According to Reuters, Galapagos, a Belgian biotech group announced that GlaxoSmithKline has stopped a joint drug development project over concerns about adverse effects.
In June 2006, Galapagos signed a broad alliance with GSK to discover and develop breakthrough medicines. This multi-target, multi-year alliance runs from target discovery through to delivery of a clinical Proof of Concept. In June 2007, the scope of the alliance was expanded to include up to two drug discovery programs on selected GSK drug targets. In December 2008, Galapagos announced that the alliance was further expanded to include two additional drug targets. In December 2009, the alliance was again expanded to include additional drug discovery programs based on novel drug target GT622. Based on these expansions, the alliance was worth more than €200 million in milestones, plus up to double-digit royalties.
GSK had decided to end work on its drug GSK2586184 for treatment of ulcerative colitis and psoriasis after tests showed it did not combine well with certain cholesterol drugs, said Reuters source. This bad news directly influenced the market value of Galapagos who has seen its valuation fall to its lowest level since 2012.
“I think investors are now worried about the company’s main product which is a large part of its valuation,” said the KBC Securities analyst Jan De Kerpel to Reuters
The abandon of GSK can influence the future of some others similar drugs of Galapagos: JAK1 inhibitors. This category of drug is really important in the Galapagos pipeline and include its most-developed drug GLPG0634, a treatment for rheumatoid arthritis developed jointly with AbbVie.
The end of the project will lower expected revenues of Galapagos for 2014. Moreover, the acquisition of its services activities by Charles River Laboratories in March of this year will increase the phenomenon. Nevertheless, Galapagos can still count on a solid pipeline and several alliances as for exemple with the French pharmaceutical group Servier who just paid a milestone in an osteoarthritis treatment.