- AbbVie will take full control of development and commercialization of a slate of cystic fibrosis drugs that it's developed through a collaboration with Galapagos, betting on the potential of bringing to market a triple-combination therapy for the lung disease.
- In return, Galapagos will receive $45 million upfront, with another $200 million in future milestone payments as well as single digit to low teens royalties on any eventual sales of the cystic fibrosis drugs.
- It's a risky bet that the experimental treatments from Galapagos can outflank market leader Vertex's dominant position and ongoing triple-combination therapy research.
AbbVie's deal to take over the research program is an interesting twist from June, when Galapagos announced the pharma would step back from a triple combo study that analysts predicted to be the preferred experimental option.
Results from a separate Phase 2 study announced then showed underwhelming results for a combination pairing an experimental C2 corrector from Galapagos with Vertex's doublet therapy Orkambi (lumacaftor/ivacaftor).
That seemed to weigh on plans for a triple-combo study of that same C2 corrector with Galpagos' own experimental potentiator therapy with a C1 corrector. At the time, Galapagos stated that it was "reviewing the future of its CF collaboration with AbbVie."
The deal with AbbVie comes the same day as Galapagos unveiled initial data from that triple-combo study.
"Per Galapagos, AbbVie is better equipped to take their time and work to develop a more attractive combination in this highly competitive space," noted Credit Suisse Vamil Divan in an investor note.
Investors didn't appear impressed with the deal, with shares in both companies trading down this week (albeit amid a broader market sell-off).
The deal gives Galapagos breathing room to focus on its JAK inhibitor, filgotinib, which is in late-stage Phase 3 trials in rheumatoid arthritis.
In cystic fibrosis, AbbVie will now face the prospects of competing with Vertex Pharmaceuticals, which owns a suite of approved drugs with a strong pipeline in late-stage testing.
Still, the deal could diminish takeout prospects for Vertex, according to Leerink analyst Geoffrey Porges.
"This may be a headwind for Vertex's stock in the near term, not due to strength of Galapagos' data, but because [AbbVie] is a respectable competitor in any market, and presumably no longer a theoretical potential acquirer of Vertex," he wrote in a note.