Belgian biotechnology company Galapagos NV has signed a major deal potentially worth 1 billion euros with US healthcare giant Johnson & Johnson which will see the firms develop treatments for rheumatoid arthritis.

Under the terms of agreement, J&J’s Janssen Pharmaceutica unit may select up to 12 programmes from Galapagos' RA targets to develop, including the latter’s most advanced project which is based on the kinase target GT418. A compound from that particular programme is expected to enter Phase I trials next year.

In cash terms, Galapagos will receive 15 million euros upfront plus a 2 million-euro alliance milestone payment connected with the selection of GT416, one of its most advanced RA programmes. The Mechelen-based firm will be responsible for taking all product candidates through to Phase IIa proof- of-concept trials and for each compound it takes on, Janssen will pay up to 73 million euros, plus royalties on net sales of each approved new RA drug.

Galapagos chief executive Onno van de Stolpe said that the deal “will provide us with the resources to broaden our product pipeline in RA,

exploiting the full value of our portfolio of proprietary targets”. Based on this deal, the firm said that full-year 2007 revenues should reach 60-64 million euros, up from a previous guidance of 54-58 million euros.

The deal with J&J comes a couple of months after Galapagos expanded its existing multi-year osteoarthritis alliance with GlaxoSmithKline.