Galapagos service division claims latest two-year extension could be worth £21.5 million.

The Galapagos service division Argenta inked a potentially £21.5 million (about $35 million) extension to its existing drug discovery agreement with Genentech. The two-year extension is the third since the deal was first signed in 2005, and will cover a number of drug discovery programs that are using Argenta’s expertise in computer-aided drug design, medicinal chemistry, in vitro biology and screening, to discover new chemical entities against Genentech targets.

The extended agreement in addition means Genentech can continue to place drug discovery projects directly with Galapagos’ other service division, BioFocus, which will provide integrated medicinal chemistry, in vitro biology, and ADME services. BioFocus started working with Genentech in 2010 as the result of one of the other amendments to the original Argenta deal.

Announcement of the extension also comes less than two months after Argenta reported signing a potentially £6 million agreement with Pulmagen Therapeutics, through which it will carry out integrated chemistry, biology, ADMET/PK, and pharmacology services for two of the latter’s respiratory projects, to bring them up to preclinical status.

Argenta offers integrated drug discovery services including hit identification, hit-to-lead, and lead optimization. The business was acquired by Galapagos in February 2010, but the latter’s services division has been built up on the back of its 2005 acquisition of U.K.-based BioFocus. In 2006 Galapgos added to the BioFocus range of capabilities by taking over the drug discovery operations of Discovery Partners and Inpharmatica, and in 2008 bought the structure-based drug discovery business of Sareum Holdings.

It says these acquisitions means BioFocus can offer a full suite of target-to-candidate services, spanning target discovery and validation, screening and drug discovery, through to delivery of preclinical candidates.

With over 350 employees, Argenta and BioFocus have a combined estimated annual turnover of some €70 million (roughly $101 million). 

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