Galapagos to acquire Inpharmatica

Acquisition broadens drug discovery capabilities and services

08-Dec-2006

Galapagos NV and Inpharmatica Ltd. announced that they have entered into a definitive agreement under which Galapagos will acquire Inpharmatica in an all-share transaction. The acquisition price of Inpharmatica is in three components: the ongoing business is valued at EUR6.5 million, the estimated cash at an additional EUR6 million (of which half is due by 31 December 2006), and the potential maximum earn-out related to commercial milestones at EUR6.6 million.

Galapagos will issue, on the basis of EUR8.82 per share (the average GLPG share price over the last thirty days prior to 5 December 2006), a maximum of 2,165,532 new shares assuming that all three components are fully delivered. The new shares will be issued to the Inpharmatica shareholders in three tranches. The first tranche of 623,582 new Galapagos shares shall be issued in December 2006. Two subsequent tranches are due to be issued in April and May 2007. The exact number of shares to be issued in these two tranches at that time will be dependent upon certain pre-agreed contractual conditions.

According to tge company, Inpharmatica's technologies for drug discovery shall bolster Galapagos' position in this field by improving the Group's ability to select targets and compounds based on predictive models and expertise. These technologies include ADME services (Admensa(TM)), a novel approach to prioritize chemical compounds in drug screening, as well as chemo-informatics services (Chematica(TM)) to select the best targets for drugability. Major new customers brought by Inpharmatica to the Galapagos group include Pfizer and Schering.

Inpharmatica will become part of BioFocus DPI, Galapagos' drug discovery services business. BioFocus DPI will assume the commercial and scientific management of Inpharmatica, including the execution of all current contracts of Inpharmatica. As a consequence of the acquisition, the companies anticipate downsizing of Inpharmatica's management, sales and administrative staff positions. The current CEO and CFO will assist in handover until 31 December 2006 and 31 March 2007 respectively.

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