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Gilead elevates M&A architect Dickinson to CFO. Could more deals be next?

Gilead Sciences has found a new chief financial officer in an appointment that has mergers and acquisitions written all over it.

Andrew Dickinson, who joined Gilead in 2016 as EVP of corporate development and strategy, will assume the CFO role on Nov. 1, taking over from retiring financial chief Robin Washington.

At least two teams of analysts viewed the internal promotion of Dickinson as a sign of increased focus on M&A and partnerships at the Big Biotech.

Dickinson orchestrated Gilead’s $11.9 billion acquisition of Kite Pharma in 2017, which marked Gilead’s venture into cancer and cell therapy. And in July, Gilead splashed $3.95 billion upfront and $1.1 billion in equity investment for an expanded 10-year R&D pact with Galapagos. The two currently have JAK1 inhibitor filgotinib, which just came out of a phase 3 trial in rheumatoid arthritis with flying colors, on the horizon.

In his new role, Dickinson will remain responsible for business development activities, Gilead said. Praising Dickinson’s “impressive business and financial acumen and broad experience” in a Tuesday statement, Gilead CEO Daniel O’Day said the newly appointed CFO possesses “strong creativity and vision,” as evident in how he has approached acquisitions and partnerships.

The fact that Dickinson will retain control over corporate development “highlights the crucial importance that M&A and partnerships likely have in Gilead’s capital allocation strategy, and we believe should also minimize any disruptive transition to still enable potential deals in the works to materialize in the near term,” RBC Capital Markets analyst Brian Abrahams said in a Tuesday note to investors.

After Kite and Galapagos, Gilead might not have enough firepower to do large deals, but Cantor Fitzgerald analyst Alethia Young said she expects the company “will continue to build in new categories like oncology, inflammation, and potentially NASH.”

O’Day has rejigged Gilead’s C-Suite since he jumped from Roche and took the helm at a turning point for the company. Its hepatitis C franchise has been continuing its sales freefall. Its HIV business, meanwhile, looks solid thanks to new drug Biktarvy taking off, but PrEP therapy Truvada is facing a patent cliff next fall, and Gilead will have to get patients to switch to newer drug Descovy if it wants to preserve those revenues. That's not to mention Gilead's Kite buy, which hasn’t yet paid off as Yescarta sales lag industry watchers’ original expectations.

In the past few months, O’Day has brought on Eli Lilly exec and former Novartis North American oncology leader Christi Shaw as the new Kite CEO; tapped Genentech's early clinical development leader Merdad Parsey as its new CMO; and recruited Bristol-Myers Squibb’s Johanna Mercier to be its new commercial chief, a move that came shortly after former Amgen exec Laura Hamill had assumed that role.

Now, with a clean slate of executive management in place, Gilead has effectively ended a transition period, and investors could expect to see a clearer go-forward strategy from here on out, RBC’s Abrahams said.

Written by: Angus Liu |

Published on: Oct 15, 2019 11:33am

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