As hep C rev­enue dis­in­te­grates, pres­sure keeps grow­ing on Gilead to do deals

Gilead CEO John Mil­li­gan

Gilead’s hep C busi­ness is get­ting shred­ded by grow­ing com­pe­ti­tion and dis­count prices. Next year the com­pa­ny ex­pects to see its $14.8 bil­lion in 2016 hep C rev­enue melt down to $7.5 bil­lion to $9 bil­lion. And the rapid dis­in­te­gra­tion is build­ing pres­sure on the big biotech to fi­nal­ly get down to busi­ness and use its con­sid­er­able fi­nan­cial re­serves for some M&A and ma­jor deal­mak­ing.

Of course, that’s been said be­fore. An­a­lysts have been urg­ing Gilead to get am­bi­tious on the busi­ness de­vel­op­ment side of things for the past two years. 2017, though, may prove to be a year that Gilead’s path to whip­ping up some ex­cite­ment for its fu­ture lies al­most sole­ly in new ac­qui­si­tions.

CEO John Mil­li­gan, though, in­sists he isn’t go­ing to rush out and grab some­thing.

“We feel very good about our cash flow for the fu­ture,” he told an­a­lysts in Tues­day evening’s call with an­a­lysts. “I think it’s still for us a de­sire and a need to have a right strate­gic fit for the com­pa­ny. That is the dri­ver for why and when we do any merg­ers or ac­qui­si­tions or part­ner­ships, much more so than the need for cash flow, be­cause we feel very com­fort­able about where we are.”

But, asked Mark Schoenebaum, can you grow the com­pa­ny now with­out an ac­qui­si­tion?

“We are fac­ing some head­winds in 2018 and be­yond on oth­er patent ex­piries we’ll have, in­clud­ing the U.S. patent for TDF. We’ll al­so have patents on Letairis and the fol­low­ing year Ranexa. So that puts some down­ward pres­sure on that non-HCV rev­enue base and so that makes it chal­leng­ing for us to grow with­out some sort of ac­qui­si­tion in those ar­eas.”

Gilead CFO Robin Wash­ing­ton added:

“I think we’ve been fair­ly thought­ful par­tic­u­lar­ly deal­ing with the rat­ing agen­cies and in think­ing about debt lev­els that we feel very com­fort­able that we can sup­port ac­qui­si­tions and in­crease our debt to EBIT­DA. Most im­por­tant­ly be­cause giv­en our cash flows, which we ex­pect to con­tin­ue for a very long time, we can eas­i­ly de­liv­er over time with our ex­ist­ing ther­a­peu­tic area fran­chis­es. And this is to­tal­ly ex­clu­sive of any po­ten­tial tax changes, or par­tic­u­lar­ly if there were repa­tri­a­tion. That would make all that even sim­pler. So we feel com­fort­able that from an as­set stand­point that we could sup­port any type of ac­qui­si­tion that we’d need to do to sup­port Gilead’s growth.”

But don’t look for any dra­mat­ic move like a com­pa­ny split.


“We’re not con­sid­er­ing split­ting up the com­pa­ny,” he said in re­ply to the sug­ges­tion. “And while it looks good in the world of Wall Street from a mul­ti­ples per­spec­tive, I think it’s an eco­nom­i­cal­ly and fi­nan­cial­ly a bad idea for the com­pa­ny. So we are com­mit­ted to grow­ing the com­pa­ny. We’re com­mit­ted to our field of NASH. We’re com­mit­ted to grow­ing that HIV field. And we are go­ing to con­tin­ue to ac­cel­er­ate our pipeline through ac­qui­si­tions and what­not over the course of the year.

Med­ical an­i­ma­tion: Mak­ing it eas­i­er for the site and the pa­tient to un­der­stand

Medical animation has in recent years become an increasingly important tool for conveying niche information to a varied audience, particularly to those audiences without expertise in the specialist area. Science programmes today, for example, have moved from the piece-to-camera of the university professor explaining how a complex disease mechanism works, to actually showing the viewer first-hand what it might look like to shrink ourselves down to the size of an ant’s foot, and travel inside the human body to witness these processes in action. Effectively communicating a complex disease pathophysiology, or the novel mechanism of action of a new drug, can be complex. This is especially difficult when the audience domain knowledge is limited or non-existent. Medical animation can help with this communication challenge in several ways.
Improved accessibility to visualisation
Visualisation is a core component of our ability to understand a concept. Ask 10 people to visualise an apple, and each will come up with a slightly different image, some apples smaller than others, some more round, some with bites taken. Acceptable, you say, we can move on to the next part of the story. Now ask 10 people to visualise how HIV’s capsid protein gets arranged into the hexamers and pentamers that form the viral capsid that holds HIV’s genetic material. This request may pose a challenge even to someone with some virology knowledge, and it is that inability to effectively visualise what is going on that holds us back from fully understanding the rest of the story. So how does medical animation help us to overcome this visualisation challenge?

Alice Shaw, Lung Cancer Foundation of America

Top ALK ex­pert and can­cer drug re­searcher Al­ice Shaw bids adieu to acad­e­mia, hel­lo to No­var­tis

Jay Bradner has recruited a marquee oncology drug researcher into the ranks of the Novartis Institutes for BioMedical Research. Alice Shaw is jumping from prestigious posts intertwined through Mass General, Harvard and Dana-Farber to take the lead of NIBR’s translational clinical oncology group.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,500+ biopharma pros reading Endpoints daily — and it's free.

