Merck, Galapagos ink $2M diabetes drug development pact

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Galapagos has entered into a multi-year global strategic alliance with Merck to develop potential new therapies for obesity and diabetes.

The Mechelen, Belgium-based Galapagos will be responsible for the discovery and pre-clinical development of new small molecule candidate drugs based on new Galapagos targets. The Whitehouse, N.J.-based Merck will have the exclusive option to license each candidate for clinical development and commercialization on a global basis.

The companies said the alliance will make use of Galapagos' proprietary SilenceSelect target discovery platform for identification of novel targets in obesity and diabetes.

Galapagos said it may execute phase I clinical studies and will have the right to further develop and commercialize certain compounds for which Merck does not exercise its exclusive option.

Under the terms of the agreement, Galapagos will receive an upfront fee of €1.5 million ($2.02 million) from Merck. In addition, Galapagos is eligible to receive discovery, development and regulatory milestone payments that could potentially exceed €170 million ($228.87 million) total for multiple products, as well as specific sales milestones and royalties upon commercialization of any products covered under the agreement.