Galapagos has signed a drug discovery deal with Johnson & Johnson that could be worth 33.5 million euros to the Belgian group.

The deal actually involves Galapagos' UK affiliate Argenta Discovery and will see the latter perform hit-to-lead and lead optimisation for a number of oncology targets for J&J unit Janssen Pharmaceutica, and certain activities up to pre-clinical candidate selection. Janssen retains the option to extend the services beyond the initial set, up to a total of 15 targets.

Onno van de Stolpe, Galapagos chief executive, said "we are seeing an increased demand for longer term, integrated deals in our services business, which access a variety of our drug discovery capabilities". He added that with Argenta’s "strong track record of delivering on integrated drug discovery programs, we are well positioned to meet this growing need”.

Argenta, which is based in Harlow and employs about 140 people, was acquired by Galapagos in February this year. News of the J&J deal has gone down well with investors and at 10.35am, Galapagos shares were touching an all-time high at 12.18 euros, up 3.7%.