Dutch biotechnology company Galapagos has snapped up the UK-based drug discovery research services firm Inpharmatica in a transaction valued at 12.5 million euros.

The purchase price includes Inpharmatica’s ongoing business, which is

valued at 6.5 million euros, plus an additional estimated 6 million euros

in cash. There is a third component to the deal which sets out a potential

maximum pay-out from commercial milestones of 6.6 million euros.

Inpharmatica will become part of BioFocus DPI, Galapagos’ drug discovery

services business. However, as a consequence of the acquisition, the companies anticipate downsizing the UK firm’s management, sales and

administrative staff positions. Immediate synergies are expected to be

around 1.5 million euros a year.

Onno van de Stolpe, Galapagos chief executive, said that adding

Inpharmatica’s “proprietary target and compound selection tools to our

platform provides an even broader array of drug discovery solutions for

both our internal R&D and for our services business.” Inpharmatica also

brings major clients to the merger, notably Pfizer and Wyeth.

Galapagos said that the acquisition of Inpharmatica fits within its strategy of partnering with pharmaceutical and biotechnology companies in

‘turn-key’ drug discovery collaborations. It entered into such an alliance with GlaxoSmithKline in osteoarthritis in June 2006 and intends to complete two more such deals during the next three years.

Galapagos, which employs more than 360 staff and has facilities in the US,

the UK, Belgium, Switzerland and Germany, as well as in the Netherlands,

has maintained its revenue guidance for 2006 at 33-38 million euros.