Why is J&J getting rid of Galapagos’ shares, when Everyone else is Buying?

J&J has sold over 2 million of Galapagos‘ shares, which had been inherited from previous acquisitions, reducing its equity in this Belgian Biotech to below 5%. What’s wrong?

galapagos_jonhson&johnson_j&j_rheumatoid_arthritis_stock_share_crucell_tibotec_vircoBack in May, we talked about how J&J and AbbVie could be entering a fight for Galapagos’ filgotinib, a drug for rheumatoid arthritis (RA) that performed well in a phase II trial.

This was connected to the loss of patents for RA in both companies. For example, J&J’s Remicade is no longer covered by a patent in several European countries and faces competition from biosimilars like Celltrion‘s Remsima (South Korea). And the US patent is likely to expire in 2018.

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This is a considerable cause of concern for this Big Pharma, as Remicade is the main income in pharmaceutical’s sales for J&J.

However, J&J didn’t make a move on filgotinib – nor AbbVie, for that matter. Like AbbVie, J&J also has another RA candidate. Sirukumab is being developed in collaboration with GSK, and is currently in phase III trials.

sirukumab_il-6_rheumatoid_arthritis_ra_galapagos_phase_III_remicade

Fig. 1: J&J’s Rheumatoid Arthritis candidate, sirukumab, works by inhibiting interleukin-6 which triggers inflammation of the joints.

The partner for the upcoming phase III trial ended up being revealed as Gilead, which now has close to 15% equity of Galapagos.

Part of the Galapagos’ shares that were controlled by J&J were actually inherited from two previous biotech acquisitions: Tibotec Virco, (acquired way back in 2002), and the vaccine developer Crucell (Netherlands), which joined J&J in 2011.

Together, the two companies had over 2.34M shares (about 6% equity), that were now sold. J&J is still a shareholder of Galapagos, but it is now below 5% (so they don’t have to tell Galapagos that they had sold them due to the Belgian transparency rules).

J&J did not comment this decision.

So it seems that J&J is definitely moving away from Galapagos. Could it be financial housekeeping or is the outlook for J&J’s sirukumab for Rheumatoid that good?


Feature image credit: Painful Joints © Guniita- (BigStock ID89263163)
Figure 1: Dayer and Choy (2010) Therapeutic targets in rheumatoid arthritis: the interleukin-6 receptor, Rheumatology (doi: 10.1093/rheumatology/kep329)

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