Galapagos is taking a leaf out of the Sanofi playbook for offloading unwanted French R&D units. Seeking to slim down to execute its new strategy, the Belgian biotech has struck a deal to transfer a facility on the outskirts of Paris to the drug discovery contract research organization (CRO) NovAliX.
The 6,753 square meter facility in Romainville, France is Galapagos’ second largest by headcount, trailing only its headquarters in Mechelen, Belgium. At the end of last year, the biotech employed 254 people at the French site, all of whom were represented by a labor union and/or covered by a collective bargaining agreement. The lease on the facility is set to expire in 2027.
Mass layoffs in France are covered by labor laws that complicate the process for companies. To bypass those complications, Sanofi has previously opted to offload rather than close facilities, handing sites to the CRO Evotec in 2015 and 2018. Now, Galapagos has gone down the same route.
“As a result of the acquisition, Galapagos’ employees in Romainville who are exclusively dedicated to the operation of these activities will be transferred to NovAliX who is dedicated to assuming all ongoing research and discovery activities in Romainville,” Galapagos wrote in a statement.
In return, Galapagos is “committed to utilizing the research capabilities and expertise of NovAliX through a five year-collaboration and within the context of the company’s R&D portfolio.” The Belgian biotech factored the financial impact of the deal into its previous 2023 cash burn forecast of up to €420 million ($457 million). Galapagos expects the transaction to close in July.
Paul Stoffels, M.D., who took over as CEO and chairman of Galapagos last year, framed the deal as part of the pivot in R&D strategy that he outlined late last year. At the time, Galapagos said it planned to reduce its headcount by approximately 200 positions across its sites in Europe.