Belgian biotech Galapagos surges after Gilead sinks another $5.1 billion into the firm
- Gilead announced Sunday it will pay $5.1 billion to increase its stake in Belgian biotech company Galapagos to 22% from 12.3%.
- Galapagos shares rose as much as 18% in early trading Monday.
- The decade-long collaboration deal gives Gilead rights outside Europe to Galapagos' drug pipeline.
- Watch Galapagos trade live here.
The deal involves Gilead paying $3.95 billion to Galapagos upfront and making a $1.1 billion equity investment, or $158.49 per share, to increase its stake in the company to 22% from 12.3%. The investment represents a 20% premium to Galapagos' 30-day average share price, which last closed at $145.75 per share. Galapagos trades in Amsterdam and on Nasdaq.
If Galapagos shareholders approve the deal, Gilead will get two seats on Galapagos' board of directors. It will also gain rights outside Europe to Galapagos' treatments in development.The deal gives Galapagos capital to advance its drug-research initiatives. The Belgian company has six compounds in human testing, including drugs for knee osteoarthritis and pulmonary fibrosis.
"We are excited to enter into this unique agreement, which will generate both long-term strategic value and mutual, immediate benefits," Daniel O'Day, Gilead's chairman and CEO, said in a statement. "We chose to partner with Galapagos because of its pioneering target and drug discovery platform, proven scientific capabilities and outstanding team."The two companies have collaborated on a drug for rheumatoid arthritis for more than three years. They expect to seek approval to sell the drug by the end of 2019, with the new deal giving Galapagos greater involvement in the drug's commercialization in Europe.Advertisement
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