Galapagos buys Argenta to strengthen discovery services

03-Feb-2010 - Last updated on 03-Feb-2010 at 10:39 GMT

Belgium-based Galapagos NV has acquired Argenta Discovery for €16.5m ($23.1m), creating a drug discovery service company with 390 employees and estimated revenues of €70m.

The acquisition “creates a true powerhouse in the drug discovery services market”, according to Onno van de Stolpe, CEO of Galapagos. Following completion of the deal the division will have operations in the UK, Switzerland and the US and provide an array of services.

Argenta brings medicinal and computational chemistry capabilities to Galapagos, as well as expertise in ADME (absorption, distribution, metabolism, and excretion).

Notably, clients of Galapagos’ current service division, which operates under the name BioFocus, will access Argenta’s formulation and pharmacokinetic (PK) capabilities. Likewise, Argenta’s clients will have access to BioFocus’ synthetic compound libraries and protein crystallography.

Galapagos entered the drug discovery service sector in 2005 through the acquisition of BioFocus. The service division generates revenues to progress Galapagos’ drug pipeline and using this combined biotech and contract research organisation (CRO) model the company has become financially self-reliant.

Argenta Discovery used a similar business model and its drug development programmes will continue as a new privately held company, Pulmonary Therapeutics. Galapagos has now ownership in Pulmonary.

In addition to providing additional revenues, the acquisition of Argenta benefits Galapagos’ in-house pipeline by giving it access to respiratory models.

Combined business models

The companies’ familiarity with the combined business model led to Galapagos deciding to operate its service division as two separate organisations under the BioFocus and Argenta brand names.

In the past both companies had to turn down clients because of conflicts of interest. If this happens to BioFocus following the acquisition it can refer the client to Argenta, giving confidence that the intellectual property generated is independently created.

Argenta will be run by John Montana, who was chief scientific officer of the acquired business, and he will report to Christopher Newton, senior vice president at Galapagos.