GlaxoSmithKline has expanded an existing multi-year osteoarthritis alliance with Galapagos, signed in June last year, and is also increasing its stake in the Belgian biotechnology company.

Under the terms of the revised deal, the UK drugs major will make a 4.4-million-euro equity investment in Galapagos in return for over 513,000 shares and is adding a drug discovery programme to the alliance. The latter will be responsible for moving the compound through to Phase IIa trials while GSK will take charge of late-stage development, production and marketing of the drug. It also has the option of adding a second osteoarthritis programme to the deal.

Galapagos could receive total milestone payments of up to 186 million euros if the expanded collaboration results in two marketed products, up from the 137 million euros stated in the original agreement. The Mechelen-headquartered group has already received 7.6 million euros and Hugh Cowley, head of the Centre of Excellence for External Drug Discovery at GSK noted that the alliance “is off to an excellent start.” He added that “the CEEDD is very pleased with the progress to date”, saying that the alliance will contribute to GSK's development pipeline in osteoarthritis in the future, “validating the collaboration model we sought to establish under the CEEDD strategic initiative".

The news pushed Galapagos shares up and chief executive Onno van de Stolpe said that the expansion of the collaboration “shows the strength of our drug discovery engine and the trust that GSK has in our capabilities to develop novel drugs". The firm’s BioFocus service division has a number of deals in place with some major players in the pharmaceutical industry, aside from GSK, such as Amgen, AstraZeneca, Boehringer Ingelheim, Celgene and Roche.

GSK passes on 50% of Theravance

One company that GSK will not be increasing its stake in is Theravance. It has elected not to exercise the right to acquire 50% of the US biopharmaceutical group granted through the terms of the companies' 2004 strategic alliance for $54.25 per share.

The firms have been partners since 2003 and are collaborating on the Beyond Advair (fluticasone/salmeterol) programme to combine a longer-acting beta-2 agonist and a corticosteroid for the treatment of asthma and chronic obstructive pulmonary disease.