A JP Morgan promise, a last-minute bid and the coronavirus stock market — how Gilead’s Daniel O’Day nabbed Forty Seven
When Gilead CEO Daniel O’Day walked on stage at the JP Morgan Healthcare Conference, he had lots of details but little concrete to bring to what he acknowledged was “a bit of a coming-out party.”
It was O’Day’s first JPM for the company. After 9 months of Gilead trial failures and sluggish sales, and with the promise of new management, analysts talked about the “urgent” need for a buyout. O’Day, though, couldn’t offer anything but corporate shoptalk about “strategy” and the rough outlines of a plan: small to mid-size deals in core areas of expertise.
“What’s on everybody’s mind is ‘what’s Gilead going to buy? What’s the next generation of M&A for Gilead?’” He said. “And I think that has to be informed by strategy. I’m not going to tell you today what we are going to buy, but I think that has to be informed by strategy.”
What O’Day couldn’t say was that he had already started making his first purchase. The week before JPM, Gilead signed a confidentiality agreement with Forty Seven, the cancer biotech they would ultimately buy this month for $4.9 billion, their largest acquisition since they bought Kite Pharma for $11.9 billion in 2017.
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