Christine Bunt, Robert Langer. Verseau

Armed with Langer tech and $50M, Verseau hails new check­point drugs un­leash­ing macrophages against can­cer

The rising popularity of CD47 has propelled the “don’t-eat-me” signal to household name status in the immuno-oncology world. But just as PD-(L)1 merely represents the most fruitful of all checkpoints regulating T cells, Verseau Therapeutics is convinced that CD47 is one of many regulators one can modulate to stir up or tame the immune system.

“Macrophages are interesting because we were all educated probably 20 years ago that they are the big eaters in the immune system, but they’re really the orchestrators of the immune system,” CEO Christine Bunt said.

Hal Barron, GSK's president of R&D and CSO, speaks to Endpoints News founder and editor John Carroll in London at Endpoints' #UKBIO19 summit on October 8, 2019

[Video] Cel­e­brat­ing tri­al fail­ures, chang­ing the cul­ture and al­ly­ing with Cal­i­for­nia dream­ers: R&D chief Hal Bar­ron talks about a new era at GSK

Last week I had a chance to sit down with Hal Barron at Endpoints’ #UKBIO19 summit to discuss his views on R&D at GSK, a topic that has been central to his life since he took the top research post close to 2 years ago. During the conversation, Barron talked about changing the culture at GSK, a move that involves several new approaches — one of which involves celebrating their setbacks as they shift resources to the most promising programs in the pipeline. Barron also discussed his new alliances in the Bay Area — including his collaboration pact with Lyell, which we covered here — frankly assesses the pluses and minuses of the UK drug development scene, and talks about his plans for making GSK a much more effective drug developer.

This is one discussion you won’t want to miss. Insider and Enterprise subscribers can log-in to watch the video.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Mi­rati preps its first look at their KRAS G12C con­tender, and they have to clear a high bar for suc­cess

If you’re a big KRAS G12C fan, mark your calendars for October 28 at 4:20 pm EDT.

That’s when Mirati $MRTX will unveil its first peek at the early clinical data available on MRTX849 in presentations at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston.

Mirati has been experiencing the full effect of a rival’s initial success at targeting the G12C pocket found on KRAS, offering the biotech some support on the concept they’re after — and biotech fans a race to the top. Amgen made a big splash with its first positive snapshot on lung cancer, but deflated sky-high expectations as it proved harder to find similar benefits in other types of cancers.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,500+ biopharma pros reading Endpoints daily — and it's free.

The FDA will hus­tle up an ex­pe­dit­ed re­view for As­traZeneca’s next shot at a block­buster can­cer drug fran­chise

AstraZeneca paid a hefty price to partner with Daiichi Sankyo on their experimental antibody drug conjugate for HER2 positive breast cancer. And they’ve been rewarded with a fast ride through the FDA, with a straight shot at creating another blockbuster oncology franchise.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,500+ biopharma pros reading Endpoints daily — and it's free.

Sean Parker, AP

Sean Park­er helps cre­ate a CRISPRed cell ther­a­py 2.0 play — and he’s got a high-pro­file set of lead­ers on the team

You can rack up one more high-profile debut effort in the wave of activity forming around cell therapy 2.0. It’s another appealing Bay Area group that’s attracted some of the top hands in the business to a multi-year effort to create a breakthrough. And they have $85 million in hand to make that first big step to the clinic.

Today it’s Ken Drazan and the team at South San Francisco-based ArsenalBio that are coming from behind the curtain for a public bow, backed by billionaire Sean Parker and a collection of investors that includes Beth Seidenberg’s new venture investment operation based in LA.
Drazan — a J&J Innovation vet with a long record of entrepreneurial endeavors — exited the stage in 2018 when his last mission ended as he stepped aside as president of Grail. It wasn’t long, though, before he was helping out with a business plan for ArsenalBio that revolved around the work of a large group of interconnected scientists supported by the Parker Institute for Cancer Immunology.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,500+ biopharma pros reading Endpoints daily — and it's free.

CSL ac­cus­es ri­val Pharm­ing of par­tic­i­pat­ing in a scheme to rip off IP on HAE while re­cruit­ing se­nior R&D staffer

Pharming has landed in the middle of a legal donnybrook after recruiting a senior executive from a rival R&D team at CSL. The Australian pharma giant slapped Pharming with a lawsuit alleging that the Dutch biotech’s new employee, Joseph Chiao, looted a large cache of proprietary documents as he hit the exit. And they want it all back.
Federal Judge Juan Sanchez in the Eastern District Pennsylvania court issued an injunction on Tuesday prohibiting Chiao from doing any work on HAE or primary immune deficiency in his new job and demanding that he return any material from CSL that he may have in his possession. And he wants Pharming to tell its employees not to ask for any information on the forbidden topics.
For its part, Pharming fired off an indignant response this morning denying any involvement in extracting any kind of IP from CSL, adding that it’s cooperating in the internal probe that CSL has underway.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,500+ biopharma pros reading Endpoints daily — and it's free.

Eli Lil­ly’s first PhI­II show­down for their $1.6B can­cer drug just flopped — what now?

When Eli Lilly plunked down $1.6 billion in cash to acquire Armo Biosciences a little more than a year ago, the stars seemed aligned in its favor. The jewel in the crown they were buying was pegilodecakin, which had cleared the proof-of-concept stage and was already in a Phase III trial for pancreatic cancer.

And that study just failed.

Lilly reported this morning that their cancer drug flopped on overall survival when added to FOLFOX (folinic acid, 5-FU, oxaliplatin), compared to FOLFOX alone among patients suffering from advanced pancreatic cancer.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 62,500+ biopharma pros reading Endpoints daily — and it's free.