Galapagos enters into global alliance with Janssen
Pharmaceutica on rheumatoid arthritis research
• Multi-target alliance to discover, develop, and commercialize oral small
molecule therapeutics for rheumatoid arthritis
• Janssen Pharmaceutica obtains option to license Galapagos’ internal programs
including GT418, after completion of Phase IIa clinical studies
• Galapagos will receive €15 million in upfront cash payments plus a first €2
million alliance milestone payment
• Galapagos to receive yearly option fee and is eligible for discovery,
development, regulatory and sales milestones as well as licensing fees and
double digit royalties on worldwide sales
Mechelen, Belgium; 24 October 2007 - Galapagos NV (Euronext and LSE: GLPG)
announced today that it has entered into a worldwide multi-target alliance with
Janssen Pharmaceutica NV (‘Janssen’), a Johnson & Johnson company, to discover
and develop novel small-molecule therapeutics for the treatment of rheumatoid
arthritis (RA). Under the alliance agreement, Janssen may select up to 12 programs
from Galapagos’ internally identified RA targets into the alliance. Janssen receives
future option rights to exclusively license these programs. In addition, Janssen
obtained an option to the future development and commercialization of product
candidates from Galapagos’ other internal RA programs, including its most advanced
program based on the kinase target GT418. A compound from this proprietary drug
discovery program is expected to enter Phase I clinical trials in 2008.
Terms of the agreement
With the signing of the agreement, Janssen will make an initial up-front cash
payment of €15 million to Galapagos. In addition, Janssen will make a €2 million
milestone payment for the selection of GT146, one of Galapagos’ advanced RA
programs, into the alliance.
Under the alliance agreement, Galapagos will be responsible for the discovery of
small molecule product candidates for those novel, validated RA targets that are
chosen by Janssen. Galapagos will develop product candidates through to Phase IIa
Proof of Concept (POC) clinical trials. During the term of the collaboration,
Galapagos is eligible to receive success-based progress milestones from Janssen.
Upon Galapagos’ achievement of POC for a product candidate, Janssen has an
exclusive option to license the product candidate from each alliance program and will
then assume full responsibility for further clinical development and worldwide
commercialization, at its expense. For each alliance program licensed by Janssen,
contingent on discovery, development and regulatory accomplishments, Galapagos
could receive option exercise fees and milestone payments up to €73 million, plus
royalties on net sales of each approved new RA drug.
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In addition to performing research on the alliance RA targets, Galapagos will
continue to perform the R&D activities for its internal RA programs, including its
most advanced program GT418, at its own expense up to clinical POC, subject to an
exclusive option by Janssen. Janssen’s license option for the Galapagos drug will
become exercisable upon successful completion of Phase IIa clinical trial by
Galapagos. Should Janssen elect to exercise the option, a non-refundable exercise
fee of €60 million will be paid and thereafter Janssen would be responsible for the
development and global commercialization, at its expense. Galapagos could be
eligible to receive up to €430 million in development and regulatory milestones
payments should more than one product be approved for several indications in major
markets. Furthermore, if a licensed product is commercialized, Galapagos could
receive up to €346 million of one-time sales milestones upon the achievement of
predetermined sales levels and receive double-digit royalties on worldwide sales.
“This deal will provide us with the resources to broaden our product pipeline in RA,
exploiting the full value of our portfolio of proprietary targets. It will increase the
chances of bringing a disease modifying drug against rheumatoid arthritis to the
market,” stated Onno van de Stolpe, CEO of Galapagos. “Janssen's vast experience
in clinical development and commercialization in rheumatoid arthritis make Janssen
the perfect partner for this program.”
Development status of Galapagos R&D program in RA
Galapagos is a drug discovery company with pre-clinical programs in bone and joint
diseases. In the RA program, lead compounds have shown significant disease-
modifying properties and good pharmacokinetic properties in relevant animal models
of the disease. These molecules also show substantial protection against bone loss
in the industry standard RA animal models. The compounds target proprietary
kinase proteins that were identified using the Galapagos’ SilenceSelect target
discovery platform. Based on these results, Galapagos anticipates initiation of pre-
clinical studies later this year, with the potential of a candidate drug entering clinical
Phase I in 2008.
About RA
RA is a chronic disease, mainly affecting the joints. The disease is characterized by
inflammation of the affected joint, which can result in chronic pain, swelling and
stiffness, and later, joint destruction and disability. RA is the most debilitating form
of arthritis and the most common inflammatory joint disease. It is estimated that 1-
2% of the population has RA, and although it can occur at any age, onset usually
begins between the ages of 25 and 50. Women are three times more likely than
men to be affected by RA. Current market for RA medicines is estimated at €7 billion
annually; this is expected to approach €9 billion by 2011.
About Galapagos
Galapagos (Euronext Brussels, GLPG; Euronext Amsterdam, GLPGA; London AiM:
GLPG) is a drug discovery company with pre-clinical programs in bone and joint
diseases and cachexia. Its division BioFocus DPI offers a full suite of target-to-drug
discovery products and services to pharmaceutical and biotech companies,
encompassing target discovery and validation, screening and drug discovery through
to delivery of pre-clinical candidates. BioFocus DPI also provides adenoviral reagents
for rapid identification and validation of novel drug targets, compound libraries for
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drug screening as well as chemogenomics and ADMET database products to select
targets and compounds. Galapagos currently employs 460 people and operates
facilities in seven countries, with global headquarters in Mechelen, Belgium. More
information about Galapagos and BioFocus DPI can be found at www.glpg.com and
www.biofocusdpi.com.
Galapagos webcast & press conferences
Amsterdam
Galapagos will host an audio webcast press conference starting at 10.30 Central
European Time (CET) today at the Amsterdam World Trade Center, Room 6,
Strawinskylaan 77, 1077 XW, Amsterdam. To participate in the conference remotely
by telephone, dial +32 2290 1608 prior to 10.25 CET. The live audio webcast of the
press conference can be accessed on the Galapagos website at www.glpg.com.
Brussels
Galapagos will host a video webcast press conference starting at 15.45 CET today at
the Diamant Conference & Business Centre, Galilei Room, 80 Bd A. Reyers Ln, 1030
Brussels. To participate in the conference remotely by telephone, dial +32 2290
1608 prior to 15.40 CET. The live video webcast of the press conference can be
accessed on the Galapagos website at www.glpg.com.
Both webcasts will be available for replay later today and archived on the Galapagos
website for 30 days.
CONTACT
Galapagos NV
Onno van de Stolpe, CEO
Tel: +31 6 2909 8028
ir@glpg.com
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