SOURCE: Galapagos NV

November 26, 2008 01:40 ET

MorphoSys and Galapagos enter alliance to co-develop novel therapeutic antibodies in bone & joint disease

MECHELEN, BELGIUM--(Marketwire - November 26, 2008) - Combination of proprietary drug targets and unique technologies to create range of new therapeutic antibodies.

Click here to access the live audio webcast presentation at 14.00 CET/8:00 AM EST, call number +32.2.401.53.06, or toll free from the US 1.866.931.1567

Mechelen, Belgium and Munich, Germany; 26 November 2008 - Galapagos NV (Euronext: GLPG) and MorphoSys AG (FSE: MOR) announced today the launch of a long term co-development alliance aimed at discovering and developing antibody therapies based on novel modes of action in bone & joint disease, including rheumatoid arthritis, osteoporosis and osteoarthritis.

The alliance spans all activities from target discovery through to completion of proof of concept clinical trials of novel therapeutic antibodies. Both companies will contribute their core technologies and expertise to the alliance. Galapagos will provide antibody targets implicated in bone & joint disease in addition to its adenoviral target discovery platform to discover further targets for antibody development. MorphoSys will contribute its HuCAL antibody technologies to generate fully human antibodies directed against these targets. The initial goal is to further validate the targets through disease-specific in vitro and in vivo testing of the antibodies. After successful validation, the alliance will select antibody programs for pre-clinical and clinical development. Following proof of concept in human clinical trials, programs will be partnered for subsequent development, approval and marketing.

Under the terms of the agreement, Galapagos and MorphoSys will share the research and development costs, as well as all future revenues equally. Decisions will be made by a Joint Steering Committee comprising members of both companies. An initial set of three targets implicated in bone & joint disease has been selected for the collaboration, and Galapagos is already commencing with production of these proteins for the alliance. Generation of antibodies directed against these targets will start in 2009. More targets will be selected using Galapagos' target discovery platform to fuel the alliance in the coming years. If successful, the first antibody programs based on these novel targets could enter the clinic within four to five years.

"With this alliance, we are adding a biologics strategy to our small molecule drug discovery. Galapagos is the world leader in discovery of novel targets, and this alliance with MorphoSys enables us to explore the potential of proprietary antibody targets. Antibody approaches have proven to be successful in developing new therapies for major diseases, including rheumatoid arthritis. Having both approaches, small molecules and antibodies, to fill our product pipeline in bone & joint disease will further establish Galapagos as the leader in this field," said Onno van de Stolpe, Chief Executive Officer of Galapagos. "With our cash position and revenue streams from both BioFocus DPI and our pharma alliances, we are in a good financial position to enter into this alliance to create value for our shareholders."

"This alliance represents a major step in our efforts to gain access to novel antibody targets for proprietary drug development in disease areas with a high unmet medical need. The partnership with Galapagos combines both the scientific and financial strength of two leading companies in their space," said Simon Moroney, Chief Executive Officer of MorphoSys. "We are excited to combine our broad antibody expertise with Galapagos' target discovery capabilities and disease know-how to form a successful partnership. The access to novel disease-related target molecules from a renowned partner accelerates the expansion of our proprietary antibody pipeline. This alliance also complements our development efforts in the field of inflammation and arthritis including our lead program MOR103."

With this strategic alliance, MorphoSys gains access to a proven target discovery engine as well as to Galapagos' expertise in bone & joint disease, to support its therapeutic antibody pipeline expansion. The three main indications of bone & joint disease - rheumatoid arthritis, osteoporosis and osteoarthritis - all represent very significant market opportunities with several million people affected worldwide and combined sales of drug treatments of more than US$ 15 billion in 2006.

Through the alliance with MorphoSys, Galapagos enters the rapidly growing market for therapeutic antibodies. In 2007, total sales for the 20 antibody drugs on the market amounted to more than US$ 25 billion and antibody sales are forecast to increase to approximately US$ 50 billion in 2013. Fully human antibodies are recognized as the next generation and the majority of therapeutic antibodies currently in development are humanized or fully human. The average industry timescale from discovery to pre-clinical development of antibody therapies is only two to three years, considerably shorter than the average six years for small molecules. Antibodies also incur lower attrition rates than small molecules.

