here - Galapagos

Regulated information
13 March 2014
Charles River Laboratories to acquire Galapagos’ Argenta and BioFocus
service operations for up to €134 million
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Total cash consideration of up to €134 million
o €129 million cash payment
o earnout of €5 million upon achievement of revenue target after 12 months
Proceeds to be used to progress Galapagos’ pipeline
o four Phase 2 patient data readouts expected over next 15 months
o delivery of multiple Phase 1 studies and candidates in 2014
Galapagos retains target discovery capabilities for its R&D and alliance operations
Management guidance for 2014 Group revenues (including Argenta and BioFocus
revenues Q1) of €125 million and year end cash of €170 million
Galapagos to hold a live audio webcast presentation today at 10.00 CET,
call number +32-2290-1608, www.glpg.com
Mechelen, Belgium; 13 March 2014 – Galapagos NV (Euronext: GLPG) announces the
signing of a definitive agreement to sell the BioFocus and Argenta service division
operations to Charles River Laboratories International, Inc. (NYSE: CRL) for a total
consideration of up to €134 million. The transaction is subject to customary closing
conditions and is expected to close early in the second quarter of 2014.
“We are pleased to sell the Argenta and BioFocus divisions to Charles River, one of the premier life
science service providers in the world. These newly acquired capabilities are fully complementary
to the services provided by Charles River, and Charles River therefore provides a logical and
excellent home for Argenta and BioFocus,” CEO Onno van de Stolpe commented. “With this
transaction, Galapagos transforms from a hybrid drug discovery service and pipeline company into
a research and development biotech focusing on developing innovative drugs for unmet medical
needs. We have created significant value in building our service activities, and BioFocus and
Argenta have greatly contributed to our current pipeline. The time has now come to move into
the next phase of the Company with our focus on the pipeline, and to let Argenta and BioFocus
continue their success under the wings of Charles River. We would like to thank the employees of
Argenta and BioFocus for their contribution to Galapagos’ success over the years. We wish them
the very best within Charles River.”
Details of the transaction
Charles River acquires all service operations of BioFocus and Argenta in the UK and The
Netherlands. The acquisition includes all client contracts, order pipeline, premises, equipment,
and further obligations of BioFocus and Argenta. All employees of BioFocus and Argenta will
move into the Charles River organization upon completion of the transaction, which is expected
to occur early in the second quarter of 2014, subject to customary closing conditions. David
Smith will join Charles River as Corporate Vice President, In Vitro Discovery Services and lead the
transition.
Charles River agrees to pay Galapagos immediate cash consideration of €129 million. Upon
achievement of a revenue target 12 months after transaction closing, Galapagos will be eligible to
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receive an earnout payment of €5 million. The purchase price implies a multiple of approximately
2 times 2013 sales and approximately 12 times 2013 adjusted EBITDA.
Galapagos agrees to retain 5.4% of the €129 million cash consideration in an escrow account for
15 months.
Charles River is a global leader in drug research services, with over 7700 employees and 2013
revenues of $1.17 billion. The acquisition affords Charles River further vertical integration into a
high growth outsourcing area, fully complementary to its existing offering and in line with its
announced growth strategy.
Galapagos retains target discovery and assay development capabilities in Leiden for its R&D and
alliance operations. Post-transaction, Galapagos will have three R&D sites in Mechelen, Belgium
(headquarters), Romainville, France, and Leiden, the Netherlands. Galapagos also retains Fidelta,
a fee-for-service operation based in Zagreb, Croatia. In total, Galapagos employs over 400 staff.
Outlook 2014
Management guides for €125 million in Group revenues in 2014 (lowered from €180M as a result
of divesture of the Argenta and BioFocus operations), and a year-end cash position of €170 million.
Conference call and webcast presentation
Galapagos will conduct a conference call open to the public today at 10:00 Central European Time
(CET)/5:00 AM EDT, which will also be webcast. To participate in the conference call, please call
+32-2290-1608 ten minutes prior to commencement. Go to www.glpg.com to access the live audio
webcast. The archived webcast will also be available for replay shortly after the close of the call.
About Galapagos
Galapagos (Euronext: GLPG; OTC: GLPYY) is specialized in novel modes-of-action, with a large
pipeline comprising five Phase 2 studies (two led by GSK), one Phase 1 study, six pre-clinical, and
20 discovery small-molecule and antibody programs in cystic fibrosis, inflammation, antibiotics,
metabolic disease, and other indications. In the field of inflammation, AbbVie and Galapagos
signed a worldwide license agreement whereby AbbVie will be responsible for further development
and commercialization of GLPG0634 after Phase 2B. GLPG0634 is an orally-available, selective
inhibitor of JAK1 for the treatment of rheumatoid arthritis and potentially other inflammatory
diseases, currently in Phase 2B studies in RA and in Phase 2 in Crohn’s disease. Galapagos has
another selective JAK1 inhibitor in Phase 2 in ulcerative colitis and psoriasis, GSK2586184 (formerly
GLPG0778, in-licensed by GlaxoSmithKline in 2012). GLPG0974 is the first inhibitor of FFA2 to be
evaluated clinically for the treatment of IBD; this program is currently in a Proof-of-Concept Phase
2 study. GLPG1205 is a first-in-class molecule that targets inflammatory disorders and has
completed Phase 1. AbbVie and Galapagos signed an agreement in CF whereby they work
collaboratively to develop and commercialize oral drugs that address two mutations in the CFTR
gene, the G551D and F508del mutation. Potentiator GLPG1837 is at the pre-clinical candidate
stage. Galapagos has 400 employees, operating from its Mechelen, Belgium headquarters and
facilities in The Netherlands, France, and Croatia. Further information at: www.glpg.com
CONTACT
Galapagos NV
Elizabeth Goodwin, Head of Corporate Communications & Investor Relations
Tel: +31 6 2291 6240
[email protected]
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This release may contain forward-looking statements, including, without limitation, statements containing the
words “believes,” “anticipates,” “expects,” “intends,” “plans,” “seeks,” “estimates,” “may,” “will,” “could,”
“stands to,” and “continues,” as well as similar expressions. Such forward-looking statements may involve
known and unknown risks, uncertainties and other factors which might cause the actual results, financial
condition, performance or achievements of Galapagos, or industry results, to be materially different from any
historic or future results, financial conditions, performance or achievements expressed or implied by such
forward-looking statements. Given these uncertainties, the reader is advised not to place any undue reliance
on such forward-looking statements. These forward-looking statements speak only as of the date of
publication of this document. Galapagos expressly disclaims any obligation to update any such forward-looking
statements in this document to reflect any change in its expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based, unless required by law or
regulation.
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