Galapagos and Gilead Announce Global Partnership to Develop Filgotinib for the Treatment of Inflammatory Diseases

Galapagos and Gilead Sciences have entered into a global partnership for the development and commercialization of the JAK1-selective inhibitor filgotinib for inflammatory disease indications.

PRESS RELEASE

MECHELEN, Belgium

&

FOSTER CITY, Calif.

--(BUSINESS WIRE)--Dec. 17, 2015--

Galapagos NV

(Euronext & NASDAQ:GLPG) and

Gilead Sciences, Inc.

(NASDAQ:GILD) today announced that the companies have entered into a global partnership for the development and commercialization of the JAK1-selective inhibitor filgotinib for inflammatory disease indications. Galapagos will receive an upfront payment of

$725 million

consisting of a license fee of

$300 million

and a

$425 million

equity investment in Galapagos. In addition, Galapagos is eligible for payments up to

$1.35 billion

in milestones, with tiered royalties starting at 20% and a profit split in co-promotion territories.

Phase 2 trial data show that filgotinib has the potential to be an effective and well-tolerated oral therapy for patients with rheumatoid arthritis (RA) (DARWIN studies) and Crohn’s disease (FITZROY study). The companies will start Phase 3 trials in RA and Crohn’s in 2016 pending the successful outcome of discussions with regulatory authorities.

“We are excited about the potential of filgotinib in RA and other diseases with a strong partner like Gilead, which shares our goal of rapidly delivering these therapies for patients,” said

Onno van de

Stolpe, Chief Executive Officer of Galapagos. “Furthermore, we look forward to the perspective of working together worldwide across other possible indications. The co-development and co-promotion aspects of this collaboration bring us into the next phase of the company’s evolution.”

“This partnership represents an opportunity to add complementary clinical programs to our growing inflammation research and development efforts,” said

Norbert Bischofberger

, PhD, Gilead’s Executive Vice President, Research and Development and Chief Scientific Officer. “We look forward to working with Galapagos to advance this program forward as quickly as possible.”

Under the terms of the agreement, the companies will collaborate jointly on the global development of filgotinib starting with the initiation of Phase 3 trials in RA. Galapagos will co-fund 20 percent of global development activities and Gilead will be responsible for manufacturing and worldwide marketing and sales activities. 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. If Galapagos exercises its option to co-promote in

Belgium

,

the Netherlands

or

Luxembourg

, it will also book sales in these countries.

Galapagos will receive an upfront license fee of

$300 million

and Gilead will make a

$425 million

equity investment in Galapagos by subscribing for shares at a price of €58 per share, which represents a 20% premium as compared to the average share price over the last 30 days. After the issuance of the shares, Gilead will own approximately 15% of the outstanding share capital of Galapagos depending on the $/€ exchange rate at closing. Galapagos is eligible to receive further development, regulatory and commercial milestone payments up to

$1.35 billion

, plus tiered royalties on global sales starting at 20%, with the exception of the co-promotion territories where profits will be shared equally.

This transaction has been approved by the boards of both companies, and is subject to customary closing conditions and clearances under the Hart-Scott Rodino Antitrust Improvements Act.