Gilead Sciences, Inc. /ˈɡɪliəd/, is an American biotechnology company that researches, develops and commercializes drugs. The company focuses primarily on antiviral drugs used in the treatment of HIV, hepatitis B, hepatitis C, and influenza, including Harvoni and Sovaldi.

Headquartered and founded in Foster City, California, Gilead is a member of the NASDAQ Biotechnology Index and the S&P 500.

History

Foundation

Gilead Sciences was originally founded under the name Oligogen^[4] in June 1987 by Michael L. Riordan, a medical doctor who was 29 years old at the time.^[5] Riordan graduated from Washington University in St. Louis, the Johns Hopkins School of Medicine and the Harvard Business School.^[6] Three core scientific advisers worked with Riordan to create the company and establish its scientific vision. These were Peter Dervan of Caltech, Doug Melton of Harvard, and Harold M. Weintraubof the Fred Hutchinson Cancer Research Center. Riordan served as CEO from inception until 1996.^[7][8] Riordan had previously worked for a year for venture capital firm Menlo Ventures, which proceeded to make the first investment in Gilead, of $2 million, and Menlo partner DuBose Montgomery served as Chairman of the Board until 1993, when Riordan became Chairman.^[5] Riordan also recruited as scientific advisers Harold Varmus, a Nobel laureate who later became Director of the National Institutes of Health, and Jack Szostak, recipient of the Nobel Prize for Physiology or Medicine in 2009.^[9][10]

The company's primary therapeutic focus was, and continues to be, in antiviral medicines, a field that interested Riordan because he contracted dengue fever, an untreatable viral disease, while working in malnutrition clinics as a Henry Luce Scholar in the Philippines.^[11] Riordan recruited Donald Rumsfeld to join the board of directors in 1988,^[12] followed by Benno C. Schmidt, Sr.,^{[citation needed]} Gordon Moore,^[12] and George P. Shultz.^[12]Riordan tried to recruit Warren Buffett as an investor and board member, but was unsuccessful.^{[citation needed]}

Under the technical leadership of scientist Dr. Mark Matteucci,^{[citation needed]}the company focused its early discovery research on making small strands of DNA (oligomers, or more particularly, oligonucleotides) to target specific genetic code sequences (i.e., gene therapy).^[4] Because of the expected healing potential of such research, Oligogen soon changed its name to Gilead Sciences, after the reputed healing properties of the ancient Balm of Gilead, and moved its headquarters to Foster City's Vintage Park neighborhood, where it has been based ever since.^[4] The company's development of small molecule antiviral therapeutics began in 1991 when CEO Riordan and R&D head John C. Martin in-licensed a group of nucleotide compounds discovered in two European academic labs; one of the compounds was tenofovir, a prodrug which under the trade name Viread became one of the most widely used antiretroviral drugs.^{[citation needed]}

1990-1999: IPO

In 1990, Gilead entered into a collaborative research agreement with Glaxo for the research and development of genetic code blockers, also known as antisense. This collaboration was terminated in 1998, and Gilead's antisense intellectual property portfolio was sold to Ionis Pharmaceuticals. Gilead debuted on the NASDAQ in January 1992. Its initial public offering raised $86.25 million in proceeds.

In June 1996, Gilead launched Vistide (cidofovir injection) for the treatment of cytomegalovirus (CMV) retinitis in patients with AIDS. The company cooperated with Pharmacia & Upjohn to market the product outside the United States.

In January 1997, Donald Rumsfeld, a board member since 1988, was appointed Chairman,^[13] but left the Board in January 2001 when appointed United States Secretary of Defense at the start of George W. Bush's first term as President.

In March 1999, Gilead acquired NeXstar Pharmaceuticals of Boulder, Colorado following two years of negotiations with the company. At the time, NeXstar's annual sales of $130 million was three times Gilead's sales. NeXstar's two revenue-generating drugs were AmBisome, an injectable fungal treatment, and DaunoXome, an oncology drug taken by HIV patients. Also in 1999, Roche announced first approval of Tamiflu (oseltamivir) for the treatment of influenza. Tamiflu was originally discovered by Gilead and licensed to Roche for late-phase development and marketing.

