Galapagos said today it received a €3 million (about $4 million) milestone payment from Servier tied to the late-stage discovery of new small molecules against a new target for fighting osteoarthritis (OA), three years to the month that the companies launched an up-to-€290 million ($382.5 million) alliance.

“Today’s achievement is consistent with our strategy to move multiple, novel mechanism-of-action programs toward the clinic, thereby increasing the chances of success in disease areas with high unmet medical needs,” Galapagos CEO Onno van de Stolpe said in a statement.

The milestone payment will be included among first-half revenues, Galapagos said.

Galapagos and Servier launched their OA alliance in July 2010. Galapagos is responsible for discovery and development of new candidate drugs against novel targets, while Servier has an exclusive option to license these after the completion by Galapagos of Phase I clinical trials. Galapagos also retains exclusive U.S. commercialization rights to all commercial compounds.

In addition to milestone payments, Galapagos is also eligible for royalties on commercial sales. The company maintains a pipeline of five clinical, six preclinical, and 30 discovery small molecule and antibody programs in OA as well as cystic fibrosis, inflammation, antibiotics, metabolic disease, and other indications.

The new milestone payment is the second announced this year. In March, Galapagos announced the triggering of a €7.5 million (about $9.9 million) payment from Servier following the advance into late discovery of multiple compounds against different OA targets. The companies announced optimization of a preclinical candidate, triggering a €4 million ($5.3 million) Servier milestone payment to Galapagos.

The two companies launched a multi-year strategic alliance to develop oncology drugs in 2011, in return for Servier paying Galapagos €2 million ($2.6 million) in up-front “research access” payments, plus up to €260 million ($342.9 million) in milestone payments plus royalties. 

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