Dive Brief:
- Gilead on Tuesday reported sales of $8.4 billion in the fourth quarter of 2015, a 16% increase year over year. The Hepatitis C drugs Harvoni and Sovaldi accounted for $4.9 billion of that figure.
- In a call with investors, soon-to-be CEO John Milligan said Gilead continued to be interested in possible acquisitions, particularly in oncology, inflammatory diseases, and liver diseases areas. Gilead had $26 billion in cash and cash equivalents as of December 31, 2015.
- Overall, fourth quarter U.S. sales slowed by 12% compared to Q4 2014. However, dramatic non-Europen international growth, along with steady gains in Europe, helped balance this out.
Dive Insight:
Gilead had a very strong 2015. The Foster City, CA-based company raked in just over $32 billion in annual revenues, compared to about $24.9 billion in 2014. Its Hepatitis C drugs continued to dominate, although they will face increased competition from AbbVie's Viekira Pak and Merck's newly-approved Zepatier.
Zepatier could shift the price dynamics of the Hep C market as Merck priced a 12 week treatment course at $54,600, significantly lower than the $94,500 for Gilead's Harvoni.
Combined, Harvoni and Sovaldi notched $4.9 billion in sales in the fourth quarter, and nearly $20 billion in 2015. While Sovaldi sales in the U.S. fell sharply as patients switched to Harvoni, Japanese approval of Sovaldi in May helped lessen the drop-off from 2014. Hep C sales grew by 34% in Japan and other non-European markets.
The company forecast 2016 sales between $30 and $31 billion, in line with estimates.
Current CEO John Martin will step down in March after 20 years of running the company. Martin oversaw dramatic growth in his tenure as CEO and turned Gilead into a market leader in Hepatitis C and HIV. Gilead will now turn to its Chief Operating Officer, John Milligan, to lead the company.
In a call following the earnings announcement, Milligan said Gilead would look to acquire assets in areas outside of its traditional viral diseases focus. In particular, Gilead will search for opportunities in oncology, inflammatory diseases, and liver diseases. Fueled by a $10 billion note issuance in September 2015, Gilead is sitting on $26 billion in cash to put toward an acquisition.