Galapagos Considers Sale of Cell Therapy Business Amid Restructuring Review

Galapagos is considering selling its cell therapy business, having previously planned to split into two companies. The decision comes as the company re-evaluates its restructuring plan and explores strategic alternatives. Galapagos had 3.1 billion euros in cash and financial investments at the end of June. The company is also revamping its leadership team with new hires and appointments.

Galapagos NV, a Belgian biopharmaceutical company, is exploring strategic alternatives for its cell therapy business, including a potential sale. This decision comes as the company reassesses its restructuring plan, which initially involved splitting into two entities: one focused on cell therapy and another building a pipeline through asset acquisitions [1].

Galapagos, which has been under pressure from investors due to R&D setbacks over the past five years, announced in January that it would split into two companies. However, in May, the company indicated it was re-evaluating this plan and considering all strategic options for its existing businesses. The latest update from Galapagos suggests that it is now evaluating strategic alternatives for its cell therapy business, including a divestiture [1].

The company has also made significant changes to its leadership team. CEO Henry Gosebruch, who was originally tapped to lead the planned spinout company, is now charged with an overall revamp of Galapagos. He is joined by a new CFO, Aaron Cox, and two new executives: Sooin Kwon as chief business officer and Dan Grossman as chief strategy officer. Both Kwon and Grossman start on August 4 [1].

Galapagos has a substantial cash reserve of 3.1 billion euros ($3.6 billion) at the end of June, which will be employed to buy experimental medicines and potentially turn them into blockbuster drugs. The company reported a second-quarter loss of 215.7 million euros, an increase from 71.3 million euros a year earlier [1].

Investors have reacted cautiously to the latest developments. Leerink Partners analyst Faisal Khurshid noted that while the new management team appears credible and has the right skillsets, he is maintaining his "market perform" rating on the stock until he sees how the team executes its mission [1].

Galapagos has also made some interim steps on its transformation journey. The company transferred certain small molecule programs in oncology and immunology to Onco3R Therapeutics in return for equity and future unspecified "milestone-based considerations." Additionally, Gilead Sciences agreed to give up its opt-in rights to the cell therapy business, giving full control to Galapagos [1].

References:
[1] https://www.biopharmadive.com/news/galapagos-cell-therapy-possible-sale-executives/753920/