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Gilead New CEO Says It's Time to Go Out and Do Important Deals

John Milligan was the 32nd employee at Gilead Sciences Inc. when he was hired as a research scientist in 1990. Now, he’s at the helm of the biggest biotechnology firm in the world, charged with maintaining the company’s blistering pace of growth to satisfy investors anxious about a slowdown in its blockbuster hepatitis C treatments.

“It’s time for us to go out and do important deals,” Milligan, who became chief executive officer in March, said in an interview at Gilead’s headquarters in Foster City, California. “We need some other assets that can bolster our pipeline.”

The new CEO has inherited the drugmaker at a critical juncture. Sales of Gilead’s two hepatitis C pills -- among the fastest-selling drugs of all time -- fell for the first time last quarter as they face competing products, sparking concerns that the franchise will decline faster than predicted.

Milligan says he’s eager to score a key asset in cancer, one of the three therapeutic areas he seeks to expand alongside liver diseases and inflammatory disorders. His guiding question when surveying possible targets is: “What is going to be the cutting-edge technology five years from now, and would I be part of that?” To that end, he’s not limiting himself to any particular subset of cancer, like blood or solid tumors.

Cancer Drugs

Gilead, whose only approved cancer drug, Zydelig, is limited in use because of its side effects, doesn’t have a key compound in-house. The company has a “nascent oncology platform, but what I don’t yet see is a drug that we can rally around,” the CEO said.

With $21.3 billion in cash and short-term equivalents on hand, Milligan has the firepower to spend big. The pressure is high to repeat the success his predecessor John Martin had with the $11 billion deal in 2011 that brought in hepatitis C drug Sovaldi, which helped double revenue in 2014.

While Milligan wouldn’t identify specific targets, Geoffrey Porges, an analyst at Leerink Partners LLC, estimates the CEO needs to find a product that would add $5 billion to $10 billion to revenue in...