Gilead Sciences and Galapagos NV, a Belgian biopharmaceutical company, have closed their previously announced $2 billion global license and collaboration agreement for the JAK1-selective inhibitor, filgotinib for treating inflammatory disease indications.

Under the terms of the agreement, the closing of this transaction triggers an upfront license fee payment of $300 million by Gilead to Galapagos. In addition, Gilead has made a $425 million equity investment in Galapagos by subscribing for new shares at a price of EUR 58 per share, including issuance premium. As a result, Gilead now owns 6,760,701 ordinary shares of Galapagos, representing 14.75% of the currently outstanding share capital of Galapagos.

Galapagos and Gilead entered into a collaboration for the global development and commercialization of filgotinib in inflammatory diseases in December 2015. 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 rheumatoid arthritis (RA). Galapagos will co-fund 20% 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 is entitled to an upfront payment of $725 million under the collaboration agreement, consisting of a license fee of $300 million and a $425 million equity investment in Galapagos. In addition, Galapagos is eligible for payments of up to $1.35 billion in milestones, with tiered royalties starting at 20% and a profit split in co-promotion territories.

Source: Gilead Sciences