As per the agreement, Abbott will make an initial upfront payment of $150m for rights related to the global collaboration.
Upon successful completion of the RA Phase II studies, Abbott will license the program for a one-time fee of $200m if the studies meet certain pre-agreed criteria.
Abbott will be responsible for Phase III clinical development and global manufacturing.
Galapagos would be eligible to receive additional milestone payments amounting to $1bn from Abbott, with the achievement of certain developmental, regulatory, commercial and sales-based milestones.
Galapagos will also receive tiered double-digit royalties on net sales upon commercialization and retains co-promotion rights in Belgium, the Netherlands and Luxembourg.
Galapagos’ GLPG0634, a highly selective JAK1 inhibitor, is being developed for the treatment of rheumatoid arthritis (RA) and other autoimmune diseases.
Galapagos CEO Onno van de Stolpe said the company will continue the Phase II trials and expect to deliver to Abbott a complete Phase II package in 2014.