Our collaboration with Gilead

In July 2019, we and Gilead entered into a strategic R&D collaboration, giving Gilead access to our innovative portfolio of compounds and our drug discovery platform, in return for a $3.95 billion upfront payment and a $1.5 billion equity investment (including the exercise of warrant A). Gilead is subject to a 10-year standstill, securing our long-term independence, and a lock-up until 22 August 2024. Following the amendment of the arrangement for the commercialization and development of filgotinib late 2020, we have assumed sole commercial responsibility in Europe and clinical development for the majority of ongoing trials with filgotinib. For the remainder of the pipeline, we are eligible to receive a $150 million opt-in fee per program, plus tiered royalties ranging from 20 – 24% on net sales of all our products outside of Europe (ex-filgotinib) opted-in by Gilead. Galapagos retains European commercialization rights. Gilead remains responsible for filgotinib outside Europe, including in Japan where filgotinib is approved and co-marketed with Eisai. We received payments from Gilead in connection with changes in responsibility for the commercialization and development of filgotinib in Europe, and Gilead will receive royalties from European net sales on filgotinib.

Following the amended agreement with Gilead announced in October 2021, Galapagos will become now the sole sponsor of the DIVERSITY trial of filgotinib in CD and the long-term extension study. The parties intend to complete the transfer no later than 30 June 2022. Under the terms of the agreement and upon completion of the transfer, Gilead will make a one-time payment of $15 million to Galapagos. From 1 April 2022, Galapagos will also be solely responsible for all development costs for DIVERSITY. In addition, if the EMA grants regulatory approval of filgotinib for the treatment of CD based on data from the DIVERSITY trial, then royalties payable by Galapagos to Gilead will be reduced by 30% across all filgotinib indications and will become 5.6 to 10.5% of net sales in Europe. These royalties are payable as of 2024. Gilead remains responsible for commercial activities outside of Europe. See also Notes to the consolidated financial statements.