Gilead Sciences inks 10-year collaboration deal with Galapagos

Gilead Sciences will pay over $5.0bn for the exclusive licence and options rights to Belgian-Dutch biotechnology outfit Galapagos's entire pipeline of potential drugs outside of Europe.

As part of the 10-year global research and development collaboration, US-based Gilead will fork out $3.95bn in upfront payments and invest $1.1bn in Galapagos.

The American company will also gain access to the European group's development platform, including its 500 scientists, and be able to name two persons to its board of directors.

Galapagos already had six molecules undergoing clinical trials and was carrying out over 20 preclinical programs.

In particular, Galapagos highlighted that Gilead would gain access to GLPG 1690, its Phase three candidate for idiopathic pulmonary fibrosis and options rights on GLPG1972, a Phase 2b candidate for osteoarthritis.

Under the terms of the agreement, Galapagos would lead all discovery and development efforts until they reached the end of Phase two, but after successfully completing a Phase two trial, Gilead would have the option to buy an expanded license.

The options rights would extend for 10-year and for an another three years in the case of those programmes that had entered into clinical development before the end of the collaboration agreement.

And if GLPG 1690 were approved for use in the US then Gilead would have to pay Galapagos another $325m milestone fee and for GLPG 1972, Gilead had the option to pay a $250m fee in order to license the compound in the States after the current Phase 2b study in osteoarthritis was concluded.

Should certain milestones be met for GLPG 1972, Gilead would pay up to a further $200m and after opt-in Galapagos would be eligible to receive as many as $550m in regulatory and commercial milestones.

Gilead would make $150m in opt-in payments per each remaining programme but own no subsequent milestones.

Galapagos would also receive royalty payments of between 20-24% on the net sales of all of its products licensed by Gilead.

As of 1204 BST, shares of Galapagos were trading 16.04% higher at €148.70.