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FOSTER CITY, Calif. & MECHELEN, Belgium – (BUSINESS WIRE– Gilead Sciences, Inc. (NASDAQ: GILD) and Galapagos NV (Euronext & NASDAQ: GLPG) announced today that they have entered into a 10-year global collaboration in research and development. Through this agreement, Gilead will have access to an innovative portfolio of compounds including six molecules in clinical trials, more than 20 preclinical programs and a proven drug discovery platform.
The Galapagos will receive an upfront payment of $ 3.95 billion and a $ 1.1 billion equity investment from Gilead. The Galapagos will use recipes to develop and accelerate their 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 conditions of the agreement governing filgotinib, the candidate can now claim rheumatoid arthritis and other inflammatory diseases to give a greater role to the marketing of Galapagos in Europe.
The collaboration will allow a closer scientific partnership between the companies. Gilead will have access to Galapagos' established research base, which has more than 500 scientists, and its unique platform, which uses human and disease-related primary cell-based tests to discover and test new therapeutic targets. . Gilead will also appoint two people to the Galapagos board of directors after closing the deal.
"We are pleased to conclude this unique agreement, which will generate both long-term strategic value and immediate mutual benefits. We chose to partner with Galapagos because of its pioneering drug discovery platform and targets, its proven scientific capabilities and outstanding team, "said Daniel O'Day, Chairman and Chief Executive Officer of Galapagos. Gilead. "Gilead also gains exclusive access to all current and future compounds of the rich Galapagos Pipeline, while they can expand their research activities and create a commercial infrastructure. The collaboration reflects Gilead's intention to grow our innovation network through diverse and creative partnerships. "
As part of this collaboration, Gilead earns rights to GLPG1690, the Galapagos Phase 3 Candidate for Idiopathic Pulmonary Fibrosis. Gilead also receives an option for GLPG1972, the Phase 2b osteoarthritis candidate, in the United States. GLPG1690 and GLPG1972 are both first-class compounds and could offer significant opportunities for intermediate and advanced pipeline development for Gilead. In addition, Gilead is granted option rights on all other current and future Galapagos clinical programs outside Europe.
"What a fantastic moment of our 20th anniversary to sign this historic agreement with our great partner Gilead, "said Onno van de Stolpe, president and CEO of Galapagos. "The Galapagos have been very effective at target identification and drug discovery, evolving new molecules from research to the clinic. We will greatly benefit from Gilead's expertise and infrastructure, and we are confident that this collaboration will accelerate the progress of our pipeline. This agreement aims to maximize innovation by developing new drugs with modes of action. With the capital provided by Gilead, we aim to advance innovation for patients. "
Conditions of the collaboration
The Galapagos will fund and direct all discovery and development autonomously until the end of Phase 2. Following the completion of a qualifying Phase 2 study, Gilead will have the opportunity to acquire an expanded license for the complex. If the option is exercised, Gilead and Galapagos will jointly develop the compound and share the costs equally. Gilead will retain the option rights for Galapagos programs for the duration of the 10-year collaboration, and for an additional three years thereafter for clinical development programs prior to the end of the collaboration period.
If the GLPG1690 is approved in the United States, Gilead will pay the Galapagos an additional $ 325 million. For GLPG1972, Gilead has the option to pay a $ 250 million license fee for the compound in the United States after the completion of the ongoing Phase 2b OA study. If certain secondary effectiveness criteria are met, Gilead will pay an additional $ 200 million. As a result of membership, the Galapagos would be eligible to receive regulatory and commercial milestones of up to $ 550 million.
For all other programs resulting from the collaboration, Gilead will make an inclusion payment of $ 150 million per program and will not impose subsequent milestones. The Galapagos will receive tiered royalties ranging from 20% to 24% of the net sales of all Galapagos products licensed from Gilead under the agreement.
