J&J sells 5% stake in Galapagos after Gilead usurps it as largest shareholder

Johnson & Johnson ($JNJ) has sold its 5.1% stake in Galapagos ($GLPG). The deal, which brings the 14-year relationship between the two companies to an end, comes shortly after Gilead ($GILD) made a $425 million (€385 million) investment in Galapagos and usurped J&J as its largest shareholder.

Galapagos CEO Onno van de Stolpe

Mechelen, Belgium-based Galapagos first became financially involved with J&J in 2002. That year, J&J bought Tibotec in a $320 million deal, acquiring a stake in Galapagos in the process. Tibotec founded Galapagos as a joint venture with Crucell in 1999. In 2010, J&J swooped for Galapagos' other parent, landing Crucell in a deal valued at €1.75 billion. The acquisition added to J&J's stake in Galapagos. In between those two takeovers, J&J began working with Galapagos, handing over €15 million upfront and committing to up to €1 billion in milestones to gain access to rheumatoid arthritis programs.

J&J sought to solidify its position as a major shareholder in Galapagos in the run up to the Belgian biotech's Nasdaq IPO, picking up a $25 million piece of the offering. At that time, J&J and AbbVie ($ABBV), which had just committed to buying a $30 million stake, appeared to be getting in position for a possible buyout, yet 9 months later the importance of both companies to Galapagos has diminished. AbbVie still holds a small stake and continues to work with Galapagos on cystic fibrosis, but in walking away from a rheumatoid arthritis program it opened the door to Gilead.

After buying a $425 million stake in Galapagos around the turn of the year, Gilead catapulted ahead of J&J to become the company's largest shareholder. The Big Biotech owned 14.75% of Galapagos following the deal, leaving J&J a distant second with a 6.4% share of the business. One month after the Gilead deal was finalized, J&J has decided to cash out, selling 2.35 million shares at €37 apiece, according to De Tijd. Gilead bought into Galapagos at €58 a share, gaining rights to the rheumatoid arthritis drug filgotinib in the process.

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- and De Tijd's take (Dutch)