Conference call and webcast presentation

Galapagos will conduct a conference call open to the public today at 14.00 Central European Time (CET)/8:00 AM US Eastern Standard Time (EST), which will also be webcast. To participate in the conference call, please call +32.2.401.53.06, or toll free in the US 1.866.931.1567, ten minutes prior to commencement. A question and answer session will follow the presentation of the results. Click here to access the live audio webcast. The archived webcast also will be available for replay shortly after the close of the call.

About antibodies

Antibodies are proteins that recognize and bind to foreign substances, such as bacteria or viruses, so that immune cells can destroy them. Each person has approximately one to two billion different antibodies continuously flowing throughout the bloodstream to fight infections and diseases in their human host. The idea of specifically using antibodies as therapeutics against various diseases was conceived more than 25 years ago. It is the ability of antibodies to specifically recognize and thereby block or activate target molecules which researchers seek to exploit when developing antibody drugs.

About Galapagos' target discovery technology

Galapagos' target discovery engine is based on adenoviruses that efficiently introduce human gene sequences into a wide variety of human cells to knock-down specific proteins. High-throughput assays that represent a selected human disease state are then used to functionally select for those proteins that have a causative effect in those models of human disease. After rigorous validation of these protein targets, they form the basis for the development of novel drugs.

About MorphoSys' HuCAL technology

The HuCAL (Human Combinatorial Antibody Library) technology is a unique and innovative concept for the in vitro generation of highly specific and fully human antibodies. The library comprises more than 10 billion different functional and fully human antibodies. HuCAL provides a seamless transition from a rapidly generated antibody fragment with outstanding binding characteristics to a fully human antibody drug candidate. It is the system of choice for a broad range of purposes reaching from target validation to drug development. Of course, HuCAL is also a direct source of antibodies for all kinds of diagnostic and therapeutic applications.

About MorphoSys

MorphoSys (FSE: MOR) is a publicly traded biotechnology company focused on the generation of fully human antibodies as a means to discover and develop innovative antibody-based drugs against life-threatening diseases. MorphoSys's goal is to establish HuCAL as the technology of choice for antibody generation in research, diagnostics and therapeutic applications. The Company currently has therapeutic and research alliances with the majority of the world's largest pharmaceutical companies including Boehringer Ingelheim, Centocor/Johnson & Johnson, Novartis, Pfizer and Roche. Within these partnerships, more than 50 therapeutic antibody programs are ongoing in which MorphoSys participates through exclusive license and milestones payments as well as royalties on any end products. Additionally, MorphoSys is active in the antibody research market through its AbD Serotec business unit. The business unit has operations in Germany (Munich), the US (Raleigh, NC) and UK (Oxford). More information about MorphoSys can be found at www.morphosys.com.

About Galapagos

Galapagos (Euronext Brussels: GLPG; Euronext Amsterdam: GLPGA; OTC: GLPYY) is a drug discovery company with pre-clinical programs in bone and joint diseases and bone metastasis. Its BioFocus DPI division offers a full suite of target-to-drug discovery products and services to pharmaceutical and biotech companies, encompassing target discovery and validation, screening and drug discovery through to delivery of pre-clinical candidates. BioFocus DPI also provides adenoviral reagents for rapid identification and validation of novel drug targets, compound libraries for drug screening as well as chemogenomics and ADMET database products to select targets and compounds. Galapagos currently employs about 460 people and operates facilities in six countries, with global headquarters in Mechelen, Belgium. More information about Galapagos and BioFocus DPI can be found at www.glpg.com and www.biofocusdpi.com.

CONTACTS

Galapagos NV
Onno van de Stolpe, CEO
Tel: +31 6 2909 8028
ir@glpg.com

MorphoSys AG
Mario Brkulj, Manager Corporate Communications & Investor Relations
Tel: +49 89 899 27 454
mario.brkulj@morphosys.com

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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