One reason for entering into the Tamiflu licensing agreement was that with only 350 employees, Gilead still did not yet have the capability to sell its drugs directly to overseas buyers.^[14] To avoid having to license future drugs in order to access international markets, Gilead simply acquired the 480-employee NeXstar, which had already built its own sales force in Europe to market AmBisome there.^[14]

2000 to 2009

Viread (tenofovir) achieved first approval in 2001 for the treatment of HIV.

In 2002 Gilead changed its corporate strategy to focus exclusively on antivirals, and sold its cancer assets to OSI Pharmaceuticals for $200 million.^[15]

In December 2002, Gilead and Triangle Pharmaceuticals announced that Gilead would acquire Triangle for around $464 million; Triangle's lead drug was emtricitabine that was near FDA approval, and it had two other antivirals in its pipeline.^[15][16] The company also announced its first full year of profitability. Later that year Hepsera (adefovir) was approved for the treatment of chronic hepatitis B, and Emtriva (emtricitabine) for the treatment of HIV.

During this era, Gilead completed its gradual evolution from a biotech startup into a pharmaceutical company.^[4][12]The San Francisco Chronicle noted that by 2003, the Gilead corporate campus in Foster City had expanded to "seven low-slung sand-colored buildings around a tiny lake on which ducks happily paddle."^[4] Like many startups, Gilead originally leased its space, but in 2004, the company paid $123 million to buy all its headquarters buildings from its landlords.^[12] However, even as Gilead developed its ability to distribute and sell its own drugs, it remained distinct from most pharmaceutical companies in terms of its strong reliance on subcontracting most of its manufacturing to contract manufacturing organizations.^[17]

In 2004, Gilead launched Truvada. Years later, though efforts of activists and other groups, Gilead was convinced that a fixed-dose combination of tenofovir and emtricitabine could be used as a pre-exposure prophylactic against the transmission of HIV. ^[18]

In 2006, Gilead completed two acquisitions that allowed the company to branch out from its historical antiviral franchise into the cardiovascular and respiratory therapeutic arenas. Under an agreement with GlaxoSmithKline, Myogen marketed Flolan (epoprostenol sodium) in the United States for the treatment of primary pulmonary hypertension. Additionally, Myogen was developing (in Phase 3 studies) darusentan,^[19] also an endothelin receptor antagonist, for the potential treatment of resistant hypertension.

In 2006, the company acquired Corus Pharma, Inc. for $365 million. The acquisition of Corus signaled Gilead's entry into the respiratory arena. Corus was developing aztreonam lysine for the treatment of patients with cystic fibrosiswho are infected with Pseudomonas aeruginosa.

In July 2006, the U.S. Food and Drug Administration (FDA) approved Atripla, a once a day single tablet regimen for HIV, combining Sustiva (efavirenz), a Bristol-Myers Squibb product, and Truvada (emtricitabine and tenofovir disoproxil), a Gilead product.^[20][21]

Gilead purchased Raylo Chemicals, Inc. in November 2006 for a price of $133.3 million.^[22] Raylo Chemical, based in Edmonton, Alberta, was a wholly owned subsidiary of Degussa AG, a German company. Raylo Chemical was a custom manufacturer of active pharmaceutical ingredients and advanced intermediates for the pharmaceutical and biopharmaceutical industries. Later in the same year Gilead acquired Myogen, Inc. for $2.5 billion (then its largest acquisition). With two drugs in development (ambrisentan and darusentan), and one marketed product (Flolan) for pulmonary diseases, the acquisition of Myogen has solidified Gilead's position in this therapeutic arena.

Gilead expanded its move into respiratory therapeutics in 2007 by entering into a licensing agreement with Parion for an epithelial sodium channel inhibitor for the treatment of pulmonary diseases, including cystic fibrosis, chronic obstructive pulmonary disease and bronchiectasis.^[23]

In 2009, the company acquired CV Therapeutics, Inc. for $1.4 billion, bringing Ranexa and Lexiscan into Gilead. Ranexa is a cardiovascular drug used to treat chest pain related to coronary artery disease, with both of these products and pipeline building out Gilead's cardiovascular franchise.^[24] Later, in the same year the company received the award for one of the Fastest Growing Companies by Fortune. In the same year they were also named as one America's Top Companies to work for by Forbes.

