Innovation Pharmaceuticals Inc (IPIX)

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CASE STUDY: $5B Upfront for access to pipeline

Gilead Sciences is paying $5.1 billion (€4.5 billion) to enter into a 10-year collaboration with Galapagos. The deal gives Gilead access to all of Galapagos’ current and future programs outside of Europe.

Through the deal, Gilead will gain access to six clinical-phase assets, 20 preclinical programs and whatever else Galapagos moves into the clinic over the next decade. Gilead is paying $3.95 billion upfront and making a $1.1 billion equity investment at a 20% premium in Galapagos to secure such wholesale access to its partner’s pipeline.

With Gilead already having a stake in late-phase JAK1 inhibitor filgotinib, the pipeline of programs covered by the deal is led by phase 3 autotaxin inhibitor GLPG1690 and phase 2b ADAMTS-5 inhibitor GLPG1972. Galapagos is developing GLPG1690 and GLPG1972 in idiopathic pulmonary fibrosis and osteoarthritis, respectively.

Gilead will hand over still more money if GLPG1690 and GLPG1972 progress as hoped. If GLPG1690 is approved in the U.S., Gilead will pay a $325 million milestone fee. Gilead will have to pay $250 million if it wants the U.S. rights to GLPG1972 following the completion of the ongoing phase 2b. That figure will swell by $200 million if the osteoarthritis trial meets certain secondary efficacy endpoints. Gilead is also on the hook for up to $550 million in regulatory and commercial milestones.
The opt-in fee for all other programs is $150 million, with no subsequent milestones, meaning Gilead could pay billions more on top of its huge upfront.

https://www.fiercebiotech.com/biotech/gilead-inks-5b-upfront-deal-to-gain-broad-access-to-galapagos-pipeline?mkt_tok=eyJpIjoiT1RSalpHVXdObU5sTkRkayIsInQiOiJWQlNaYWhqMnVyZkc5ejJLQmlwSVI0QTVNYVhldE44bVgwU0dWOUk5WmxTSmNLUWg4TGNGSkJGelNTWnc0WE45ZEdwUFJxd3kwSXJXaWwwNm1WXC9BMVp1R0tpK2hcL0VNaW5CNEpLU3FlcXJxV3N4U3NHVHcwWHhaM2o5MXl6eWlMIn0%3D&mrkid=762402