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12:00 AM
 | 
Mar 05, 2012
 |  BioCentury  |  Strategy

Not optional

How Galapagos structured its JAK-1 deal with Abbott for rheumatoid arthritis

Galapagos N.V. desired to control Phase II studies of its GLPG0634 oral Janus kinase-1 inhibitor in rheumatoid arthritis, but also wanted an experienced Phase III partner.

The result was last week's hybrid option-like licensing deal with Abbott Laboratories. The biotech gets to take the JAK-1 compound through the Phase II study in RA without delay, while the pharma expects to get a molecule with a relatively benign safety profile and competitive efficacy in what is fast becoming a crowded space.

Galapagos will receive $150 million up front to design and conduct a Phase IIb study. If the data meet undisclosed safety and efficacy criteria, Abbott will pay $200 million for a worldwide license to develop and commercialize the program.

The latter payment resembles an option exercise, except that Abbott cannot back out if the criteria are met.

"With a traditional option, it is dependent upon what the partner thinks at the time," Galapaos CEO Onno van de Stolpe told BioCentury. Under the Abbott deal, "we have certainty that this program will be licensed after Phase IIb - and we get $150 million to execute the trial."

Galapagos also is eligible for up to $1 billion in development, regulatory and commercial milestones, including development of GLPG0634 for additional indications like...

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