Galapagos has announced a business restructure that includes trimming its fibrosis and kidney disease programs and axing 200 staff in favor of its immune-oncology pipeline.
The ‚ÄėForward, Faster‚Äô strategy, announced in line with Galapagos‚Äô third quarter 2022 results, aims to move the Belgian biopharma‚Äôs focus from novel target-based discovery to patient centric medical need R&D with a focus on immunology and oncology.
As part of this, CEO Paul Stoffels stressed the firm will ‚Äúbuild on our current capabilities and derisk R&D through multiple drug modalities, including CAR-T,‚ÄĚ and ‚Äúwill increase our business development efforts to complement our pipeline and continue to work with our collaboration partner Gilead to bring more medicines to patients worldwide.‚ÄĚ
The traditional small molecule-focused pharma firm received a $3.95 billion upfront payment from CAR-T pioneer Gilead Sciences¬†in 2019, along with a $1.1 billion equity investment. However, it was only in June when the company propelled itself fully into the chimeric antigen receptor (CAR) T-cell space, through the acquisitions of Cellpoint and AboundBio for ‚ā¨125 ($125) million and $14 million, respectively.
This new direction will see cuts across other parts of the business, the firm said, with the firm discontinuing its activities in fibrosis and kidney disease. (If an ongoing study with its ‚Äė2737 candidate in polycystic kidney disease is successful, Galapagos will out license the program). Around 200 job positions across sites in Europe will also be axed to create room to reinvest in new capabilities and programs in the oncology franchise.
‚ÄúNew details add intrigue to its recently-inlicensed point of care CAR-T program,‚ÄĚ Brian Abrahams, an analyst at RBC Capital Markets wrote in a note, adding ‚Äúcuts across de-emphasized areas were not hugely surprising.‚ÄĚ
‚ÄúOverall, we believe the company has a clear long-term vision and credible leadership to get there, and the strong balance sheet will likely continue to attract attention, but pending more clinical/regulatory clarity around cell therapy or proof of differentiation from the immunology platform, we expect shares to trade in line.‚ÄĚ
For the nine months ending September 30 2022, Galapagos reported total sales of ‚ā¨410 million, up from ‚ā¨318 million in the year prior. The firm did, however, report an operating loss of ‚ā¨135 million.