(RTTNews) -  Drug discovery company Galapagos NV (GLPYY.PK: News , GLPG.NX) Wednesday said it has expanded its global strategic alliance with an affiliate of pharma major Merck & Co., Inc. (MRK: News ) in metabolic diseases to incorporate development of new therapies for atherosclerosis. Galapagos added that the announced expansion is separate from its alliance with Merck in inflammatory diseases that was announced in April 2009.

Under the terms of the expanded deal, Galapagos will be eligible to receive research, regulatory and sales milestone payments that may total in excess of EUR 400 million and also royalties on worldwide sales. In addition to this, Galapagos will also be eligible to receive royalties upon commercialization of any products covered under the agreement.

Atherosclerosis involves thickening of artery walls due to build-up of fatty materials like cholesterol. Atherosclerosis is considered to be the most common underlying cause for strokes, heart attacks and most cardiovascular diseases in general, including congestive heart failure.

Mechelen, Belgium-based Galapagos stated that it will be responsible for the discovery and pre-clinical development of new small molecule candidate drugs based on novel Galapagos targets.

The partnership will make use of Galapagos' target discovery platform for identification of novel targets in atherosclerosis, as well as in obesity and diabetes. The targets, after validation, will be selected by a joint steering committee and will be entered into screening and chemistry by Galapagos.

As per the transaction terms, Whitehouse Station, New Jersey-based Merck will have an exclusive option to license in each candidate for clinical development and commercialization on a worldwide basis. Merck, upon exercise of such option, will be responsible for the development and commercialization of the candidate drug.
Galapagos added that it may execute Phase I clinical studies and will have the right to further develop and commercialize certain compounds for which Merck does not exercise its exclusive option.

In January 2009, Galapagos had announced a multi-year alliance with Merck for the development of new therapies in diabetes and obesity, with milestone payments with the potential to exceed EUR 170 million.

GLPYY last traded on October 8 at $12.00 per share on the Pink Sheets.

MRK closed Tuesday's regular trading at $32.42 per share on the new York Stock Exchange.

To receive FREE breaking news email alerts for Galapagos NV and others in your portfolio

by RTT Staff Writer

For comments and feedback: contact editorial@rttnews.com