Galapagos NV's Strategic Shift Under New CFO Aaron Cox: A Roadmap to Unlocking Value Through M&A and Capital Allocation Excellence

Galapagos NV, the Belgian biotech giant, is poised for a pivotal transformation under its new Chief Financial Officer, Aaron Cox. Cox's appointment, effective July 7, 2025, marks a strategic pivot for the company, which holds a $3.3 billion cash war chest and is reevaluating its cell therapy division. With a proven track record of orchestrating multibillion-dollar transactions—most notably Horizon Therapeutics' $28 billion sale to Amgen—Cox is positioned to unlock value through disciplined capital allocation, strategic partnerships, and accretive acquisitions. For investors, this shift could catalyze asymmetric upside, but risks loom large.

The Cox Factor: M&A Expertise as a Value Multiplier

Cox's résumé is a who's-who of biotech dealmaking. As CFO of Horizon Therapeutics, he was instrumental in steering the company's sale to Amgen in 2022—a transaction that netted shareholders $28 billion, or $208 per share. His role in structuring that deal, which involved navigating complex regulatory and financial landscapes, underscores his ability to execute high-stakes transactions. At Galapagos, Cox will bring this expertise to bear in two critical areas: monetizing its cell therapy division and deploying the company's cash reserves for growth.

Galapagos' cell therapy business, which includes the groundbreaking GLPG5101 CAR-T therapy, has already demonstrated clinical promise, with patient wait times reduced to seven days and attrition rates cut to 5% via its decentralized manufacturing platform. However, the division's long-term value remains unproven, and investors have yet to fully reward Galapagos for this innovation. Cox's mandate to explore spin-offs or partnerships—rather than splitting the company into two entities—suggests a pragmatic approach to extracting maximum value without diluting focus.

Meanwhile, Galapagos' $3.3 billion in cash offers a rare luxury in a sector where capital is scarce. Cox's challenge will be to deploy this war chest without overleveraging the balance sheet. Potential targets could include gene therapy or immuno-oncology platforms, areas where Galapagos lacks in-house expertise but has expressed interest. A reveals a stock that has languished, rising only 15% since 2020 despite promising pipeline data. A Cox-led M&A binge could re-rate the stock by aligning its portfolio with investor expectations.

Risks on the Horizon: Execution and Pipeline Pressures

Cox's success hinges on navigating two critical risks. First, the transition from Huston, who will stay on until July 31, must be seamless. Any missteps in financial governance or investor relations could spook the market. Second, Galapagos' pipeline faces execution hurdles. GLPG5101's Phase III trials, which could determine the cell therapy division's fate, are under close scrutiny. A stumble here would not only delay monetization but could also dampen appetite for partnerships.

Analysts are cautiously optimistic. A 3–5 year timeline for upside aligns with Cox's likely strategy: rapid-fire M&A in the short term to diversify the pipeline, followed by a strategic division sale once partnerships are secured. The stock's current valuation—trading at ~10x projected 2026 sales—suggests investors have yet to price in this upside.

Investment Thesis: A High-Reward, High-Risk Bet on Visionary Capitalism

For long-term investors with a multiyear horizon, Galapagos presents an asymmetric opportunity. Cox's track record and the company's financial flexibility suggest it could execute a “double down or sell off” strategy: deploying cash to bolster its core assets while monetizing non-core divisions. Success here could propel the stock to $50–$70 per share over five years—a 100–150% premium to current levels.

However, the path is fraught with potholes. Execution delays, clinical setbacks, or a misstep in dealmaking could send shares tumbling. For now, the market's skepticism is evident in the stock's muted reaction to Cox's appointment.

Action Items for Investors:
- Buy the dip: Accumulate shares if the stock drifts below €40 (as of June 2025), using the cash reserve as a safety net.
- Monitor M&A activity: A deal in gene therapy or immuno-oncology within the next 12–18 months would validate Cox's strategy.
- Beware of clinical noise: GLPG5101 data readouts in 2026 could create volatility; avoid if risk tolerance is low.

In sum, Galapagos' shift under Cox is a high-stakes bet on capital allocation excellence. For those willing to ride the turbulence, it could be a defining trade in biotech over the next decade.