BRUSSELS (Reuters) - Belgian biotech company Galapagos (GLPG.AS) has signed a development deal for drugs targeting inflammatory diseases potentially worth more than $2 billion with U.S. group Gilead (GILD.O).
For the deal, which concerns experimental drug filgotinib, Galapagos will receive a $725 million upfront payment and may receive up $1.35 billion in payments if certain targets are met as well as royalties once the drug enters the market.
The $725 million upfront payment is made up of a $300 million license payment and a $425 million equity investment, Galapagos said.
The capital investment will be made through the acquisition of Galapagos shares at 58 euros each, a 20 percent premium to the average closing price over the past 30 days, the group added. After the transaction, Gilead will own a 15 percent stake.
Filgotinib may start final clinical trials (Phase III) for rheumatoid arthritis and Crohn's disease in 2016, Galapagos said.
Reporting by Robert-Jan Bartunek; Editing by Biju Dwarakanath