Pharmaceutical firm Galapagos announced that it will split into two separate companies in a restructuring that will include a layoff of 300 employees and changes to a major licensing agreement with Gilead Sciences.
The Mechelen, Belgium-based drug manufacturer said in a statement that its planned separation will create two entities: a new company that Galapagos is currently calling SpinCo, focused on building a pipeline of therapeutics in oncology, immunology, or virology; and Galapagos, which would continue advancing its work in oncology cell therapy, including its lead CAR-T candidate, GLPG5101, that has shown promising results in patients with relapsed/refractory non-Hodgkin's lymphoma.
SpinCo will be financed with approximately 2.45 billion euros ($2.5 billion) of Galapagos’ current cash.
The restructuring will result in the elimination of approximately 300 jobs, a 40% cut in Galapagos’ workforce. The layoffs will occur throughout the company’s sites in Belgium and France, with the site in France expected to close, according to the firm. Galapagos will continue operating from its hubs in Princeton, NJ; Pittsburgh; Leiden, the Netherlands; and Mechelen, Belgium.
Furthermore, as part of the planned restructuring and company separation, Galapagos and Gilead are amending their 2019 optioning, licensing, and collaborative agreement. With the changes, the agreement will only apply to SpinCo; Galapagos will gain full global development and commercialization rights to its pipeline, subject to the payment of single-digit royalties to Gilead on net sales of certain products, the firm said.
Gilead will own about 25% of each of the two companies; all Galapagos shareholders will receive shares of SpinCo on a pro rata basis based on their shares of Galapagos owned as of a record date to be established, following the approval by Galapagos shareholders. Both companies will be listed on Euronext, Galapagos added.
The spinoff of SpinCo is subject to the satisfaction of customary conditions, including concluding consultations with works councils in the Netherlands, Belgium, and France, Galapagos said, and the approval of Galapagos shareholders. The firm expects the separation to occur by mid-2025.
