NASDAQ-listed Gilead SciencesInc.andGalapagos NV have announced that they have entered into a 10-year global research and development collaboration. Through this agreement, Gilead will gain access to a portfolio of compounds, including six molecules currently in clinical trials, more than 20 preclinical programs and a proven drug discovery platform.

 

Galapagos will receive a$3.95 billionupfront payment and a$1.1 billionequity investment from Gilead. Galapagos will use the proceeds to expand and accelerate its research and development programs. Gilead will receive an exclusive product license and option rights to develop and commercialize all current and future programs in all countries outsideEurope.

 

In addition, Gilead and Galapagos have agreed to amend certain terms in the agreement governing filgotinib, the candidate being advanced for rheumatoid arthritis and other inflammatory diseases to provide a broader commercialization role for Galapagos inEurope.

 

The collaboration will allow for closer scientific partnership between the companies. Gilead will have access to Galapagos’ established research base, which includes more than 500 scientists, and to Galapagos’ unique platform, which utilizes disease-related, human primary cell-based assays to discover and verify novel drug targets. Gilead will also nominate two individuals to Galapagos’ Board of Directors following the closing of the transaction.

 

“We are excited to enter into this unique agreement, which will generate both long-term strategic value and mutual, immediate benefits. We chose to partner with Galapagos because of its pioneering target and drug discovery platform, proven scientific capabilities and outstanding team,” said Daniel O’Day, Chairman and Chief Executive Officer of Gilead. “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 collaboration reflects Gilead’s intent to grow our innovation network through diverse and creative partnerships.”

 

As part of the collaboration, Gilead gains rights to GLPG1690, Galapagos’ Phase 3 candidate for idiopathic pulmonary fibrosis. Gilead also receives option rights for GLPG1972, a Phase 2b candidate for osteoarthritis, in the United States. Both GLPG1690 and GLPG1972 are first-in-class compounds and could offer important mid- and late-stage pipeline opportunities for Gilead. In addition, Gilead receives option rights on all of Galapagos’ other current and future clinical programs outside of Europe.

 

Galapagos will fund and lead all discovery and development autonomously until the end of Phase 2. After the completion of a qualifying Phase 2 study, Gilead will have the option to acquire an expanded license to the compound. If the option is exercised, Gilead and Galapagos will co-develop the compound and share costs equally. Gilead will maintain option rights to Galapagos’ programs through the 10-year term of the collaboration and for up to an additional three years thereafter for those programs that have entered clinical development prior to the end of the collaboration term.

For this collaboration, Galapagos will receive a $3.95 billion upfront payment and a $1.1 billion equity investment from Gilead.