Biopharmaceutical firm Gilead Sciences has entered into a 10-year global research and development collaboration with Galapagos.
As per terms of the deal, Galapagos will secure $3.95bn (£3.5bn) upfront payment and $1.1bn (£874m) equity investment from Gilead. It intends to use the proceeds to expand and enhance its research and development programmes.
The equity investment of Gilead will include a subscription for new Galapagos shares at a price of €140.59 (£111.73) per share. It will help increase Gilead’s interest in Galapagos from around 12.3% to 22%.
Subject to certain closing conditions, the deal is expected to be completed in the third quarter of this year.
Gilead chairman and CEO Daniel O’Day said: “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.”
The deal will allow Gilead to access an advanced portfolio of compounds, including six molecules currently in clinical trials, over 20 preclinical programmes and proven drug discovery platform.
The companies have also agreed to amend certain terms in the agreement governing filgotinib, the candidate being advanced for rheumatoid arthritis and other inflammatory diseases to offer a wider commercialisation role for Galapagos in Europe.
Gilead can also access Galapagos’ research base, including more than 500 scientists and its advanced platform that uses disease-related and human primary cell-based assays to discover and verify novel drug targets.
Upon closing of the transaction, the company will also induct two individuals into Galapagos’ board of directors.
The deal will allow Gilead to secure rights to GLPG1690, Galapagos’ Phase 3 candidate for idiopathic pulmonary fibrosis.
It will also receive option rights for GLPG1972, a Phase 2b candidate for osteoarthritis, in the US. The company will also secure option rights on all of Galapagos’ other current and future clinical programs outside of Europe.
Galapagos CEO Onno van de Stolpe said: “Galapagos has been highly effective at target identification and drug discovery, progressing novel molecules from research into the clinic. We will benefit greatly from Gilead’s expertise and infrastructure and believe this collaboration will provide an accelerated path to advance our pipeline.”