Gilead to Develop a New Research Centre as a Result of 2022 Financial Growth

The HIV focused pharmaceutical Gilead Sciences Inc. plans to build a 175,000 square feet research center in their headquarters in Foster City, California, with the aim to expand their portfolio of drugs pertaining to oncology and hepatitis C. 

With the additional goal to convert their 250,000 square feet of campus office space into labs, their growth in collaborations, internal research and acquisitions has allowed Gilead to spend over $200 million building a research center that will open in 2026. “It’s a significant investment,” said Joydeep Ganguly, the senior vice president of corporate operations at Gilead. “It is the largest capital investment that we will be making in our master plan in the last four years.” 

Gilead Sciences Inc. made such financial investments and internal expansion possible as a result of the growth the company experienced in 2022. “2022 marked Gilead’s strongest full year growth in our base business since HCV sales peaked in 2015. This return to growth was driven by consistent and high quality commercial and clinical execution across our portfolio," said Gilead’s Chairman and Chief Executive Officer Daniel O’Day. 

Financial Growth

Gilead’s financial results for the fourth quarter of 2022 showed the total revenue increase by 2% compared to that same quarter in 2021, with a total revenue of $7.4 billion. Diluted earnings per share–meaning the measurement of a company’s earnings when converting all securities to common stocks and a shareholder’s existing equity stake–increased from $0.30 in the fourth quarter of 2021 to $1.30 in the fourth quarter of 2022. 

In 2021, Gilead Sciences Inc. had to pay $1.25 billion to HIV competitor Viiv Healthcare–a subsection of the GlaxoSmithKline conglomerate–in a legal patent settlement and spent a $625 million to opt in to a collaboration with Arcus Biosciences Inc. to co-develop and commercialize next generation cancer immunotherapies. 

In the fourth quarter of 2022, Gilead expenses included acquiring new assets, including buying the immunotherapy GS-1811 from Jounce Therapeutics, Inc., a collaboration with antibody-based pharmaceutical company MacroGenics. In 2022, Gilead invested in higher research and development, and terminated of the collaboration with licensing pharmaceutical company Everest Medicines for drug Trodelvy. As a result, Gilead generated $2.6 billion in operating cash flow and utilized $791 million to repurchase common stock in the fourth quarter of 2022. 

Ganguy attributes Gilead’s growth to a variety of factors, particularly a focus on research, which acts as an important financial reason to invest on the new Foster City, California research quarters. “In HIV, Biktarvy gained market share in the U.S. as it has every quarter since launch, while our long-acting HIV agent, lenacapavir, received its first regulatory approvals,” Ganguy said. “The strong full year growth in oncology was driven by continued increase in demand for Trodelvy and our Cell Therapies. We look forward to building on this momentum in 2023 and further increasing our impact for people and communities worldwide.” 

Source: Yahoo Finance (NasdaqGS - NasdaqGS Real-time price, 2023). 

Gilead showed great growth in the fourth quarter of 2023 as a result of their focus on internal research. 

Internal Research and Sustainability 

The new California Research Centre will house between 300 and 350 workers, and contribute to Gilead’s efforts for internal research, with the aim to develop more than ten new transformative drug treatments across the therapeutic areas of virology, oncology and inflammation by 2030. Other than addressing issues with the company’s technological capabilities, and with the capacity needs for Gilead’s growing oncology and inflammation research teams, Gilead wants to ensure the new campus is socially responsible, by implementing renewable energy solar panels and will become one of the only research centers classified LEED Gold for sustainability in the biotech industry. 

“Positioning people at the center of the research and development process is helping us to fuel the next wave of innovation in virology," said Frank Duff the Senior Vice President of Virology Therapeutic in Gilead Sciences. “Our scientific advances are grounded in collaboration with community and research partners around the world.” 

According to the Executive Vice President of Research Flavius Martin, the decision of build a new research center lies on the company’s plan to “redefine sustainability standards for research buildings and allow us to attract and retain top scientific talent,” continuing its financial growth prompted by research in oncology, virology and inflammation, and allowing the company to expand its currently HIV-focused portfolio. 

Sources

Business Wire. (2023, February 2). Gilead Sciences Announces Fourth Quarter and Full Year 2022 Financial Results. Yahoo Finance. https://finance.yahoo.com/news/gilead-sciences-announces-fourth-quarter-210100106.html 

Gilead Press Releases. (2020, May 27). Gilead Sciences and Arcus Biosciences Establish 10-year Partnership to Co-develop and Co-commercialize Next-generation Cancer Immunotherapies. Gilead Sciences Inc. https://www.gilead.com/news-and-press/press-room/press-releases/2020/5/gilead-sciences-and-arcus-biosciences-establish-10-year-partnership-to-co-develop-and-co-commercialize-next-generation-cancer-immunotherapies 

Kenton, M. (2023, February 11). What Is Diluted EPS? Definition, Formula, and Example. Investopedia. https://www.investopedia.com/terms/d/dilutedeps.asp#:~:text=Diluted%20earnings%20per%20share%20(EPS,a%20firm's%20earnings%20per%20share 

Masson, G. (2023, January 18). Gilead fosters growth with plans for new research center in California hometown. Fierce Pharma. https://www.fiercebiotech.com/biotech/gilead-designs-new-research-building-california-hometown 

NasdaqGS - NasdaqGS Real-time price. (Retrieved Feb 13, 2023). Yahoo Finance. https://finance.yahoo.com/chart/GILD 

TRD Staff. (2023, January 18). Gilead to build 175K sf research facility at Foster City campus. The Real Deal: NYC Real Estate Forum. https://therealdeal.com/sanfrancisco/2023/01/18/gilead-to-build-175k-sf-research-facility-at-foster-city-campus/