SAN FRANCISCO—After taking the reins at Gilead early last year, CEO Daniel O’Day’s been heading up the company long enough to understand what investors really want: more transparency and M&A clues.
He gave them both on Monday at the J.P. Morgan Healthcare Conference.
“This has been billed as the coming-out party for Gilead’s strategy, and I’d like to not disappoint in that regard,” he joked to open the company’s Monday presentation, adding that he knows the question on everyone’s mind is, “What’s Gilead going to buy?"
While he of course didn’t name names, he did drop some big hints in that department—beginning by pointing to the 10-year, $5.1 billion Galapagos pact Gilead inked last summer as “the type of innovation we’re trying to drive.”
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“I’m a big believer that you don’t get innovation through scale,” O’Day said during a breakout Q&A session directly following the presentation. “The answer is not to double our research base in Foster City.”
Of course, not every partnership the Big Biotech does can be as far-reaching as the Galapagos agreement, which Gilead knows.
“You can’t do a lot of those, but we would like to find a way to do at least one more over the next few years,” CFO Andy Dickinson said during the breakout.
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To supplement, Dickinson told investors to expect a “regular cadence of partnership,” including small and medium deals. And the company will be pursuing outright buys, as well—“don’t get me wrong,” O’Day noted, adding, “I think we need to think about multiple approaches here.”
While the “vast majority of deals will still be earlier stage by definition,” investors should “rest assured” that Gilead is working to supplement its late-stage portfolio through M&A, too. As it does, it’ll be looking for targets that fit into its core areas of viral diseases, inflammatory diseases, fibrotic diseases and oncology, with a particular focus on immuno-modulatory drugs.
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Immuno-modulatory expertise is something Gilead's already honing with the CAR-T presence it picked up in its $11.9 Kite Pharma buyout back in 2017. And while CAR-T isn't the only part of Gilead's oncology portfolio, it's certainly a major part, and the company expects it to contribute big things as already-marketed therapy Yescarta pursues new indications.
“I’m conscious of the fact that we can’t be all things to all people in oncology, nor should we be,” O’Day said.