Galapagos NV has entered into a multi-year global strategic alliance with Merck & Co, Inc to develop potential new therapies in obesity and diabetes.

Galapagos will be responsible for the discovery and pre-clinical development of new small molecule candidate drugs based on novel Galapagos targets. Merck will have the exclusive option to license each candidate for clinical development and commercialization on a worldwide basis. The alliance will make use of Galapagos' proprietary SilenceSelect target discovery platform for identification of novel targets in obesity and diabetes. After validation, targets will be selected by a joint steering committee and entered into screening and chemistry by Galapagos. Merck has the option to acquire an exclusive license to each candidate drug and upon exercise of such an option, Merck will be responsible for the development and commercialization of the candidate drug. Galapagos may execute phase I clinical studies and will have the right to further develop and commercialize certain compounds for which Merck does not exercise its exclusive option.

Under the terms of the agreement, Galapagos will receive an upfront fee of €1.5 million from Merck. In addition Galapagos is eligible to receive discovery, development and regulatory milestone payments that could potentially exceed €170 million total for multiple products, as well as specific sales milestones and royalties upon commercialization of any products covered under the agreement.

"The alliance with Merck in obesity and diabetes further demonstrates Galapagos' ability to expand into new therapeutic areas," said Onno van de Stolpe, CEO. "Galapagos has a proven track record of delivering on its alliance programs, making us attractive to potential pharma partners seeking to fill their pipelines with medicines based on novel modes of action. Galapagos has been successful through careful management of its R&D programs; this early stage alliance with Merck fits nicely into our alliance infrastructure as other programs advance into later stages."

"By combining Galapagos' novel target identification strategy with Merck's drug development expertise this collaboration provides a unique opportunity to discover and develop potential new therapies for diabetes and obesity," said Catherine Strader, vice president, External Basic Research, Merck Research Laboratories.

Galapagos is a drug discovery company with pre-clinical programs in bone and joint diseases and bone metastasis.