When Gilead promoted James Meyers to executive VP of worldwide commercial operations in late 2016, it was entrusting a host of tough marketing tasks to a veteran with two decades of successful product launches under his belt. But now Meyers is unexpectedly retiring, leaving Gilead without an operations chief at a time when the company is facing serious challenges across its infectious-disease and oncology portfolios.
Gilead announced late Thursday that after taking a “brief family leave,” Meyers decided to retire. The company has embarked on a search for his successor and Meyers will continue to act as a consultant during that process, Gilead said in a statement.
News of the transition comes just two weeks after Gilead warned investors that sales in its hepatitis C franchise would fall short of expectations. During the company’s 2017 earnings report, it said 2018 hep C sales, led by blockbusters Sovaldi and Harvoni, would come in between $3.5 billion and $4 billion—significantly below the average analyst estimate of $5 billion.
Gilead has been fighting to preserve market share in the face of Mavyret, AbbVie’s rival hep C treatment, which was rolled out at a cost of about $13,200 per course. That proved irresistible to pharmacy benefit managers (PBMs), which had been paying as much as $28,000 per month for Sovaldi and $31,500 for Harvoni. Mavyret already has 32% of the market, AbbVie reported earlier this year.
Meyers had a tense relationship with PBMs during his tenure at Gilead. Early last year, he griped in an interview with Bloomberg that even if Gilead were to slash the prices of its hep C drugs, PBMs wouldn’t bite, because they prefer to take the higher prices and then get a rebate. “We have a system that’s incentivized upon rebate revenue,” Meyers told the news service.
Meyers’ replacement will have to contend with those pricing challenges, not to mention the overall decline of Gilead’s hep C portfolio. In 2015, Sovaldi and Harvoni pulled in more than $19 billion in sales. But the drugs actually cure the majority of patients, so the franchise is suffering not only from pricing pressure but also from a rapidly shrinking customer base.
Earlier this month, Gilead’s flagship HIV franchise got a major boost from the FDA approval of its combo drug Biktarvy. Analysts are expecting the product to eventually bring in more than $6 billion in sales a year. But meeting those high expectations will prove challenging for Meyers’ successor. Biktarvy will have to face off in the market against GlaxoSmithKline’s Tivicay and Epivir. What’s worse, GSK has hit Gilead with a patent lawsuit.
Gilead made a big move toward diversifying beyond infectious disease last August, when it acquired Kite Pharma for $12 billion. Kite won FDA approval for its CAR-T lymphoma treatment, Yescarta, in October. The personalized cell therapy sells for $373,000.
That list price may seem like a bargain compared to the other CAR-T therapy on the market, Novartis’ $475,000 Kymriah, but the rollout has been anything but hassle-free. In December, news emerged that 200 patients were on a waiting list to receive Yescarta. Part of the problem was that insurers didn’t have the proper billing procedures in place to cover CAR-T treatments. That made it impossible for Gilead to hit the $9.7 million in sales that analysts had predicted for the product last year.
One piece of good news will provide some cushioning as Gilead transitions to a new chief of commercial operations: The company just won a major patent battle. On Tuesday, a federal judge threw out a $2.54 billion jury verdict against Gilead, which had been sued by Merck for infringing a patent in its development of Harvoni and Sovaldi. The judge ruled that Merck’s patent was invalid.