What's Happening?
Galapagos, a Belgian biotech company, has decided to wind down its cell therapy business, affecting 365 jobs across Europe, the US, and China. This decision follows a challenging year for the company, which
initially planned to split its drug development and cell therapy businesses but later abandoned the plan due to regulatory and market conditions. The company attempted to find a buyer or investor for the cell therapy unit but received only a limited number of non-binding offers. The board of directors has approved the decision, but negotiations with works councils in Belgium and the Netherlands are still required. The cell therapy pipeline included a CD19-targeting CAR-T candidate, GLPG5101, which showed promising results in a phase 1/2 trial.
Why It's Important?
The decision to abandon the cell therapy unit highlights the challenges faced by biotech companies in sustaining high-cost, high-risk ventures like cell therapy. This move could have significant implications for the biotech industry, particularly in the field of cell therapy, as it underscores the financial and strategic difficulties in maintaining such operations. The job losses will impact the workforce across multiple regions, and the company's focus will shift towards finding partners for its drug development projects. This development may influence other biotech firms to reassess their strategies in cell therapy and related fields.
What's Next?
Galapagos will continue to seek transformational business development transactions with its available cash resources. The company is also focused on finding a partner for its TYK2-targeting small molecule, GLPG3667, which is in mid-stage development for systemic lupus erythematosus and dermatomyositis. The winding-down process of the cell therapy unit will proceed, with any viable acquisition proposals being considered. The company is expected to report its third-quarter results on November 6, which may provide further insights into its strategic direction.
Beyond the Headlines
The decision by Galapagos to exit the cell therapy space follows a similar move by Novo Nordisk, which recently announced its exit from the category, resulting in around 250 job losses. This trend may indicate a broader industry shift away from cell therapy due to the high costs and uncertain returns. The ethical and economic implications of such strategic shifts could lead to increased scrutiny of biotech companies' investment decisions and their impact on innovation and employment in the sector.
