Gilead Sciences (GILD) Appoints Daniel O'Day As New CEO

Gilead Sciences, Inc. (NASDAQ:GILD) announced that its board of directors has appointed Daniel O’Day as the company’s Chairman and Chief Executive Officer (CEO).

O’Day will take over the reins on Mar 1, 2019. Meanwhile, the board appointed Gregg Alton as interim CEO for the period of Jan 1 to Mar 1, 2019.

O’Day is the CEO of the pharmaceutical arm of Roche Holdings (OTC:RHHBY) since 2012. Prior to 2012, O’Day was heading Roche Diagnostics.

The appointment of a veteran leader like O’Day should relieve wary investors as the new CEO will bring leadership experience across multiple therapeutic areas, which is much needed at Gilead.

Gilead has been facing turbulent times lately, and hence O’Day has a tough job in his hands. Gilead’s stock has lost 4.4% in the past six months, against the industry's decline of 12.7%.

Gilead was once a market outperformer, with its strong HCV franchise boasting a number of blockbuster drugs. However, the HCV franchise has been under pressure since the last three-four years due to competitive pressure from the likes of AbbbVie, Inc. (NYSE:ABBV) .

Consequently, Gilead had turned focus on its HIV franchise and newer avenues like CAR T therapy. Gilead was the first to bring to market a single-tablet regimen (STR) — Atripla — for the treatment of HIV. Other STRs for HIV in the market include Complera/Eviplera and Stribild. TAF-based products like Genvoya, Odefsey and Descovy are performing well with strong adoption both in the United States and Europe. The company received a major boost when the FDA approved its once-daily STR, Biktarvy.

Due to the dwindling HCV sales, Gilead acquired Kite Pharma in 2017. Kite is a pioneer in cell therapy, having developed engineered cell therapies that express either a CAR or an engineered T cell receptor (TCR) depending on the type of cancer. The approval of lead candidate Yescarta for the treatment of refractory aggressive non-Hodgkin lymphoma and the initial uptake of the therapy have been encouraging.

Nevertheless, Gilead has been trying to revive its portfolio of late, and with a new CEO, we expect a more concrete and focused approach. Gilead has promising late-stage candidates — selonsertib and filgotinib — in the NASH and inflammation markets. The company also has a collaboration agreement with Sangamo Therapeutics, Inc. (NASDAQ:SGMO) to use Sangamo’s zinc finger nuclease technology platform for the development of next-generation ex vivo cell therapies in oncology.

Zacks Rank

Gilead currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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