– Gilead to Make $3.95 Billion Upfront
Payment and $1.1 Billion Equity Investment –
– Gilead Gains Access to Galapagos’
Differentiated Drug Discovery Platform and Current and Future
Pipeline Outside of Europe –
– Investment Enables Galapagos to Expand and
Accelerate Research and Clinical Programs –
– Galapagos Gains Broader Commercialization
Role for Filgotinib in Europe and Agrees to Share Equally in Future
Development Costs –
– Gilead Agrees to 10-year Standstill
–
Gilead Sciences, Inc. (NASDAQ: GILD) and Galapagos NV (Euronext
& NASDAQ: GLPG) today announced that they have entered into a
10-year global research and development collaboration. Through this
agreement, Gilead will gain access to an innovative portfolio of
compounds, including six molecules currently in clinical trials,
more than 20 preclinical programs and a proven drug discovery
platform.
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the full release here:
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Galapagos will receive a $3.95 billion upfront payment and a
$1.1 billion equity investment from Gilead. Galapagos will use the
proceeds to expand and accelerate its research and development
programs. Gilead will receive an exclusive product license and
option rights to develop and commercialize all current and future
programs in all countries outside Europe. In addition, Gilead and
Galapagos have agreed to amend certain terms in the agreement
governing filgotinib, the candidate being advanced for rheumatoid
arthritis and other inflammatory diseases to provide a broader
commercialization role for Galapagos in Europe.
The collaboration will allow for closer scientific partnership
between the companies. Gilead will have access to Galapagos’
established research base, which includes more than 500 scientists,
and to Galapagos’ unique platform, which utilizes disease-related,
human primary cell-based assays to discover and verify novel drug
targets. Gilead will also nominate two individuals to Galapagos’
Board of Directors following the closing of the transaction.
“We are excited to enter into this unique agreement, which will
generate both long-term strategic value and mutual, immediate
benefits. We chose to partner with Galapagos because of its
pioneering target and drug discovery platform, proven scientific
capabilities and outstanding team,” said Daniel O’Day, Chairman and
Chief Executive Officer of Gilead. “Gilead also gains exclusive
access to all current and future compounds in Galapagos’ rich
pipeline while Galapagos is able to expand its research activities
and build commercial infrastructure. The collaboration reflects
Gilead’s intent to grow our innovation network through diverse and
creative partnerships.”
As part of the collaboration, Gilead gains rights to GLPG1690,
Galapagos’ Phase 3 candidate for idiopathic pulmonary fibrosis.
Gilead also receives option rights for GLPG1972, a Phase 2b
candidate for osteoarthritis, in the United States. Both GLPG1690
and GLPG1972 are first-in-class compounds and could offer important
mid- and late-stage pipeline opportunities for Gilead. In addition,
Gilead receives option rights on all of Galapagos’ other current
and future clinical programs outside of Europe.
“What a fantastic moment in our 20th anniversary year to sign
this landmark deal with our great partner Gilead,” said Onno van de
Stolpe, Chief Executive Officer of Galapagos. “Galapagos has been
highly effective at target identification and drug discovery,
progressing novel molecules from research into the clinic. We will
benefit greatly from Gilead’s expertise and infrastructure and
believe this collaboration will provide an accelerated path to
advance our pipeline. This agreement is about maximizing innovation
based on developing new mode of action medicines. With the capital
provided by Gilead, we aim to progress innovation to patients.”
Terms of the
Collaboration
Galapagos will fund and lead all discovery and development
autonomously until the end of Phase 2. After the completion of a
qualifying Phase 2 study, Gilead will have the option to acquire an
expanded license to the compound. If the option is exercised,
Gilead and Galapagos will co-develop the compound and share costs
equally. Gilead will maintain option rights to Galapagos’ programs
through the 10-year term of the collaboration and for up to an
additional three years thereafter for those programs that have
entered clinical development prior to the end of the collaboration
term.
If GLPG1690 is approved in the United States, Gilead will pay
Galapagos an additional $325 million milestone fee. For GLPG1972,
Gilead has the option to pay a $250 million fee to license the
compound in the United States after the completion of the ongoing
Phase 2b study in osteoarthritis. If certain secondary efficacy
endpoints are met, Gilead would pay up to an additional $200
million. Following opt in, Galapagos would be eligible to receive
up to $550 million in regulatory and commercial milestones.
For all other programs resulting from the collaboration, Gilead
will make a $150 million opt-in payment per program and will owe no
subsequent milestones. Galapagos will receive tiered royalties
ranging from 20-24% on net sales of all Galapagos products licensed
by Gilead as part of the agreement.
