Gilead Sciences entered a partnership with Galapagos potentially worth more than $2 billion to develop and market the latter's JAK1-selective inhibitor filgotinib for inflammatory diseases, the companies reported Thursday. Gilead chief scientific officer Norbert Bischofberger said the deal "represents an opportunity to add complementary clinical programmes to our growing inflammation research and development efforts."
Under the agreed terms, Gilead will pay Galapagos a license fee of $300 million and make an equity investment in the Belgian company of $425 million, representing around 15 percent of the drugmaker. Further, Galapagos is eligible to receive payments of up to $1.35 billion in milestones, with tiered royalties starting at 20 percent and a profit split in co-promotion territories.
The companies noted that under the partnership, they will collaborate jointly on the global development of filgotinib starting with the initiation of Phase III trials in rheumatoid arthritis (RA). Galapagos will co-fund 20 percent of global development activities and Gilead will be responsible for manufacturing and worldwide marketing and sales activities. Meanwhile, Galapagos has the option to co-promote filgotinib in the UK, Germany, France, Italy, Spain, Belgium, the Netherlands and Luxembourg, in which case the companies will share profits equally.
Gilead and Galapagos noted that mid-stage trial results have shown that filgotinib has the potential to be an effective and well-tolerated oral therapy for patients with RA and Crohn's disease. The companies plan to start Phase III trials in both indications in 2016 pending the successful outcome of discussions with regulatory authorities. For related analysis, see and Physician Views Poll Results: Opportunity for oral Crohn's disease drugs significant, but pricing will be critical, argue gastroenterologists .
In September, AbbVie decided against  exercising its right to filgotinib after announcing plans to move its own experimental JAK1 inhibitor ABT-494 into Phase III development in RA. "In the hands of Gilead, filgotinib has found a strong partner," noted KBC analyst Jan De Kerpel, adding "the deal should also remove doubts investors had on the reason why AbbVie didn't lift the option." Shares in Galapagos rose as much as 15 percent on the news. For related analysis, read ViewPoints: Galapagos strikes back .
For more information on the latest developments in RA, see Rheumatoid Arthritis: Update Bulletin .