Dive Brief:

• Galapagos on Wednesday said it’s considering selling its cell therapy business, which previously had been the centerpiece of a restructuring plan. 
• In January, the Belgian drugmaker said it would split into two pieces, one that would keep the name Galapagos and focus on cell therapy and another that would build a pipeline by buying assets. Then in May, the company said it was re-evaluating that plan while exploring “all strategic alternatives for its existing businesses” and looking for more outside deals.
• In its latest update, Galapagos said it’s evaluating strategic alternatives for the cell therapy business, including a divestiture. It also announced the appointments of two new executives and two new board members who will join an already revamped leadership team.

Dive Insight:

Investors have punished Galapagos over the last five years after a series of research and development setbacks. The company’s American depositary receipts, which topped $274 in February 2020, plummeted below $23 five years later. And while the stock has ticked up in recent months, the announcement of the latest “new chapter” from Galapagos sent ADRs down 10% to under $30 apiece on Thursday.

CEO Henry Gosebruch, originally tapped to lead the planned spinout company, is now charged with an overall revamp of Galapagos. He’s joined by a new CFO, Aaron Cox, and the latest hires, Sooin Kwon as chief business officer and Dan Grossman as chief strategy officer. Kn and Grossman start on Aug. 4.

Together, the group needs to find a way to stem losses that have expanded with restructuring costs while employing a huge pile of cash to buy experimental medicines that could turn into blockbusters. Galapagos had 3.1 billion euros, or $3.6 billion, in cash and financial investments at the end of June after its second-quarter loss widened to 215.7 million euros from 71.3 million euros a year earlier.

“The new management appears credible and has the right skillsets for the tasks at hand,” Leerink Partners analyst Faisal Khurshid wrote in a note to clients Wednesday. Still, Khurshid said he’s keeping his “market perform” rating on the stock as he waits to see how the team executes its mission.

Galapagos reported a few interim steps on its “transformation journey.” The company said it’s transferred certain small molecule programs in oncology and immunology to Onco3R Therapeutics in return for equity and future unspecified “milestone-based considerations.” Gilead Sciences also agreed to give up its opt-in rights to the cell therapy business, giving full control to Galapagos.