Ladies and gentlemen, thank you for standing by, and welcome to the Gilead Sciences Third Quarter 2016 Earnings Conference Call. My name is Candice, and I'll be your conference operator today. At this time, all participants are in a listen-only mode. And as a reminder, this conference call is being recorded. I would now like to turn the call over to Sung Lee, Vice President of Investor Relations. Please go ahead.

Thank you, Candice, and good afternoon, everyone. Just after market close today, a press release was issued with earnings results for the third quarter of 2016. The press release and detailed slides are available on the Investor Relations section of the Gilead website. Joining today's call will be John Milligan, President and Chief Executive Officer; Robin Washington, Executive Vice President and Chief Financial Officer; Kevin Young, Chief Operating Officer; and Norbert Bischofberger, Executive Vice President of Research and Development and Chief Scientific Officer. Before we begin formal remarks, let me remind you that we will be making forward-looking statements, including plans and expectations with respect to products, product candidates, financial projections and the use of capital, all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause actual results to differ materially from these statements. A description of these risks can be found in the latest SEC disclosure documents and recent press releases. In addition, Gilead does not undertake any obligation to update any forward-looking statements made during this call. Non-GAAP financial measures will be used to help you understand the company's underlying business performance. The GAAP-to-non-GAAP reconciliations are provided in the earnings press release as well as on the Gilead website. I will now turn the call over to Robin.

Thanks, Sung, and good afternoon, everyone. We are pleased to share our results for the third quarter of 2016. I'll first review our financials, and Kevin, Norbert, and John will then make a few comments. Total revenues for the third quarter were $7.5 billion, with non-GAAP diluted earnings per share of $2.75. This compares to revenues of $8.3 billion and non-GAAP earnings per share of $3.22 for the same period last year. Product sales for the third quarter were $7.4 billion, down 10% year-over-year and down 3% sequentially. These declines were due to lower HCV sales, partially offset by increased sales in HIV and other therapeutic areas. Sequentially, declines in our HCV sales in the U.S., Japan and Europe were partially offset by increases in U.S. HIV and other product sales. Turning to the U.S. Product sales for the third quarter were $5.1 billion, down 9% year-over-year. HCV product sales were $2 billion, down 37% year-over-year, driven primarily by lower patient starts for Harvoni and lower revenues per patient, primarily due to a higher percentage of sales to more deeply discounted segments. The decline was partially offset by demand for Epclusa, which was launched at the end of Q2 2016 and generated $593 million in its first full quarter of sales. Sequentially, our HCV product sales were down 12%. These sales were essentially flat compared to the second quarter, excluding the favorable adjustment to our HCV sales return of $279 million that we made last quarter. HIV and other antiviral sales increased 32% year-over-year and 19% sequentially. The quarterly revenues of $2.6 billion were positively impacted by strong uptake of our TAF-based regimen and a one-time favorable adjustment of $332 million to our rebate reserve, primarily related to our TDF-based regimen. Without the adjustment, U.S. HIV and other antiviral sales…

Thank you, Robin, and good afternoon, everyone. I am very pleased to take you through a solid set of operating results for the third quarter. Starting with HIV, Gilead continues to make significant steps in delivering improved single-tablet regiments to patients around the world. We have seen strong adoption of our TAF-based regiments in the U.S. and in the European markets where we have received reimbursement. In the U.S., of the nearly 840,000 people on antiretroviral therapy, approximately 80% receive a Gilead regimen. Genvoya is the most-prescribed regimen for both treatment-naïve and switch patients. This month we expect cumulative prescriptions of Genvoya to surpass Atripla's prescription at the same point in time post-approval. This will make Genvoya the all-time most successful product adoption in its first year in the 30-year history of HIV therapy in this country. The uptick in Genvoya, Odefsey, and Descovy have largely been driven by the switch from Gilead's old STRs due to the improved safety profile of TAF. It is also encouraging to see a notable number of patients from non-Gilead therapies moving to TAF-based regimens. Approximately 10% of Genvoya switches are incremental to the Gilead HIV franchise. Turning to Europe. Total HIV and other antiviral revenue was $728 million, up 1% year-over-year and down 4% sequentially. Third quarter European pharmaceutical revenues are typically affected by summer seasonality. In Italy, Spain, and Portugal, we saw lower prescribing risk consistent with prior years. Genvoya has been launched in 18 markets in the EU, including Spain and Germany, where we are seeing rapid uptake, similar to the U.S. Descovy has been launched in nine markets and Odefsey has been launched in eight markets, the largest being Germany in both cases. We expect our TAF-based therapies to continue to grow in Europe, with Spain still early in its…

