Galapagos has taken up its option to co-promote filgotinib with Gilead in certain European nations. The action is a big milestone on Galapagos’ path to becoming a commercial-stage biotech, but the news risked being overshadowed by news Gilead will be free to acquire its partner in two weeks.
Having exercised its option, Galapagos will be responsible for 35% of promotion efforts in the big five European medicine markets and the Benelux region it calls home. In return, Galapagos will get half of any profits—or losses—in these countries, rather than the up to 30% royalties it will pocket on sales of the drug elsewhere.
Those sales are predicated on the results of the wide-ranging clinical development program Gilead and Galapagos have orchestrated over the past two years. The centerpiece of the program is a clutch of phase 3 trials that are assessing the efficacy of the JAK1 inhibitor in patients with Crohn’s disease, rheumatoid arthritis and ulcerative colitis.
Galapagos’ decision to opt in to the promotion of filgotinib fits with its long-stated goal of growing into a standalone commercial-stage company. But that is unlikely to stop the other section of its latest release from heightening expectations about a possible takeover of the company.
Gilead agreed to a near-two-year lock-up and standstill agreement when it paid $425 million for a 13% stake in Galapagos at the start of 2016. Galapagos disclosed an end of 2017 expiry date for the lock-up component of the agreement last year. But back then it was tight-lipped about when the standstill clause would expire.
Galapagos has now said the entire agreement will expire at the end of this year, at which point Gilead will be free to increase its stake up above the current 15% cap. That opens to door to the takeover that investors and analysts have had one eye on ever since Gilead arrived as Galapagos’ white knight after the AbbVie abandonment.
Shares in Galapagos opened up 7% following the news.