8:43 PM
Dec 14, 2018
 |  BioCentury  |  Product Development

O’Day’s expansive task at Gilead

How incoming Gilead CEO O’Day could make the biotech’s move into new therapeutic areas a success

A fresh executive team and a track record of building deep portfolios could allow incoming Gilead Sciences Inc. chairman and CEO Daniel O’Day to do what his predecessors couldn’t: make Gilead a leader outside of virology.

The first read of his success may not come until 2021, after Gilead launches its first autoimmune drug.

On Dec. 10, Gilead announced that O’Day will replace John Martin as chairman and John Milligan as CEO, effective March 1, 2019. Chief Patient Officer Gregg Alton will serve as interim CEO from Jan. 1.

A 30-year veteran of Roche, O’Day has been CEO of Roche Pharmaceuticals since 2012, where he has overseen R&D and commercialization of products across the pharma’s core areas of cancer, neuroscience, infectious disease, immunology, ophthamology and respiratory disease. During the prior six years, he held leadership roles at Roche Molecular Diagnostics, first CEO from 2006-2010, then COO from 2010-2012.

Both stints will stand him in good stead to meet Gilead’s biggest challenge: recovering from flagging sales in HIV and HCV and making good on its 2017 $11.9 billion acquisition of Kite Pharma Inc. His best chance to offset the risk of that investment and infuse stability in the pipeline is to broaden the bellwether biotech’s success into other areas.

That will mean not only going into new therapeutic areas, but also using his experience in precision medicine and in different therapeutic modalities, as well as his learnings in data science and digital health to prepare Gilead to compete in the areas where oncology and other diseases are headed. At Roche, O’Day oversaw the acquisitions of Flatiron Health Inc. and Foundation Medicine Inc. and served on the boards of both companies.

“The big question for Gilead right now is it’s looking for direction in a new area of growth, whether that’s oncology, or a disease like NASH [non-alcoholic steatohepatitis],” said Brad Loncar, CEO of Loncar Investments, which is an investor in Gilead.

Previous attempts by Gilead to go beyond virology faltered, primarily because the company lacked either the necessary expertise or a deep enough pipeline to build franchises in areas such as cardiovascular or respiratory disease. For example, attempts to build out a cardiovascular franchise after the 2009 acquisition of CV Therapeutics Inc. fell flat, and Gilead’s early acquisitions in cancer have produced mixed results, with one program being sold and the others providing modest sales (see “Table: Gilead’s Growing Pains”).

Table: Gilead’s growing pains

Acquisitions by Gilead Sciences Inc. (NASDAQ:GILD) outside its core area of virology have largely either failed, or fallen flat for compounds that made it to the market. According to BioCentury’s BCIQ database, the biotech has acquired at least 12 companies or assets in areas that would expand its pipeline and/or commercial portfolio beyond HIV or HCV since John Milligan and John Martin have held the CEO and President positions. Among the lead products gained, two have been discontinued or sold; five are marketed, with each contributing less than 5% to Gilead’s total sales; and three remain in the clinic. Two others -- both preclinical at the time of the deals -- have had no updates. Martin became CEO in 1996; Milligan became COO in 2007 and was named President in 2008 and CEO in 2016. Sales listed below are nine-month 2018 sales unless otherwise noted. (A) Does not include $25 million investment in early 2006 that gave Gilead the option to acquire Corus Pharma Inc.; (B) Cayston sales are reported grouped with Hepsera adefovir and Sovaldi sofosbuvir; $285 million is the total sales for all three products; ms = milestones; Source: BCIQ: BioCentury Online Intelligence, Gilead website

CompanyLead product gainedLead status at time of dealDisease areaYearValueCurrent status
Corus Pharma Inc.Cayston aztreonamPh IIIPulmonary2006$365M (A)Mkt; <$285M (<2%) (B)
Myogen Inc.Letairis ambrisentanPh III completePulmonary2006$2.5BMkt; $689M (4%)
CV Therapeutics Inc.Ranexa ranolazineMktCardiovascular2009$1.4BMkt; $581M (4%)
CGI Pharmaceuticals Inc.Spleen tyrosine kinase (SYK) inhibitorsPreclinAutoimmune disease2010Up to $120MPh II

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