The already unlucky recent history of the Dutch-Belgian biotech company Galapagos took a new – and apparently definitive – twist on Tuesday. The company was once the Dutch promise in the field of pharmaceuticals, but it is now stopping its work on cell therapy against cancer and closing several branches, including the one in Leiden. The works councils of locations in the Netherlands and Belgium still have to agree to the plan.
Galapagos has already changed course several times this year. It previously announced that it would split into two companies. Galapagos would continue to focus on cell therapy against various forms of cancer. The company then said to become a “global market leader” in that field. A new company, SpinCo, would focus on acquiring other drug and treatment developers in the field of oncology, immunology and virology with a dowry of 2.45 billion euros.
That intention to split was canceled in May. Galapagos referred to “changes in regulations and market conditions,” without wanting to specify. CEO Paul Stoffels, who previously announced his departure, was immediately replaced by the American Henry Gosebruch.
Galapagos’ cell therapy is seen as a promising treatment for cancer
And now there is a plan to stop cell therapy completely. Galapagos says it has tried to find a buyer for this part. Stoffels himself also showed interest. “After a number of exploratory bids, there was ultimately no financially feasible proposal with which the [celtherapie] activities could be continued for a long time,” the company says.
It will likely mean the dismissal of 365 employees, including staff in Leiden, Basel, Shanghai (China), Princeton and Pittsburgh (both in the US) and at the head office in Mechelen. At the end of last year, more than 600 people worked at Galapagos.
Future
Cell therapy is considered a promising treatment for cancer. White blood cells from a cancer patient are modified in a laboratory so that, once placed back into the body via an infusion, they can recognize and fight the cancer cells. The edited cells are called CAR T cells.
It is not clear why Galapagos wanted to become the global market leader in cell therapy in January and is now stopping completely – without selling the activities. The company could not be reached for comment on Tuesday afternoon.
The pharmaceutical company now wants to “reposition” itself and focus on acquiring pharmaceutical companies with promising treatments. What remains of Galapagos now that it is largely dismantled is unclear. The company still has several oncology projects underway and is developing a drug against inflammatory bowel diseases through subsidiaries. Even if these processes lead to good results, it will still take a long time before the treatments reach the market and generate revenue.
The company previously made rheumatoid drug Jyseleca available to patients in Europe and Asia. The drug was not authorized in the US. The regulator there was concerned, among other things, about possible effects on fertility in men. Other late-stage drug trials were stopped due to side effects that patients experienced.
Stock market value evaporates
In recent years, the Galapagos stock price has fallen sharply, and on Tuesday it took another dive. While the company was still worth 16 billion euros in 2021, a tenth of that is now left. This creates the strange situation that there is now more money in cash – around 3 billion euros – than the company is worth on the stock exchange. The fact that Galapagos was unable to find a destination for that money shows how errant the company was.
To protect itself against a possible takeover, Galapagos entered into an agreement with American competitor Gilead a few years ago. In exchange for access to Galapagos’ research programs and the rights to sell its drugs in the US, Gilead promised not to acquire the company for ten years and paid 4.5 billion euros.
But that agreement started to strain. For example, Gilead has its own Car-T cell therapy line through its subsidiary Kite. This competed with Galapagos’ treatment. The Americans in particular seem to benefit from the disappearance of Galapagos’ cell therapy branch.
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