U.S. drugmaker Gilead Sciences will increase its stake in Belgian-Dutch biotech firm Galapagos and gain rights outside Europe to its treatments in development as part of a $5.1 billion deal, the company announced Sunday.
Continue Reading Below
Gilead will make an upfront payment of $3.95 billion to Galapagos and will invest $1.1 billion, or $158.49 per share, to increase its stake in the company to 22 percent from 12.3 percent, according to the Journal. Galapagos will use the proceeds to "expand and accelerate" its R&D programs.
The Foster City, California-based drugmaker will now have access to Galapagos' research base of more than 500 scientists and will nominate two members to the Belgian-Dutch firm's board of directors after the deal closes. The transaction is expected to close late in the third quarter of 2019.
|GILD||GILEAD SCIENCES INC.||76.75||-0.79||-1.02%|
Gilead will gain rights to Galapagos' drugs for idiopathic pulmonary fibrosis (Phase 3 candidate), option rights for its osteoarthritis drug (Phase 2b candidate) in the U.S. The American firm also receives option rights on all of Galapagos' other current and future clinical programs outside Europe.
"We chose to partner with Galapagos because of its pioneering target and drug discovery platform, proven scientific capabilities and outstanding team,” Gilead CEO Daniel O’Day said in a statement. "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."
Gilead will not be able to make a bid for more than 29.9 percent of Galapagos as part of a 10-year standstill included in the deal.
The two companies partnered with each other in 2015 on a drug to treat rheumatoid arthritis, called filgotinib, which it plans to seek approval for this year. Under an amended agreement, also announced Sunday, Galapagos will have more involvement in the global strategy for the drug and participate "more broadly in the commercialization of the product in Europe," Gilead said.