Galapagos (NASDAQ:GLPG) said it has entered into a binding collaboration agreement with Gilead focused on Gamgertamig, a BCMA x CD3 T-cell engager being developed for autoimmune diseases. Chief Executive Officer Henry Gosebruch said the deal follows “advanced discussions” disclosed the prior week and is intended to support the company’s transformation into a clinical-stage biotech while preserving what he described as significant strategic and financial flexibility.
Deal structure and amended Gilead agreement
Gosebruch outlined a collaboration in which Galapagos and Gilead will work together to develop Gamgertamig, which is currently in phase 1b dose-ranging studies and “expected to enter registrational studies as early as 2027.” He characterized the program as having “multi-billion-dollar revenue potential” across immune-mediated diseases.
- Galapagos and Gilead will “equally split an upfront payment” and milestone payments, which management described as including $1.675 billion and “milestone payments of up to $500 million.”
- Galapagos will be responsible for development costs through initiation of registrational studies, after which development costs will be shared equally.
- Galapagos is eligible for up to $100 million in development milestones.
- Galapagos will receive a preclinical portfolio of three additional autoimmune-focused programs originating from Ouro, with an opt-in for Gilead at proof of concept for a 50/50 profit split for $75 million per program.
- Gilead will retain sole worldwide commercialization rights and pay related costs outside of Greater China, while Galapagos will receive royalties of 20% to 23%.
The transaction also amends the companies’ legacy Option, License and Collaboration Agreement (OLCA). Management said the revised terms “unlock” an additional $500 million of Galapagos cash that can be used for R&D or strategic transactions outside of Gilead partnerships, including up to $150 million for a potential return of capital to shareholders, subject to limitations.
Aaron Cox, Chief Financial Officer, said the modification marks a “meaningful step forward” in strategic and financial flexibility by enabling Galapagos to pursue transactions independently of Gilead and broadening “the universe of potential strategic targets.” Cox added that Galapagos expects to retain “a majority of our cash” after accounting for the Ouro transaction and development costs, and that the company continues to expect investment income from its cash as well as an “expected annual income stream from existing partnerships into the twenty-thirties” and anticipated tax credit receivables.
Clinical rationale: Gamgertamig and the “immune reset” approach
Eric Hedrick, Head of Clinical Evaluation, said the company views Gamgertamig as a “potentially transformative immune reset treatment for autoimmune disease.” He described it as a BCMA-directed T-cell engager with “high potency against BCMA and a detuned CD3 binding arm,” which he said “significantly abrogates cytokine release.” He noted that studies to date have used a subcutaneous formulation.
Hedrick said more than 60 patients across five autoimmune indications have been treated with Gamgertamig, and he highlighted a profile characterized by “durable, complete responses” and “minimal cytokine release syndrome” on the current administration schedule, with consistent findings across studies and indications. He also said more than 160 patients have been treated across clinical trials, including autoimmune and other settings.
Hedrick framed the therapeutic concept as targeting autoreactive B-cells and plasma cells that drive disease, arguing current treatments do not effectively reverse that pathogenic process. He said BCMA-directed T-cell engagers may be able to eliminate pathogenic immune cells across B-cell and plasma cell lineages, contrasting them with approaches directed at B-cell restricted antigens that may spare autoreactive plasma cells.
In response to a UBS question about the detuned CD3 arm and CRS, Hedrick said CRS risk is generally lower in autoimmune disease than in multiple myeloma with this class of agents, and added that the detuned CD3 arm “really prevents excessive activation of T cells,” which he said is consistent with what has been observed clinically in minimizing CRS risk.
Regulatory path and expected 2026 catalysts
Hedrick said the program has received Fast Track and Orphan Drug Designation in the U.S. for hemolytic anemia and immune thrombocytopenic purpura (ITP), which he said supports an accelerated development path. He also said the initial proof-of-concept indications are orphan diseases with manageable trials and potential expansion into additional indications.
He pointed to multiple ongoing and completed studies, including investigator-sponsored trials in autoimmune hemolytic anemia, ITP, and pemphigus vulgaris, as well as ongoing phase 1b dose-ranging studies sponsored by Ouro globally and by Keymed in China. Hedrick said the company anticipates publications or meeting presentations for “many of these studies” during 2026.
Management indicated that dose and schedule optimization remains a focus. Hedrick said Galapagos is “confident” it will identify, before the end of 2026, a go-forward dose and schedule characterized by durable remissions, favorable CRS risk, and a manageable period of hypogammaglobulinemia. In ITP patients in an ongoing Ouro-sponsored study, he said no CRS was observed in the cohort discussed, and that modifications to dose and schedule have meaningfully reduced CRS incidence and severity.
Business development strategy and remaining cash
Analysts pressed management on how the company plans to deploy cash beyond the newly unlocked $500 million envelope. Gosebruch said the Ouro collaboration leaves “the majority of our cash” available even after funding the portfolio and continuing development work. He said Galapagos will keep “a very, very high bar for transactions,” remain selective, and evaluate opportunities beyond autoimmune disease while acknowledging natural ways to build on its autoimmune position.
In discussing deal selection criteria, Gosebruch said the company valued the ability to be “first to market” in indications not adequately addressed by existing therapies or other T-cell engager efforts, and he emphasized the attractiveness of a clear regulatory path and trials that are “not very expensive,” citing pivotal studies in some diseases around “100 patients” as a reference point. Chief Business Officer Sooin Kwon added that Galapagos weighed both financial and regulatory considerations, including “visibility on what it would take to get through the finish line” and feasibility given the company’s size and capabilities.
On the three preclinical programs from Ouro, management did not provide timelines. Hedrick said the team is working to identify candidates that could enter the clinic “in the near term,” but said the company is not disclosing precisely when.
In closing remarks, Gosebruch called the transaction a “seminal moment” and said Galapagos looks forward to releasing additional clinical data later in 2026 as it advances what he described as a “first and best-in-class program” in autoimmune disease “with speed and urgency.”
About Galapagos (NASDAQ:GLPG)
Galapagos NV (NASDAQ:GLPG) is a clinical-stage biotechnology company headquartered in Mechelen, Belgium, focused on the discovery and development of novel small-molecule therapies. Established in 1999 through the merger of Tibotec and Progenix, Galapagos has built a research platform targeting chronic inflammatory diseases, fibrosis and oncology. The company’s discovery engine integrates human genetics, translational biology and medicinal chemistry to identify and optimize drug candidates with unique modes of action.
The company’s pipeline encompasses multiple programs across various stages of development.
