Galapagos Acquires Argenta Discovery's Service Operations
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The acquisition also brings additional capacity and drug discovery capabilities to the Galapagos Group. Galapagos has paid €16.5 million cash for Argenta Discovery 2009 Ltd. Argenta's respiratory development programs will continue as a new privately held company, Pulmagen Therapeutics. Galapagos will have no ownership in Pulmagen.
"Today's acquisition of the services division of Argenta, one of premier players in the segment, creates a true powerhouse in the drug discovery services market. It also provides Galapagos R&D with additional capacity, capabilities and access to respiratory models for our internal R&D efforts," said Onno van de Stolpe, CEO of Galapagos.
"This new combined service division builds on our successful cash-generating business model, and it provides more resources to progress our drug pipeline. With a post-transaction cash position of more than €30 million and Galapagos now financially self reliant, we are well capitalized and in a strong position to further build Galapagos into a biotech leader in Europe."
"This acquisition is a winning situation for all parties. Pulmagen is now able to focus its entire resources on moving its therapeutic pipeline through the clinic," said Dr. Chris Ashton, CEO of Pulmagen. "Furthermore, the stellar team that has made Argenta Discovery's services renowned in the drug discovery industry will remain together as an integral part of Galapagos' service division and I am sure they will continue to thrive within the Galapagos environment."
Galapagos has acquired Argenta Discovery's medicinal chemistry, computational chemistry, ADME and biology activities as well as the respiratory models and pharmacokinetics operations through a €16.5 million cash payment, approximately 4.7 x EBIT or 1.2 x annual revenue. The acquired business will be accretive to Galapagos' 2010 Group revenues, result and operational cash flow.
The Group's combined service division operations, which will operate under the BioFocus and Argenta brand names, are expected to achieve €70 million in 2010 revenues. Post-acquisition, Galapagos' service division operations will employ 390 staff in the UK, Switzerland and the US.
The acquired Argenta operations will be run by Dr. John Montana, who will report into Dr. Christopher Newton, Senior Vice President of Galapagos. Dr. Newton was Chief Scientific Officer and Board Director at Argenta Discovery Ltd. from 2000 to 2005, prior to joining BioFocus.