Galapagos to acquire Inpharmatica
December 06 2006 - 1:00AM
UK Regulatory
Acquisition broadens drug discovery capabilities and services
Webcast Conference Call Scheduled for 10.00 AM CET on 6 December,
2006
* Acquisition price of �12.5 million in all-share transaction
* Acquired assets include an estimated �6 million in cash (of which
half is due by December 31, 2006)
* Potential all-share earn out payments of maximum �6.6 million based
on pre-agreed commercial milestones
* Technology will accelerate Galapagos' drug development
* Services will add breadth and depth to BioFocus DPI offering
* Estimated 2006 Inpharmatica revenues of �4.7 million
Mechelen, Belgium, and London, UK, 6 December, 2006; Galapagos NV
(Euronext & London AIM: GLPG), an integrated drug discovery company,
and UK-based Inpharmatica Ltd. today announced that they have entered
into a definitive agreement under which Galapagos will acquire
Inpharmatica in an all-share transaction. The acquisition price of
Inpharmatica is in three components: the ongoing business is valued
at �6.5 million, the estimated cash at an additional �6 million (of
which half is due by 31 December 2006), and the potential maximum
earn-out related to commercial milestones at �6.6 million.
Galapagos will issue, on the basis of �8.82 per share (the average
GLPG share price over the last thirty days prior to 5 December 2006),
a maximum of 2,165,532 new shares assuming that all three components
are fully delivered. The new shares will be issued to the
Inpharmatica shareholders in three tranches. The first tranche of
623,582 new Galapagos shares shall be issued in December 2006. Two
subsequent tranches are due to be issued in April and May 2007. The
exact number of shares to be issued in these two tranches at that
time will be dependent upon certain pre-agreed contractual
conditions.
All issued shares will be subject to a lock up agreement ending 10
May 2007. Galapagos shall apply for a listing of the newly issued
Galapagos shares on Euronext Brussels and Euronext Amsterdam, subject
to the approval by the Belgian Banking Finance and Insurance
Commission (BFIC-CBFA) of a prospectus as required under applicable
Belgian law, as well as on London AIM.
Inpharmatica is a world-leader in the development and application of
powerful, genome-scale predictive products and services for drug
discovery research. The company's technologies for drug discovery
will bolster Galapagos' leading position in this field by improving
the Group's ability to select targets and compounds based on
predictive models and expertise. These technologies include ADME[1]
services (Admensa(TM)), a novel approach to prioritize chemical
compounds in drug screening, as well as chemo-informatics services
(Chematica(TM)) to select the best targets for drugability[2]. Both
technologies have already been widely adopted by the pharmaceutical
industry and enjoy a track record of success. Major new customers
brought by Inpharmatica to the Galapagos group include Pfizer and
Schering.
Inpharmatica will become part of BioFocus DPI, Galapagos' drug
discovery services business. BioFocus DPI will assume the commercial
and scientific management of Inpharmatica, including the execution of
all current contracts of Inpharmatica. As a consequence of the
acquisition, the companies anticipate downsizing of Inpharmatica's
management, sales and administrative staff positions. The current
CEO and CFO will assist in handover until 31 December 2006 and 31
March 2007 respectively. Immediate annualized operational synergies
are expected to amount to about �1.5 million. As part of the
acquisition, Galapagos will obtain certain downstream financial
rights to Inpharmatica's internal PPAR-delta program, addressing
obesity and diabetes, which has reached the stage of candidate
selection.
"We are excited to add the distinguished drug discovery capabilities
of Inpharmatica to our BioFocus DPI business. Adding proprietary
target and compound selection tools to our platform provides an even
broader array of drug discovery solutions for both our internal R&D
and for our services business," commented Onno van de Stolpe, CEO of
Galapagos. "It will position our company further for additional
turn-key deals ranging from target discovery all the way to clinical
Proof of Concept."
"We believe that the merger of our drug discovery service operations
into BioFocus DPI creates the best value for our shareholders", said
John Lisle, Inpharmatica's CEO. "Integrating Admensa and Chematica
within the BioFocus DPI offering will greatly increase their
commercial potential and opportunity."
Rationale and strategy of acquisition by Galapagos
Galapagos acquires Inpharmatica as part of its strategy to build a
worldwide leader in drug discovery services, ranging from target
discovery all the way through to the delivery of compounds with
clinical Proof of Concept.
Galapagos will integrate Inpharmatica into its service division
BioFocus DPI. Inpharmatica currently employs around 30 people in
Cambridge and London, UK; the majority of this staff will join
BioFocus DPI and will bring the total Galapagos headcount to over 380
staff in seven countries.
Galapagos will also employ this acquired capability in its own drug
discovery programs in bone and joint diseases, where it aims to bring
its own candidate drugs into the clinic.
