GlaxoSmithKline sells Croatian research center to Galapagos, names new CFO and enters supply deal with Lonza; EMEA update on Avandia and Pandemrix

In what proved to be a busy news day for UK pharma giant GlaxoSmithKline (GSK: L) the company yesterday announced an agreement for Belgian group Galapagos (XBRU:GLPG) to acquire its state-of-the art research center in Zagreb, Croatia, a succession plan for its chief financial officer and a supply deal with Swiss contract manufacturer Lonza (LONN.VX). Added to which, the European Medicines Agency (EMEA) gave an update to its consideration of the firm's diabetes drug Avandia (rosiglitazone), which has been the subject of much debate and criticism due to its supposed links with cardiovascular side effects.

The arrangement with Galapagos, which is subject to closing conditions and is expected to be effective as of today (September 9), provides for ongoing employment of the staff at the center and additional capacity for Galapagos' growing R&D requirements. Terms of the deal include the acquisition of the research center along with the transfer of around 130 staff. In addition, Galapagos will provide R&D services to GSK under a three year fee-for-service contract to the value of 14 million euros ($18 million). Further terms were not disclosed.

The Zagreb center comes with a strong heritage in the area of antibacterial research having served as GSK's Macrolide Center of Excellence for Drug Discovery and before that as an R&D site for Pliva, the independent pharmaceutical company and founder of the blockbuster antibiotic azithromycin. The integrated capabilities in the operations will allow Galapagos to resource research programs from molecule through to the clinic in alignment with its milestone-driven alliance model. The site will form the basis of a newly-created third Galapagos business unit, Internal Outsourcing, that will provide flexible, additional capacity for the Galapagos group. GSK's senior researcher from the Zagreb site, Radan Spaventi, will join the Galapagos Executive Team as Senior Vice President.