Multitarget deal includes over $21 million upfront and about $1 billion in milestone and exercise option fees.

Galapagos and Janssen Pharmaceutica will work together to discover and develop novel small molecule therapeutics for the treatment of rheumatoid arthritis (RA). The agreement covers multiple targets for which Galapagos will initially receive €15 million, or about $21.31, and could earn a further €911 million, or approximately $1.29 billion, in milestone and exercise option fees.

Janssen may select up to 12 programs from Galapagos’ internally identified RA targets. Galapagos will be responsible for the discovery of small molecules against the chosen targets. The company will develop these candidates through to Phase IIa trials.  Janssen may then exercise its exclusive option to license these compounds. The company will assume full responsibility for further development and worldwide commercialization. 

Additionally, Janssen obtained an option for the future development and commercialization of candidates from Galapagos’ other internal RA programs including its most advanced program based on the kinase target GT418.  A related compound is expected to enter Phase I trials in 2008, and Galapagos is responsible for advancing it into Phase IIa studies. 

For each program licensed by Janssen as per the terms of the agreement, contingent on discovery, development, and regulatory accomplishments, Galapagos could receive option exercise fees and milestone payments of up to €73 million. It will also earn royalties on net sales of each approved new RA drug and up to €346 million in a one-time sales milestone payment. Should Janssen elect to license GT418, Galapagos will receive a €2 million milestone payment and a nonrefundable exercise fee of €60 million. Thereafter Janssen would be responsible for the development and global commercialization. 

Galapagos is also eligible to get up to €430 million in development and regulatory milestone payments if more than one product is approved for several indications in major markets.

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