Filgotinib Collaboration
Gilead and Galapagos also agreed to amend certain terms relating to the development and marketing of filgotinib, the investigational compound being used for rheumatoid arthritis and other inflammatory diseases. The companies have recently completed the full phase 3 FINCH rheumatoid arthritis program and plan to seek regulatory approval for the drug in the US and Europe by the end of the year. Under the amended agreement, the Galapagos will become more involved in the global filgotinib strategy and will be more involved in marketing the product in Europe, providing the opportunity to establish a commercial presence in a timely manner.
Gilead and Galapagos will co-market filgotinib in France, Germany, Italy, Spain and the United Kingdom and will retain the 50/50 profit share in these countries, which was part of the initial filgotinib licensing agreement and Under the terms of the revised agreement, Galapagos has an expanded commercial role. Galapagos retains exclusive rights in Belgium, the Netherlands and Luxembourg. The companies will share the future global development costs of filgotinib equally, instead of the 80/20 cost-sharing provided for in the original agreement. The remaining terms of the original license agreement remain in force, including potential potential milestones of $ 1.27 billion and tiered royalties ranging from 20 to 30% payable on territories other than Belgium, France, Germany. , Italy, Luxembourg, the Netherlands, Spain and the United States. United Kingdom.
Conditions for investing in shares
Gilead's investment will consist of a subscription of new Galapagos shares at a price of € 140.59 per share, a 20% premium over the 30-day volume-weighted average price of Galapagos. This will increase Gilead's ownership interest in Galapagos from approximately 12.3% to 22% of the issued and outstanding shares of Galapagos. In addition, Galapagos intends to seek shareholder approval to issue two mandates allowing Gilead to increase its interest in Galapagos by 29.9% of the issued and outstanding shares of Galapagos. The agreement also provides for a 10-year shutdown limiting Gilead's ability to acquire Galapagos or increase its interest in Galapagos beyond 29.9% of the issued and outstanding shares of the company, subject to exceptions. limited.
The transaction, which is expected to close at the end of the third quarter of 2019, is subject to certain closing conditions, including the expiry or the end of the waiting period under the Hart-Scott-Rodino Act. on improvements to anti-trust legislation and obtaining approval of merger control by the Austrian Federal Competition Authority.
Barclays, Centerview Partners and Lazard act as financial advisors for Gilead. Moelis & Co. and Morgan Stanley act as financial advisors for Galapagos. Skadden, Arps, Slate, Meagher & Flom, Covington & Burling LLP and Eubelius serve as legal counsel for Gilead and Baker McKenzie and Linklaters as legal counsel for Galapagos.
Conference call
At 3:00 pm today, the Gilead and Galapagos management teams will hold a simultaneous teleconference and webcast on the collaboration. To access the live call via the Internet, log on to the company's website at http://investors.gilead.com/events or www.glpg.com 15 minutes before the teleconference, to allow enough time to download any software that may be needed to listen to the webcast.
To access the call by phone from the United States / Canada, call 1-877-359-9508 or 1-224-357-2393 from Canada / US and use conference ID 186 9522.
For international telephone access, please call Belgium: 080073264; la France0805081488; Netherlands: 08000232838 and United Kingdom: 08000288438 and use conference ID 186 9522.
A retransmission of the webcast will be archived on the companies' websites for one year. A retransmission will be available approximately two hours after the call, until July 28, 2019. To access the retransmission, please dial 1-855-859-2056 or 1-404-537-3406. dial conference number 186 9522.
About Galapagos
Galapagos (Euronext & NASDAQ: GLPG) discovers and develops novel small molecule drugs with novel modes of action, three of which show promising results for patients and are in the final stage of development of several diseases. The company's pipeline includes programs ranging from Phase 3 to discoveries in the areas of 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 drugs in areas where medical needs are not being met. The company strives to transform and simplify the care provided to people with life-threatening diseases worldwide. Gilead is present in more than 35 countries around the world and is headquartered in Foster City, California. For more information on Gilead Sciences, please visit the company's website at: www.gilead.com.
