• Galapagos to discover small molecule candidate drugs for pre-clinical development
• Upfront fee, milestones on pre-clinical and clinical development of small molecule candidates, plus royalties on worldwide sales

Click here to access the live audio webcast presentation at 11.30 CET,
call number +31 20 794 8504

Mechelen, Belgium; 9 January 2009 Galapagos NV (Euronext: GLPG) announced today that it has entered into a multi-year global strategic alliance with Merck & Co., Inc. to develop potential new therapies in obesity and diabetes.

Galapagos will be responsible for the discovery and pre-clinical development of new small molecule candidate drugs based on novel Galapagos targets. Merck will have the exclusive option to license each candidate for clinical development and commercialization on a worldwide basis. The alliance will make use of Galapagos’ proprietary SilenceSelect® target discovery platform for identification of novel targets in obesity and diabetes. After validation, targets will be selected by a joint steering committee and entered into screening and chemistry by Galapagos. Merck has the option to acquire an exclusive license to each candidate drug and upon exercise of such an option, Merck will be responsible for the development and commercialization of the candidate drug. Galapagos 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.

Under the terms of the agreement, Galapagos will receive an upfront fee of €1.5 million from Merck. In addition Galapagos is eligible to receive discovery, development and regulatory milestone payments that could potentially exceed €170 million total for multiple products, as well as specific sales milestones and royalties upon commercialization of any products covered under the agreement.

“The alliance with Merck in obesity and diabetes further demonstrates Galapagos’ ability to expand into new therapeutic areas,” said Onno van de Stolpe, CEO. “Galapagos has a proven track record of delivering on its alliance programs, making us attractive to potential pharma partners seeking to fill their pipelines with medicines based on novel modes of action. Galapagos has been successful through careful management of its R&D programs; this early stage alliance with Merck fits nicely into our alliance infrastructure as other programs advance into later stages.”

"By combining Galapagos' novel target identification strategy with Merck's drug development expertise this collaboration provides a unique opportunity to discover and develop potential new therapies for diabetes and obesity," said Catherine Strader, Vice President, External Basic Research, Merck Research Laboratories.

Conference call and webcast presentation
Galapagos will conduct a conference call open to the public today at 11.30 Central European Time (CET), which will also be webcast. To participate in the conference call, please call +31 20 794 8504, ten minutes prior to commencement. A question and answer session will follow the presentation. Click here to access the live audio webcast. The archived webcast also will be available for replay shortly after the close of the call.

About diabetes and obesity
Diabetes mellitus is a disorder in which blood sugar (glucose) levels are abnormally high because the body does not produce enough insulin to meet its needs. Patients with diabetes type 1 (10% of diabetes patients) have lost the ability to produce insulin themselves. In type 2 diabetes, patients develop resistance to the effects of insulin; obesity is the chief risk factor in developing this type, as 80-90% of patients with type 2 diabetes are obese. Diabetes symptoms include increased urination, thirst, and weight loss. Diabetes also can lead to nerve damage, blood vessel damage, and increased risk of heart attack, stroke, and kidney failure. About 15% of people over the age of 70 develop Type 2 diabetes. Treatment of diabetes involves diet, exercise, education, and, for most people, drugs. Global sales of diabetes drugs totaled $15 billion in 2005 1.

Obesity is the excess accumulation of body fat and is defined as having a Body Mass Index 2 > 30. Being obese increases the risk of many disorders, such as diabetes, heart disease, and certain cancers, and can result in high blood pressure and early death. Increasing activity and reducing caloric intake are essential to treating obesity, but some people also need to take drugs. Around 10% of the world population is obese 3, and sales of obesity drugs in the world’s largest markets are expected to grow from $500 million in 2006 to more than $2 billion by 2016 4.

About Galapagos
Galapagos (Euronext Brussels: GLPG; Euronext Amsterdam: GLPGA; OTC: GLPYY) is a drug discovery company with pre-clinical programs in bone and joint diseases and bone metastasis. Its BioFocus DPI division offers a full suite of target-to-drug discovery products and services to pharmaceutical and biotech companies, encompassing target discovery and validation, screening and drug discovery through to delivery of pre-clinical candidates. BioFocus DPI also provides adenoviral reagents for rapid identification and validation of novel drug targets, compound libraries for drug screening as well as chemogenomics and ADMET database products to select targets and compounds. Galapagos currently employs about 460 people and operates facilities in six countries, with global headquarters in Mechelen, Belgium. More information about Galapagos can be found at www.glpg.com.

CONTACT

Galapagos NV
Onno van de Stolpe, CEO
Tel: +31 6 2909 8028
ir@glpg.com

This release may contain forward-looking statements, including, without limitation, statements containing the words “believes,” “anticipates,” “expects,” “intends,” “plans,” “seeks,” “estimates,” “may,” “will,” “could,” “stands to,” and “continues,” as well as similar expressions. Such forward-looking statements may involve known and unknown risks, uncertainties and other factors which might cause the actual results, financial condition, performance or achievements of Galapagos, or industry results, to be materially different from any historic or future results, financial conditions, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this document. Galapagos expressly disclaims any obligation to update any such forward-looking statements in this document to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless required by law or regulation.

1 “The Global Diabetes Market – Therapeutics, Diagnostics, and Complications” Arrowhead Publishers
2 Body Mass Index = (weight in kilograms)/(length in meters)²
2 World Health Organization estimates from 2005
4 Decision Resources, March 2008