Belgian biotechnology company Galapagos NV (Euronext Brussels:GLPG) (NASDAQ:GLPG) announced on Tuesday that it has entered into a binding agreement with US biopharmaceutical company Gilead Sciences Inc (Nasdaq:GILD) to collaborate on advancing a first-in-class T cell engager programme for autoimmune diseases.

This agreement is linked to Gilead's planned acquisition of Ouro Medicines LLC for USD1.675bn upfront, with up to USD500m in milestone payments.

The collaboration centres on gamgertamig, a clinical-stage BCMAxCD3 T cell engager that has shown efficacy and a differentiated safety profile in Phase 1/2 studies for autoimmune conditions. The programme is expected to enter registrational studies as early as 2027, with Galapagos obtaining licensing rights and operational assets from Ouro as part of the transaction.

Under the framework, Galapagos will fund early development costs, while later-stage development expenses will be shared equally, and Gilead will lead global commercialisation outside certain territories. Galapagos is eligible for milestone payments and tiered royalties of 20% to 23% on net sales.

The agreement also provides Galapagos with increased financial flexibility, including the ability to deploy at least USD500m independently for strategic initiatives and capital allocation priorities.