Merdad Parsey, Gilead’s chief medical officer, will leave the company at a time when its pipeline has stalled and it’s faced several major stumbles in cancer drug development.
He is staying on until the first quarter of 2025 as the pharma company searches for his successor.
Gilead’s stock $GILD, which is down 10% since the beginning of the year, was up about 2% following Wednesday’s announcement.
“There has been significant controversy and debate around R&D success and disappointment over the last few years. The significant disappointment has been a key driver for the underperformance of the stock,” Jefferies analyst Michael Yee wrote in a note to investors. “The market will view this as a chance for a new change and pivot in R&D, regardless if this is true or not.”
Parsey became Gilead’s medical chief in November 2019, right before the Covid-19 pandemic. Under his watch, the company developed the first Covid treatment, which was eventually marketed as Veklury.
In 2020, Gilead made two major deals in a bid to expand its business beyond virology, where it built its name. It purchased Forty Seven, Stanford University stem cell researcher Irv Weissman’s startup, for $4.9 billion, and oncology company Immunomedics for $21 billion. However, experimental drugs from both acquisitions have not lived up to expectations.
Gilead in February discontinued development of magrolimab, the anti-CD47 antibody it obtained from Forty Seven, in all blood cancers. Results from two of the Phase 3 studies shared in June detailed concerning safety risks, including a higher number of deaths in one trial.
Meanwhile, Trodelvy — the crowning antibody-drug conjugate from the Immunomedics deal — had back-to-back failures in a lung cancer trial and then a confirmatory study in bladder cancer. The lung cancer failure was a major blow to Gilead’s plans to expand its oncology business. The drug is also approved for certain breast cancers, where it is mostly used.
In HIV, Gilead touted that a twice-a-year injection for pre-exposure prophylaxis succeeded in a Phase 3 study in June. The company is making its way into obesity, and a note from Yee on the company’s preclinical obesity program sent Gilead’s stock up several percentage points in mid-June.