Thank you, Kevin. During the third quarter, a number of Phase II and Phase III studies concluded, providing insights into efficacy and safety of both approved and experimental Gilead agents in the areas of HIV, liver disease, inflammation, oncology and cardiovascular disease. Some of these results were disappointments, some were exciting successes. To start off with the disappointments. We now have the final analyses from three 96-week studies of the anti-LOXL2 monoclonal antibody, simtuzumab. The data indicate that, while safe and well-tolerated, there is no evidence of efficacy in one study in primary sclerosing cholangitis and in two studies in NASH. One NASH study was in patients with cirrhosis and one was in patients with liver (20:54) fibrosis. Consequently, we will not develop simtuzumab any further in these or any other indications. We will present these data at future conferences. As for GS-5745, an anti-MMP-9 antibody, we stopped a Phase II/III study in patients with ulcerative colitis because of the lack of efficacy. This decision for the planned interim DSMB analysis after the first 150 patients had been enrolled, that the study met pre-defined futility criteria. Also, and not unexpectedly, there was no evidence of benefit of GS-5745 in a Phase II study in patients with Crohn's disease. Consequently, we will not further pursue GS-5745 for ulcerative colitis or Crohn's. In these studies, GS-5745 was safe and well tolerated, and we're continuing to evaluate GS-5745 in rheumatoid arthritis as an add-on to anti-TNFs or other therapies. Eleclazine, or GS-6615, failed to meet its primary endpoint in a study of patients with ventricular tachycardia, ventricular fibrillation, or VT/VF, and implanted cardioverter-defibrillators. Patients were randomized to two doses of eleclazine or placebo. The primary endpoint was the number of electrical interventions, including shocks and pacing, by the implanted device. And there was…

Thanks, Norbert. I would like to make a few closing remarks before we get to your questions. We continue to have success with the important work we do in HIV and viral hepatitis. There's still a great need for innovation in these fields. Both of these include patients whose needs remain unaddressed and both represent global epidemics. Our researchers are working to bring to options to a wider range of patients than ever before. This includes people with HIV who've been on therapy for decades and may need to change their medication due to side effects, or patients who may be failing to fully suppress their virus due to the presence of resistance. Approaches our research teams are pursuing include new molecules for treating resistant virus, novel formulations in combinations that may be dosed infrequently and opportunities to cure HIV patients by clearing out the viral reservoirs from their bodies. Our innovative work in conjunction with our many partners has already allowed our HIV medicines to reach millions of patients worldwide. We're particularly excited about the role that TAF will play. With a small daily dose and improved side effect profile, it is ideal for resource-constrained areas of the world and requires only one-tenth of the manufacturing capacity to supply the same number of patients. In the area of viral hepatitis, the data now obtained with Epclusa suggests that we have an excellent option for the many parts of the developing world for genotyping HCV and determining the stage of disease can be difficult, if not impossible. With Epclusa, there's no difference in dosing for the different genotypes or stages of liver disease and so there's no need for these diagnostic procedures. We are working around the globe to rapidly introduce Epclusa as well as Sovaldi and Harvoni. Finally, in…

Thank you. Today's question-and-answer session will be conducted electronically. And our first question comes from the line of Geoff Meacham of Barclays. Your line is now open.

Hey, guys. Good afternoon and thanks for taking the question. John or Kevin, I've got one for you. I just wanted to ask about hep C, but in a broader context. So you guys have had flat patient numbers despite better access in the U.S., and revenue is down sequentially, but on payer mix. So the question is, how do you think about the return on investing continually in hep C, either commercially or in new products, versus, say, looking outwards and being more aggressive in a new therapeutic category? Thanks.

