|Gilead CEO John Martin|
U.S. CEO watchers can't get enough of Gilead Sciences ($GILD) chief John Martin. After catching bouquets from Harvard Business Review and a Tuck School of Business executive rater, Martin now wins the annual "best chief executive" trophy from investment firm Morningstar.
Predictably--considering the source--Morningstar's applause is mostly based on stock performance, and Martin has certainly excelled there. Over his 18-year tenure, Gilead shares have risen 100-fold, and the stock posted a 157% gain just over the past two calendar years, the firm notes.
Morningstar also singled out Martin for ratcheting up Gilead's competitive advantages, including "a long runway for key patents"--i.e., exclusive market access for its pricey products. Of course, the celebration of Gilead's patents wouldn't be relevant if the company's drugs weren't standout competitors, and Martin has managed to expand Gilead's range beyond the HIV market, where it's a dominant player. Its "quad" pill Stribild, with four HIV fighters in one, made FiercePharma's list of drug launch superstars.
And need we mention Gilead's biggest and best victory of 2014? Its hepatitis C drug Sovaldi (sofosbuvir) went from zero-to-blockbuster in a couple of months, and it is expected to top $10 billion for the year. Talk about a launch superstar. The combo pill Harvoni--which pairs Sovaldi with a new antiviral, ledipasvir--is already racking up big sales after its October approval.
Then there's the acquisition that brought Gilead that hep C glory: its $11 billion Pharmasset buyout in 2012. The deal came at a high premium, and Martin took some darts for that price. But given Sovaldi's screaming-fast launch and Harvoni's early success, the premium looks pretty justified in hindsight.
Meanwhile, for those who keep score by top-line financial results, Martin has scored another coup: According to our back-of-a-napkin math, Gilead is set to break into FiercePharma's annual list of the top 10 pharma companies ranked by revenue.
Martin isn't without his detractors, of course. With a history of pricing its antivirals on the high side, Gilead has drawn fire from AIDS activists and now, hep C patient advocates. Officials at publicly funded HIV treatment programs are perennial critics of the company's pricing policies, as are the market-access gurus at Doctors Without Borders/Médecins Sans Frontières (MSF). Most recently, MSF took issue with Gilead's agreements to team up with generics makers to supply Sovaldi in emerging markets, saying the deals could still put the treatment out of reach of patients who need it most. The group is also backing India's decision to deny Gilead patent protection on Sovaldi, saying Indian patients need much cheaper alternatives to the $900-per-treatment-course generics licensed by Gilead in that country.
And then there are the U.S. payers who've been balking at Sovaldi's $84,000 list price from the beginning. Pharmacy benefits manager Express Scripts ($ESRX) railed at Gilead for setting an "orphan drug-level" price on a mass market med, and then inked an exclusive deal with AbbVie ($ABBV) on its rival hep C regimen Viekira Pak. Gilead has struck back with payer exclusives of its own, however, including a deal with Express Scripts' top competitor, CVS Health ($CVS).
To score Morningstar's top-chief award, Martin beat Gregory Henslee of O'Reilly Automotive and Gail Kelly of Westpac Banking. Martin was a nominee last year but lost out to E. Hunter Harrison, CEO of Canadian Pacific Railway. Previous winners include Costco CEO Jim Sinegal and Ford's Alan Mulally. Not to mention Warren Buffett.
- read the Morningstar release
Special Reports: Top 15 drug launch superstars - Gilead Sciences' Stribild | Top 15 highest-paid biopharma CEOs - John Martin, Gilead