Wall Street Trader schreef op 6 augustus 2020 13:28:
Some more information about the Gilead deal/collaboration (Dec. 2, 2019)Dr. Ashok Dutta, Avisol Capital PartnersWe then discussed the terms of the partnership with Gilead. Here's what we asked:
Dr. Ashok Dutta: Your lead drug candidate is filgotinib, which many analysts consider a potential blockbuster drug. However, in 2016, you sold the rights to Filgotinib to Gilead for a 15% (22% now in 2019), $425mn stake in Galapagos, $1.35bn in milestone payments and between 20% and 30% in royalties, in all geographies and for all indications. Is my understanding of the terms of the 2016 Gilead partnership correct? What's the latest partnership terms from 2019 with Gilead?
What led you to license Filgotinib to Gilead and partner with them?Essentially, though, this increasingly comprehensive partnership has allowed Galapagos to leave the hassle of commercialisation to a more expert biopharma major while making very generous revenues in milestones and potential royalties. However, in my next question, I still asked him if the partnership was beneficial to Galapagos all the way.
Dr. Ashok Dutta: In hindsight, would you have done this differently from 2016?
Would you have liked to retain the rights to filgotinib for yourself, or have made other changes to the terms? I guess what I am trying to ask is, what are some of the positives and negatives of the Gilead partnership as far as Galapagos is concerned?
How are those going to affect your plans for future partnerships for the rest of your pipeline?Mr. Onno van de Stolpe: At the time, this was the right deal with the right partner. Gilead has done an excellent job of executing phase 3 trials in rheumatoid arthritis and are exploring filgotinib in a whole range of other inflammatory diseases. In the new alliance we were able to increase our commercial footprint for Galapagos, which was something we wanted but were not able to negotiate in 2016. One learns along the way, and the many partnerships that we had over the past 15 years provides us with an excellent framework on what we want and especially what we do not want in an alliance.
I believe this has all come very good together in the all-encompassing alliance with Gilead, where we struck the right balance between independence in R&D and dependence on bringing innovative products to the market.What are the three main reasons investors would be interested in Galapagos?Mr. Onno van de Stolpe: We have a fantastic pipeline with a number of potentially blockbuster molecules moving towards the market.
The true innovation, based on a unrivaled target discovery platform, has already delivered new mode of actions into late stage clinical trials, and has the promise to address further diseases with high unmet medical needs.
The $6 billion cash pile enables us to make the right decisions for the projects, nut hindered by funding concerns. This increases the chance of further success. And that combined with the guaranteed 10-year independence as part of the Gilead deal, makes me a strong believer in the potential to grow out into one of the leading biotech companies in the world. This is just the beginning...
Terms of the collaborationWe will fund and lead all discovery and development autonomously until the end of Phase 2. After the completion of a qualifying Phase 2 study, Gilead will have the option to acquire a license to the compound outside Europe. If the option is exercised,
we and Gilead will co-develop the compound and share costs equally. Gilead will maintain option rights to our programs through the 10-year term of the collaboration and for up to an additional three years thereafter for those programs that have entered clinical development prior to the end of the collaboration term. If GLPG1690 is approved in the United States, Gilead will pay us an additional $325 million milestone fee. For GLPG1972, after the completion of the ongoing Phase 2b study in osteoarthritis, Gilead has the option to pay a $250 million fee to license the compound in the United States. If certain secondary efficacy endpoints are met, Gilead will pay us up to an additional $200 million. Following opt-in on GLPG1972, we are eligible to receive up to $550 million in regulatory and commercial milestones. For all other programs resulting from the collaboration, Gilead will make a $150 million opt-in payment per program and will owe no subsequent milestones. We will receive tiered royalties ranging from 20-24% on net sales of all our products licensed by Gilead in all countries outside Europe as part of the agreement.
Filgotinib collaborationUnder the revised agreement, we will have greater involvement in filgotinib’s global strategy and participate more broadly in the commercialization of the product in Europe, providing the opportunity to build a commercial presence on an accelerated timeline. We and Gilead will co-commercialize filgotinib in France, Germany, Italy, Spain and the United Kingdom and retain the 50/50 profit share in these countries that was part of the original filgotinib license agreement, and under the revised agreement, we will have an expanded commercial role. We will be the lead commercialization party for filgotinib in France, Italy and Spain for rheumatology indications and Gilead will be the lead commercialization party for gastro indications. In Germany and the United Kingdom, Gilead will lead the rheumatology indications and Galapagos will lead the gastro indications. We retain exclusive commercialization responsibility in Belgium, the Netherlands and Luxembourg, where the 50/50 profit share also applies. The companies will share future global development costs for filgotinib equally until a predetermined level, in lieu of the 80/20 cost split provided by the original agreement. Other terms of the original license agreement remain in effect, including the remaining $1.27 billion in total potential milestones and tiered royalties ranging from 20-30% payable in territories outside of Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain and the United Kingdom.
Terms of the equity investment
Gilead’s equity investment consists of a subscription for new Galapagos shares at a price of €140.59 per share, representing at 14 July 2019 a 20% premium to Galapagos’ 30-day, volume-weighted average price. This equity subscription took place at closing of the transaction, on 23 August 2019 and increased Gilead‘s stake in Galapagos from approximately 12.3% to 22.04% of the then issued and outstanding shares in Galapagos.
In addition, we intend to seek shareholder approval to issue two warrants allowing Gilead to further increase its ownership of Galapagos to up to 29.9% of the company’s issued and outstanding shares. The agreement also includes a 10-year standstill restricting Gilead’s ability to seek to acquire Galapagos or increase its stake in Galapagos beyond 29.9% of the company’s issued and outstanding shares, subject to limited exceptions.