Belgian biotech Galapagos NV has entered into a R&D collaboration with Gilead Sciences. The US drug maker is paying up to US$5bn for Galapagos’ pipeline and drug discovery platform.
Galapagos will receive a US$3.95bn upfront payment and a US$1.1bn equity investment from Gilead. In return, Gilead is gaining access to Galapagos’ portfolio of compounds. It will have the exclusive product license and option rights to develop and commercialise all current and future programmes outside Europe. Galapagos’ pipeline includes six molecules currently in clinical trials – among them GLPG1690, a Phase 3 candidate for idiopathic pulmonary fibrosis and GLPG1972, a Phase 2b candidate for osteoarthritis, – as well as more than 20 preclinical programmes. Galapagos’ drug discovery platform, which utilises disease-related, human primary cell-based assays to discover and verify novel drug targets, is also part of the deal.
Galapagos will use the proceeds to expand and accelerate its R&D programmes. Gilead will nominate two individuals to Galapagos’ Board of Directors following the closing of the transaction. “We chose to partner with Galapagos because of its pioneering target and drug discovery platform, proven scientific capabilities and outstanding team,” commented Daniel O’Day, Chairman and CEO of Gilead. “Gilead also gains exclusive access to all current and future compounds in Galapagos’ rich pipeline while Galapagos is able to expand its research activities and build commercial infrastructure.”
“Galapagos has been highly effective at target identification and drug discovery, progressing novel molecules from research into the clinic,” added Onno van de Stolpe, Chief Executive Officer of Galapagos. “We will benefit greatly from Gilead’s expertise and infrastructure and believe this collaboration will provide an accelerated path to advance our pipeline.”
Galapagos will fund and lead all discovery and development autonomously until the end of Phase 2. After the completion of a qualifying Phase 2 study, Gilead will have the option to acquire an expanded license to the compound. If the option is exercised, Gilead and Galapagos will co-develop the compound and share costs equally. Gilead will maintain option rights to Galapagos’ programmes through the 10-year term of the collaboration and for up to an additional three years thereafter for those programmes that have entered clinical development prior to the end of the collaboration term.
If GLPG1690 is approved in the US, Gilead will pay Galapagos an additional US$325m milestone fee. For GLPG1972, Gilead has the option to pay a US$250m fee to license the compound in the United States after the completion of the ongoing Phase 2b study in osteoarthritis. If certain secondary efficacy endpoints are met, Gilead would pay up to an additional US$200m. Following opt in, Galapagos would be eligible to receive up to US550m in regulatory and commercial milestones.
For all other programs resulting from the collaboration, Gilead will make a $150 million opt-in payment per program and will owe no subsequent milestones. Galapagos will receive tiered royalties ranging from 20-24% on net sales of all Galapagos products licensed by Gilead as part of the agreement.