Gilead enters $5bn R&D deal with Galapagos

Gilead will pay more than $5 billion as part of a collaborative research and development agreement with Belgian-Dutch pharmaceutical company Galapagos.

As part of the deal, the California-based biotech company will pay $3.95 billion upfront and make a $1.1 billion equity investment in Galapagos.

In exchange, Gilead will receive an exclusive product licence and option rights.

The ten-year deal grants Gilead access to Galapagos’ portfolio, which includes six molecules in clinical trials, and more than 20 preclinical programmes, a press release said.

Under the terms of the agreement, Galapagos will bear the financial cost of all programmes until the end of phase two of the clinical research stage.

Gilead will then have an option to acquire an expanded licence to a compound, the press release said.

Costs would be borne equally if Gilead exercises its licensing option to a compound.

Daniel O’Day, chairman and CEO of Gilead, said the company was “excited to enter into this unique agreement, which will generate both long-term strategic value and mutual, immediate benefits”.

“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,” O’Day added.

Galapagos CEO Onno van de Stolpe said that the pharmaceutical company will “benefit greatly from Gilead’s expertise and infrastructure”.

“This agreement is about maximising innovation based on developing new mode of action medicines,” Stolpe said.

Gilead will be able to nominate two members to Galapagos’ board of directors following closure of the deal.

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