12:00 AM
Oct 09, 2006
 |  BioCentury  |  Strategy

Gilead defines its space

Over the last few months, Gilead Sciences Inc. has made good on its long-standing promise to revisit the idea of expanding its disease focus beyond its franchise in infectious diseases. Some seven years after its first foray into expansion, and five years after deciding to abandon the plan, the company agreed to buy a pair of companies to make it a player in what it calls the "pulmonology" space - an arena in which no single company appears to have a franchise.

Last week, GILD agreed to pay $2.5 billion in cash for Myogen Inc. (MYOG, Denver, Colo.), which will provide it with two Phase III products - one in pulmonology and one in cardiovascular disease - to add to the Phase III pulmonary compound it acquired when it bought Corus Pharma Inc. in July for $365 million in cash.

The company's working definition of the pulmonology space includes chronic obstructive pulmonary disease (COPD), pulmonary arterial hypertension (PAH), cystic fibrosis (CF) and idiopathic pulmonary fibrosis (IPF). The definition encompasses spaces occupied by at least 30 biotech companies, although none of them span all the indications.

Meanwhile, a number of big pharma players have pulmonology programs, but only Pfizer Inc. (PFE, New York, N.Y.) and sanofi-aventis Group (Euronext:SAN; SNY, Paris, France) have products targeting both the larger indications of COPD and PAH (see "Pulmonology Players").

This is not the first time that GILD (Foster City, Calif.) has tried to expand its focus. In 1999, the company paid about $550 million in stock for NeXstar Pharmaceuticals Inc., primarily to expand into cancer where it believed the regulatory environment allowed for rapid development of drug candidates (see BioCentury Extra, March 2, 1999).

But while GILD was able to successfully monetize the acquisition through product sales and a number of licensing deals, it never did gain the oncology foothold it had set out to establish. The company decided to stick to its original infectious disease focus as it turned the corner to profitability and eventually sold the remaining oncology assets to OSI Pharmaceuticals Inc. (OSIP, Melville, N.Y.) (see BioCentury, Dec. 3, 2001).

At the time, however, President and CEO John Martin told BioCentury that GILD probably would revisit adding an additional therapeutic category in about five years (see BioCentury, Sept. 3, 2002). In...

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