The acquisition of Inpharmatica fits within Galapagos' strategy to
partner with pharmaceutical and biotechnology companies in turn-key
drug discovery collaborations, as it strengthens the company's
breadth of technologies and services. Galapagos entered such a
turn-key alliance with GlaxoSmithKline in osteoarthritis in June 2006
and intends to complete two more such turn-key deals in the coming
three years.
The predictive drug discovery capabilities acquired are expected to
accelerate Galapagos' own R&D pipeline by enabling prioritization of
its validated targets and the chemical lead compounds in the process
of drug development.
Webcast Conference Call details
Galapagos will host a conference call discussing the transaction on 6
December, 2006 at 10.00 AM CET/ 9.00 AM GMT. To participate in the
call, dial +32 2290 1608 ten minutes in advance of the call. A live
webcast of the conference call can be accessed on the Galapagos and
Inpharmatica websites at www.glpg.com and www.inpharmatica.co.uk,
respectively. An archived version of the webcast will be available
later today and archived on both company's websites for 30 days.
About Galapagos
Galapagos is a publicly traded, genomics-based drug discovery company
(Euronext Brussels, GLPG; Euronext Amsterdam, GLPGA, London AiM:
GLPG) that has drug discovery programs based on proprietary, novel
targets in bone and joint diseases - osteoarthritis, osteoporosis and
rheumatoid arthritis. Galapagos offers a full suite of
target-to-drug discovery products and services to pharmaceutical and
biotech companies through its division BioFocus DPI, encompassing
target discovery and validation, and drug discovery services through
to clinical Proof of Concept. In addition, BioFocus DPI provides
adenoviral reagents for rapid identification and validation of novel
drug targets and compound libraries for screening. Prior to this
transaction, Galapagos employed more than 360 staff, and occupies
facilities in the US, the UK, Belgium, Switzerland, Germany and the
Netherlands. Galapagos maintains its revenue guidance for 2006 of
�33-38 million. More information about Galapagos and BioFocus DPI
can be found at www.glpg.com.
About Inpharmatica
Inpharmatica is a privately held drug discovery company. Founded in
1998, the company employs around 30 people at its UK locations in
London and Cambridge. Major investors include 3i, GIMV, Advent
Venture Partners, Abingworth, Gilde and Reed Elsevier Ventures. The
principal capability of Inpharmatica is to effectively manage and
leverage the overwhelming gene, protein and drug compound related
data generated in drug discovery.
The company offers a full set of predictive capabilities, database
products and consultancy services to accelerate the drug discovery
process and enable creation of high quality Candidate molecules.
Inpharmatica reported an audited operating loss of �11.9 million for
the year ended 31 December 2005, mainly attributable to the discovery
unit, and net assets of �10.9 million (before preference share debt
of �18.5 million, which will be eliminated upon consolidation by
Galapagos). The discovery unit was closed during 2006, consolidating
operations towards services, and Inpharmatica is in advanced stages
of agreeing a partner for its PPAR delta discovery program.
Galapagos acquired the continuing service operations as well as the
downstream PPAR-delta rights. It has two remaining service business
units:
Chematica(TM), which enables effective selection of the best
biological targets and the most appropriate drug-like chemistry
starting points for advancement; and
Admensa(TM), which enables the highly efficient selection of chemical
compounds with the optimal balance of ADME properties.
Inpharmatica is a very well-known and highly-regarded partner to the
pharma and biotech industries with excellent connections in most
leading companies worldwide.
More information about Inpharmatica can be found at
www.inpharmatica.co.uk.
Forward Looking Statements
This release contains certain forward-looking statements that involve
risks and uncertainties that could cause actual results to be
materially different from historical results or from any future
results expressed or implied by such forward-looking statements. You
are urged to consider statements that include the words "may,"
"will," "would," "could," "should," "believes," "estimates,"
"projects," "potential," "expects," "plans," "anticipates,"
"intends," "continues," "forecast," "designed," "goal," or the
negative of those words or other comparable words to be uncertain and
forward-looking. Any forward-looking statements made by Inpharmatica
or Galapagos speak only as of the date made. Inpharmatica and
Galapagos undertake no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
CONTACTS:
For Galapagos NV: For Inpharmatica:
Onno van de Stolpe John Lisle
CEO CEO
+31 6 2909 8028 +44 20 74 47
23
ir@glpg.com
j.lisle@inpharmatica.co.uk
[1] ADME is the acronym for Absorption, Distribution, Metabolism, and
Excretion: Meeting parameters against these four criteria is critical
to the success of a pharmaceutical compound as a drug.
[2] Drugability measures how effectively a target can be modulated by
a small molecule with the right ADME properties to be developed into
a drug.
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Copyright � Hugin ASA 2006. All rights reserved.
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