There was a jump in the shares of Galapagos in the early trading Monday following the statement of Gilead Sciences which stated that it will increase its stake in the Belgian biotechnology firm as part of a $US5.1bn deal.
There was an increase in the shares of Galapagos as much as 18 percent in the early trading. Gilead Sciences traded almost flat to lower. The announcement of a ten-year-long research agreement was made on Sunday.
The deal includes an amount of $US3.95Bn to be paid by Gilead to Galapagos upfront & making a $US1.1Bn equity investment which is equivalent to $US158.49 per share, to boost its stake in the firm to 22 percent from 12.3 percent. The investment shows a representation of a 20 percent premium to Galapagos’ per month average share price, which most recently closed at $US145.75 per share. Galapagos trades in Amsterdam and on Nasdaq.
If the deal gets approved by the shareholders of Galapagos, Gilead will get 2 seats on the board of directors of Galapagos. It will also be gaining the rights outside Europe to Galapagos’ treatments in development.
Capital would be given to Galapagos according to the deal for the advancement of its drug-research initiatives. The Belgian firm has 6 compounds in human testing, inclusive of drugs for knee osteoarthritis & pulmonary fibrosis.
The Chief Executive Officer, as well as, Chairman of Gilead, Daniel O’Day stated that they are thrilled to tap into this unique agreement, which will be generating both strategic value & mutual, immediate benefits. They chose to partner with Galapagos because of its ground-breaking target & drug discovery platform, proven scientific capabilities and exceptional team.
The two firms have teamed up on a drug for rheumatoid arthritis for over three years.