Armed with a revamped deal-scouting team, Gilead is eyeing oncology—and it isn't fazed by turbulence in Washington, CEO John Milligan said on Tuesday.
“A number of different opportunities … could play out over the coming year as we start to make progress in getting partnerships and potential acquisitions together,” Milligan said.
Where is the company looking? As he's said before, oncology is one major focus. And to help with that push, Gilead in January hired former Novartis exec Alessandro Riva, tasking the development veteran with rebuilding an outfit that has been damaged by a series of clinical setbacks and an executive departure last year.
Questioned on whether political uncertainties in Washington are affecting Gilead’s search, Milligan said that Beltway indecision “seems to be the norm” during his 27 years at the drugmaker, and that the Gilead team isn’t rattled by ongoing political chatter.
“We're going to just focus on what's right for Gilead, try to ignore the noise globally on terms of tax reform,” Milligan said.
Analysts and investors are certainly ready for the company to make some moves. Quarter after quarter, they’ve pressed Gilead management for answers as the Big Biotech’s hepatitis C sales have taken a dive thanks to new competition from AbbVie and Merck.
That trend continued in the first quarter, when Gilead’s HCV sales crashed to $2.6 billion, down 50% from $4.6 billion during the same period last year. The company reported $6.5 billion in overall revenue, a 16% drop from last year’s first-quarter haul of $7.8 billion.
With that, Gilead execs faced familiar business development questions; early in the Q&A session, Barclays analyst Geoffrey Meacham asked about potential deal metrics. Milligan said Gilead is looking at margins, cash flows and options “that have a scientific and medical need such that we can build a sustainable business that would have the top line growth that we desire.”
Following the company’s Q1 call and pipeline update, Barclays analysts said in an investor note that they “continue to favor growth via an external asset to offset” hepatitis C pressures. It remains to be seen exactly where the company will look to address those issues.
Gilead last year acquired a subsidiary of Nimbus Therapeutics in a deal worth up to $1.2 billion for a non-alcoholic liver disease drug now in phase 2.