Hey, Geoff. It's Kevin. Let me just take maybe half a step back from your question and just a few more observations. I've got to tell you that I think we're really executing well in the area of hepatitis C. I've spent a lot of time this quarter with many Gileads and with several providers. And I think the variables that we can directly influence, we're really doing a good job on. Our market share is staying incredibly strong. We're ensuring access whilst preserving the value of our hepatitis C drugs, and we're executing on new versions coming to the market. I think you've seen that with Epclusa. And the area that we can less control but we can influence, you're now seeing some new activities from us in terms of unbranded awareness campaigns. And you may have seen our advertisement that came on the television just over a week ago. So I think, from my point of view, in terms of operational excellence, we're doing a very nice job. It is true that the treatments are staying about the same. Actually, I consider that very positive. Let's not forget that we're at treatment levels that are 2.5 times the treatment levels that were there before the Gilead regimens came to the market. So I take at the level of 50,000 to 60,000 patients as very good. The vast proportion of those are Gilead patients. Epclusa had a very big effect in this quarter, so it goes to show that there's still room for new patients, albeit that we're entering a high level of satisfaction. But with Harvoni for Genotype 1, both 12-weeks and now a high proportion at 8-weeks, and now Epclusa for the 2 and 3 patients. Yes, we have got patients being cured at very high levels. In terms of our triple, I do agree that it'll be a relatively small proportion of patients, but it's the right thing to do and it completes our whole picture for hepatitis C. So I think to have the range of products that we have, to have the efficacy that we have, is the right offering for healthcare. So we continue to move forward and I think we have a healthy franchise. And we are getting better access from particularly the commercial payers, although, as I pointed out and I often discuss with the team here, the Medicaid is still a little bit on the slow side in terms of access. But great progress as far as I'm concerned in the third quarter.

Geoff, it's John. The second part of your question was something about investing in this area versus other areas. So I would say from a pipeline perspective, with SOF/VEL/VOX being our fourth generation of HCV product now being approved, there really isn't much left in terms of unmet medical need. And so from a pipeline perspective, this is really the end of what we'll be developing in terms of HCV molecules and that will allow us then to turn our attention to the important aspects in our fibrosis and NASH franchises and our oncology franchises. So we've really largely turned our attention away from HCV to those areas already.

Okay. That's helpful. Thanks.

Thank you. And our next question is from Brian Abrahams of Jefferies. Your line is now open.

Hey, guys. Thanks for taking my question. Norbert, a question on 4997. Wondering if you could talk a little bit more about the go-forward plan there, particularly with respect to a potential Phase III trial duration, and whether or not a fibrosis endpoint might be acceptable, just given the effects that you saw in such a short time period in Phase II and the plan to target more severe progressive patients. And then can you confirm that there were no baseline imbalances in the Phase II that might have influenced the fibrosis data or progression to cirrhosis data? Thanks.

Hi, Brian. So the second question, yes, I can confirm that there were no baseline imbalances. And regarding the Phase III study, no, we're going to make the proposal to regulatory authorities to use just fibrosis as the endpoint. We feel very convinced that that's the right thing to do because, as you may know, fibrosis is the only histological correlate to clinical outcomes. There was a large study published a few years ago where they looked at baseline histology and they correlated histological variables with clinical outcomes. And steatosis didn't correlate, inflammation didn't correlate, ballooning didn't correlate. The only thing that correlated was fibrosis. So we are going to propose two Phase III studies, both looking at fibrosis 48-week as the endpoint. The other thing we're going do with the studies, in F3, F4 patients, again, the rationale is that that's where the unmet need is. And also since ultimately for full approval you will need some clinical endpoint, we think we can get there much faster maybe with a 96-week study even if we start off with F4 patients. But having all of that said, this all has to be agreed upon by regulatory authorities. We have a date with the FDA, but we have not discussed this with them yet. So stay tuned. Some time early next year I think we can update you on the exact plan.

Thanks.

Thank you. And our next question comes from Matthew Harrison of Morgan Stanley. Your line is now open. Matthew K. Harrison - Morgan Stanley & Co. LLC: Thanks. Thanks for taking the call. Sorry, I was on mute. Can I just ask – you made two comments related to HCV that I just want to get some more clarity on. You talked about that you're pleased with the 2017 payer cycle. Could you just tell us if we should expect any significant changes in pricing or not? And then can you describe what you think is the size of the Epclusa warehouse and if you think you've moved through that or you would expect to see more of that through the end of the year? Thanks.

