What can Gilead investors expect to see from incoming CEO Daniel O’Day? Patience, but also more deal hunting, according to the big biotech’s executives.
When former Roche pharma chief O’Day—who’s slated to join Gilead on March 1—makes his entrance, “he’s going to take his time to get to know the company,” Gregg Alton, Gilead’s interim CEO, said on the drugmaker’s fourth-quarter conference call.
“Certainly he will … put his own mark on where he wants to take the company,” but “I think he’s going to be thoughtful and make sure he’s really understanding what we’re doing,” Alton said, adding that he expects O’Day to “be patient.”
O’Day will enter at an uncertain time for Gilead, whose declining hepatitis C revenues and slow start for CAR-T drug Yescarta have thrown doubt on whether the company can return to growth this year. Some analysts on the call seemed puzzled by Gilead’s guidance, which laid out 2019 product sales of $21.3 billion to $21.8 billion—potentially less than the $21.7 billion the company pulled in this year.
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“Our first guidance of this year does include downside risk,” but Gilead is “very focused” on reversing the growth trend in 2019 and executives “really believe that’s achievable,” CFO Robin Washington told investors.
Of course, the company is hoping O’Day’s commercial oncology expertise will come in handy when it comes to pumping up CAR-T med Yescarta, whose $264 million in 2018 sales Gilead predicts could double this year.
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But it may still have to turn to M&A to make that growth wish come true. As Washington told investors, “we continue to look for deals with commercial assets” as well as pipeline assets, and “we’ll continue to focus in this area as Dan joins us.”
Meanwhile, Gilead’s HIV franchise is decidedly on the right track for the California company, which pulled in $4.1 billion in fourth-quarter HIV sales to top Wall Street’s expectations. Overall, for the period, Gilead churned out $5.7 billion in sales and posted earnings per share of $1.44, taking a 31-cent hit from a $410 million write-down on raw materials for hepatitis C medication Harvoni.