Galapagos is paying €16.5 million (almost $23 million) in cash to take over Argenta Discovery’s service business, a contract research drug discovery company. Argenta's respiratory development programs will continue as a new privately held company called Pulmagen Therapeutics. Galapagos will have no ownership in Pulmagen.
Through the acquisition, Galapagos gains Argenta Discovery's medicinal chemistry, computational chemistry, ADME, and biology activities as well as the respiratory models and pharmacokinetics operations. The combination of Argenta with Galapagos' service division BioFocus creates a drug discovery service organization with 390 employees spread across the U.K., Switzerland, and the U.S.
The acquired business will be accretive to Galapagos' 2010 revenues and operational cash flow, according to the company. The combined service division, which will operate under the BioFocus and Argenta brand names, is expected to achieve €70 million (about $97.57 million) in 2010 revenues including about €11 million (approximately $15.33 million) in service contracts by Galapagos.
“This new combined service division builds on our successful cash-generating business model, and it provides more resources to progress our drug pipeline,” says Onno van de Stolpe, CEO of Galapagos. “It also provides Galapagos R&D with additional capacity, capabilities, and access to respiratory models for our internal R&D efforts. With a post-transaction cash position of more than €30 million (roughly $41.82 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.”