New Gilead CEO O'Day Says Boosting Drug Pipeline Is Top Priority
(Bloomberg) -- Gilead Sciences Inc. Chief Executive Officer Daniel O'Day, who took the reins in March, said one of his top priorities is bolstering the biotechnology giant's drug pipeline.
Gilead's blockbuster hepatitis C franchise turned the company into a pharmaceutical giant, but sales have slipped from their peak. O'Day, a 54-year-old former Roche Holding AG veteran, needs to find a way to reinvigorate the company.
“I was drawn by the potential I saw to build on a legacy,” O'Day said Thursday on his first quarterly conference call with analysts, after Gilead reported earnings that beat the highest estimates.
Adjusted earnings per share were $1.76, compared with analysts' estimates of $1.61. Total revenue of $5.28 billion compared with expectations of $5.30 billion.
Biktarvy, the company's HIV drug that hit the market last year, may be the company's next big hit, if recent sales are any indication. Its sales totaled $793 million in the quarter, well above the average estimate of $648 million. The company's HIV portfolio brought in $3.6 billion overall.
But HIV drug sales may not be enough to stem the tide of waning hepatitis C sales, and O'Day inherits a company whose next big bet, treating the liver disease NASH, has already encountered significant setbacks this year as well.
Moreover, Gilead is still stinging from its last attempt to ward off slipping sales. In 2017 it paid $11.9 billion for Kite Pharma Inc. and its cancer immunotherapy drug, Yescarta. Gilead had said it was hopeful Yescarta sales would improve this year, but the drug brought in only $96 million in the first quarter versus estimates of $104.9 million.
O'Day said one of his areas of focus will be Kite. Alessandro Riva, Gilead's executive vice president of oncology, left the company just days after O'Day started. Kite announced plans to expand its manufacturing capacity with a new plant in Maryland last month.
“I've been very encouraged by what I've seen at Kite,” O'Day said on the call.
Gilead shares rose 0.4 percent to 65.55 in late trading in New York. The stock had been up 4.4 percent this year through Thursday's close.
Chief Financial Officer Robin Washington this week announced she'll step down early next year after more than a decade at the company.
To contact the reporter on this story: Kristen V. Brown in San Francisco at kbrown340@bloomberg.net
To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Mark Schoifet, Timothy Annett
©2019 Bloomberg L.P.
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