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Gilead, Galapagos close $5.05B research agreement

Gilead Sciences Inc. and Galapagos NV have closed their research and development collaboration, valued at over $5 billion, having received antitrust clearance from the U.S. Federal Trade Commission and merger control approval from the Austrian Federal Competition Authority.

Gilead will immediately pay Galapagos $3.95 billion, per the terms of the agreement signed on July 14. The Foster City, Calif.-based biotechnology company has also made an equity investment in Galapagos of approximately $1.1 billion, or about €960 million, thus raising its ownership to 13,589,686 shares of the Belgian drug developer, or about 22% of Galapagos' outstanding share capital.

Galapagos focuses on small molecule medicines, which includes experimental rheumatoid arthritis drug filgotinib, currently under European Medicines Agency review.

The companies previously said the collaboration will allow Galapagos to continue to fund and lead drug development through phase 2 of clinical trials, at which point Gilead will have the option to acquire an expanded license of the compound.