Galapagos Announces Milestone Payment in Osteoarthritis Alliance with GlaxoSmithKline
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Galapagos NV has announced that it has reached significant milestones in its multi-year drug discovery alliance with GlaxoSmithKline in osteoarthritis, triggering a payment of €7.5 million from GSK.
In June 2006, GSK's Center of Excellence for External Drug Discovery (CEEDD) and Galapagos initiated a program to deliver disease-modifying drugs with clinical Proof of Concept to GSK's global research and development organization.
The aim of this agreement is for Galapagos to expand its portfolio of novel targets in the field of osteoarthritis, to conduct compound screening, identify tractable hits, pursue a number of hit-to-lead programs, and develop the resulting leads into candidate selection compounds through to a successful Proof of Concept in clinical research Phase IIa.
GSK has exclusive options to further develop and commercialize these compounds on a worldwide basis. Galapagos will have the right to further develop and commercialize compounds for which GSK does not exercise its option.
In July 2007, GSK made a €4.4 million equity investment in Galapagos and the alliance was expanded to include up to two selected GSK targets. The expanded alliance is worth up to €186 million in milestones for two marketable products to Galapagos, plus up to double-digit royalties on global product sales.
The announcement marks the fourth milestone payment made to Galapagos since the start of the osteoarthritis alliance. The milestone of €7.5 million includes a €5.9 million payment for initiating two drug discovery programs from GSK that have been brought into the alliance as a consequence of the expansion of the alliance between Galapagos and GSK in July. To date, Galapagos has received a total of €15.1 million in access fees and milestone payments from GSK under the alliance.
"Achieving these significant milestones according to plan is evidence that we can deliver on our risk/reward sharing alliances with pharma," said Onno van de Stolpe, Chief Executive Officer of Galapagos. "Furthermore, we have demonstrated that this model is a viable strategy to progress a number of drug discovery programs while retaining the upside."
Hugh Cowley, Senior Vice President of GSK and head of the Center of Excellence for External Drug Discovery at GSK noted "Galapagos goes from strength to strength in our collaboration, and we are very pleased with today's excellent results. We are confident that our alliance will continue to advance GSK's pipeline in osteoarthritis."