Hey, Matt. It's Kevin Young. I'll take your second part first. Yeah, there was a small warehousing effect. We think that – and this is anecdotal and qualitative, we think that providers probably held people for a quarter, two to three-month period. So this is nothing like the warehousing that we saw with Sovaldi or with Harvoni. So we think it's largely a Q3 effect. It might go into the fourth quarter, into the quarter now, but we really think it's mostly a 2016 effect. In terms of our negotiations and contracts, I really can't make any specific comments. Obviously they're confidential. But we are pleased with the outcome. We feel we're in a strong position for 2017, and most providers will have very, very good access in the private and Medicaid, Medicare Part D setting to both Harvoni and Epclusa. So we think we're in good shape and our providers will have the Gilead options to look forward to giving to their patients as we have done in 2016. So feel good about that. Matthew K. Harrison - Morgan Stanley & Co. LLC: Great. Thanks very much.

Thank you. And our next question comes from John Scotti of Evercore ISI. Your line is now open.

Hi. Thanks for taking my question. I wanted to ask one on capital allocation, if I may. So last quarter you spoke about potentially having a more complete story of internal and also external programs by year end, and you've continued to be relatively light on the buyback in 3Q. So a couple things. Can you characterize right now your current appetite for M&A and if that's changed the current thinking more along the lines of larger transformative deals? Or should we expect a string of in-licensing deals similar to what we saw with filgotinib and Nimbus? And how should we think about the sense of urgency here given your comments and going into year end? Thanks a lot.

Hi, John. It's John. I think you asked a capital allocation questions and switched to strategy. We'll try to answer that for you. So as we said in our opening comments, we're still very actively evaluating opportunities. We're actively evaluating a series of different partnerships. But as I said in my comments, we're going to remain disciplined and we're going to keep the bar high. You don't want the sense of urgency to overwhelm your discipline because then you'll do things that don't make long-term sense. And that's been the history in all businesses, and that's one we apply here. So we're currently very, very active. We'll do things when they make sense for us and not before then. And that's really as much as I can say.

Thank you. And our next question comes from Geoffrey Porges of Leerink Partners. Your line is now open.

Thank you very much. Appreciate the question. Robin, just a couple for you, if we may. First, operating margin trending down by 200 basis points to 300 basis points a quarter. Is that something that we should anticipate continuing, or are there some variables in there? Secondly, just on Epclusa. Was there any channel inventory build in the reported number? And then lastly, how are you judging the share buyback? You spent $10 billion, as you pointed out, this year, and the average cost is around $90. Compared to other things that you might have invested in, how are you feeling about that buyback going forward? Thanks.

Sure, Geoff. So I'll start on a reverse order and address the buyback first. We really look at buybacks on a long-term perspective, which is pretty much what I mentioned during the last quarter call. So we're still very comfortable where we are. We did front-load a significant component of our share buybacks. As a matter of fact, I think just in the first quarter we did more than the entire three quarters of 2015. And we messaged very early on that we would see those decline towards the second half of this year, very much in alignment with John's comments on being prepared for M&A. It's still clearly part of our capital allocation strategy along with dividends. So I think balancing that with overall looking for growth is something that we're still focused on doing. And as John mentioned, these things take time to play themselves out. I'll let Kevin answer the inventory question. But I think to your question of operating margins, yeah, the quarterization of our margins do get impacted by revenue dynamics as well as expenses. Keep in mind, R&D had a $200 milestone payment this quarter included that. Overall, I think our margins still remain high – high relative to overall industry, et cetera. And we're comfortable with them, we're very prudent with expense management. You saw SG&A expenses down. I think the other thing you're slightly seeing is some mix changes between HCV and HIV. That has a little bit of an impact on our gross margins. But, overall, with the continued conversion of TAF, long term you'll continue to see that go down, but it will be impacted relative to HCV becoming a smaller component of our total revenue. And I can't really give guidance on our gross margins, but I think the bar still remains high for them and we still remain a very disciplined spending type of organization.

Yeah, Geoff, just to comment on Epclusa. If you recall, we launched Epclusa in the last week in quarter two. So that's when our opening inventory went in. Like any growing product, major wholesalers tick up their inventory basically because they've got a standard calculation for days on hand. So basically that just ticks up as a product grows, or indeed comes down as a product – comes down, as likely Sovaldi, because it's now becoming Epclusa, will in the future. So there was nothing unnatural about inventory for Epclusa in the third quarter. But as I said, we did get a very nice bump in usage from a small warehousing of patients.

Okay. Great. Thanks very much, guys.

Thank you. Our next question comes from Corey Kasimov of JPMorgan. Your line is now open.

