Merck ends discovery deal with Galapagos

By Alexandria Pešić

- Last updated on GMT

Related tags Pre-clinical development

US drug giant Merck & Co has ended its strategic drug discovery and development alliance with Belgian biotechnology firm Galapagos.

The decision, which ends a two-year accord focused on metabolic, CV and inflammatory diseases, follow just months after Merck announced plans to cut its R&D investment by $3bn in as part of an 'efficiency drive'.

Kathleen Metters, head of Merck's external discovery and preclinical sciences unit, said a strategic change in the company's early discovery programmes “has required us to make some challenging decisions.”

However, Metters went on to add that “we look forward to investigating alternate opportunities to collaborate with Galapagos in the future.”

The US drug company will make a final payment of €12m to Galapagos for work completed in 2010, bringing the total figure paid out over the course of the alliance to €20.9m.

In addition, Galapagos will retain the rights to targets and assays developed during the collaboration. Galapagos CEO, Onno van de Stolpe, said “owning these valuable assets can form the basis of future alliances.”

A Minor Hiccup

Though on the surface the decision may seem disheartening for Galapagos, Edison Investment Research analysts suggested that in truth, Merck’s withdrawal represents nothing more than a 'minor hiccup' for the Belgian firm.

They pointed out that during 2010, Galapagos made 'good progress' as a company, with a 28 per cent increase in revenues marking the firm’s second consecutive profitable year.

Galapagos also has three products in clinical development and a number of drugs at various stages of the trial process and, according to the report, is well placed to profit from future royalties and sales.

Antiviral drug grant

On the same day the Belgian company disclosed its split from Merck, the Flemish agency for Innovation by Science and Technology (IWT) awarded it a €2.7m grant to help progress its proprietary antiviral drug discovery programs.

The project will span two years, and will focus on novel mode-of-action small molecules that have shown antiviral activity in lab tests. The goal is to deliver a preclinical candidate within a year.

Galapagos is once again breaking new ground,”​ said Graham Dixon, svp of drug discovery, “This grant provides funding for us to further understand the mechanism by which these orally available, small molecules play a role in inhibiting viral infection.”

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