Gilead’s new CEO Daniel O’Day has lost no time in putting his seal on the company, announcing plans to separate its Kite cell therapy business into its own business unit.
The announcement, which was announced internally in March, comes as the company’s first CAR-T therapy Yescarta (axicabtagene ciloleucel) for lymphoma continues to show somewhat sluggish growth, with first quarter sales of $96m falling a little short of analyst expectations. Gilead forked out $11.9bn for Kite in 2017.
O’Day told analysts on the company’s first-quarter results call that a search has already been launched for a CEO for Kite, which will be operating in a highly competitive field and needs to foster “agility, innovation and entrepreneurialism.”
New CEO Daniel O’Day
“I think we have a leadership position, but I think we need to maintain that leadership position,” he said. “And for the reasons of focus, we decided to create Kite as an independent business unit that will wake up and go to sleep every day thinking about how to be leaders in oncology cell therapy.”
The separation will also allow Gilead to focus more effectively on its other oncology programmes such as internal small-molecule R&D and a bispecific antibody collaboration with Agenus, said O’Day.
The CEO – who joined the company from March having been head of Roche’s pharma business – also intimated that other changes may be coming, with a series of meetings planned to “shape our long-term strategy and vision for the future of Gilead.”
O’Day’s mission is to revitalise Gilead after a tricky few years marked by a massive decline in sales for its hepatitis C virus (HCV) drugs, which continued to fall from $1bn to $790m in the first quarter. There has been concern for some time about Gilead’s reliance on HCV and HIV drugs, and the company has taken steps to try to move into new areas such as cancer and liver diseases.
The Kite acquisition was made as part of that drive, and O’Day said on the call that “we’ll be looking for opportunities” to help boost the late-stage pipeline, as well as accelerating some internal programmes.
Overall, Gilead said first-quarter revenue totalled $5.3bn, up from $5.1bn a year earlier and in line with forecasts. New HIV drug Biktarvy getting off to a great start with sales reaching $739m, up from just $35m a year ago, with a European roll-out only just starting to gather pace.
The company reiterated its full-year guidance, which estimates net product sales of $21.3bn to $21.8bn.