The biotech giant has come under pressure from investors to make acquisitions.
The biotech company reported Friday that Gilead Sciences CEO John Martin has stepped down after two decades in that role. Martin, 64, will become executive president of Gilead (GILD -5.18%, while current COO John Milligan will become the new CEO). Gilead's stock price fell more than 5% after the announcement.
gilead, No. 118 a Fortune 500-ranked company, has impressed investors in recent years with tremendous growth in revenue and earnings, driven by sales of its market-leading hepatitis C drugs; its recent quarter earnings topped 68% from a year earlier. But the company's stock price has struggled lately as investors have become increasingly pressured on whether Gilead buy another company biotech, and lawmakers have targeted the company in a investigation for the high prices of the drug. Gilead shares are down 20% in the past month alone.
Martin was a runner-up for Fortunes Business Person of the Year in 2014, when Gilead's annual revenue had doubled, and he was named the Morningstar CEO of the Year in 2015 after leading more than 100 times the stock price increase during his presidency of Gilead.
But since then we have seen a growing increase in investor pressure. Martin had refrained from dealmaking the pharmaceutical industry's M&A [mergers and acquisitions] frenzy of recent years, recently joking on an investor request, on suggestions to invest the profits, that was “open to suggestions” for companies that Gilead should buy. (You see of Fortunes history ", can Gilead continue to grow without a great deal?")
Last week Martin received a letter from the Massachusetts Attorney General warning him that Gilead's prices for its hepatitis C drugs Sovaldi and Harvoni il can cost up to nearly 100,000 $ per treatment and could violate the laws of the trade.
Note: John C. Martin Ph.D., CEO of Gilead Sciences Inc, received total compensation of $18,957,994 in fiscal year 2014
Related news: Gilead risks becoming victim of its own success (Financial Times)
