Galapagos To Spin Off Innovative Medicines Business

Deal Overview - Galapagos NV plans to split into two listed entities by mid-2025, creating a new entity focused on innovative medicines, referred to as SpinCo, which will concentrate on oncology, immunology, and virology [1][7] - The remaining Galapagos entity will specialize in cell therapy, particularly its lead CAR-T candidate, GLPG5101, for non-Hodgkin lymphoma [2][10] - Both companies will be listed on Euronext, with Gilead Sciences holding approximately 25% of shares in both entities post-split [3][9] Strategic Rationale - The separation is deemed a crucial move to unlock substantial value for shareholders and position Galapagos for sustainable growth [4][9] - SpinCo will receive around $2.5 billion from Galapagos to focus on building a pipeline of innovative medicines through strategic business development [5][13] - The reorganization follows a significant decline in company value, with over 90% correction since 2020 due to clinical trial setbacks and the impact of the COVID-19 pandemic [8][10] Financial Overview - Galapagos expects to have about €500 million in cash post-separation, aiming to address unmet medical needs through its cell therapy pipeline [10][11] - The company anticipates a normalized annual cash burn between €175 million and €225 million, excluding restructuring costs [12] - In FY23, total revenue declined 0.6% YoY to €239.7 million, with collaboration revenues amounting to €239.7 million [26] Workforce and Operations - The reorganization will lead to a reduction of around 300 positions in Europe, representing approximately 40% of the workforce [3][11] - Galapagos plans to discontinue its small molecule discovery programs and seek partners for its small molecule assets [11][19] Research and Development Focus - Galapagos will continue to advance its cell therapy platform, particularly in oncology, while SpinCo will focus on acquiring and developing innovative therapies in oncology, immunology, and virology [10][28] - The company has a robust pipeline of CAR-T therapies and over 15 discovery programs in immunology and oncology [20][21]