Galapagos splits in two, slashes 40% of workforce

Belgium-based biotech Galapagos announced a planned separation into two entities: one focused on building a pipeline of innovative medicines through strategic transactions and one which will continue to advance its cell therapy candidates in oncology.

The newly formed, yet to be named company (known as ‘SpinCo’ for the time being) will focus on innovative medicines with robust clinical proof-of-concept in oncology, immunology, and/or virology. The second company, which will retain the Galapagos name, will continue to use Galapagos’ decentralized cell therapy manufacturing platform in oncology, including advancing its lead CAR-T candidate, GLPG5101, in relapsed/refractory non-Hodgkin lymphoma.

As part of the planned separation, Galapagos and Gilead Sciences have agreed to amend their 10-year global option, license and collaboration agreement inked in 2019. Per the original deal, Gilead had handed Galapagos upfront payment of $3.95 billion as well as an equity investment of approximately $1.1 billion. Now, Galapagos will gain full global development and commercialization rights to its pipeline. Following the separation, the licensing agreement will only apply to SpinCo and not Galapagos.

Gilead will hold approximately 25% of the outstanding shares in both Galapagos and SpinCo.

The split means Galapagos will reorganize its business, cutting approximately 300 positions across the organization in Europe — 40% of the company’s employees. The reorg will reduce staff in the company’s Belgium location and lead to the closure of its site in France.

The streamlining had begun earlier this year, with Galapagos reporting less than ideal financials in February, as well as discontinuing its lupus CAR-T program and reducing its workforce by 100 positions.