Transaction ends integration of BioFocus’ worldwide operations.
ChemVentures is buying Galapagos’ BioFocus DPI chemistry facility in San Diego. This marks the completion of Galapagos’ efforts to integrate BioFocus’ global activities.
The San Diego plant currently employs 40 people and provides medicinal chemistry and custom library production services to pharmaceutical and biotech customers. ChemVentures reports that it intends to retain the employees at the San Diego site.
This San Diego facility has been part of BioFocus DPI since the acquisition of the Discovery Partners International assets in July 2006 for $16.63 million. These operations contributed around $4.8 million to Galapagos’ revenues on an annual basis. The company retains its guidance of total revenues of E75–80 million for the year 2008 and a year-end cash position of around E25 million.
Over the past 18 months, Galapagos has been trying to optimize the number of service locations and to create a cost-effective BioFocus DPI organization. This program resulted in the closure of the London site upon the out-licensing of predictive drug discovery databases to the EMBL, roll up of the Heidelberg activities into operations in Basel, and the consolidation of the Cambridge activities into the BioFocus DPI headquarters in Saffron Walden, U.K. The divesture of the San Diego operation will improve the operational margin of BioFocus DPI going forward.
Galapagos believes that it will be able to serve its customers for medicinal chemistry and compound libraries out of its U.K. facility. The company also has biology services and compound libraries at its sites in the U.K. Additionally, BioFocus DPI operates facilities in the U.S. (compound management), Switzerland (natural products and high-throughput screening), and The Netherlands (target discovery and assay development).
