The Belgium-based drugmaker Galapagos is considering reversing course on plans to split into two biotechnology companies.
In an announcement Tuesday, Galapagos said its board of directors decided to re-evaluate the separation because of “regulatory and market developments.” The company is now exploring “all strategic alternatives for its existing businesses” and, moving forward, the focus will be to direct as many resources as possible at “transformative” business development deals.
Unveiled this year, the restructuring was supposed to create two companies with different priorities. The original would carry on the Galapagos brand and specialize in cell therapy research, while the other, yet-to-be-named spinout would rely on “strategic” dealmaking to build a pipeline of drug programs targeting cancer, viruses and the immune system.
This plan followed a series of research and development setbacks that dampened investor confidence in Galapagos. Over the past five years, the company’s stock price has lost nearly 90% of its value.
Last month, Galapagos’ board appointed industry veteran Henry Gosebruch to lead the proposed spinout. Gosebruch was a top dealmaker at J.P. Morgan and AbbVie, and most recently served as CEO of the buzzy neuroscience startup Neumora Therapeutics.
But with the split tabled for now, the board has made Gosebruch the CEO of the intact Galapagos effective immediately. He succeeds Paul Stoffels, who came to the biotech after a decade serving as chief scientific officer of Johnson & Johnson. Galapagos disclosed in April that Stoffels intended to retire from his position in the next 12 months, so the board was searching for a successor who can lead the company “into its next phase of growth.”
Galapagos said that, in his new role, Gosebruch will be in charge of evaluating strategic options for the current business. Among those options are deals involving the company’s cell therapy assets, including a flagship program code-named GLPG5101, which is a CAR-T cell therapy in mid-stage testing for several kinds of hard-to-treat blood cancers.
Gosebruch’s duties overall appear more aligned with the goals of the spinout, as one of his main tasks will be to deploy at least some of the 3.3 billion euros worth of cash and cash equivalents the company had at the end of last year on deals that bring in “innovative medicines.”
In a statement, Gosebruch said he and the board will “intensify” efforts to deliver value to Galapagos’ stakeholders.
Alongside Gosebruch’s appointment, Galapagos announced that Jérôme Contamine, a member of the board since 2022 and lead non-executive director, has been tapped to chair the board. Stoffels, meanwhile, will continue to advise the company and help it evaluate strategic options for its cell therapies and manufacturing platform.
“I look forward to working with Paul in finding a value-maximizing alternative for the cell therapy business including exploring mergers, divestures and out-licensing,” Gosebruch said.
Shares of Galapagos were up around 5% late Tuesday morning, to trade about $26 apiece.
