Gilead CFO Says Reliance On Outsourcing Helped It Bump Eli Lilly Out of Top 10 Ranking

Published: May 26, 2015

Gilead CFO Says Reliance On Outsourcing Helped It Bump Eli Lilly Out of Top 10 Ranking
May 22, 2015
By Riley McDermid, Breaking News Sr. Editor

Outsourcing much of its work is what’s allowed biotech darling Gilead Sciences, Inc. to climb into the ranks of the Top 10 most lucrative pharmaceutical firms, the company’s chief financial officer told attendees at the UBS 2015 Global Healthcare Conference in New York this week, highlighting just how important streamlining business models has become.

Outsourcing Pharma first reported the story. Gilead made its way into the Top 10 for the first time this year, after it saw sales of almost $25 billion in 2014—a number which allowed it bump Eli Lilly and Company off the list, as it joined much older, more established marquee names like Roche , Novartis AG and Pfizer Inc. .

Gilead said it was able to gain that ranking because of its flexible work operations.

“While we only have 7,500 employees, we leveraged CMOs [contract manufacturing organizations] for manufacturing and we leveraged CROs and outsourced a lot of our clinical development activity,” CFO Robin Washington told the crowd.

“Our true population of employees that work on getting Gilead products to market is a lot larger,” said Washington. “It’s just done in a very different way. And I think that’s given us a lot of flexibility over the years.”

Although Gilead owns its own sites in Ireland, Canada and California, the company said in an annual report that is increasingly using outsourcing as a way to manufacture most of its solid dose products (including blockbuster Sovaldi) and other ingredients. That comes with its own quality control risks, warned Gilead last year.

“For products manufactured by our third¬-party contract manufacturers, we have disclosed all necessary aspects of this technology to enable them to manufacture the products for us,” said Gilead in an annual filing. “We have agreements with these third¬ party manufacturers that are intended to restrict these manufacturers from using or revealing this technology, but we cannot be certain that these third-¬party manufacturers will comply with these restrictions.”

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