By mid-2025, the biotech will split into two entities: a new, as-yet-unnamed innovative medicines specialist and a cell therapy company, the latter of which will inherit the Galapagos name.
Galapagos’ most recent attempt to turn its fortunes around will see it separate into two entities—one focused on an innovative medicine pipeline and another on cell therapies. At the same time, the Belgian biotech will take back the rights to its pipeline from Gilead and cut staff.
Galapagos CEO Paul Stoffels called Wednesday’s business move a “critical step” for the company to unlock significant value for its shareholders. “The planned reorganization is a difficult but necessary step, but one that will position Galapagos for sustainable growth and value creation and for future success in its renewed focus on cell therapies,” Stoffels added in a Wednesday statement.
The new innovative medicines business, which has yet to be named, will debut with an approximately $2.5 billion infusion from Galapagos and will focus drug development efforts on oncology, immunology and/or virology. This new entity will prioritize “strategic business development transactions” to fill out its pipeline—a strategy that will be reflected in its masthead, which will include professionals with proven track-records in securing transactions.
In connection with the new entity, Galapagos on Wednesday also announced that it has amended its ongoing collaboration with Gilead, signed in 2019. Galapagos will now have full worldwide development and commercialization rights over its pipeline in exchange for single-digit royalties that will be owed to Gilead based on future potential net sales of certain products. Following the split, the 2019 deal will apply only to the new entity.
“Gaining full global development and commercialization rights from Gilead to our robust discovery and development pipeline supports our commitment to executing our strategy for accelerated growth and value creation,” Stoffels said Wednesday.
The remaining Galapagos entity will be a cell therapy specialist focusing on the lead CAR-T candidate GLPG5101, which is being tested for relapsed or refractory non-Hodgkin lymphoma.
The new Galapagos will also undergo a sweeping strategic realignment, which includes the discontinuation of its small molecule programs. Those programs will be shopped to potential partners.
Galapagos will also conduct a 40% workforce reduction, expected to affect around 300 employees across its operations in Europe. As a result of this reorganization, Galapagos plans to close down its site in France, while its business in Belgium will suffer a “meaningful” decrease in staff.
Galapagos expects to complete the spin-out by mid-2025, subject to customary conditions such as approval from shareholders and concluding consultations with relevant authorities in France, Belgium and the Netherlands. The new spinout company will also apply to be listed on Euronext, and all existing Galapagos shareholders will own shares of the new entity on a pro rata basis.
Wednesday’s strategic move comes almost three years after Stoffels assumed the top executive position at Galapagos with a mission to bring “novel modes of action medicines to patients in need of new treatment options.” Meeting that goal proved to be difficult, however, particularly as the biotech’s stocks never recovered from a December 2020 decision to abandon U.S. prospects for its rheumatoid arthritis therapy Jyseleca, which the regulator rejected months earlier.
In November 2022, just months after he took Galapagos’ reins, Stoffels announced a sweeping strategic overhaul of the biotech. Dubbed its ‘Forward, Faster’ program, the new business approach did away with target-based drug discovery and pivoted to patient-centric R&D, while also beefing up business development efforts and derisking its CAR-T program.
https://www.biospace.com/business/galapagos-to-spin-out-innovative-medicines-regain-gilead-assets
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