Great. Good afternoon, guys. And thanks for taking my question. John, I wanted to go back to your comments on the strategic question you just got. When you talk about having a high bar in the M&A front, does that mean you see a lack of interesting opportunities out there that just don't meet that bar? Or is this more of a price disconnect given the continued volatility in the market? Thanks.

Discipline has both components to it. There are a number of things that I think are probably too early for us to take part in. There are a number of things that I think are just overpriced. And so it's been a combination of those two things looking backward. Going forward, we'll have to see what makes sense for us and where we're willing to go to bring in new products.

Okay. Thank you.

Thank you. And our next question comes from Michael Yee of RBC Capital Markets. Your line is now open.

Hi. Thanks. Good afternoon. I wanted to ask a question on patient volumes in hep C, specifically as it relates to slide 41, I guess. Previously I would have thought that changes in payer access would have opened up the availability of these drugs to get reimbursed for the healthier F0s and F1s. I guess with patient volumes flattish, are you seeing these F0s and F1s coming in, are they getting treated? Or is your bottleneck there? They come in and they don't get treated? Just wanted to understand your dynamic on that and whether you think that that's going to drive some positive development of volumes. And then in Europe the same question. Europe declined from 27,000 down to 21,000. How do you think that plays out I guess going forward? What are the dynamics there for volumes? Thanks so much.

Hi, Michael. Two great questions. Let me try to deal with those in the order. So the first the U.S. If you look at our slide, actually the percentage of F0s to F2s has increased over time. It was sort of 50% a little while ago, and now it's up to 60%. So, clearly, a fitter patient, they're less sick, are being treated. And of course, that's as a result of coverage. But I want to say that the patient journey, I think, is becoming longer in the U.S. now. If you think about it, patients really are starting further back because they are healthier. We are continuing to see approximately 30,000 patients coming into specialist care, so in other words, 90,000 patients a quarter. 60,000 of those are coming out of the other side and are being treated and cured. That's probably not a bad ratio in itself. Not every patient is treated and not every patient is immediately treated. Now, we shouldn't forget that sometimes patients drift in and out of specialist care. Some patients have compounding factors that complicate the start of therapy, most notably, drug use or alcohol use. And the patients who are just less sick have less motivation themselves and the physician has less motivation to really push those sort of therapy. And lastly, the paperwork and the administrative process for authorization is still there, like it is with any specialist product. So I think those are mostly the dynamics and it's mostly around the patient being less time in the physician's practice. They're not patients that have been held for a long time. They're not patients that failed one or two prior therapies and a great urgency by the physician. In terms of Europe, as I said, we did see a down tick in the patients treated in the Southern European markets, primarily Italy and Spain. And I think that's because they are working through the sicker patients and becoming more like France and Germany. There still are more patients in the Southern European markets, but I do think they are clearing the most obvious patients to treat and cure. And I want to emphasize that market share has stayed very, very solid in those markets. And whilst there's not an obvious mechanism through advertising, television advertising, in the European markets, we are doing a lot of partnership with KOLs, with societies, with patient groups, to again try to encourage the right screening practices and the right transfer of patients into specialist care.

Thanks.

Thank you. And our next question comes from Robyn Karnauskas of Citi. Your line is now open.

Hi. Thank you for the question. So just to ask the HCV question from a fourth quarter and payer perspective. I remember last fourth quarter, you started to see hints of changes in HCV. So given it looks like the U.S. has stabilized, are you seeing anything that hints that payers could change how they're viewing hep C, or any changes in fourth quarter that you're seeing that could influence 2017? And then given you maintained guidance, how are you thinking now about providing – what kinds of guidance you might provide in 2017 to help investors feel comfortable that you can predict going forward? I know you can't give guidance, but can you give any hints on how you're thinking about giving us some color next year? Thanks.

Hi, Robyn. I'll take the first part. I think, again, come back to the quality of the discussions that we had for 2017 contracting. And I think they were very good. Let's not forget the fact that Gilead are in a very strong place by virtue of our Harvoni being in a good proportion of patients in eight-week therapy. So it's a very big advantage for us and I think that's really appreciated from the point of view of managing costs from a commercial payer. We didn't see much change in the ratio of the public to private payer in the third quarter. It was still about 45% of patients who were covered as a public patient as opposed to a commercial or Medicare Part D plan. Part of the commercial part of the market is, of course, the VA. The VA was a little bit lower in the third quarter versus the second quarter. They still seem to be very enthusiastic, very engaged in recalling patients. But I think that's perhaps one of the variables that will unfold in 2017 is the VA and their continuing ability to recall and treat patients. But I think with our efforts around highlighting the CDC and need to treat the Baby Boomers and the activity of all the companies involved in hepatitis C, I'd like to think that we can continue our progress in 2017.

