Belgian biotech Galapagos has abandoned its previously announced plan to split into two separate companies, citing challenging "regulatory and market conditions." The company has simultaneously appointed Henry Gosebruch as its new CEO, effective immediately, while accelerating the planned retirement of current chief executive Paul Stoffels.
The strategic reversal comes just months after Galapagos had unveiled plans to separate its drug development and cell therapy businesses. Under the original proposal, the company's pipeline of cell-based therapies for cancer would have remained under the Galapagos name, while the drug development unit would have been spun out as a separate Euronext-listed entity with €2.45 billion (approximately $2.5 billion) in cash.
New Leadership and Strategic Direction
Gosebruch, who previously served as CEO of neuroscience-focused Neumora Therapeutics, brings significant dealmaking experience to Galapagos. Before Neumora, he held senior positions at J.P. Morgan and AbbVie, where he established a reputation as a top dealmaker.
"We are currently evaluating strategic options regarding our clinical programs and other assets," said Gosebruch in a statement. "I look forward to working with Paul in finding a value-maximizing alternative for the cell therapy business, including exploring mergers, divestitures, and out-licensing."
The new CEO has been tasked with conducting a strategic review aimed at "maximizing resources" to pursue "transformative" business development transactions. This approach will leverage Galapagos' substantial cash reserves, which stood at approximately €3.3 billion at the end of March 2024.
Leadership Transition
Paul Stoffels, who joined Galapagos three years ago after nearly two decades at Johnson & Johnson, had originally planned to step down as CEO following the company separation and transition to board chairman. With the abandonment of the split, his retirement has been accelerated, though he will remain involved with the company as non-executive chairman, providing strategic guidance and support.
Jérôme Contamine will replace Stoffels as chair of the board, while Stoffels maintains his advisory role. The leadership changes reflect Galapagos' attempt to navigate a challenging period following several research setbacks that have contributed to a roughly 90% decline in share price over the past five years.
Reassessing the Cell Therapy Portfolio
The decision to abandon the split raises questions about the future of Galapagos' cell therapy business, which is currently focused on CD19-targeting CAR-T therapy GLPG5101 for blood cancers. The company's lead cell therapy candidate recently entered the ATALANTA-1 study for mantle cell lymphoma (MCL) and was scheduled to begin pivotal trials in 2026.
Galapagos had also been developing a decentralized cell therapy manufacturing platform designed to deliver stem-like early memory CAR-T cells with a vein-to-vein time of just seven days, potentially offering advantages over existing approaches.
Revised Gilead Partnership
The original separation plan had included significant amendments to Galapagos' 10-year, $5.1 billion R&D alliance with Gilead Sciences. Under those terms, Galapagos would have regained full rights to the pipeline of partnered projects while ceasing work on small-molecule drugs, including TYK2 inhibitor GLPG3667, which is in Phase 2 trials for systemic lupus erythematosus (SLE) and dermatomyositis.
Andrew Dickinson, Gilead's chief financial officer and a non-executive member of Galapagos' board, had previously expressed support for Gosebruch's appointment to lead the spinout company, stating: "Henry is the right leader to take on the CEO role for SpinCo as he leverages his extensive experience and the strong balance sheet to build an exciting pipeline."
Market Response and Future Outlook
The strategic pivot comes at a critical juncture for Galapagos, which has struggled to regain investor confidence following multiple research setbacks. Faisal Khurshid, an analyst at investment bank Leerink Partners, had previously noted that the structure and leadership choices for the spinout could be the most important near-term factors affecting Galapagos' stock price.
With approximately €3.3 billion in cash, Galapagos now appears focused on leveraging its financial resources to pursue business development opportunities that could potentially rebuild its pipeline and restore shareholder value. The company will "pursue transformative business development opportunities in order to build an innovative pipeline with the potential to deliver differentiated medicines for patients," according to Gosebruch.
For investors and industry observers, the key question remains whether Galapagos can successfully execute this strategic pivot and identify value-creating opportunities after abandoning its separation plans.
