Gilead Sciences CEO John Milligan hinted that the drugmaker is on the lookout for potential deals, with particular interest in acquiring a key asset in cancer therapy, Bloomberg reported Friday. The news follows the recent release of Gilead's first-quarter results showing a slowdown in sales for its hepatitis C drugs Harvoni (sofosbuvir/ledipasvir) and Sovaldi (sofosbuvir), which has raised concerns the franchise could decline more rapidly than projected. "It's time for us to go out and do important deals," Milligan stated, adding "we need some other assets that can bolster our pipeline."
Currently, Gilead's sole marketed oncology product is the blood cancer treatment Zydelig (idelalisib), for which the FDA recently issued an alert about reports of an increased rate of adverse events, including deaths, seen in clinical trials (for related analysis, see ViewPoints: Gilead's push into oncology hits yet another roadblock.) Milligan said the company has a "nascent oncology platform, but what I don't yet see is a drug that we can rally around." The CEO indicated he does not plan to limit the search to a particular type of cancer, adding he is more likely to be guided by "what is going to be the cutting-edge technology five years from now."
Besides identifying an asset in cancer, Milligan said he would also like to expand the company's portfolio of treatments for liver disease and inflammatory disorders. Gilead, which has $21.3 billion in cash and short-term equivalents at its disposal, has been investing in nonalcoholic steatohepatitis (NASH) and currently has four experimental NASH compounds in its pipeline. Last month, the company agreed to purchase Nimbus Therapeutics' Nimbus Apollo unit and its acetyl-CoA carboxylase inhibitor programme focussed on NASH for up to $1.2 billion (for additional analysis, see ViewPoints: Investors wanting a big deal forced to settle for Gilead's long game in NASH). However, Milligan cautioned that uptake of any potential NASH drug may initially be slow. "We will have to do quite a bit of work to study and understand the characteristics of what treatment of NASH means for a patient," he said, and "as an innovative company, it's up to us to help prove it."
Meanwhile, in regards to inflammatory diseases, Gilead is placing its hopes in the investigational JAK1-selective inhibitor filgotinib, which is currently under development for the treatment of Crohn's disease and rheumatoid arthritis. Milligan suggested that the oral drug, which is being developed in partnership with Galapagos, could provide greater convenience to patients compared with injectable alternatives. However, he was more cautious about engineered T-cell therapies for cancer. "It's a very labour-intensive kind of business," Milligan remarked, adding that "those programmes are projected to be quite expensive and are more akin to a bone marrow transplant, with a lot of supportive care and hospitalisation costs, and those are the sorts of things that make me nervous."
Leerink Partners analyst Geoffrey Porges commented that in order to "move the needle," Milligan, who was appointed to replace former CEO John Martin earlier this year, needs to identify a product that will increase Gilead's revenue by $5 billion to $10 billion over the next five to 10 years. Porges said "in another era, [Milligan would have been] considered one of the most respected executives in the entire industry, but unfortunately he's sort of stepped into the leadership role at a very challenging time and effectively is having to re-prove himself."
For related analysis, see ViewPoints: Three reasons why Gilead investors – and analysts – are gunning for M&A.
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