2010 to 2019

In 2010, the company acquired CGI Pharmaceuticals for $120 million, expanding Gilead's research expertise into kinase biology and chemistry. Later that year, the company acquired Arresto Biosciences, Inc. for $225 million, obtaining developmental-stage research for treating fibrotic diseases and cancer.^[25]

In February 2011, the company acquired Calistoga Pharmaceuticals for $375 million ($225 million plus milestone payments). The acquisition boosted Gilead's oncology and inflammation areas.^[26] Later that year, Gilead made its most important acquisition — and most expensive to date — with the $10.4 billion purchase of Pharmasset, Inc. This transaction helped cement Gilead as the leader in treatment of the hepatitis C virus by giving it control of sofosbuvir(see below).

In October 2011, Gilead broke ground on a massive multi-year expansion of its 17-building headquarters campus in Foster City.^[27] By replacing eight one or two-story buildings with seven new structures ranging as tall as 10 stories, Gilead nearly doubled its headquarters real estate footprint from about 620,000 square feet to about 1.2 million square feet.^[27]

On July 16, 2012, the FDA approved Gilead's Truvada for prevention of HIV infection (it was already approved for treating HIV). The pill was a preventive measure (PrEP) for people at high risk of getting HIV through sexual activity.^[28]

In 2013, the company acquired YM Biosciences, Inc. for $510 million. The acquisition brings drug candidate CYT387, an orally-administered, once-daily, selective inhibitor of the Janus kinase (JAK) family, specifically JAK1 and JAK2, into Gilead's oncology pipeline. The JAK enzymes have been implicated in myeloproliferative diseases, inflammatory disorders, and certain cancers.

In 2015, the company made a trio of acquisitions:

• It bought Phenex Pharmaceuticals for $470 million. Its Farnesoid X Receptor (FXR) program used small-molecule FXR agonists in the treatment of liver diseases such as nonalcoholic steatohepatitis.^[29]

• It bought EpiTherapeutics for $65 million. This acquisition gave Gilead first-in-class small molecule inhibitors of histone demethylases involved in regulating gene transcription in cancer.^[30]

• It paid $425 million for a 15% equity stake in Galapagos NV, with additional payments for Gilead to license the experimental anti-inflammatory drug filgotinib, which may treat rheumatoid arthritis, ulcerative colitis, and Crohn's disease.^[31]

In 2016, the company acquired Nimbus Apollo, Inc. for $400 million, giving Gilead control of the compound NDI-010976 (an ACC inhibitor) and other preclinical ACC inhibitors for the treatment of non-alcoholic steatohepatitis and for the potential treatment of hepatocellular carcinoma.^[32][33] Also in 2016, the company was named the most generous company on the 2016 Fortune list of The Most Generous Companies of the Fortune 500. Charitable donations to HIV/AIDS and liver disease organizations totaled over 440 million in 2015.^[34]

In August 2017, the company announced it would acquire Kite Pharma for $11.9 billion,^[35] equating to $180 cash per share, a 29% premium over the closing price of the shares. The deal will add the promising CAR-T candidate to the companys existing portfolio.^[36] In November, the company announced it will acquire Cell Design Labs for up to $567 million, after it indirectly acquired a stake of 12.2% via the Kite Pharma deal.^[37]

On May 9, 2019, the U.S. Department of Health and Human Services announced that Gilead Sciences will donate Truvada, the only drug approved to prevent infection with H.I.V., for free to 200,000 patients annually for 11 years. ^[38] On December 3, 2019, HHS explained how the government would distribute the donated drugs. The new program called Ready, Set, PrEP is accepting applications from any patient who doesn't have health insurance, has a valid prescription for PrEP and has had a recent negative H.I.V. test. To apply, patients can call 855-477-8410, online at www.getyourprep.com or in person at participating health care provider. HHS Secretary Alex Azar explained that the U.S. government will pay Gilead $200 per bottle for 30 pills for costs associated with getting the drug from factories into the eventual hands of patients.^[39]

In March 2020, the company announced it would acquire Forty Seven Inc. for $95.50 a share ($4.9 billion in total).^[40][41][42]

• Sovaldi and Harvoni

  • • The drug sofosbuvir had been part of the 2011 acquisition of Pharmasset. In 2013, the FDA approved this drug, under the trade name Sovaldi, as a treatment for the hepatitis C virus. Forbes magazine ranked Gilead its number 4 drug company, citing a market capitalization of US$113 billion and stock appreciation of 100%, and describing their 2011 purchase of Pharmasset for $11 billion as “one of the best pharma acquisitions ever”.^[43] Deutsche Bankestimated Sovaldi sales in the year's final quarter would be $53 million,^[44] and Barron's noted the FDA approval and subsequent strong sales of the “potentially revolutionary” drug as a positive indicator for the stock.^[45]

