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Help wanted: New CEO to run Gilead as John Milligan steps down

Gilead $GILD CEO John Milligan is out.

In a completely unexpected announcement, the big biotech company reported right after the market close Wednesday evening that Milligan will remain in his position until the end of the year, as the board looks for his successor.

He’s stepping down, but Milligan clearly has another career chapter in mind.

“It has been an honor to work at Gilead for my entire professional career and, now that the company is on solid footing for the future, the Board and I have agreed it is a good time to turn the reins over to a new leader,” said Milligan in a statement. “I’m looking forward to a well-deserved break and will then move on to new and different opportunities.”

Also out is Chairman John Martin, who preceded Milligan at the helm. He plans to leave once the new CEO arrives.

The upcoming change at the top has big implications, notes Leerink’s Geoffrey Porges, who’s been watching this company for years. His note:

These announcements come as a surprise to investors given Dr. Milligan’s 28-year career at Gilead and his relatively short 2-year stint in the long-awaited CEO position, and no internal successor has been identified. These announcements clearly signal a decision by the company’s board to “go in a different direction” and while we don’t believe the orderly departures suggest any immediate issue, the basis for these changes and their implications are likely to dominate investor conversations about the company for several months. Investor chatter is likely to switch from “what’s Gilead going to buy” to “who’s Gilead going to hire,” and given the company’s mixed hiring record, the appointee may not necessarily be an individual with immediate industry or investor credibility. Certainly these transitions confirm our view that despite the obvious need for significant new pipeline and product opportunities, Gilead won’t be making any major strategic moves for potentially a year or more.

Together, Martin and Milligan made biotech history at Gilead. They led the team that provided a painless cure for hepatitis C, creating a huge, if temporary, mega-market to profit from. And they continued to dominate the HIV space, offering new blockbuster combination drugs that remain the standard therapy in the field over careers that spanned decades.

Faced with the decline of the hep C franchise, Milligan aggressively snapped up Kite to become a leader in CAR-T, buying new technologies along the way.

Martin and Milligan also endured endless criticism for their aggressive pricing strategy, particularly when they priced their hepatitis C drug at $84,000, triggering outrage from Washington DC to the Bay Area. That controversy never really died out, leaving the industry with the worst rep it’s ever had.

They’ll be missed by investors, but not by everyone.


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