Gilead Delves into Oncology

When Daniel O’Day took over as Gilead’s Chief Executive Officer in 2019, his focus on oncology plus the development of twenty new Cancer treatments, made Gilead’s stock accelerate every quarter. According to Investors writer Allison Gatlin, sales from the oncology drug Yescarta soared 82%, bringing in $317 million during the September quarter of 2022. Yescarta sales helped Gilead’s oncology business grow 79% coming into 2023. 

The success came after Gilead acquired Yescarta’s producer Kite Pharma in 2017. Even after the Food and Drugs Administration (FDA) approved Yescarta for patients with late-stage blood Cancer, Yescarta sales did not increase until the fourth quarter of 2018, due to insurers debating whether to imburse patients for the treatments amid manufacturing challenges. 

Since the fourth quarter of 2018, Yescarta sales have beat expectations 56% of the time. In 2022 specifically, Yescarta sales grew 31% in the first quarter, 66% in the second, and 82% in the third. The Yescarta treatment works by reprogramming a patient’s cells through a drug named chimeric antigen receptor T-cell therapy, or CAR-T for short. 

Cash Flow 

Due to the financial success of their oncology medications, Gilead Sciences plans to expand their portfolio by augmenting its late-stage clinical pipeline, corresponding to the four stages of drug trials for a new treatment to launch into the market: discovery and development (1), preclinical research (2), clinical research (3), and FDA drug review (4). 

With a current value of $30 billion and having spent $12 billion on the acquisition of Kite Pharma, Gilead plans to develop the clinical trials of non-alcoholic steatohepatitis (NASH) and off-the-shelf therapy tabelecleucel, in collaboration with pharmaceuticals Novo Nordisk and Atara Biotherapeutics. 

By turning away from low-risk licensing deals and acquisitions, and towards bigger collaborations and buy-ins, clinical trials, and off-the-shelf-cell therapies, Gilead seeks to ensure its stop in the competitive field of oncology pharmaceutical drugs. 

Sources

Budwell, G. (2019, May 7). Where Will Gilead Sciences Spend Its Cash?Yahoo Finance. https://ca.finance.yahoo.com/news/where-gilead-sciences-spend-cash-130000982.html 

FDA Archive. (2018, January 4). Step 3: Clinical Research. U.S. Food and Drug Administration. https://www.fda.gov/patients/drug-development-process/step-3-clinical-research 

Gatlin, A. (2023, November 23). See Why Gilead's Cancer Business Is Driving The Stock To A Fever Pitch. Investors. https://www.investors.com/news/technology/gild-stock-surges-why-gilead-sees-its-oncology-business-as-a-force-to-be-reckoned-with/