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2.2.0.7 false SUBSEQUENT EVENT 11501 - Disclosure - SUBSEQUENT EVENT true false false false 1 USD false false Unit12 Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Unit13 Standard http://www.xbrl.org/2003/instance pure xbrli 0 Unit1 Standard http://www.xbrl.org/2003/instance shares xbrli 0 Unit14 Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 $ 5 SUBSEQUENT EVENT 3 us-gaap_ScheduleOfSubsequentEventsTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false false 1 false false false false 0 0 <div> 15. SUBSEQUENT EVENTS Acquisition of CGI Pharmaceuticals, Inc. In June 2010, we signed an agreement to acquire CGI Pharmaceuticals, Inc. (CGI) for up to $120 million in cash, the majority as an upfront payment and the remaining based on the achievement of clinical development milestones. This transaction closed on July 8, 2010, at which time CGI became a wholly-owned subsidiary of Gilead. CGI was a privately-held development stage pharmaceutical company based in Branford, Connecticut, primarily focused on small molecule chemistry and protein kinase biology. The lead preclinical compound from CGI's library of proprietary small molecule kinase inhibitors targets spleen tyrosine kinase (Syk) and could have unique applications for the treatment of serious inflammatory diseases, including rheumatoid arthritis. We believe the acquisition will provide us with an opportunity to expand our research efforts in an interesting and promising area of drug discovery. Given the timing of the closing of this acquisition, we are currently in the process of valuing the assets acquired and liabilities assumed in the business combination. As a result, we are unable to provide the amounts recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed and certain disclosures pertaining to contingent consideration. 2014 and 2016 Convertible Senior Notes In July 2010, we issued $1.25 billion of convertible senior notes due in 2014 (2014 Notes) and $1.25 billion of convertible senior notes due in 2016 (2016 Notes) in a private placement pursuant to Rule 144A of the Securities Act of 1933, as amended. The 2014 Notes and the 2016 Notes were issued at par and bear interest rates of 1.00% and 1.625%, respectively. The aggregate principal amount of the 2014 and 2016 Notes sold reflects the full exercise by the initial purchasers of their option to purchase additional Notes to cover over-allotments. The initial conversion rate for the 2014 Notes is 22.1845 shares per $1,000 principal amount of 2014 Notes (which represents an initial conversion price of approximately $45.08 per share), and the initial conversion rate for the 2016 Notes is 22.0214 shares per $1,000 principal amount of 2016 Notes (which represents an initial conversion price of approximately $45.41 per share). The conversion rates are subject to customary anti-dilution adjustments. The 2014 and 2016 Notes may be converted only under the following circumstances: 1) during any calendar quarter beginning after September 30, 2010 if the closing price of our common stock for at least 20 trading days during the last 30 consecutive trading day period of the previous quarter is more than 130% of the applicable conversion price per share, 2) during the five business day period after any ten consecutive trading day period in which, for each trading day of such period, the trading price per $1,000 principal amount of the relevant notes was less than 98% of the product of the closing price of our common stock and the applicable conversion rate on such trading day, or 3) upon the occurrence of specified corporate events, such as the distribution of warrants to our stockholders that would entitle them to purchase shares of our common stock at a price below the average closing price for our stock during the ten days prior to the announcement of such distribution. Generally speaking, upon conversion, a holder would receive an amount in cash equal to the lesser of (i) the principal amount of the note or (ii) the conversion value for such note, as measured under the indenture governing the relevant notes. If the conversion value exceeds the principal amount, we may also deliver, at our option, cash or common stock or a combination of cash and common stock for the conversion value in excess of the principal amount. If the 2014 and 2016 Notes are converted in connection with a change in control, we may be required to provide a make whole premium in the form of an increase in the conversion rate, subject to a stated maximum amount. In addition, in the event of a change in control, the holders may require us to purchase all or a portion of their notes at a purchase price equal to 100% of the principal amount of Notes, plus accrued and unpaid interest, if any. Concurrent with the issuance of the 2014 and 2016 Notes, we purchased convertible note hedges in private transactions at a cost of $362.6 million, which will be tax deductible over the life of the notes. We also sold warrants in private transactions and received net proceeds of $155.4 million from the sale of the warrants. The convertible note hedges and warrants are intended to reduce the potential economic dilution upon future conversions of the 2014 and 2016 Notes by effectively increasing the initial conversion price to $56.763 per share for the 2014 Notes and $60.102 per share for the 2016 Notes. The net cost of $207.2 million of the convertible note hedge and warrant transactions will be recorded in stockholders' equity. The convertible note hedges cover, subject to customary anti-dilution adjustments, 55.3 million shares of our common stock at strike prices that initially correspond to the initial conversion prices of the 2014 and 2016 Notes and are subject to adjustments similar to those applicable to the conversion price of the related notes. If the market value per share of our common stock at the time of conversion of the 2014 and 2016 Notes is above the strike price of the applicable convertible note hedges, we will be entitled to receive from the counterparties in the transactions shares of our common stock or, to the extent we have made a corresponding election with respect to the related convertible notes, cash or a combination of cash and shares of our common stock, at our option, for the excess of the market value of the common stock over the strike price of the convertible note hedges. The convertible note hedges will terminate upon the maturity of the 2014 and 2016 Notes or when none of the 2014 and 2016 Notes remain outstanding due to conversion or otherwise. There are 55.3 million shares of our common stock underlying the warrants, subject to customary anti-dilution adjustments. The warrants have strike prices of $56.763 per share (for the warrants expiring in 2014) and $60.102 per share (for the warrants expiring in 2016) and are exercisable only on their respective expiration dates. If the market value of our common stock at the time of the exercise of the applicable warrants exceeds their respective strike prices, we will be required to net settle in cash or shares of our common stock, at our option, with the respective counterparties for the value of the warrants in excess of the warrant strike prices. We expect to use the net proceeds to repurchase at least $1.0 billion of our common stock, including the repurchase of 7.4 million shares of our common stock for $248.0 million contemporaneously with the closing of the sale of our 2014 and 2016 Notes. The remaining proceeds will be used to pay off existing indebtedness and make additional repurchases of our common stock. </div> 15. SUBSEQUENT EVENTS Acquisition of CGI Pharmaceuticals, Inc. In June 2010, we signed an agreement to acquire CGI Pharmaceuticals, Inc. (CGI) for up to $120 false false false us-types:textBlockItemType textblock Describes disclosed significant events or transactions that occurred after the balance sheet date, but before the issuance of the financial statements. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, losses resulting from fire or flood, losses on receivables, significant realized and unrealized gains and losses that result from changes in quoted market prices of securities, declines in market prices of inventory, changes in authorized or issued debt (SEC), significant foreign exchange rate changes, substantial loans to insiders or affiliates, significant long-term investments, and substantial dividends not in the ordinary course of business. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 5 -Paragraph 11 false 1 1 false UnKnown UnKnown UnKnown false true