    • On July 11, 2014, the United States Senate Committee on Finance investigated Sovaldi's high price ($1,000 per pill; $84,000 for the full 12-week regimen). Senators questioned the extent to which the market was operating “efficiently and rationally”, and committee chairman Ron Wyden (D-Oregon) and ranking minority member Chuck Grassley (R-Iowa) wrote to CEO John C. Martin asking Gilead to justify the price for this drug.^[46] The committee hearings did not result in new law, but in 2014 and 2015, due to negotiated and mandated discounts, Sovaldi was sold well below the list price.^[47] For poorer countries, Gilead licensed multiple companies to produce generic versions of Sovaldi; in India, a pill's price was as low as $4.29.^[48]

    • Gilead later combined Sovaldi with other antivirals in single-pill combinations. First, Sovaldi was combined with ledipasvir and marketed as Harvoni. This treatment for hepatitis C cures the patient in 94% to 99% of cases (HCV genotype 1).^[49] By 2017, Gilead was reporting drastic drops in Sovaldi revenue from year to year, not only because of pricing pressure but because the number of suitable patients decreased.^[50] Later single-pill combinations were Epclusa (with velpatasvir) and Vosevi (with velpatasvir and voxilaprevir).

• Finances

  • • For the fiscal year 2017, Gilead Sciences Insurance reported earnings of US$4.628 billion, with an annual revenue of US$26.107 billion, a decline of 14.1% over the previous fiscal cycle. Gilead Sciences's shares traded at over $70 per share, and its market capitalization was valued at US$93.4 billion in October 2018.

• Prospects for the future[edit]

  • • As of 2017, Gilead's challenge is to develop or acquire new blockbuster drugs before its current revenue-producers wane or their patent protection expires. Gilead benefited from the expansion of Medicaid in the ACA; Leerink analyst Geoffrey Porges wrote that Gilead's HIV drugs could face funding pressure under reform proposals.^[53] Gilead has $32 billion in cash, but $27.4 billion is outside the U.S. and is unavailable for acquisitions unless Gilead pays U.S. tax on it, though it could borrow against it.^[54] Gilead would benefit from proposals to let companies repatriate offshore capital with minimal further taxation.^[55]

    • Gilead's Entospletinib has shown a 90% complete response rate for MLL type AML.^[56]

• Tax structures[edit]

  • • On December 26, 2018, The Times reported that Gilead had used the Double Irish arrangement to avoid U.S. corporate taxes on non–U.S. profits, reporting that "A US pharmaceutical firm used a controversial tax loophole arrangement to shift almost €20 billion in profits through an Irish entity in just two years".^[57]

Acquisition history

Criticism

Several class-action lawsuits have been filed against Gilead over allegations that the company deliberately delayed development of antiretroviral drugs based on tenofovir alafenamide fumarate (TAF) in order to maximize profits from previous-generation medications containing tenofovir disoproxil fumarate (TDF).^[58] Plaintiffs allege that Gilead suspended TAF in 2004 despite clear evidence indicating that TAF-based medications were safer than TDF, a compound whose long-term use was associated with adverse side effects such as nephrotoxicity and bone densityloss.^[59][60] Gilead intentionally withheld results of clinical trials demonstrating TAF's relative safety and efficacy and shelved TAF-based therapies until 2010, when the Food and Drug Administration approved Gilead's application to patent TAF.^[61] Gilead's first TAF medication, marketed under the trade name Genvoya, came out in 2015. In the interim period, many HIV patients who continuously took Gilead's older TDF-based drugs suffered permanent, debilitating kidney and bone damage, often developing conditions such as Fanconi syndrome and osteomalacia.^[62]

Gilead has come under intense criticism for its high pricing of its patented drug sofosbuvir. In the US, for instance, it was launched at $1,000 per pill or $84,000 for the standard 84-day course.^{[citation needed]}

Gilead has also tried to eliminate competition in lucrative markets by entering voluntary licensing agreements (VLA) with companies from developing countries such as India, which mandated the limitation of the latter's operations to less lucrative markets. The company has also been criticized for creating harsh restrictions within countries where they have been denied rights, or are engaged in VLAs. For example, in India, they tried to create an 'anti-diversion' program to determine who could buy the drug, which was considered a coercive and policing move by Médecins Sans Frontières since it could lead to the exclusion of vulnerable groups like refugees and migrants from accessing the medicines.^[63]

