Gilead shows big pharma how its done

gilead ceo

I was rather surprised to see parking lots belonging to Gilead in Martinsreid (the Munich biotech area), I never realised they had an office here. Gilead is probably one of the most successful pharmas today, experiencing a 300% growth in stock prices ever since it went on the market, multiple drug approvals and billions of dollars on sales of their rather expensive medicines. At a time when most pharmas are struggling to even produce a single drug in a 10 year period, Gilead has managed to gain approvals for 9 drugs in 11 years. How do they do it?

Gilead was founded in 1987 by Dr Michael Riordan who had contracted dengue fever in the Philippines and was so heavily traumatized by the experienced that he decided to start a company producing anti-virals. He hired John C Martin as his chief scientist, now the current CEO (guy in picture), who had a PhD in organic chemistry. A notable drug first discovered by Gilead was Tamiflu. Singaporeans may remember stocking up on Tamiflu during the H1N1 influenza pandemic in 2009. Gilead licensed their patents on the synthesis of Tamiflu to Roche, gaining millions in royalties as governments filled warehouses with Tamiflu in the event of seasonal pandemics. Gilead’s first completely owned blockbuster however, was HIV medication Viread which it obtained from acquiring Triangle Pharmaceuticals from Durham, North Carolina. They then combined Viread with their own drug creating Truvada, a once-a-day pill to treat HIV that was approved in 2004. Surprisingly they did not stop there, Truvada was found to be even more effective when combined with a drug from their competitor Bristol-Myers Squibb, and together they formulated Atripla that was approved only two years later.

Why stop at one blockbuster when you can have two? In 2011, Gilead acquired Pharmasset, a small New-Jersey-based biotech. Their decision was based on Pharmasset’s  presented findings at a medical conference where their lead candidate sofusbuvir, when given to hepatitis C patients for 12 weeks, resulted in complete cures nearly 100% of the time. The deal was done for $11 billion, a steep price which had investors worried. But fears were allayed when FDA assigned Gilead’s new drug for chronic hepatitis C, Sovaldi, Breakthrough Therapy status, accelerating approval  within 2 years. Sovaldi is truly a “breakthrough” drug as existing treatments for hep C involved pegylated interferon injections which cause rather severe side effects such as pain, nausea, and more intolerably, neuropsychiatric side effects like cognitive and behavioral changes. About 10-15% of hep C patients discontinue interferon treatment due to these side effects. Sovaldi not only has a better tolerability profile and defined treatment time (12 weeks with a 99% cure rate), but also worked for patients unresponsive to inteferon treatment. However, Sovaldi could only be used without combined interferon treatment in patients with genotype 2 and 3 of Hep C, making majority of patients (genotype 1) still subject to interferon treatment. This is now changed with Gilead’s most recent FDA approval, Harvoni, for treatment of genotype 1 hep C. Harvoni can be taken alone (without interferon or ribavirin, another antiviral drug commonly used in combination with Sovaldi) and provided high cure rates in as little as 8 weeks.

When asked what their strategy was, CEO John Martin said they kept internal infrastructure to a minimum with a much smaller sales force compared to big pharma. They also hired experts in the field with more than 10 years of experience – meaning, they know their science! Lastly, they collaborate widely. Their collaborators range from reliable manufacturers with specialized expertise, national health organizations and regulatory approval boards, and as we have seen with Atripla and Tamiflu, even other pharma companies, with the ultimate aim of creating better medicines and delivering them to the clinic quickly.

Gilead has recently come under fire for the expensive price tags on their drugs. Sovaldi costs $1000 per pill, making the 12-week treatment come up to $84,000. Truvada, the anti-HIV pill, costs $1500 per month. However, the same medications are often sold at significantly marked down prices in developing nations such as India and Egypt, where Sovaldi is sold at $300 for a bottle of pills. They even have programs demonstrating some social awareness, where they licensed their technology to generic manufacturers in India, generating profit for the local economy. Even in the US, people without the means to pay for the treatments have called the company and have gotten Sovaldi free of charge. Isn’t it all positively inspiring! And that’s how its done.

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