So Robyn, it's Robin. I'll take the second part of that question. I think, as we said, this is a curative market, HCV, and it's difficult to predict. And Kevin just outlined this patient journey taking a longer bit of time and just changing dynamics. And we spent a lot of time this fall working through the planning cycle, figuring out what that means around 2017 and beyond. Obviously, I can't give the answer yet, but how we guide will again depend on our ability to bracket the risk and opportunities around those dynamics and what those mean. It continues to change and it's something that we monitor very closely. But that patient flow, as Kevin said, is something that's just very difficult for us to control.

Yeah, I'd also add, Robin, if I might, how solid and good we feel about HIV going into next year with that chronic model and the uptick of our TAF-based regimens.

Thank you.

Thank you. And our next question comes from Ying Huang of Bank of America Merrill Lynch. Your line is now open.

Hi. Thanks for taking my questions. The first one maybe is for Kevin. Our channel checks indicated that VA is paying about $15,000 to $17,000 per patient. Do you think that's the absolute floor for HCV pricing? And then another question for John and Robin. Sounds like you guys have a really high bar for acquisitions. If you don't deploy capital in acquisitions, would you consider hiking dividends to a much higher level, like 5% to 6%, so that a lot of investors would be willing to take this off a (1:01:21) dividend payment? Thank you.

Hi, Ying. It's Kevin. I apologize, but in terms of commenting on our net pricing to the various channels, to the various constituents, it's not something that we directly comment on, so I couldn't go any further than that at this time.

Yeah, Ying. And I'll take the second half. As we said, the bar is high, but we're very engaged and remain engaged in M&A. When we think about our overall capital allocation, we wouldn't want to do anything that would constrain us and reduce our flexibility to purchase if we found something that we thought could really grow our top line. So we talk with our board all the time about dividend increases and dividends in general as well as share repurchases, and that's something that we'll continue to do.

Thank you.

Thank you. And our next question comes from Phil Nadeau of Cowen & Company. Your line is now open. Phil Nadeau - Cowen & Co. LLC: Good evening. Thanks for taking my question. And unfortunately it's another one on HCV pricing for you, Kevin. You mentioned two factors that impact the average per patient price that have been changing. One is the public versus private payer mix, which you said changed over the last year, but maybe stabilized now, and then also the rebates given to private payers. You didn't really discuss those too much on this call, but in the past your predecessor said that he expected the rebates to actually increase when Merck entered the market next year. Some of your comments today could suggest the opposite. So I guess just curious for 2017, how should we think about those two factors? Do you think public versus private has plateaued? Is 45% the number we should be thinking about for 2017? And then on the rebates to the private payers, should we continue to expect those to tick up in 2017? Or is your feeling different now that you've gone through the negotiation cycles? Thanks.

Difficult for me to comment in any great detail, Phil, on either of those questions. I'll take the commercial first. They have gone well. As I keep emphasizing, the advantage we have in eight weeks – think about it. 45% right now of Harvoni patients, genotype 1 patients, are receiving eight weeks. So if you think about 45% of genotype 1 with just that eight weeks, that's a very good economic offering for our payers that they really appreciate. So I believe we've done very well in our position going into 2017. In terms of the ratio between public and private, again, very difficult for me to make a prediction. VA did come down a little bit, but there was an increase, just a tick up, to replace that by Medicaid. I made the comment that the Medicaid opening is really slower than we would like, but I think there may be that change in mix going forward. Difficult to predict VA. VA is still a big part of the public, and we'll just have to see. It's very impressive what they've done and I know they're very committed and they feel that they haven't done their job yet. We, and that's Gilead, will estimate that between 35% and 40% of patients in the VA system have been treated to date. So still a lot of work to do and I think they want to do it. So 45%, 55%, seems to have been the level for the last couple quarters and not entirely clear if that's going to be maintained into 2017. But seems reasonable to me. Phil Nadeau - Cowen & Co. LLC: Thanks helpful. Thanks for taking the question.

