Former Gilead CEO John Martin. Source: Barron's

Gilead (GILD) is known for its R&D prowess and its strong portfolio of HIV drugs. Its $11 billion acquisition of Pharmasset changed the game. Pharmasset was in the latter stages of developing sofosbuvir, the compound used in the treatment of HCV. Shortly after the acquisition Gilead received FDA approval for its compound to be used in HCV regimens Sovaldi and Harvoni. Gilead launched Sovaldi in 2013 – one of the most successful drug launches in history. While it paid $11 billion for Pharmasset, Gilead has garnered over $50 billion in HCV sales.

Sovaldi and Harvoni have performed miracles in finding a cure for HCV. That said, the HCV runway has since declined. Competition for AbbVie’s (ABBV) Mavyret have also cut in HCV sales. In Q1 2019 Gilead reported product sales of $5.2 billion, down 8% sequentially. HCV sales fell 6% sequentially and were less than 15% of total revenue. As far back as Q2 2015 HCV represented over 60% of product sales. It has now fallen below 15%. HCV is not as important as it once was.

At the time of the Pharmasett deal John Martin was Gilead’s CEO. Martin had the chutzpah  and the vision to pull the trigger on Pharmsasett. He is no longer CEO. Daniel O’Day is currently at the helm. Pharmasset had an HCV regimen that that shown success in late stage clinical trials. It was a blockbuster in plain sight. Read more:



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