Dive Brief:

• Gilead chief medical officer Merdad Parsey will step down from his role and leave the biotechnology company early next year, Gilead said in a statement Wednesday.
• The planned departure of Parsey, who has served as Gilead’s top doctor since 2019, will be a significant change for the company’s drug development leadership. The announcement follows a number of notable clinical setbacks, particularly in oncology, that have spurred investor questions about Gilead’s R&D strategy.
• Gilead said it will begin searching for a successor to Parsey, who will support the transition over the next few months. Shares in Gilead rose by as much as 3% in Wednesday morning trading.

Dive Insight:

Parsey, a physician and biotech veteran, came to Gilead from Genentech as part of a broader overhaul of Gilead’s leadership in 2019 that began with Daniel O’Day joining as CEO. The naming of O’Day, who had previously led Roche’s pharmaceuticals division, reflected a shift in Gilead’s priorities as it expanded beyond viral diseases into oncology.

A series of cancer-focused acquisitions and partnerships followed, bringing in a raft of experimental cancer drugs that Parsey was tasked with advancing through clinical development. While Gilead has had some success, several of those deals haven’t panned out and Trodelvy, the chief asset acquired in a $21 billion buyout of Immunomedics, has come up short in key clinical trials.

“There has been significant controversy and debate around R&D success and disappointment over the last few years,” wrote Michael Yee, an analyst at Jefferies, in an investor note on news of Parsey’s departure. “Therefore a change in R&D leadership should be viewed by the market as an incremental positive for the stock due to such low expectations and mixed results over the past few years.

While Gilead’s track record in oncology has been mixed, the company has continued to expand in HIV, a disease that’s long been one of its top research priorities. Gilead in late 2022 won U.S. approval for a first-of-its-kind HIV drug, more recent testing of which has shown it strongly effective in preventing infections.

In a statement on Parsey’s planned departure, O’Day noted how Gilead “more than doubled” its portfolio under Parsey’s leadership. “These were pivotal years for the company as we worked to strengthen and diversify the portfolio, and Merdad played a fundamental role in our success.”

Parsey also had a hand in Gilead’s development of Veklury, the first treatment cleared by the Food and Drug Administration for COVID-19. Originally studied for hepatitis C and Ebola, Veklury was quickly advanced into testing early on in the pandemic and became a widely used, albeit limited, tool in caring for patients hospitalized with COVID.

“It has been a privilege to lead the development team, especially as we have worked to deliver transformative medicines for people with HIV, COVID-19, and cancer,” Parsey said in Gilead’s statement.