Gilead needs to stop waiting and start buying; Let's embrace China as a new biopharma power
Endpoints assesses the big biopharma R&D stories of the week, with a little added commentary on what they mean for the industry.
Gilead once had one of the best reputations in R&D. Its ability to hustle through a package of hep C cures was done at a jaw-dropping speed and delivered the goods with first-mover advantage in revolutionizing a market and disease treatment. But what have you done for investors lately, Gilead? A string of setbacks in the clinic has highlighted that Gilead isn’t immune from the high failure rate in biopharma. And without a big, quick assist, its numbers are going to keep shrinking. It’s time to take that big stash of cash and, perhaps with the help of the Trump administration, get it back into circulation with a couple of major acquisitions that can have an immediate impact. Any seller will see Gilead coming from miles away, and will write down a magic number that would offend most buyers. In this market, buyers can’t be choosers when it comes to superior deals. Gilead will have to pay top dollar. The company waited too long, hoping that the pipeline would come to its rescue. Wrong. Call up the BD team and get moving.
The news this week that Chinese researchers had surprised the world with the first use of CRISPR-Cas9 tech in a human study underscores a new reality in the global industry. China is moving to challenge the West in drug development. And that is going to take some getting used to. While the US and European biopharma camps have been operating in clear sight, coordinating their work with highly visible regulatory bodies, the R&D atmosphere in China is much more cloudy. So we’re not always going to get a heads up about R&D firsts like this. While the rest of the world has been focused elsewhere, China has been building a modern, audacious R&D industry of its own. Chinese scientists are among the best in the world, as a large number of companies have been finding out as they outsource more and more of their work to the Asian super power. It’s time we spent more time tracking the goings-on in Chinese research circles. As one exec recently told me, some of these groups are able to work teams on a 24-hour schedule when it comes to solving a problem. It’s time we started paying closer attention. That won’t be easy. But the tech rivalry is real, and it’s here. Great!
Right now, everybody that covers biopharma is looking for clues — solid, lukewarm, half-baked, you name it — about where the Trump administration is headed on the industry. There had been some encouragement that Rich Bagger, a political insider in the Chris Christie camp and senior Celgene exec, was likely going to be tapped for a senior spot in the healthcare sector after heading up the transition as executive director. Then seemingly minutes later he was reported to be headed back to the private sector after Christie was clearly shoved to the sidelines. We heard signals from Trump during the campaign that he favored the idea that Medicare should negotiate drug prices. And he also gave a thumbs-up to reimportation. But such political asides mean little for a new administration. He favored FDA “reform,” but we don’t know what that means in practice. And the future of Obamacare is still largely a mystery. We’ll get a much better idea of what Trump is thinking when we see his picks for HHS and the rest of the cabinet. The sooner the better.