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Case Status:    SETTLED
On or around 11/05/2010 (Date of order of final judgment)

Filing Date: November 10, 2003

The original complaint charges Gilead and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC. The complaint alleges that in an effort to allow Gilead insiders to sell their Gilead stock at artificially inflated prices, defendants falsely represented that strong sales of Viread, the Company's HIV drug, during the second quarter of 2003 was due to an increase in prescriptions and not, as some analysts had cautioned, due to inventory build-up by distributors stocking up ahead of a price increase. Such statements were materially false and misleading because, as defendants knew or recklessly disregarded, a material portion of the second quarter Viread sales were attributable to distributors stocking up ahead of a price increase. Gilead insiders sold a total of 303,981 shares in August 2003 at artificially inflated prices, reaping gross proceeds of $19,365,998. On October 28, 2003, Gilead announced that sales of Viread in the third quarter of 2003 would be materially less than expected because distributors would meet end-user demand for Viread by selling off overstock they accumulated in the second quarter. In reaction to this announcement, the price of Gilead common stock plummeted, falling $7.46 in one day, from a close of $59.46 per share on October 28, 2003 to $52 per share on October 29, 2003.

As summarized by the Company’s FORM 10-Q for the quarterly period ended March 31, 2006, tthe court issued an order consolidating the lawsuits into a single action on December 22, 2003. On February 9, 2004, the court issued an order appointing lead plaintiffs in the consolidated action. On April 30, 2004, the lead plaintiffs, on behalf of the purported class, filed their consolidated amended complaint. On June 21, 2004, the Company and individual defendants filed their motion to dismiss the consolidated amended complaint. On January 4, 2005, the court granted the defendants’ motion to dismiss with leave to amend. Plaintiffs filed a second amended complaint on February 25, 2005 and a third amended complaint on March 11, 2005. On October 11, 2005, the court granted the defendants’ notion to dismiss the third amended complaint with leave to amend. On December 2, 2005, the plaintiffs filed a fourth consolidated amended complaint. The court heard defendants’ motion to dismiss on February 21, 2006, took the matter under submission and has yet to render its decision.

On May 12, the Court entered the Order signed by U.S. District Judge Martin J. Jenkins granting the defendants’ motion to dismiss. Three days later, on May 15, 2006, the Court entered Judgment and the civil case was terminated. The plaintiffs appealed the dismissal.

According to a press release dated August 12, 2008, a California appeals court reinstated a securities class action lawsuit on Monday against Gilead Sciences that claimed the drug maker misled investors about demand for its HIV drug Viread, Reuters reports. The lawsuit accused Gilead of fostering demand for Viread by using improper marketing, including aggressively promoting off-label uses for the drug after US regulators ordered the company to stop. The Ninth US Circuit Court of Appeals reversed a San Francisco district court's decision to dismiss the case on the grounds that investors had failed to prove that their 2003 stock losses were related to the off-label sales and to alleged false statements the company made about Viread. "Gilead's fortunes, as reflected in its stock price, depended heavily on Viread's commercial success," the appeals court wrote in its opinion. "Ultimately, 75 per cent to 95 per cent of Viread sales resulted from off-label marketing efforts," the court said.

According to the Company’s Form 10-Q for the quarterly period ended March 31, 2009, on February 6, 2009, we filed a petition for a writ of certiorari with the Supreme Court of the United States, requesting that the court review the judgment of the court of appeals. In April 2009, the Supreme Court of the United States denied our petition. The case continues before the district court. On February 13, 2009, we filed a further motion to dismiss the fourth consolidated amended complaint on alternative grounds.

According to an article dated June 3, 2009, citing contradictory witness testimony, a federal judge agreed Wednesday to partially dismiss a consolidated securities class action against Gilead Sciences Inc. but granted the shareholder plaintiffs leave to revise their fourth amended complaint. Judge Susan Illston of the U.S. District Court for the Northern District of California ruled that statements in the complaint by a confidential plaintiff witness – a former Gilead sales representative - were inconsistent with earlier statements in a preceding complaint and could not be relied on. Gilead's motion to dismiss the suit was set for a hearing Friday, but Judge Illston ruled the scheduled oral argument unnecessary and vacated the hearing. She ordered the plaintiffs to file a fifth amended complaint by June 26.

On July 10, 2009, the lead plaintiffs filed a Fifth Consolidated Amended Class Action Complaint for Violations of Federal Securities Laws. The defendants responded by filing a motion to dismiss on August 12, 2009, and on October 13, 2009, Judge Illston granted in part and denied in part the defendants’ motion to dismiss the fifth consolidated amended complaint.

According to the Joint Stipulation and Proposed Order filed on March 11, 2010, the parties are now pleased to report to the Court that they have reached an agreement-in-principle to settle this action; and the parties are now proceeding with the drafting of a class action settlement stipulation and related documents, including the Notice to the Class, all of which will require Court approval.

On June 28, 2010, the parties filed a Stipulation of Settlement. The settlement is in the amount of $8.25 million. The plaintiffs filed a motion for preliminary approval of the proposed settlement, which was approved on July 8, 2010. The Final Approval Hearing was set for November 5, 2010, and on that day, the Honorable Susan Illston approved the settlement, granted the motion for attorney fees and expenses, and dismissed the action with prejudice.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Biotechnology & Drugs
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: GILD
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


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In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. California
DOCKET #: 03-CV-4999
JUDGE: Hon. Martin J. Jenkins
DATE FILED: 11/10/2003
CLASS PERIOD START: 07/14/2003
CLASS PERIOD END: 10/28/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Fruchter & Twersky
    One Pennsylvania Plaza, Fruchter & Twersky, NY 10119
    212.687.6655 212.557.6151 ·
  2. Green & Jigarjian LLP
    235 Pine Street, 15th Floor, Green & Jigarjian LLP, CA 94104
    415.477.6700 415.477.6710 ·
  3. James Orman
    1600 Market Street, Suite 1416 , James Orman, PA 19103
    215.523.7800 ·
  4. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
  5. Rabin, Murray & Frank LLP
    275 Madison Avenue, Rabin, Murray & Frank LLP, NY 10016
    212-682-1818 · info@rabinlaw.com
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 03-CV-4999
JUDGE: Hon. Martin J. Jenkins
DATE FILED: 07/10/2009
CLASS PERIOD START: 07/14/2003
CLASS PERIOD END: 10/28/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Boca Raton)
    197 South Federal Highway, Suite 200, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Boca Raton), FL 33432
    561.750.3000 56.750.3364 · info@lerachlaw.com
  2. Milberg Weiss Bershad & Schulman LLP (New York)
    One Pennsylvania Plaza, 49th Floor, Milberg Weiss Bershad & Schulman LLP (New York), NY 10119
    212.594.5300 212.868.1229 · info@milbergweiss.com
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