Merck Galapagos Deal (NYSE:MRK)

Early Wednesday afternoon, Merck announced that they have made a decision of research collaboration with Galapagos NV. The news about the research collaboration had positive responses from analysts and the shares of Merck went up shortly after the announcement was made. Building on the deal struck at the very beginning of the year, Merck has boosted its commitment on milestones for new atherosclerosis therapies for more than 400 million Euros. Galapagos NV was founded ten years ago as a joint venture between Crucell and Tibotec. The company has always adopted hybrid business model and have come up quickly raising funds through private placements and public offerings.

As per the strategic alliance between Merck and Galapagos for the development of new therapies for atherosclerosis, Galapagos VN will be responsible for the discovery and pre-clinical development of the new small molecule candidate drugs. The collaboration will also make use of Galapagos’ proprietary target discovery platform for identification of novel targets in atherosclerosis, as well as other metabolic diseases like obesity and diabetes. Merck will have an exclusive option to license in each candidate for clinical development and commercialization on a worldwide basis. Merck will be responsible for the development and commercialization of the candidate drug.