Filgotinib Collaboration
Gilead and Galapagos have also agreed to amend certain terms
around the development and commercialization of filgotinib, the
experimental compound being advanced for rheumatoid arthritis and
other inflammatory diseases. The companies have recently completed
the comprehensive Phase 3 FINCH program in rheumatoid arthritis and
plan to seek regulatory approval for the medicine in the United
States and Europe before the end of the year. Under the amended
agreement, Galapagos will have greater involvement in filgotinib’s
global strategy and participate more broadly in the
commercialization of the product in Europe, providing the
opportunity to build a commercial presence on an accelerated
timeline.
Gilead and Galapagos will co-commercialize filgotinib in France,
Germany, Italy, Spain and the United Kingdom and retain the 50/50
profit share in these countries that was part of the original
filgotinib license agreement, and under the revised agreement,
Galapagos will have an expanded commercial role. Galapagos retains
exclusive rights in Belgium, the Netherlands and Luxembourg. The
companies will share future global development costs for filgotinib
equally, in lieu of the 80/20 cost split provided by the original
agreement. Other terms of the original license agreement remain in
effect, including the remaining $1.27 billion in total potential
milestones and tiered royalties ranging from 20-30% payable in
territories outside of Belgium, France, Germany, Italy, Luxembourg,
the Netherlands, Spain and the United Kingdom.
Terms of the Equity
Investment
Gilead’s equity investment will consist of a subscription for
new Galapagos shares at a price of €140.59 per share, representing
a 20% premium to Galapagos’ 30-day, volume-weighted average price.
This will increase Gilead’s stake in Galapagos from approximately
12.3% to 22% of the issued and outstanding shares in Galapagos. In
addition, Galapagos intends to seek shareholder approval to issue
two warrants allowing Gilead to further increase its ownership of
Galapagos to up to 29.9% of the company’s issued and outstanding
shares. The agreement also includes a 10-year standstill
restricting Gilead’s ability to seek to acquire Galapagos or
increase its stake in Galapagos beyond 29.9% of the company’s
issued and outstanding shares, subject to limited exceptions.
The transaction, which is expected to close late in the third
quarter of 2019, is subject to certain closing conditions,
including the expiration or termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act and receipt of
merger control approval from the Austrian Federal Competition
Authority.
Barclays, Centerview Partners and Lazard are acting as financial
advisors to Gilead. Moelis & Co. and Morgan Stanley are acting
as financial advisors to Galapagos. Skadden, Arps, Slate, Meagher
& Flom, Covington & Burling LLP and Eubelius are serving as
legal counsel to Gilead and Baker McKenzie and Linklaters are
serving as legal counsel to Galapagos.
Conference Call
At 3:00 p.m. Eastern Time today, the Gilead and Galapagos
management teams will host a joint conference call and a
simultaneous webcast to discuss the collaboration. To access the
live call via the internet, please connect to the company's website
at http://investors.gilead.com/events or www.glpg.com
15 minutes prior to the conference call to ensure adequate time for
any software download that may be needed to hear the webcast.
To access the call by telephone from the U.S./Canada,
please call 1-877-359-9508 or 1-224-357-2393 from the U.S./Canada
and use the conference ID 186 9522.
For international telephone access, please call Belgium:
080073264; France: 0805081488; Netherlands:
08000232838 and United Kingdom: 08000288438 and use the
conference ID 186 9522.
A replay of the webcast will be archived on the companies'
websites for one year, and a phone replay will be available
approximately two hours following the call through July 28, 2019.
To access the phone replay, please call 1-855-859-2056 or
1-404-537-3406 and dial the conference ID 186 9522.
About Galapagos
Galapagos (Euronext & NASDAQ: GLPG) discovers and develops
small molecule medicines with novel modes of action, three of which
show promising patient results and are currently in late-stage
development in multiple diseases. The company’s pipeline comprises
Phase 3 through to discovery programs in inflammation, fibrosis,
osteoarthritis and other indications. Galapagos’ ambition is to
become a leading global biopharmaceutical company focused on the
discovery, development and commercialization of innovative
medicines. More information at www.glpg.com.
About Gilead Sciences
Gilead Sciences, Inc. is a research-based biopharmaceutical
company that discovers, develops and commercializes innovative
medicines in areas of unmet medical need. The company strives to
transform and simplify care for people with life-threatening
illnesses around the world. Gilead has operations in more than 35
countries worldwide, with headquarters in Foster City, California.
For more information on Gilead Sciences, please visit the company’s
website at www.gilead.com.
