needs for this medicine can be met, both for the treatment and prevention of seasonal influenza as well as for the worldwide stockpiling for pandemic plans.”

“The global threat of a potential avian flu pandemic has challenged governments, public health officials and the pharmaceutical industry to join together in partnership for the purpose of establishing a comprehensive plan to combat this deadly disease. Beyond this threat, seasonal influenza outbreaks result in hundreds of thousands of deaths each year around the world. We have ended our dispute with Roche in an effort to work together, with the utmost diligence, to address this global public health need,” said John C. Martin, PhD, President and CEO, Gilead Sciences. “As the inventor and the company that devised the manufacturing process for Tamiflu, Gilead looks forward to partnering our expertise with that of Roche, serving as an additional resource to support this important product.”

Roche has agreed to waive the pre-existing contractual cost of goods adjustments from all future royalty calculations. Gilead’s royalty on net sales of Tamiflu is unchanged and will range from 14 to 22 percent, depending on the volume of sales in each year. Based on actual sales for the first nine months of 2005 and estimated pandemic sales for the fourth quarter, Gilead anticipates receiving a blended royalty for Roche’s full year 2005 Tamiflu sales in the range of 18 to 19 percent. As a result, Roche will also pay Gilead 62.5 million US dollars in retroactive royalty adjustments to account for the elimination of the cost of goods adjustment for 2004 and for the first three quarters of 2005. In addition, Gilead will retain 18.2 million US dollars that had been paid by Roche under protest in respect of disputed royalty calculations for sales in the period from 2001 through 2003.

About Tamiflu
Tamiflu (oseltamivir), the only oral antiviral for the treatment and prevention of influenza A and B, was invented by Gilead and licensed to Roche in 1996. Tamiflu is designed to be active against all clinically relevant influenza viruses. When neuraminidase is inhibited, the virus is not able to spread to and infect other cells in the body. Key international research groups have demonstrated, using animal models of influenza, that Tamiflu is effective against the avian H5N1 strain circulating in the Far East. As a result, more governments are stockpiling Tamiflu, therefore Roche is expanding a collaborative production network to meet the increasing demand. So far, Roche has received and/or fulfilled orders from around 50 countries. The manufacturing process for Tamiflu is complex and lengthy. Additional information about Tamiflu is available on the Internet.

About Gilead
Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. The company’s mission is to advance the care of patients suffering from life-threatening diseases worldwide. Headquartered in Foster City, California, Gilead has operations in North America, Europe and Australia. Additional information about Gilead Sciences is available on the Internet (www.gilead.com).

About Roche
Headquartered in Basel, Switzerland, Roche is one of the world’s leading research-focused healthcare groups in the fields of pharmaceuticals and diagnostics. As a supplier of innovative products and services for the early detection, prevention, diagnosis and treatment of diseases, the Group contributes on a broad range of fronts to improving people’s health and quality of life. Roche is a world leader in diagnostics, the leading supplier of drugs for cancer and transplantation and a market leader in virology. In 2004 sales by the Pharmaceuticals Division totalled 21.7 billion Swiss francs, while the Diagnostics Division posted sales of 7.8 billion Swiss francs. Roche employs roughly 65,000 people in 150 countries and has R&D agreements and strategic alliances with numerous partners, including majority ownership interests in Genentech and Chugai. Additional information about the Roche Group is available on the Internet (www.roche.com).

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Baschi Dürr

Roche Group Media Office

Roche

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