Galapagos Intents to Split into Two Publicly Traded Entities
Galapagos, a biotechnology company headquartered in Belgium, plans to split into two entities: a newly formed company (name to be announced at a later date) that will focus on building a pipeline of innovative drugs through transformative transactions, and Galapagos, which will continue to develop its cell therapy manufacturing platform in oncology.
The name of the new firm, which is to be listed on Euronext, will be announced at a later date, Galapagos said. All Galapagos shareholders are to receive shares of the new company on a pro rata basis based on their shares of Galapagos.
As part of the planned separation, Galapagos and Gilead Sciences have agreed to amend their 10-year global Option, License and Collaboration Agreement (OLCA) entered into in 2019, whereby Galapagos will gain full global development and commercialization rights to its pipeline, subject to payment of single digit royalties to Gilead on net sales of certain products.
“In the last two years, Galapagos has undergone significant changes to accelerate innovation and bring life-changing medicines to patients in need. Today’s news is a critical step in unlocking shareholder value by creating two entities, one focused on deploying significant capital to build a new company and Galapagos focusing on independently realizing the full potential of its cell therapy platform in oncology, addressing high unmet needs worldwide,” said Paul Stoffels, CEO of Galapagos. “Gaining full global development and commercialization rights from Gilead to our robust discovery and development pipeline supports our commitment to executing our strategy for accelerated growth and value creation,” Stoffels added.
Galapagos also said that the new entity, “together with Gilead as a collaboration partner, will have significant cash to pursue strategic business development opportunities.”
The new firm will be capitalized with approximately €2.45 billion of Galapagos’ current cash and focus on building a pipeline of innovative medicines with robust clinical proof-of-concept in oncology, immunology, and/or virology through strategic business development transactions.
At the time of separation, Gilead will hold approximately 25% of the outstanding shares in both Galapagos and the new entity.
Galapagos said that it intends to reorganize its business to focus on cell therapy in oncology and, therefore, to divest its small molecule assets.
“The planned reorganization is a difficult but necessary step, but one that will position Galapagos for sustainable growth and value creation and for future success in its renewed focus on cell therapies,” Stoffels commented.
The completion of the spin-off, which is subject to customary conditions, is expected by mid-2025.
