Galapagos Reverses Course on Split, Appoints New CEO to Lead Strategic Transformation

Galapagos NV, a Belgium-based biopharmaceutical company, has announced a significant shift in its corporate strategy, backtracking on previously announced plans to split into two separate entities. The company has also appointed industry veteran Henry Gosebruch as its new CEO, signaling a renewed focus on strategic dealmaking and business development.

Restructuring Plans Reevaluated

In a surprising turn of events, Galapagos revealed on Tuesday that its board of directors has decided to re-evaluate the proposed separation of the company. This decision comes in response to what the company describes as "regulatory and market developments." The original restructuring plan, unveiled earlier this year, would have created two distinct biotechnology companies: one retaining the Galapagos brand and specializing in cell therapy research, and another focusing on strategic dealmaking in oncology, virology, and immunology.

The reversal of this strategy marks a significant pivot for Galapagos, which has faced a series of research and development setbacks in recent years. These challenges have contributed to a dramatic decline in the company's stock price, which has lost nearly 90% of its value over the past five years.

New Leadership and Strategic Focus

In conjunction with the reevaluation of its split, Galapagos has appointed Henry Gosebruch as its new CEO, effective immediately. Gosebruch, who was initially tapped to lead the proposed spinout, brings a wealth of experience from his roles as a top dealmaker at J.P. Morgan and AbbVie, as well as his recent position as CEO of neuroscience startup Neumora Therapeutics.

Gosebruch succeeds Paul Stoffels, who had previously announced his intention to retire within the next 12 months. In his new role, Gosebruch will be tasked with evaluating strategic options for the company's current business, with a particular emphasis on exploring deals involving Galapagos' cell therapy assets. This includes the flagship program GLPG5101, a CAR-T cell therapy currently in mid-stage testing for various hard-to-treat blood cancers.

Financial Position and Future Outlook

With approximately 3.3 billion euros in cash and cash equivalents at the end of last year, Galapagos is well-positioned to pursue "transformative" business development deals. Gosebruch's primary mandate will be to deploy these resources strategically to bring innovative medicines into the company's pipeline.

In a statement, Gosebruch expressed his commitment to intensifying efforts to deliver value to Galapagos' stakeholders. He also highlighted his intention to work closely with Paul Stoffels, who will continue to advise the company, in finding "a value-maximizing alternative for the cell therapy business including exploring mergers, divestures and out-licensing."

The market has responded positively to these announcements, with Galapagos shares trading up around 5% following the news, reaching approximately $26 per share.