Staring down the barrel of two key patent expirations, Gilead Sciences is sharpening its job-cutting ax. The California drugmaker will cut loose 150 salespeople who rep its cardiopulmonary drugs, a $1.7 billion franchise set for generic competition this year.
The layoffs are part of a cost-cutting plan the company rolled out in 2017 as it braced for Letairis and Ranexa generics, Gilead spokesperson Marni Kottle told FiercePharma via email.
"Gilead has worked with the impacted employees to provide ample notice and to help them plan for their transitions," Kottle said. "The efforts and dedication of our cardiopulmonary employees have been deeply appreciated."
Pulmonary arterial hypertension med Letairis, which pulled in $943 million in the U.S. last year, is expected to lose exclusivity by the end of this quarter, Gilead CFO Robin Washington said during an earnings conference call. Chest pain med Ranexa pulled in $756 million in the U.S. last year, and it's already facing off against exclusive generics from Lupin. Together, Gilead expects those generics to take a $1.1 billion to $1.2 billion bite out of sales this year.
RBC Capital Markets analyst Brian Abrahams said the layoffs weren't a surprise. The job cuts are a “culmination of a long-term strategy and events, and [are] not representative of any specific new or different plan being implemented by the company's CEO," Abrahams wrote in a note to investors.
Nevertheless, the layoffs are among the first public moves authorized by Gilead's brand-new CEO, Dan O’Day, who joined the company last month from Roche. Gilead has been struggling with hepatitis C competition for years, and market watchers saw O’Day’s appointment as a signal that Gilead would look to oncology for growth.
At least in the short term, the company’s new cancer cell therapy Yescarta isn’t chipping in enough sales to offset Gilead's flagging hep C business. Last year, the CAR-T drug generated $264 million. Gilead's hep C drugs have churned out billions in sales, but the company's revenues in the field have cratered on increasing competition and pricing pressures.