Even in the highly mercurial pharmaceutical industry, Gilead Sciences' growth between 2012 and 2015 was astonishing, with revenues more than doubling in 2014 alone, and then rising by almost another third in 2015 to $32.6bn. In the same period, profits soared sixfold to over $18bn. The cause was the company's spectacularly successful (and expensive) hepatitis C drug Sovaldi, launched at the end of of 2013, followed by combination treatment Harvoni in late 2014. Both products had been developed by US company Pharmasset, acquired by Gilead in 2012. Together they contributed first year sales of more than $12bn, rocketing Gilead into the global Top 10 pharmaceutical companies. However, that kind of growth is hard to maintain, and sales and profits tumbled over the next few years. The key challenge facing Gilead has been to maintain steady development in the face of numerous rival drugs entering the market, all priced well below Sovaldi's staggering original cost of $85k for a three-month course. Both Solvadi and Harvoni saw their sales plunge. The group countered those declines with acquisitions. In 2017, the group jumped into oncology with the purchase of CAR-T cancer drug Yescarta for $11bn (though sales have so far been disappointing, just $456m in 2019). It spent another $11bn on Kite Pharma, the developer of Axi-cel and other CAR-T drugs that use patients' own immune systems to fight cancer. It also operates partnerships with several other developers including Galapagos (to develop a drug for rheumatoid arthritis), Goldfinch Bio and Nurix Therapeutics. In 2020 alone, it acquired biotech Forty Seven for $4.9bn in cash, followed by Immunomedics for $21bn in cash, and Germany's MYR for $1.4bn. Group revenues have slowly recovered, rebounding from 2018's low of $22.2bn to $22.5bn for 2019, with net income of $5.4bn. The group has remained a specialist in anti-viral treatments, now primarily for HIV. Drugs in the latter field contributed almost 73% of group revenues in 2019. Its best seller was Biktarvy, sales of which quadrupled that year to $4.7bn, overtaking the previous year's champion Genvoya, which slipped to $3.9bn. Other HIV blockbusters were Truvada ($2.8bn), Odefsey ($1.7bn) and Descovy ($1.5bn). Subsidiary company Asegua Therapeutics manufactures a generic version of the group's HCV drug Epclusa, sold as Sofosbuvir or Velpatasvir with sales of $2.0bn. Newly developed drug remdesivir has been identified as one of the most effective treatments for Covid-19 in 2020. It was launched commercially as Veklury. Daniel O'Day was named as chairman & CEO at the end of 2018, Gilead's third in two years. Gilead is no new arrival on the scene. Always a specialist in biopharmaceutical anti-viral treatments, it was launched in 1987, and among its early successes was the flu treatment Tamiflu (now controlled by Roche; Gilead earns royalties), followed by several anti-HIV products including Viread and Atripla (co-marketed by BMS).
Capsule checked 3rd March 2020
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Adbrands Daily Update 26th Oct 2020: Gilead secured FDA approval for its controversial Covid-19 treatment remdesivir, which has been launched commercially under the name Veklury. The FDA nod makes Gilead the first company to bring a Covid drug to market, but there are numerous question marks surrounding its efficacy. A large trial of the drug conducted by the World Health Organisation demonstrated no specific benefit from Veklury. Indeed it was reported that it "appeared to have little or no effect on hospitalised COVID-19" patients. Several physicians expressed astonishment that the drug had received FDA approval. This is widely thought to be linked to the fact that it has been championed by President Trump who was treated with it during his own infection.
Adbrands Daily Update 14th Sep 2020: Gilead widened its footprint in the valuable and high profile oncology sector with a deal to purchase Immunomedics, makers of breast cancer treatment Trodelvy, for $21bn. That drug is also thought to be valid for other forms of cancer, which could boost sales to as much as $5bn a year. Gilead's offer was more than double Immunomedics' stock value.
Adbrands Daily Update 9th Jun 2020: AstraZeneca's partnership with Oxford University is regarded as one of the most promising programmes to develop a vaccine against Covid-19. In deals with manufacturing partners, including two backed by Bill Gates, the pharma group has also established capacity to produce two billion doses of any successful product over two years. That caused the company's share price to soar to record highs, making it for a while Britain's most valuable company. Yet investors now fear that AstraZeneca's CEO Pascal Soriot may have overplayed his hand. Reports have emerged of a merger approach last month to US rival Gilead Sciences, whose antiviral drug Remdesivir is the leading approved treatment so far for Covid infections. Any such deal, worth somewhere in the region of $240bn, would be the biggest ever in the pharma sector. Gilead has said repeatedly that it would not be interested in sale or merger, so investors are questioning Soriot's motivation. The reports have already dented some of AstraZeneca's stock gains. Further negative responses from investors prompted AstraZeneca to abandon its approach to Gilead soon afterwards.
Adbrands Weekly Update 31st Aug 2017: Pharmaceutical group Gilead Sciences, one of the newer challengers to the traditional order of drug companies, launched its biggest acquisition to-date with an $12bn offer for Kite Pharma, which specialises in a radical and complex new type of cancer therapy that is expected to become commercially viable in the very near future. CAR-T treatments work by extracting immune cells from cancer sufferers, modifying them genetically in the lab to be more efficient and then re-injecting them. The move into oncology will offset steep declines in Gilead's existing portfolio, which mostly consists of high-priced anti-virals like Harvoni, Sovaldi and Truvada which combat hepatitis and HIV.
Adbrands Weekly Update 10th Mar 2016: Direct to consumer ad expenditure for US prescription pharmaceuticals came close to record levels in 2015, according to estimates from Nielsen, reported by industry blog DTC Perspectives. Total spend reached $5.17bn last year, capping three years of gains since 2012's low of $3.4bn. The latest figure is close to eclipsing the record $5.4bn spent in 2006. A key factor is the increase in drugs with high selling prices, such as Gilead's Harvoni, a course of which costs as much as $100,000 a year. At that level, it doesn't take an excessive number of users to get a return on investment in marketing if its successfully builds demand. That in turn has prompted a backlash from physicians and insurers, who believe that marketing costs contributes to high pricing of many new launches. Harvoni was itself the year's 5th most advertised drug, behind Valeant's Xifaxan, Sanofi's Toujeo, Merck's Belsomra, and GSK's Breo Ellipta.
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