Galapagos Forward-Looking
Statement
This release may contain forward-looking statements with respect
to Galapagos, including statements regarding Galapagos’ strategic
ambitions, regarding the expected timing of closing of the
transaction with Gilead, filings and approvals relating to the
transaction, the amount and timing of potential future milestone,
opt-in and/or royalty payments by Gilead, the mechanism of action
and potential safety and efficacy of filgotinib, GLPG1690 and/or
GLPG1972, the anticipated timing of clinical studies with
filgotinib, GLPG1690 and/or GLPG1972, the progression and results
of such studies, and statements regarding the regulatory pathway
for filgotinib and the timing of regulatory filings. Galapagos
cautions the reader that forward-looking statements are not
guarantees of future performance. Forward-looking statements
involve known and unknown risks, uncertainties and other factors
which might cause the actual results, financial condition and
liquidity, performance or achievements of Galapagos, or industry
results, to be materially different from any historic or future
results, financial conditions and liquidity, performance or
achievements expressed or implied by such forward-looking
statements. In addition, even if Galapagos’ results, performance,
financial condition and liquidity, and the development of the
industry in which it operates are consistent with such
forward-looking statements, they may not be predictive of results
or developments in future periods. Among the factors that may
result in differences are the inherent uncertainties associated
with competitive developments, uncertainty regarding the ability of
the parties to complete the transaction considering the transaction
is subject to closing conditions and any applicable antitrust
clearance requirements, clinical trial and product development
activities and regulatory approval requirements (including that
data from the ongoing and planned clinical research programs may
not support registration or further development of Galapagos’ drug
candidates due to safety, efficacy or other reasons), Galapagos’
reliance on collaborations with third parties (including its
collaboration partner Gilead), and estimating the commercial
potential of filgotinib, GLPG1690 and/or GLPG1972. A further list
and description of these risks, uncertainties and other risks can
be found in Galapagos’ Securities and Exchange Commission (SEC)
filings and reports, including in Galapagos’ most recent annual
report on Form 20-F filed with the SEC and subsequent filings and
reports filed by Galapagos with the SEC. Given these uncertainties,
the reader is advised not to place any undue reliance on such
forward-looking statements. These forward-looking statements speak
only as of the date of publication of this document. Galapagos
expressly disclaims any obligation to update any such
forward-looking statements in this document to reflect any change
in its expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based or
that may affect the likelihood that actual results will differ from
those set forth in the forward-looking statements, unless
specifically required by law or regulation.
Gilead Forward-Looking
Statement
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, related to Gilead, Galapagos and the collaboration and option
agreement and restructuring of the filgotinib collaboration that
are subject to risks, uncertainties and other factors. All
statements other than statements of historical fact are statements
that could be deemed forward-looking statements, including all
statements regarding the intent, belief or current expectation of
the companies and members of their senior management team.
Forward-looking statements include, without limitation, the risk
that Gilead may not realize any benefits from the global
collaboration and option agreement; its potential effects on
Gilead's revenues and earnings; Gilead may fail to discover,
develop and commercialize any of Galapagos’ pipeline products under
the agreement; the filing of the new drug applications for approval
of filgotinib in the currently anticipated timeframe; approval of
filgotinib by regulatory authorities, including any approvals, if
granted, may have significant limitations on its use; the
anticipated timing of clinical data of Galapagos’ pipeline
products; the possibility of unfavorable results from these
clinical trials; filings and approvals relating to the transaction;
the expected timing of the completion of the transaction; the
ability to complete the transaction in a timely manner or at all;
and the accuracy of any assumptions underlying any of the
foregoing. Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve
risks and uncertainties and are cautioned not to place undue
reliance on these forward-looking statements. Actual results may
differ materially from those currently anticipated due to a number
of risks and uncertainties. Risks and uncertainties that could
cause the actual results to differ from expectations contemplated
by forward-looking statements include: uncertainties as to the
closing of the collaboration and option transaction; the
possibility that various closing conditions for the transaction may
not be satisfied or waived, including that a governmental entity
may prohibit, delay or refuse to grant approval for the
consummation of the transaction; the occurrence of any event,
change or other circumstance that could give rise to the
termination of the collaboration and option agreement; the effects
of the transaction (or the announcement thereof) on relationships
with employees, customers, other business partners or governmental
entities; transaction costs; the risk Galapagos’ stockholders do
not approve Gilead’s board nominees or issuance of the warrants, as
the case may be. These and other risks are described in detail in
Gilead’s Quarterly Report on Form 10-Q for the quarter ended March
31, 2019, as filed with the U.S. Securities and Exchange
Commission. All forward-looking statements are based on information
currently available to Gilead, and Gilead assumes no obligation to
update any such forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20190714005034/en/
Gilead Sung Lee, Investors (650) 524-7792
Amy Flood, Media (650) 522-5643
Galapagos Elizabeth Goodwin, Investors (781) 460-1784
Carmen Vroonen, Media +32 473 824 874
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