Abbott Laboratories (ABT) said it has entered an agreement with
Galapagos NV (GLPG.BT) to develop and commercialize an oral
treatment for rheumatoid arthritis and other autoimmune
diseases.
The treatment, GLPG0634, is currently in Phase II development.
Galapagos expects to complete its Phase II studies in 2014.
Under the terms of the agreement, Abbott will make an initial
upfront payment of $150 million. Upon completion of the Phase II
studies, Abbott will license the program for a one-time $200
million if the studies meet certain criteria. Abbott will assume
sole responsibility for Phase III clinical development and global
manufacturing.
Galapagos is eligible for $1 billion in milestone payments in
addition to tiered double-digit royalties on sales upon
commercialization. Galapagos will retain co-promotion rights in
Belgium, the Netherlands and Luxembourg.
Abbott's diverse portfolio had cushioned it from some of the
problems facing other large drug makers, like patent expirations
and generic competition. Last month, Abbott reported fourth-quarter
earnings rose 12% on improved profit margins, though sales were
less than expected.
GLPG0634 is a highly selective inhibitor for enzymes that play a
key role in the signaling mechanism used by several cytokines that
are involved in autoimmune diseases. An additional Phase II
dose-ranging finding study with the treatment is expected to begin
soon.
Abbott shares closed at $57.04 Tuesday and were inactive
premarket.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com