John Martin, who has led Gilead Sciences through two decades of incredible growth and more recently significant controversy over the pricing of its hep C cures, is stepping up and out of the CEO role. President John Milligan has been named CEO as Martin moves up to the executive chairman of the board.
The switchover becomes effective March 10. Gilead ($GILD), in its four-paragraph announcement, gave no explanation for the decision. Martin, 64, has been CEO of the Foster City, CA, company since 1996 and chairman of the board since 2008. Milligan, 54, who joined Gilead in 1990 with Martin, has been president since 2008.
Martin's "legacy is clear--and the vision he has set will continue with his contributions as executive chairman," said John Cogan, Gilead's lead independent director.
Of course that legacy is clear. With an uncompromising vision, Martin led Gilead to become first the leader in HIV meds and then moved it to conquer hepatitis C. The pivotal decision of his legacy may very well be his decision in 2011 to bet $11 billion on Pharmasset to get control of what has become one of the most valuable franchises in recent pharma history, hep C cures Sovaldi and Harvoni.
|Gilead's John Milligan
At the time, there was huge fretting by analysts that Martin had paid way too high price on a questionable outcome. Martin never blinked an eye and set about developing the drugs into superstars that in the first 9 months of 2015 turned in combined revenues of $14.25 billion.
But another aspect of his take-no-prisoners approach was Gilead's insistence on pricing its drugs at premium prices, even in the face of intense criticism from members of Congress, payers and patient advocates, first with its HIV drugs and then with Sovaldi and Harvoni.
Only time will tell if the uproar over Gilead's decision to bring Sovaldi to market at a list price of $1,000 a pill, $84,000 for a 12-week regimen, will also be pivotal. The decision stoked the fires of protest over rising drug prices and also led Express Scripts to strike an exclusive deal with AbbVie when its hep C treatment Viekira Pak, became available in an effort to get a better price. Gilead's growth in sales for the hep C drugs slowed as the company was faced with striking special deals of its own. Other payers have adopted Express Scripts strategy while the backlash over the prices of the meds have helped push drug prices into the national presidential election discourse.
But in the process Gilead's strategy under Martin has also paid off handsomely for investors and made Martin a billionaire. Gilead's stock price adjusted for splits and dividends has grown from about $1.10 a share in January 1996, to $87.50 in midmorning trading 20 years later.
- read the announcement
Special Report: The 25 most influential people in biopharma today - 2013 - John Martin - Gilead Sciences