Thank you. Our next question is from Alethia Young of Credit Suisse. Your line is now open. Alethia Young - Credit Suisse Securities (USA) LLC (Broker): Hey, guys. Thanks for taking my question. I wanted to talk a little bit about Genvoya launch, maybe how it's faster than even the Atripla launch, which obviously a very good launch. Maybe if you can just frame how doctors are looking at this. Are they looking at it more as just for everyone that comes to the doctor, they just go and get this drug? Or just give us some more flavor on the dynamics. Thanks.

Hey, Alethia. Thanks for an HIV question. I really appreciate it. Alethia, I was at our International Advisory Board a couple of weeks ago, and we had some of the foremost HIV doctors from around the world. And it was absolutely unanimous the commitment to switching patients. All things being equal, particularly in terms of pricing, physicians see the benefit in terms of bone and kidney from the point of view of TAFs. So I think there's an awful strong commitment. Let's not forget that in most practices now, half the patients are over the age of 50 and they've been on long-term therapy and physicians just see a natural and fairly straightforward switch going on. I really didn't think I'd ever see an uptake quicker than Atripla. As you remember, there were the components of Atripla that could just be put together and the patient switched. These are slightly different with Genvoya because it's a switch of regimen. So I'm delighted with the way it's going. 80% of Genvoya comes from switches, and right now half of those switches are from Striva, (1:07:38) which is the natural TDF-to-TAF switch. So my expectation is that we'll continue to convert patients. I'm super enthusiastic about it. And once we get more countries online in Europe, I think we can have that same expectation. Germany's going great. Spain's going great. And we're on the threshold of getting the most important market up and running, and that's France.

Thank you. And our next question is from Terence Flynn of Goldman Sachs. Your line is now open. Terence Flynn - Goldman Sachs & Co.: Hi. Thanks for taking the question. Maybe just wondering if you guys can comment on the GSK ViiV doublets for HIV. Maybe just help frame for us how to think about that if those are successful in either treatment or maintenance setting. Would you look to explore your own doublet regiment, or do you think you've already set a high enough bar there? Thank you.

Terence, the debate in with bictegravir is not doublet or triplet. We're developing bictegravir F/TAF because it has three excellent components that have proven safety and enormously high efficacy. If you look at the ViiV Triumeq compound, of course that continues abacavir. So in that scenario, there is an incentive to get rid of abacavir and go to a doublet, as you call it. But in our case, we have no incentive whatsoever to do that. I would like to point out it's an interesting strategy. It's a potential competitor. The only thing I would like to point out, the safety efficacy has to be still proven in a larger patient population, number one, and, number two, in a more diverse patient population, particularly in patients with high viral load.

Thank you. And our next question comes from Ian Somaiya of BMO Capital Markets. You line is now open.

Thanks for taking my question. Just a question for you maybe, Robin, on just R&D spend going forward. The filgotinib program, Phase III programs, may in aggregate cost about $1 billion. You're about to embark on a fairly sizable NASH program. Just how should we think about R&D spend going forward? Are there any files that are completing that might provide an offset? Just if you could give us some color related to that.

Yeah. So maybe, Ian, I'm going to answer the first question and Robin can join in. So as we indicated before, our hepatitis C research is winding down or the development is winding down. Really with this SOF/VEL/VOX, this will be our last development candidate. And we have spent over the last three years probably most of our money on hepatitis C, so that's winding down. And also on HIV coming down because bictegravir F/TAF is going to be our last single-tablet regimen for a broad patient population. And that I think will offset the increased spending in the other areas, as you pointed out, filgotinib and also oncology.

Yeah. I think Norbert summed it up, Ian. I'd only add that I think the rigor remains very internally high within Gilead as well. We're always making the various trade-offs. And we look to do the right thing scientifically, so you could see variably in cost. But overall, there's still a high bar internal relative to how we allocate our research spend. But a lot of our projects ongoing, as mentioned, will be paid for with a decline in some of the larger products we've had with HIV and HCV.

Thank you. And our final question comes from the line of Jim Birchenough of Wells Fargo. Your line is now open.

Jim, are you there? Jim?

Again, Jim Birchenough, your line is open. Please check your mute button.

I think that's it, Candice.

And there are no further questions at this time. I'd like to turn the conference back over to Sung Lee for closing remarks.

Great. Thanks, Candice. Thanks, everyone for joining us today. We appreciate your continued interest in Gilead. And the team here looks forward to providing you with updates on our future progress.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Have a great day, everyone.