Gilead Discontinues Blood Pressure Drug

Gilead acquired darusentan as part of the $2.5 billion purchase of Myogen in 2006, which was supposed to expand Gilead's reach into serious cardiovascular and lung disease and diversify away from its core operations as a provider of market-leading HIV drugs.

But three years later, the Myogen acquisition seems like an expensive failure. Darusentan's development has been shelved and Letairis, a drug for pulmonary arterial hypertension (PAH) also acquired from Myogen, has been a commercial disappointment.

Letairis was launched commercially during the summer of 2007, but sales in the first nine months of 2009 totaled $132 million, far below the expectations of investors first set when the drug was acquired. Gilead has acknowledged that selling Letairis, particularly against an entrenched, competing PAH drug marketed by Swiss firm Actelion, has been more difficult than the company first envisioned.

Neither of Gilead's other recent corporate acquisitions designed to diversify away from the HIV field -- Corus Pharmaceuticals in 2006 and CV Therapeutics in 2009 -- have managed to contribute meaningfully to the company's earnings to date.

The more Gilead invests in areas outside HIV, the more the company seems to become reliant on HIV for its future growth. The most important project in the company's research pipeline today is the so-called quad pill for HIV which combines four Gilead drugs into a single, once-daily treatment for HIV.

If the quad pill is successful, Gilead will become the first company to market a complete treatment for HIV on its own. Results from important mid-stage studies of the quad pil" are expected in early 2010.

Gilead shares closed Monday at $46.96. The stock is down 8% for the year. Only Genzyme(GENZ), among the big-cap biotech stocks, has performed worse in 2009. Biogen Idec(BIIB) and Celgene(CELG) are up small amounts for the year, while Amgen(AMGN) shares are down slightly.

-- Reported by Adam Feuerstein in Boston

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