Galapagos looks for new partner after Merck exits

Citing changes in its early discovery strategy, Merck has opted to end its alliances with Galapagos. The rights to all drugs covered in the deals have been returned to Galapagos, and Merck will make a payment of $16.3 million for work completed in 2010. Overall, Galapagos garnered $28.4 million in upfront and milestone payments from Merck.

The two companies partnered on a number of programs over the last several years. First was a diabetes and obesity drug deal worth up to $233 million; then Merck agreed to pay up to $252 million to use Galapagos' SilenceSelect target discovery platform to identify inflammatory disease targets. Finally, Merck boosted its commitment in 2009 on milestones for new atherosclerosis therapies to more than €400 million.

But Merck's shifting focus has put the kibosh on further work with Galapagos. "The alliances we started with them no longer fitted into their long-term plan," CEO Onno van de Stolpe said in a conference call. But the company believes it can find another develop to take the pharma's places as a major partner. "We have lost a large partner in Merck from which we expected to gain some serious milestone payments. We expect to sign another partnership soon but we can't include this in our guidance yet," the CEO told Reuters. Other current partners include GlaxoSmithKline, Eli Lilly, Johnson & Johnson's Janssen Pharmaceutica, Roche and Servier.

"In the alliances with Merck, we have discovered promising targets and developed target discovery assays for diseases with considerable unmet medical needs. Galapagos now owns these valuable assets which can form the basis for future alliances," said van de Stolpe in a statement.

- check out the release from Galapagos
- here's the report from Reuters