Galapagos NV announced that it has entered into a worldwide multi-target alliance with Janssen Pharmaceutical NV, a Johnson & Johnson company, to discover and develop novel small-molecule therapeutics for the treatment of rheumatoid arthritis (RA).
Under the alliance agreement, Janssen may select up to 12 programmes from Galapagos' internally identified RA targets into the alliance. Janssen receives future option rights to exclusively license these programs. In addition, Janssen obtained an option to the future development and commercialisation of product candidates from Galapagos' other internal RA programs, including its most advanced program based on the kinase target GT418. A compound from this proprietary drug discovery program is expected to enter phase I clinical trials in 2008.
With the signing of the agreement, Janssen will make an initial up-front cash payment of €15 million to Galapagos. In addition, Janssen will make a €2 million milestone payment for the selection of GT146, one of Galapagos' advanced RA programs, into the alliance.
Under the alliance agreement, Galapagos will be responsible for the discovery of small molecule product candidates for those novel, validated RA targets that are chosen by Janssen. Galapagos will develop product candidates through to phase IIa Proof of Concept (POC) clinical trials. During the term of the collaboration, Galapagos is eligible to receive success-based progress milestones from Janssen. Upon Galapagos' achievement of POC for a product candidate, Janssen has an exclusive option to license the product candidate from each alliance program and will then assume full responsibility for further clinical development and worldwide commercialisation, at its expense. For each alliance program licensed by Janssen, contingent on discovery, development and regulatory accomplishments, Galapagos could receive option exercise fees and milestone payments up to €73 million, plus royalties on net sales of each approved new RA drug.
In addition to performing research on the alliance RA targets, Galapagos will continue to perform the R&D activities for its internal RA programs, including its most advanced program GT418, at its own expense up to clinical POC, subject to an exclusive option by Janssen. Janssen's license option for the Galapagos drug will become exercisable upon successful completion of phase IIa clinical trial by Galapagos. Should Janssen elect to exercise the option, a non-refundable exercise fee of €60 million will be paid and thereafter Janssen would be responsible for the development and global commercialisation, at its expense. Galapagos could be eligible to receive up to €430 million in development and regulatory milestones payments should more than one product be approved for several indications in major markets. Furthermore, if a licensed product is commercialised, Galapagos could receive up to €346 million of one-time sales milestones upon the achievement of predetermined sales levels and receive double-digit royalties on worldwide sales.
"This deal will provide us with the resources to broaden our product pipeline in RA, exploiting the full value of our portfolio of proprietary targets. It will increase the chances of bringing a disease modifying drug against rheumatoid arthritis to the market," stated Onno van de Stolpe, CEO, Galapagos. "Janssen's vast experience in clinical development and commercialization in rheumatoid arthritis make Janssen the perfect partner for this programme."
Galapagos is a drug discovery company with pre-clinical programs in bone and joint diseases. In the RA program, lead compounds have shown significant disease-modifying properties and good pharmacokinetic properties in relevant animal models of the disease. These molecules also show substantial protection against bone loss in the industry standard RA animal models. The compounds target proprietary kinase proteins that were identified using the Galapagos' SilenceSelect target discovery platform. Based on these results, Galapagos anticipates initiation of pre-clinical studies later this year, with the potential of a candidate drug entering clinical Phase I in 2008.
RA is a chronic disease, mainly affecting the joints. The disease is characterized by inflammation of the affected joint, which can result in chronic pain, swelling and stiffness, and later, joint destruction and disability. RA is the most debilitating form of arthritis and the most common inflammatory joint disease. It is estimated that 1-2 per cent of the population has RA, and although it can occur at any age, onset usually begins between the ages of 25 and 50. Women are three times more likely than men to be affected by RA. Current market for RA medicines is estimated at €7 billion annually; this is expected to approach €9 billion by 2011.
Galapagos is a drug discovery company with pre-clinical programs in bone and joint diseases and cachexia. Its division BioFocus DPI offers a full suite of target-to-drug discovery products and services to pharmaceutical and biotech companies, encompassing target discovery and validation, screening and drug discovery through to delivery of pre-clinical candidates. BioFocus DPI also provides adenoviral reagents for rapid identification and validation of novel drug targets, compound libraries for drug screening as well as chemogenomics and ADMET database products to select targets and compounds. Galapagos currently employs 460 people and operates facilities in seven countries, with global headquarters in Mechelen, Belgium.