Gilead lets Kite fly solo to compete in competitive CAR-T space

Giving cell therapy unit Kite autonomy will “foster agility, innovation and entrepreneurialism,” says recently appointed Gilead CEO Daniel O’Day.

Gilead Sciences entered into the advanced therapy space in August 2017 through the $11.9 billion (€10.6 billion) acquisition of Kite. Just weeks later, the firm saw regulatory success with Yescarta (axicabtagene ciloleucel), which became the second chimeric antigen receptor (CAR) T-cell therapy to be commercialized in the US.

Close to two years on, the firm has announced it intends to run Kite as a separate business unit under plans laid down by Daniel O’Day, the former Roche Pharmaceuticals CEO appointed as Gilead’s CEO earlier this year.

Image: iStock/Solovyova

“One area of pressing need has been working to better understand the work we’re doing at Kite, identifying what it needs for short- and long-term success in cell therapy. I wanted to take some swift decisions here,” he told investors on his first financial call.

“I believe that providing Kite with this degree of autonomy will foster agility, innovation and entrepreneurialism. Cell therapy is a critical piece of the puzzle with regards to the long-term future of oncology and a critical element of Gilead’s long-term strategy helping us to build on a legacy of transformational medicines.”

Further details will emerge between now and the end of the year, O’Day continued, as he undertakes a series of meetings with the leadership team and the board to shape both Gilead and Kite’s long-term strategy.

However, he added: “We’ve initiated a search for a CEO of Kite. And once appointed that individual reports to me and will have full accountability for all aspects of cell therapy.”

Keep Kite competitive

During the call, O’Day said the separation will enable Kite to continue to contend in the “ultra-competitive” cell therapy oncology space.

“We have a leadership position, but I think we need to maintain that leadership position. And for the reasons of focus, we decided to create KITE as an independent business unit that will wake up and go to sleep every day thinking about how to be leaders in oncology cell therapy.”

For the first quarter 2019, Gilead reported total sales of $5.2 billion, up 4% year-on-year. Sales of Yescarta stood at $93 million for the quarter, up 90% on the same period last year.

CFO Robin Washington said the commercial performance continues to meet expectations.

“Since launch more than 1,500 patients have been treated with Yescarta, including patients for commercial market and clinical trials. This is an important milestone for our cell therapy business.”