|Headquarters||Foster City, California, U.S.|
Number of employees
|~10,000 (January 2018)|
Gilead Sciences, Inc., commonly known as Gilead Sciences or Gilead (also styled GILEAD), is an American biopharmaceutical company that researches, develops and commercializes drugs. The company focuses primarily on antiviral drugs used in the treatment of HIV, hepatitis B, hepatitis C, and influenza, including Harvoni and Sovaldi.
Gilead Sciences was founded in June 1987 by Michael L. Riordan, a medical doctor who was 29 years old at the time. Riordan graduated from Washington University in St. Louis, the Johns Hopkins School of Medicine and the Harvard Business School. Three core scientific advisers worked with Riordan to create the company and establish its scientific vision. These were Peter Dervan of Caltech, Doug Melton of Harvard, and Harold Weintraub of the Fred Hutchinson Cancer Research Center. Riordan served as CEO from inception until 1996. Menlo Ventures, a venture capital firm where Riordan worked for a year, made the first investment in Gilead, of $2 million, and Menlo's partner DuBose Montgomery served as Chairman of the Board until 1993, when Riordan became Chairman. Riordan also recruited as scientific advisers Harold Varmus, a Nobel laureate who later became Director of the National Institutes of Health, and Jack Szostak, recipient of the Nobel Prize for Physiology or Medicine in 2009.
The company's primary therapeutic focus was, and continues to be, in antiviral medicines, a field that interested Riordan because he contracted dengue fever, an untreatable viral disease, while working in malnutrition clinics as a Henry Luce Scholar in the Philippines. Riordan recruited Donald Rumsfeld to join the board of directors in 1988, followed by Benno C. Schmidt, Sr., Gordon Moore, and George P. Shultz. Riordan tried to recruit Warren Buffett as an investor and board member, but was unsuccessful. Under the technical leadership of scientist Dr. Mark Matteucci, the company focused its early discovery research on making small strands of DNA (oligomers) to assess the potential of genetic code blockers (gene therapy). Its development of small molecule antiviral therapeutics began in 1991 when CEO Riordan and R&D head John C. Martin in-licensed a group of nucleotide compounds discovered in two European academic labs; one of the compounds was tenofovir, a pro-drug of which, trade named Viread, became one of the most widely used anti-retroviral drugs.
In 1990, Gilead entered into a collaborative research agreement with Glaxo for the research and development of genetic code blockers, also known as antisense. This collaboration was terminated in 1998, and Gilead's antisense intellectual property portfolio was sold to Ionis Pharmaceuticals. Gilead debuted on the NASDAQ in January 1992. Its initial public offering raised $86.25 million in proceeds.
In June 1996, Gilead launched Vistide (cidofovir injection) for the treatment of cytomegalovirus (CMV) retinitis in patients with AIDS. The company cooperated with Pharmacia & Upjohn to market the product outside the United States.
In January 1997, Donald Rumsfeld, a Board member since 1988, was appointed Chairman, but left the Board in January 2001 when appointed United States Secretary of Defense at the start of George W. Bush's first term as President.
In March 1999, Gilead acquired NeXstar Pharmaceuticals of Boulder, Colorado following two years of negotiations with the company. At the time, NeXstar's annual sales of $130 million was three times Gilead's sales. NeXstar's two revenue-generating drugs were AmBisome, an injectable fungal treatment, and DaunoXome, an oncology drug taken by HIV patients. Also in 1999, Roche announced first approval of Tamiflu (oseltamivir) for the treatment of influenza. Tamiflu was originally discovered by Gilead and licensed to Roche for late-phase development and marketing. Viread (tenofovir) achieved first approval in 2001 for the treatment of HIV.
2000 to 2009
In 2002 Gilead changed its corporate strategy to focus only on antivirals, and sold its cancer assets to OSI Pharmaceuticals for $200 million.