Forward-looking statement of the Galapagos
This press release may contain forward-looking statements about Galapagos, including the strategic ambitions of Galapagos, regarding the expected timing of the closing of the transaction with Gilead, the deposits and approvals related to the transaction, the amount and schedule of milestones. future potential, opt-in and / or royalty payments made by Gilead, the mechanism of action, and the potential safety and efficacy of filgotinib, GLPG1690 and / or GLPG1972, the projected schedule for filgotinib clinical trials , GLPG1690 and / or GLPG1972, the progress and results of these studies and declarations concerning filgotinib's regulatory filings and the timing of their filing with the regulations. Galapagos warns the reader that forward-looking statements are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause Galapagos' actual results, financial condition and liquidity, performance or achievements, or the results of the business to be materially different from those of the Company. historical or future results, financial conditions and future results. Liquidity, performance or achievements expressed or implied by these forward-looking statements. In addition, even if the results, performance, financial condition and liquidity of Galapagos, as well as the development of the sector in which it operates, are consistent with these forward-looking statements, they may not be predictive of results or development. of the period. Among the factors likely to cause differences are the uncertainties inherent in the evolution of competition, the possibility for the parties to complete the operation, knowing that this is subject to closing conditions and all applicable requirements for antitrust clearance, clinical trials and product development, regulatory approval requirements (including the fact that data from current and planned clinical research programs may not support the 39, registration or further development of Galapagos drug candidates for reasons of safety, efficacy or for other reasons), the fact that Galapagos relies on collaborations with third parties ( including its collaborative partner) Gilead) and the estimation of the commercial potential of filgotinib, GLPG1690 and / or GLPG1972. A further listing and description of these risks, uncertainties and other risks can be found in the documents and reports of the Galapagos Securities and Exchange Commission (SEC), including Galapagos' latest annual report on Form 20-F filed with the SEC and in subsequent documents. and reports filed by the Galapagos with the SEC. Given these uncertainties, the reader is cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date of this document. Galapagos expressly disclaims any obligation to update the forward-looking statements contained in this document to reflect any change in its expectations therein or any change in the events, conditions or circumstances on which such statement is based or is likely to affect the probability that real information will be provided. the results will differ from those set forth in the forward-looking statements, unless otherwise provided by law or regulation.
Gilead's Forecast Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, relating to Gilead, the Galapagos, as well as the collaboration and option agreements and the restructuring of the filgotinib collaboration, which are subject to risks, uncertainties and other factors. All statements other than statements of historical fact are statements that could be considered forward-looking statements, including any statements regarding the current intent, beliefs or expectations of the companies and their management team members. . Forward-looking statements include, without limitation, the risk that Gilead will derive no benefit from the Global Collaborative Agreement and Option; its potential impact on Gilead's revenues and earnings; Gilead may not discover, develop and commercialize any of Galapagos' developing products under the agreement; the filing of new drug applications for the approval of filgotinib within the prescribed time; Approval of filgotinib by regulatory authorities, including any approval, if granted, may have significant limitations on its use; the planned schedule of clinical data for Galapagos' developing products; the possibility of adverse outcomes from these clinical trials; deposits and approvals relating to the transaction; the expected time for completion of the transaction; the ability to complete the transaction on time or at all; and the accuracy of any assumptions underlying the above. Investors are cautioned that such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. They are also 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. The risks and uncertainties that could cause actual results to differ from the expectations contemplated by the forward-looking statements include the following: uncertainties as to the conclusion of the collaboration and option transaction; the possibility that various closing conditions of the transaction may not be satisfied or waived, including the fact that a government entity may prohibit, delay or refuse to grant approval to the completion of the transaction; the occurrence of any event, change or other circumstance that may result in the termination of the collaboration and option agreement; the effects of the transaction (or the announcement thereof) on relationships with employees, customers, other trading partners or government entities; transaction costs; Galapagos shareholders do not approve Gilead's board appointments or the issuance of 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, filed with the US Securities and Exchange Commission. All forward-looking statements are based on information currently available to Gilead and Gilead assumes no obligation to update such statements.
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