Addressing a growing need
Galapagos acquires Cangenix for $1.5 million
MECHELEN, Belgium—In a move that bolsters and expands itsservice offering, Galapagos NV has announced the acquisition of Canterbury,United Kingdom-based Cangenix Ltd., which will be added to Argenta, a member ofthe Galapagos group of companies. Cangenix, a gene-to-structure biotech companythat offers drug discovery services, was established in 2011.
Per the terms of the transaction, Galapagos will pay a totalcash consideration of $1.5 million, with the potential for an additional$668,800 earn-out payment if certain conditions are met. Following thecompletion of the transaction, Cangenix's assets, know-how and service contractswill be integrated into Argenta and added to the latter's experience in hitfinding and medicinal chemistry. Cangenix's personnel—a team of fouremployees—will also join Argenta, but will continue on at the Canterbury site.The transaction is expected to contribute to Argenta's revenues and profit for2013.
"We welcome the Cangenix team and their clients to theGalapagos group," Onno van de Stolpe, CEO of Galapagos, said in a press releaseregarding the transaction. "The assets and expertise of Cangenix really addressa growing client need at Argenta. We look forward to extending and expandingthis business."
The team at Cangenix boasts 70 years of combined experiencein protein crystallography and biophysical techniques for drug discovery, andthe company offers services such as surface plasmon resonance and isothermaltitration calorimetry. The company was founded by scientists from theStructural Biology and Biophysics group at Pfizer Sandwich.
"I am confident that Cangenix's expertise in structure-baseddrug discovery services will enable Argenta to design better drugs forclients," Prof. David Brown, CEO of Cangenix, noted in a statement.
Chris Newton, senior vice president of Galapagos Services,says Argenta and Cangenix have worked together in the past, and that thatprevious relationship was one of the factors in their acquisition of thecompany. The other attractive features, he says, were Cangenix's capability andreputation in structural biology and "their mentality in terms of ambition."
Most importantly, says Newton, the addition of Cangenix andits capabilities to Argenta rounds out the latter's service offerings. Newtonsays he sees drug discovery and small molecules as a matter of four components:medicinal chemists, biologists, the pharmacokinetics group and structuralbiology. Structural biology, he notes, makes it possible to "actually see howyour molecule interacts with the protein in complete detail, and that knowledgethen enables you to design more potent drugs and more selective drugs," andthat approach and associated expertise is what Cangenix brings to Argenta.
"This is a very expert group who worked together insidePfizer to do that, so their reputation came before them," says Newton. "And itadds that fourth leg to Argenta, which couldn't do structural biology in-housebefore; it had to outsource. And I regard it as so important. John Montana, themanaging director of Argenta, and myself … agreed that this would be a verygood acquisition to augment Argenta's capabilities as one of the premier drugdiscovery contract research organizations in the world."
Newton expects that with this expansion of Argenta'scapabilities, the company will be able to win more and bigger programs, nowthat it has "a more rounded set of weapons to direct at any client's drugdiscovery project." Additionally, he notes that the acquisition provides moreoptions not just for Argenta's clients, but also for the parent company ofGalapagos itself, which does not have any in-house structural biology capabilities.
The same day that Galapagos announced its acquisition ofCangenix, the company also announced the creation of Fidelta, a third Galapagosservice division. The new organization will be based out of the research sitein Zagreb, Croatia, which Galapagos acquired from GlaxoSmithKline in September2010. Fidelta will have significant chemistry, in-vitro and in-vivo pharmacology, biomarker, toxicology and ADME/PK capabilities, withexperience in fields such as oncology, inflammation, infectious and metabolicdiseases.