GSK raises financial terms of the deal and will add up to two programs

Galapagos will expand its existing multiyear alliance in osteoarthritis with GlaxoSmithKline (GSK) to include up to two new discovery programs and an almost 36% increase in upfront, equity, and milestone payments. Galapagos reports that it could earn up to EUR 186 million, or approximately $253.44 million, in total milestones if the expanded collaboration yields two marketed products.

GSK will bring a drug discovery program against a selected GSK target, which Galapagos will progress toward completion of Phase IIa. GSK’s global R&D organization will be responsible for late-stage development, production, and marketing of the drug. Furthermore, GSK may add a second osteoarthritis discovery program against a selected GSK target.

Galapagos will receive an additional cash payment of EUR 3 million for initiating the first additional program plus EUR 3 million if GSK brings a second to the collaboration. In total, Galapagos could receive up to EUR 32.3 million in milestones for two candidates. Upon successful completion of all agreed criteria, total cash value for Galapagos, including the EUR 4.4 million equity investment, would be EUR 61.7 million for each product, plus up to double-digit royalties on GSK worldwide sales.

The original deal carried up to EUR 137 million in upfront, equity and milestone payments for two marketable products and up to double-digit royalties.  Galapagos already has received EUR 7.6 million in access fees and milestone payments from GSK since the start of the partnership in June 2006.

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