A pain-free alliance

Servier and Galapagos initiate strategic alliance in osteoarthritis

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PARIS—Servier, a leading French pharmaceutical company, andGalapagos NV announced July 1 that the two companies have entered into amultiyear strategic alliance to develop new therapies to address painful andprevalent osteoarthritis (OA).
It is expected that the two companies will cooperate injoint discovery and development ventures targeting novel small-moleculetherapies to help alleviate the condition.
Galapagos' proprietary platform will be used for developingthe therapies, and the company will be responsible for the discovery anddevelopment of new small-molecule candidate drugs against these targets.
Initially, Galapagos will receive a payment of $9.1 millionfor research access to its validated OA targets. It is estimated that, whencertain development milestones are reached, the company could see up to $377million in payments.
Some of the OA research programs are in the advanced stagesof drug discovery. OA is the most common form of arthritis, typically affectingpeople over the age of 45. It is a degenerative disease characterized by jointdestruction and loss of cartilage.
Unique to the deal is the fact that Galapagos will retainU.S. commercialization rights to the successfully developed therapies. Servierwill retain those rights across the rest of the globe.
"This is the only one of our eight current alliances fordrug development and discovery, where we retain these rights," says Onno van deStolpe, CEO of Galapagos. "It was an opportunistic as well as a pragmaticarrangement for us, as Servier does not license in the U.S. Retaining the U.S.rights to any products from this alliance is important to Galapagos, especiallyas the United States has a large need for disease-modifying osteoarthritistherapies."
Servier will have an exclusive option to license eachsmall-molecule program after the completion of Phase I clinical trials by Galapagos.Upon exercise of each option, Servier will be responsible for the furtherclinical development, registration and commercialization. For any marketedproducts, Galapagos retains exclusive U.S. commercialization rights.
Van de Stolpe says that both companies have been in contactfor several years, forming an alliance in 2006. This current opportunitymaterialized late last year, and the drive began to Phase I trials. It isexpected that the work will be in the clinical stage for the next 24 months. Heindicated that Galapagos is financially successful, even without commercialsuccess.
"We had a profit last year of $4 million," van de Stolpesays. "It's unique to be profitable without a product yet."
He says the interest in his company is due to the model ituses, which has enabled a broad development pipeline, currently boasting fivetherapies in the clinical stage and 50 therapies in development.
Servier has taken notice.
"This alliance is in line with Servier's commitment todevelop disease-modifying drugs for sufferers of uncured diseases, such as OA,a debilitating disease that affects 12 percent of the world population, leadingto severe and costly handicaps," said Emmanuel Canet, head of research anddevelopment at Servier, in a prepared statement.
Servier representatives did not respond to requests foradditional comment on this story.
No currently available treatments prevent OA or even reverseor block the disease process. Treatment of OA involves weight control, exerciseand pain relief, most frequently with non-steroidal anti-inflammatory drugs(NSAIDs) that relieve the symptoms without changing the course of theunderlying disease. Many OA patients have pain that persists despite thesemeasures and often then have to undergo costly surgical procedures to replacetheir damaged joints.
It is expected that with the aging of the population acrossthe world, more individuals will develop OA. As mobility of seniors is of highimportance to maintaining a high quality of life, preventing the severity of OAis seen as an immense clinical need over the next decade.
Servier Research Group is a privately run Frenchresearch-based pharmaceutical company with a 2009 turnover of $4.7 billion.Current therapeutic domains for Servier medicines are cardiovascular,metabolic, neurological, psychiatric and bone and joint diseases as well asoncology. Servier is established in 140 countries worldwide.
Galapagos is a mid-size biotechnology company specialized inthe discovery and development of small molecule and antibody therapies withnovel modes-of-action. The company boasts one of the largest pipelines inbiotech. Through risk/reward-sharing alliances with GlaxoSmithKline, Eli Lilly& Co., Janssen Pharmaceutica, Merck & Co. and Roche, Galapagos is eligibleto receive up to €3 billion in payments for downstream milestones, plusroyalties. Galapagos and its affiliated operations have a presence in sixcountries.

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