Galapagos to wind down cell therapy business

Galapagos has announced its intention to wind down its cell therapy business and “pursue new transformational business development transactions” with its available cash resources.

According to the company, the decision follows a comprehensive review of strategic alternatives, including a potential divestiture. The plan will enable the Galapagos to use its available cash to execute build a pipeline of novel therapeutics through strategic business development transactions under the leadership of its new management team.

The Belgium-based biotech started the year by slashing its workforce by 40% and announcing a planned separation into two companies: one focused on building a pipeline of innovative medicines through strategic transactions and one that would advance the company’s cell therapy candidates in oncology. By May, the Galapagos board of directors had decided to re-evaluate the proposed separation and began exploring other options for its existing businesses. By July Galapagos decided to consolidate its cell therapy activities under a new standalone entity — Galapagos Cell Therapeutics — as the company looked to maximize value while exploring strategic alternatives for its cell therapy business.

The intention to wind down the cell therapy business was unanimously approved by the board of Galapagos, other than the two directors appointed by Gilead, both of whom recused themselves from the vote.

“Following a limited number of non-binding offers, ultimately no viable proposals were received with terms or financing that would reasonably support the business’ future. After a comprehensive review of all strategic alternatives, given the ongoing investment requirements, coupled with evolving market dynamics and taking into account the interest of all relevant stakeholders, we believe that allocating our capital to other areas of unmet need would be a more attractive use of our resources,” said Henry Gosebruch, CEO of Galapagos.

The wind down will impact approximately 365 employees across Europe, the U.S. and China, as well as the closure of the sites in Leiden (the Netherlands), Basel (Switzerland), Princeton and Pittsburgh (U.S.), and Shanghai (China). The remaining Galapagos org will keep a dedicated presence at its headquarters in Mechelen, Belgium. The non-cell therapy activities will continue to be managed by Galapagos.