In December 2002, Gilead and Triangle Pharmaceuticals announced that Gilead would acquire Triangle for around $464 million; Triangle's lead drug was emtricitabine that was near FDA approval, and it had two other antivirals in its pipeline. The company also announced its first full year of profitability. Later that year Hepsera (adefovir) was approved for the treatment of chronic hepatitis B, and Emtriva (emtricitabine) for the treatment of HIV.
In 2006, Gilead completed two acquisitions that allowed the company to branch out from its historical antiviral franchise into the cardiovascular and respiratory therapeutic arenas. Under an agreement with GlaxoSmithKline, Myogen marketed Flolan (epoprostenol sodium) in the United States for the treatment of primary pulmonary hypertension. Additionally, Myogen was developing (in Phase 3 studies) darusentan, also an endothelin receptor antagonist, for the potential treatment of resistant hypertension.
In 2006, the company acquired Corus Pharma, Inc. for $365 million. The acquisition of Corus signaled Gilead's entry into the respiratory arena. Corus was developing aztreonam lysine for the treatment of patients with cystic fibrosis who are infected with Pseudomonas aeruginosa. In July 2006, the U.S. Food and Drug Administration (FDA) approved Atripla, a once a day single tablet regimen for HIV, combining Sustiva (efavirenz), a Bristol-Myers Squibb product, and Truvada (emtricitabine and tenofovir disoproxil), a Gilead product. Gilead purchased Raylo Chemicals, Inc. in November 2006 for a price of $133.3 million. Raylo Chemical, based in Edmonton, Alberta, was a wholly owned subsidiary of Degussa AG, a German company. Raylo Chemical was a custom manufacturer of active pharmaceutical ingredients and advanced intermediates for the pharmaceutical and biopharmaceutical industries. Later in the same year Gilead acquired Myogen, Inc. for $2.5 billion (then its largest acquisition). With two drugs in development (ambrisentan and darusentan), and one marketed product (Flolan) for pulmonary diseases, the acquisition of Myogen has solidified Gilead's position in this therapeutic arena.
Gilead expanded its move into respiratory therapeutics in 2007 by entering into a licensing agreement with Parion for an epithelial sodium channel inhibitor for the treatment of pulmonary diseases, including cystic fibrosis, chronic obstructive pulmonary disease and bronchiectasis.
In 2009, the company acquired CV Therapeutics, Inc. for $1.4 billion, bringing Ranexa and Lexiscan into Gilead. Ranexa is a cardiovascular drug used to treat chest pain related to coronary artery disease, with both of these products and pipeline building out Gilead's cardiovascular franchise. Later, in the same year the company received the award for one of the Fastest Growing Companies by Fortune. In the same year they were also named as one America's Top Companies to work for by Forbes.
2010 to 2019
In 2010, the company acquired CGI Pharmaceuticals for $120 million, expanding Gilead's research expertise into kinase biology and chemistry. Later that year, the company acquired Arresto Biosciences, Inc. for $225 million, obtaining developmental-stage research for treating fibrotic diseases and cancer.
In 2011, the company acquired Calistoga Pharmaceuticals for $375 million ($225 million plus milestone payments). The acquisition boosted Gilead's oncology and inflammation areas. Later that year, Gilead made its most important acquisition — and most expensive to date — with the $10.4 billion purchase of Pharmasset, Inc. This transaction helped cement Gilead as the leader in treatment of the hepatitis C virus by giving it control of sofosbuvir (see below).
On July 16, 2012, the FDA approved Gilead's Truvada for prevention of HIV infection (it was already approved for treating HIV). The pill was a preventive measure (PrEP) for people at high risk of getting HIV through sexual activity.
In 2013, the company acquired YM Biosciences, Inc. for $510 million. The acquisition brings drug candidate CYT387, an orally-administered, once-daily, selective inhibitor of the Janus kinase (JAK) family, specifically JAK1 and JAK2, into Gilead's oncology pipeline. The JAK enzymes have been implicated in myeloproliferative diseases, inflammatory disorders, and certain cancers.
