When Galapagos and Gilead Sciences entered into a global drug research and development collaboration six years ago, the deal focused on Galapagos’ capabilities as a small-molecule drug developer. Fast forward to today, and the two companies’ strategies and ambitions are less complementary.
Galapagos, no longer interested in small molecule development, is focusing on cell therapy, an area where Gilead already has a strong presence. Since the 2019 deal, both companies and the biotech industry have evolved, Galapagos CEO Paul Stoffels said during a presentation Wednesday at the annual JP Morgan Healthcare Conference. These changes led to Galapagos’ plans for a business split, but in a way that does not completely sever ties with Gilead.
The planned business split was announced last week. Legacy Galapagos will focus on developing cancer cell therapies while SpinCo will build a drug pipeline spanning oncology, immunology and virology. Gilead will have an equity stake in both companies. When the deal closes, the terms of Gilead’s 2019 collaboration agreement will apply only to SpinCo.
In the past two years, Galapagos has executed a strategic pivot to focus on cell therapies, specifically, point-of-care cell therapies. Currently available autologous cell therapies take a month or more to manufacture in a laboratory far from where the patient is receiving care. These cells are shipped frozen and must be thawed before they can be injected into a patient Galapagos aims to deliver these engineered cells with a seven-day turnaround time enabled by technology that produces the therapies at the point of care and does not require freezing .
“Not only does this bring logistical and cost benefits, but also, by providing patients with the right cells, we believe we are improving efficacy and safety and providing a solution for all lines of therapy, especially for those patients with very long life expectancies.” short. “, Stoffels said.
In a separate Gilead conference call with reporters on Wednesday, Gilead Chief Financial Officer Andy Dickinson said Galapagos and Gilead came to the realization that Galapagos management was spending time on the assets it wanted to move forward, which are cell therapies. Business development deals that could expand the company’s pipeline (and be developed and commercialized by Gilead) were not in focus. To achieve this goal, a new company would be needed. The SpinCo transaction is about executing two distinct strategies with the capital that is available, Dickinson said. The new Sinoff will have 2.45 billion euros (about $2.5 billion) from Galapagos to apply for business deals.
The business split highlights how Galapagos’ cell therapy strategy differs from Gilead’s. Yescarta, an FDA-approved autologous cell therapy from Gilead, is manufactured at the site of its Kite subsidiary with a turnaround time of 14 days, said Cindy Perettie, executive vice president of Kite. At that rate, Kite isn’t entering point-of-care production anytime soon, if at all. The turnaround time for cell therapies manufactured by Kite is the fastest in the industry, and the company does not need to switch to point-of-care manufacturing, Perettie said.
Galapagos originally intended to have its therapies manufactured in the same hospital where a patient receives care. Stoffels said the strategy has since changed because of the complexities of making each hospital a GMP manufacturing site. Galapagos is now taking a regional approach to the supply of its cell therapies. The company is building or acquiring manufacturing sites that will be staffed from the Galapagos. To date, Galapagos has five operational and approved manufacturing sites in Europe. In the US, a site in Boston will serve hospitals in that market; the company is also planning a location for San Francisco.
Cell therapies first came to patients as treatments for advanced cases of some blood cancers. Galapagos’ internal cell therapy pipeline currently includes three programs in clinical development for various blood cancers. In a note to investors, Leerink Partners analyst Faisal Khurshid said Galapagos management has emphasized that decentralized manufacturing could make cell therapy more widely accessible by providing patients with cells that don’t have to be frozen. For further differentiation, Galapagos will prioritize indications that do not yet have a CAR T-cell therapy available as a treatment, he said.
Photo: Yuriko Nakao, Getty Images
