Galapagos enters strategic alliance in inflammatory diseases with Merck & Co., Inc.

• Galapagos to discover small molecule candidate drugs for pre-clinical development
• Upfront fee, milestones on pre-clinical and clinical development of small molecule candidates, sales milestones plus royalties on worldwide sales

Mechelen, Belgium – Galapagos NV (Euronext: GLPG) announced today that it has entered into a multi-year global strategic alliance with Merck & Co., Inc., through an affiliate, to develop potential new therapies in inflammatory diseases.

Galapagos will be responsible for the discovery and pre-clinical development of new small molecule candidate drugs based on novel Galapagos targets. Merck will have the exclusive option to license each candidate for clinical development and commercialization on a worldwide basis. The alliance will make use of Galapagos’ proprietary SilenceSelect® target discovery platform for identification of novel targets in inflammatory diseases. After validation, targets will be selected by a joint steering committee and entered into screening and chemistry by Galapagos. Merck has the option to acquire an exclusive license to each candidate drug and upon exercise of such an option. Merck will be responsible for the development and commercialization of the candidate drug. Galapagos may execute phase I clinical studies and will have the right to further develop and commercialize certain compounds for which Merck does not exercise its exclusive option.

Under the terms of the agreement, Galapagos will receive an upfront fee of €2.5 million from Merck. In addition, Galapagos is eligible to receive discovery, development and regulatory milestone payments that could potentially exceed €192 million total for multiple products, as well as specific sales milestones and royalties upon commercialization of any products covered under the agreement.

“This new alliance with Merck in inflammatory diseases, our sixth pharma alliance to date, underscores the quality and versatility of Galapagos’ target discovery platform,” said Onno van de Stolpe, CEO. “Galapagos has proven it delivers on its alliance programs, making us attractive to potential pharma partners seeking to fill their pipelines with medicines based on novel modes of action.”

About Galapagos
Galapagos (Euronext: GLPG; OTC: GLPYY) is a drug discovery and development company with small molecule programs in bone and joint diseases, bone metastasis, cachexia, anti-infectives and metabolic diseases. It has established risk sharing alliances with GSK, Janssen Pharmaceutica, Eli Lilly and Merck. Through an alliance with MorphoSys, Galapagos is also developing new antibody therapies in bone and joint diseases. Its division BioFocus DPI offers a full suite of target-to-drug discovery products and services to pharmaceutical and biotech companies and to patient foundations, encompassing target discovery and validation, screening and drug discovery through to delivery of pre-clinical candidates. Galapagos currently employs 480 people and operates facilities in six countries, with global headquarters in Mechelen, Belgium. More info at: www.glpg.com.

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