Dive Brief:

• After months of back-and-forth announcements, Galapagos now plans to wind down its cell therapy business and focus resources on building a pipeline of new medicines through deals and acquisitions.
• If this plan happens, the Belgian biotechnology company expects to lay off about 365 workers, or more than half of the 704-person workforce it employed at the end of last year. The cell therapy unit will continue to operate amid negotiations with works councils in Belgium and the Netherlands, Galapagos said Tuesday.
• The company had hoped to sell the business, but that process failed to yield any “viable proposals,” CEO Henry Gosebruch said in a statement. Executives are still willing to consider any new offers for part or all of the business that might emerge during the wind-down process, Galapagos said.

Dive Insight:

Galapagos was once a high-flyer in the biotech industry, with a pipeline of drugs designed to treat inflammatory conditions and fibrosis and a lucrative partnership with Gilead Sciences. After an initial research collaboration inked in 2015, Gilead had so much faith in Galapagos that it deepened the relationship with a $5.1 billion deal in 2019.

But a series of research and development setbacks followed. And early this year, Galapagos announced it would split in two, spinning out a new company with about $2.5 billion in cash to pursue pipeline-building deals while the cell therapy business would carry on with the Galapagos name.

Within months, the company backtracked on that plan. Then in July, Galapagos said it was considering a sale of the cell therapy unit. A “limited number” of potential buyers came forward with nonbinding offers, but ultimately none of the bids panned out.

The wind-down proposal won unanimous support from the board, except for two directors appointed by Gilead who recused themselves, Galapagos said. The move would result in layoffs across Europe, the U.S. and China. It would also trigger site closures in the Netherlands, Switzerland, China and the U.S. — specifically Pittsburgh and Princeton, New Jersey.

As part of the anticipated business closure, Galapagos expects operating costs of 100 million to 125 million euros through 2026 and one-time restructuring costs of between 150 million and 200 million euros in 2026. The company plans to update its 2025 cash outlook when it reports third-quarter earnings in early November.