· Total cash
consideration of up to €134 million o
€129 million cash payment o
earnout of €5 million upon achievement of revenue target
after 12 months ·
Proceeds to be used to progress Galapagos'
pipeline o four Phase 2 patient data
readouts expected over next 15 months o
delivery of multiple Phase 1 studies and candidates in
2014 ·
Galapagos retains target discovery capabilities for its
R&D and alliance operations
· Management guidance
for 2014 Group revenues (including Argenta and
BioFocus revenues Q1) of €125 million and year end cash of €170
million
Galapagos to hold a live audio webcast presentation today
at 10.00 CET, call number + 32-2290-1608, www.glpg.com
MECHELEN, Belgium, March 13, 2014 (GLOBE NEWSWIRE)
-- Galapagos NV (Euronext: GLPG) announces the signing
of a definitive agreement to sell the BioFocus and Argenta service
division operations to Charles River Laboratories International,
Inc. (NYSE: CRL) for a total consideration of up to €134
million. The transaction is subject to customary closing
conditions and is expected to close early in the second quarter of
2014.
"We are pleased to sell the Argenta and BioFocus
divisions to Charles River, one of the premier life science service
providers in the world. These newly acquired capabilities are
fully complementary to the services provided by Charles River, and
Charles River therefore provides a logical and excellent home for
Argenta and BioFocus," CEO Onno van de Stolpe commented.
"With this transaction, Galapagos transforms from a hybrid drug
discovery service and pipeline company into a research and
development biotech focusing on developing innovative drugs for
unmet medical needs. We have created significant value in
building our service activities, and BioFocus and Argenta have
greatly contributed to our current pipeline. The time has now
come to move into the next phase of the Company with our focus on
the pipeline, and to let Argenta and BioFocus continue their
success under the wings of Charles River. We would like to
thank the employees of Argenta and BioFocus for their contribution
to Galapagos' success over the years. We wish them the very
best within Charles River."
Details of the transaction
Charles River acquires all service operations of BioFocus and
Argenta in the UK and The Netherlands. The acquisition
includes all client contracts, order pipeline, premises, equipment,
and further obligations of BioFocus and Argenta. All
employees of BioFocus and Argenta will move into the Charles River
organization upon completion of the transaction, which is expected
to occur early in the second quarter of 2014, subject to customary
closing conditions. David Smith will join Charles River
as Corporate Vice President, In Vitro Discovery Services and lead
the transition.
Charles River agrees to pay Galapagos immediate cash
consideration of €129 million. Upon achievement of a revenue
target 12 months after transaction closing, Galapagos will be
eligible to receive an earnout payment of €5 million. The
purchase price implies a multiple of approximately 2 times 2013
sales and approximately 12 times 2013 adjusted EBITDA.
Galapagos agrees to retain 5.4% of the €129 million cash
consideration in an escrow account for 15 months.
Charles River is a global leader in drug
research services, with over 7700 employees and 2013 revenues of
$1.17 billion. The acquisition affords Charles River further
vertical integration into a high growth outsourcing area, fully
complementary to its existing offering and in line with its
announced growth strategy.
Galapagos retains target discovery and assay
development capabilities in Leiden for its R&D and alliance
operations. Post-transaction, Galapagos will have three
R&D sites in Mechelen, Belgium (headquarters), Romainville,
France, and Leiden, the Netherlands. Galapagos also retains
Fidelta, a fee-for-service operation based in Zagreb,
Croatia. In total, Galapagos employs over 400 staff.
Outlook 2014
Management guides for €125 million in Group revenues in 2014
(lowered from €180M as a result of divesture of the Argenta and
BioFocus operations), and a year-end cash position of €170
million.
Conference call and webcast presentation
Galapagos will conduct a conference call open
to the public today at 10:00 Central European Time (CET)/5:00 AM
EDT, which will also be webcast. To participate in the
conference call, please call +32-2290-1608 ten minutes prior to
commencement. Go to www.glpg.com to access the live audio
webcast. The archived webcast will also be available for
replay shortly after the close of the call.
About Galapagos
Galapagos (Euronext: GLPG; OTC: GLPYY) is
specialized in novel modes-of-action, with a large pipeline
comprising five Phase 2 studies (two led by GSK), one Phase 1
study, six pre-clinical, and 20 discovery small-molecule and
antibody programs in cystic fibrosis, inflammation, antibiotics,
metabolic disease, and other indications. In the field of
inflammation, AbbVie and Galapagos signed a worldwide license
agreement whereby AbbVie will be responsible for further
development and commercialization of GLPG0634 after Phase 2B.
GLPG0634 is an orally-available, selective inhibitor of JAK1 for
the treatment of rheumatoid arthritis and potentially other
inflammatory diseases, currently in Phase 2B studies in RA and in
Phase 2 in Crohn's disease. Galapagos has another selective
JAK1 inhibitor in Phase 2 in ulcerative colitis and psoriasis,
GSK2586184 (formerly GLPG0778, in-licensed by GlaxoSmithKline in
2012). GLPG0974 is the first inhibitor of FFA2 to be
evaluated clinically for the treatment of IBD; this program is
currently in a Proof-of-Concept Phase 2 study. GLPG1205 is a
first-in-class molecule that targets inflammatory disorders and has
completed Phase 1. AbbVie and Galapagos signed an agreement
in CF whereby they work collaboratively to develop and
commercialize oral drugs that address two mutations in the CFTR
gene, the G551D and F508del mutation. Potentiator GLPG1837 is
at the pre-clinical candidate stage. Galapagos has 400
employees, operating from its Mechelen, Belgium headquarters and
facilities in The Netherlands, France, and Croatia. Further
information at: www.glpg.com
CONTACT
Galapagos NV Elizabeth Goodwin, Head of
Corporate Communications & Investor Relations Tel: +31 6 2291
6240 ir@glpg.com
This release may contain forward-looking
statements, including, without limitation, statements containing
the words "believes," "anticipates," "expects," "intends," "plans,"
"seeks," "estimates," "may," "will," "could," "stands to," and
"continues," as well as similar expressions. Such forward-looking
statements may involve known and unknown risks, uncertainties and
other factors which might cause the actual results, financial
condition, performance or achievements of Galapagos, or industry
results, to be materially different from any historic or future
results, financial conditions, performance or achievements
expressed or implied by such forward-looking statements. Given
these uncertainties, the reader is advised not to place any undue
reliance on such forward-looking statements. These forward-looking
statements speak only as of the date of publication of this
document. Galapagos expressly disclaims any obligation to update
any such forward-looking statements in this document to reflect any
change in its expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is
based, unless required by law or regulation.
HUG#1768493
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