Gilead, Galapagos finalise £4.1bn research and development deal

The deal signed last month by the US-based Gilead Sciences and Galapagos has been cleared under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 by the US Federal Trade Commission (FTC), in addition to securing merger control approval from the Austrian Federal Competition Authority.

Gilead Sciences chairman and CEO Daniel O’Day said: “We are excited to close this unique agreement, which will generate both long-term strategic value and mutual, immediate benefits.

“The collaboration reflects Gilead’s intent to grow our innovation network through diverse and creative partnerships.”

Under the terms of the deal, the US biotech company agreed to pay an upfront license fee payment of $3.95bn (£3.22bn) to Galapagos. In addition, the US company made an equity investment of nearly $1.1bn (£900m) in the latter to increase its stake to around 22%.

The Belgium-based clinical-stage biotech company is focused on the discovery and development of small molecule drugs for inflammation, cystic fibrosis, fibrosis, metabolic diseases, and other disease areas. Three of its candidates are under late-stage development in multiple diseases.

The transaction gives Gilead Sciences access to Galapagos’ differentiated drug discovery platform and also its present and future pipeline outside of Europe. For Galapagos, the deal will help it expand and fast track its research and clinical programmes.

Galapagos CEO Onno van de Stolpe said: “This agreement is about maximizing innovation based on developing new mode of action medicines. With the capital provided by Gilead, we aim to progress innovation to patients.”

The two pharma companies had also agreed to amend some terms in the agreement governing filgotinib, which is being advanced for rheumatoid arthritis and other inflammatory diseases to give a larger commercialisation role for the US firm in Europe. In 2015, the US company acquired the rights to filgotinib from the Belgium-based firm.

Under the collaboration, Gilead Sciences gets rights to GLPG1690, which is being developed for idiopathic pulmonary fibrosis, and currently in phase 3 development. In the US, Gilead Sciences will get option rights for GLPG1972, a phase 2b drug intended for osteoarthritis. The two pharma firms agreed to additional payments related to clinical, regulatory and commercial milestones and licensing of the drugs.