In March 2020, Gilead fought to maintain its patent on remdesivir as a treatment for several coronavirus, initiating legal conflicts with the Wuhan Institute of Virology.^[64] Gilead later secured orphan drug status for remdesivir, allowing the company to exclusively obtain marketing revenues for up to 7 years.^[65]

The Wuhan Institute of Virology, part of the China Academy of Sciences, has applied to patent the use of Gilead Sciences’ remdesivir to treat the current coronavirus outbreak.

The company has partnered with Chinese health authorities to run a Phase III clinical trial to assess remdesivir for treatment of the virus. The drug was originally developed to treat the Ebola virus, but wasn’t effective. Preclinical assays have suggested that the drug might be effective against the coronavirus, 2019-nCoV, as was published in the New England Journal of Medicine (NEJM). The drug was given to a U.S. patient for compassionate use on day seven of the disease and their condition improved on day eight.

The new clinical trial will be conducted at Friendship Hospital in Beijing, China. The trial will enroll 270 patients with mild and moderate pneumonia caused by the virus.

“Gilead is working closely with global health authorities to respond to the novel coronavirus (2019-nCoV) outbreak through the appropriate experimental use of our investigational compound remdesivir. While there are no antiviral data for remdesivir that show activity against 2019-nCoV at this time, available data in other coronaviruses give us hope,” the company stated.

The Wuhan Institute submitted the patent application jointly with the Military Medicine Institute of the People’s Liberation Army Academy of Military Science. Researchers with both organizations noted in a paper published in Nature’s Cell Research this week that both remdesivir and chloroquine, used to treat malaria, may be effective in stalling the coronavirus.

“Even if the Wuhan Institute’s application gets authorized, the role is very limited because Gilead still owns the fundamental patent of the drug,” said Zhao Youbin, a Shanghai-based intellectual property attorney at Purplevine IP Service Co. “Any exploitation of the patent must seek approval from Gilead.”

The Wuhan Institute indicated it filed the patent application on January 21, but also noted it would temporarily drop the patent claims if it had the opportunity to collaborate with foreign biopharma companies to battle the epidemic.

The World Health Organization (WHO), however, is trying to downplay media reports of any drug breakthroughs against the outbreak, stating there are “no known” drugs against the virus. “There are no known effective therapeutics against this 2019-nCoV and WHO recommends enrollment into a randomized controlled trial to test efficacy and safety,” the organization stated today. “A master global clinical trial protocol for research and prioritization of therapeutics is ongoing at the WHO.”

To date, the coronavirus has infected almost 25,000 and killed almost 500. The coronavirus, which comes from the same family of viruses as the common cold, SARS and MERS, began in the city of Wuhan, China. It is believed to have originated in bats and made the jump to human beings, possibly at a seafood market in the city. The virus’s genome is very similar to the SARS virus. It is an airborne virus, although it does not appear to survive long outside the body or on surfaces and remain infectious. It seems to require close contact or exposure to droplets, such as coughing or sneezing, from someone who is infected. However, there are some signs that it can be transmitted prior to symptoms occurring. It causes flu-like symptoms that in some cases become pneumonia.

Gilead’s remdesivir is an experimental drug that isn’t licensed or approved anywhere in the world. It is being rushed into clinical trials in China. Gilead’s chief medical officer, Merdad Parsey, told Bloomberg that the drug could enter clinical trials in China as early as next week in patients with moderate and severe symptoms.

China can manufacture chloroquine and currently wants access to remdesivir. Bloomberg points out that the country’s decision to seek a patent “instead of invoking the heavy-handed ‘compulsory license’ option that lets nations override drug patents in national emergencies, underscores the delicate balancing act before China as it signals commitment toward intellectual property rights alongside curbing the virus outbreak.”

“The fact that they have applied for a patent means there’s growing awareness about this in the country,” said Wang Yanhu, a senior partner at Albright Law Offices in Beijing. “The government is compelled to avoid using the compulsory license because it has been making efforts to show China respects intellectual property rights and the abuse of compulsory licensing will draw international criticism.”

Gilead is presently shipping enough doses of the drug to China to treat 500 patients and is increasing its supply in case the clinical trials are effective.