In 2015, the company made a trio of acquisitions:
- It bought Phenex Pharmaceuticals for $470 million. Its Farnesoid X Receptor (FXR) program used small-molecule FXR agonists in the treatment of liver diseases such as nonalcoholic steatohepatitis.
- It bought EpiTherapeutics for $65 million. This acquisition gave Gilead first-in-class small molecule inhibitors of histone demethylases involved in regulating gene transcription in cancer.
- It paid $425 million for a 15% equity stake in Galapagos NV, with additional payments for Gilead to license the experimental anti-inflammatory drug filgotinib, which may treat rheumatoid arthritis, ulcerative colitis, and Crohn's disease.
In 2016, the company acquired Nimbus Apollo, Inc. for $400 million, giving Gilead control of the compound NDI-010976 (an ACC inhibitor) and other preclinical ACC inhibitors for the treatment of non-alcoholic steatohepatitis and for the potential treatment of hepatocellular carcinoma. Also in 2016, the company was named the most generous company on the 2016 Fortune list of The Most Generous Companies of the Fortune 500. Charitable donations to HIV/AIDS and liver disease organizations totaled over 440 million in 2015.
In August 2017, the company announced it would acquire Kite Pharma for $11.9 billion, equating to $180 cash per share, a 29% premium over the closing price of the shares. The deal will add the promising CAR-T candidate to the companys existing portfolio. In November, the company announced it will acquire Cell Design Labs for up to $567 million, after it indirectly acquired a stake of 12.2% via the Kite Pharma deal.
Sovaldi and Harvoni
The drug sofosbuvir had been part of the 2011 acquisition of Pharmasset. In 2013, the FDA approved this drug, under the trade name Sovaldi, as a treatment for the hepatitis C virus. Forbes magazine ranked Gilead its number 4 drug company, citing a market capitalization of US$113 billion and stock appreciation of 100%, and describing their 2011 purchase of Pharmasset for $11 billion as “one of the best pharma acquisitions ever”. Deutsche Bank estimated Sovaldi sales in the year's final quarter would be $53 million, and Barron's noted the FDA approval and subsequent strong sales of the “potentially revolutionary” drug as a positive indicator for the stock.
On July 11, 2014, the United States Senate Committee on Finance investigated Sovaldi's high price ($1,000 per pill; $84,000 for the full 12-week regimen). Senators questioned the extent to which the market was operating “efficiently and rationally”, and committee chairman Ron Wyden (D-Oregon) and ranking minority member Chuck Grassley (R-Iowa) wrote to CEO John C. Martin asking Gilead to justify the price for this drug. The committee hearings did not result in new law, but in 2014 and 2015, due to negotiated and mandated discounts, Sovaldi was sold well below the list price. For poorer countries, Gilead licensed multiple companies to produce generic versions of Sovaldi; in India, a pill's price was as low as $4.29.
Gilead later combined Sovaldi with other antivirals in single-pill combinations. First, Sovaldi was combined with ledipasvir and marketed as Harvoni. This treatment for hepatitis C cures the patient in 94% to 99% of cases (HCV genotype 1). By 2017, Gilead was reporting drastic drops in Sovaldi revenue from year to year, not only because of pricing pressure but because the number of suitable patients decreased. Later single-pill combinations were Epclusa (with velpatasvir) and Vosevi (with velpatasvir and voxilaprevir).
Prospects for the future
As of 2017, Gilead's challenge is to develop or acquire new blockbuster drugs before its current revenue-producers wane or their patent protection expires. Like other pharmaceutical companies, it stands to gain from efforts by U.S. President Donald Trump to repeal taxes imposed by the Affordable Care Act (ACA). However, Gilead also benefitted from the expansion of Medicaid in the ACA; Leerink analyst Geoffrey Porges wrote that Gilead's HIV drugs could face funding pressure under reform proposals. Gilead has $32 billion in cash, but $27.4 billion is outside the U.S. and is unavailable for acquisitions unless Gilead pays U.S. tax on it, though it could borrow against it. Gilead would benefit from proposals to let companies repatriate offshore capital with minimal further taxation.
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