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TMCNet: Galapagos, Merck in Potential ?170M Obesity, Diabetes Deal

[January 09, 2009]

Galapagos, Merck in Potential ?170M Obesity, Diabetes Deal

(BioWorld Today Via Acquire Media NewsEdge) Mechelen, Belgium-based Galapagos NV signed its fifth major pharmaceutical alliance, inking a potential ?171.5 million (US$230.4 million)-plus deal with Merck & Co. Inc. to develop drugs aimed at the obesity and diabetes markets.

Under the terms, Galapagos will receive an up-front fee of ?1.5 million and will take on responsibility for the discovery and preclinical work on small-molecule candidates using its SilenceSelect discovery platform. Merck will retain the option to acquire an exclusive license to each drug candidate for further development and commercialization.

Galapagos is eligible for discovery, development and regulatory milestones that could exceed ?170 million total for multiple products, as well as specific sales milestones and royalties on any product sales.

It is the latest in a string of big pharma collaborations that Galapagos has secured in the last few years. The firm also boasts partnerships with GlaxoSmithKline plc for osteoarthritis drugs, with Eli Lilly and Co. for osteoporosis drugs and with German antibody firm Morphosys AG to target bone and joint diseases. And in 2007, the firm signed a potential ?1 billion partnership with Johnson & Johnson unit Janssen Pharmaceutical NV to develop rheumatoid arthritis drugs. (See BioWorld Today, June 8, 2006, Oct. 25, 2007, Dec. 20, 2007, and Dec. 1, 2008.)

Through those alliances, Galapagos is able to increase "our shots on goal," CEO Onno van de Stolpe said during a conference call. "We can have many more programs than we would be able to finance ourselves," and the company can see a number of its compounds "into the clinic in parallel."

The company reported a cash position of about ?25 million at midyear 2008, and said at the time that those funds should be sufficient for about 18 months. Galapagos has not yet reported its full-year 2008 results, but Van de Stolpe said the firm is projecting total revenues for the year to fall between ?75 million and ?80 million. n

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