Then, piece by piece, it all fell apart. The first shock came a year after the Gilead deal, when the Food and Drug Administration rejected filgotinib’s application for approval in rheumatoid arthritis, citing a safety issue. In time it became clear that the FDA would never be comfortable with filgotinib at its highest tested dose, and the drug wouldn’t be competitive at a lower one, leading Gilead to abandon the effort to win approval in the world’s most lucrative market for medicines. Galapagos’ share price fell by a third.
It would get worse. In 2021, ziritaxestat, Galapagos’ treatment for idiopathic pulmonary fibrosis, failed in a Phase 3 trial, instantly nullifying years of study and hundreds of millions of dollars invested in its development. The setback, SVB Securities analyst Geoffrey Porges wrote in a note to clients, was “a reminder for investors that while Galapagos has been a very successful drug-discovery organization, their performance as drug developers has been less impressive.” Earlier-stage treatments for osteoarthritis and eczema failed, too, and so did the company’s AbbVie-partnered cystic fibrosis medicines.
Galapagos had lost 70% of its value since filgotinib’s rejection, trading below its cash reserves for the first time.
“They went from having a drug that was about to be approved in the U.S. to having no late-stage pipeline at all,” said Field, the Barclays analyst.
In August, Galapagos said van de Stolpe would retire once the company found a replacement, ending his two-decade tenure. Two months later, Stoffels, having led J&J’s development of a vaccine for Covid-19, announced his retirement, effective Dec. 31, 2021. The plan was to rejoin Galapagos’ board of directors, on which Stoffels had served before J&J bought Tibotec. ”But then the board came back,” Stoffels said. “‘The CEO is leaving. Do you want to do the turnaround at Galapagos and become the CEO?’”
He said yes. On April 1, 2022, Stoffels went home to Belgium and began his tenure. Galapagos had lost the faith of investors, but it still had Gilead’s money. And now it had the architect of Project Playbook to piece together its future.
Galapagos immediately embarked on a rebrand. A cheerful marketing video called it “the dawn of a new era,” unveiling a Gatorade-adjacent monogram, some hashtags, and the implicit promise that the company’s future would be brighter than its dismal recent past.
“Bringing in Paul and his emphasis on business development clearly signifies that the old Galapagos is over,” said Phil Nadeau, an equities analyst at TD Cowen in New York. “But in biotech generally, business development has a non-perfect hit rate.”
In June 2022, the Stoffels administration did its first deals, paying about $150 million total for the privately held firms CellPoint and AboundBio. The acquisitions, announced on the same day, marked Galapagos’ entry into CAR-T cancer treatment, which involves genetically modifying a patients’ own immune cells to attack tumors, and an embrace of therapeutic antibodies, each a stark contrast to the company’s decades-long focus on small-molecule research.
The stock price hardly budged. Small-dollar deals for companies no one had heard of were not quite the transformational moves the market wanted from Stoffels. And because Galapagos’ newly acquired assets were so early in development, even investors with longer time horizons struggled to see an entry point, Nadeau said.
Related: A bellwether moment: Once a distant dream, gene therapy for Duchenne nears historic decision
Stoffels sees it differently. Buying AboundBio reunited him with John Mellors, a colleague from the early days of Tibotec and Virco. And bringing in a CAR-T therapy gave Galapagos a foundation for its ambitions in oncology. Just as their old company studied HIV’s adaptive mutations to find powerful antivirals, their new one will learn from cancer’s evasive maneuvers to develop counter-punching immunotherapies, Mellors said.
“We both witnessed the extraordinary success of treating HIV and want to do that again to the best of our ability,” he said. “It was truly transformative, and the opportunity to do that in cancer is just a dream.”