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Biotech Stocks to Buy for a Strong Growth Prognosis
Aaron Levitt
InvestorPlaceOctober 25, 2019, 3:20 PM GMT+2
Galapagos NV (GLPG)
A good way to spot top clinical-stage and early-entry biotech stocks is finding those firms with top-notch partners. And Galapagos NV (NASDAQ:GLPG) couldn’t have picked a better partner than biotech royalty Gilead Sciences (NASDAQ:GILD). Earlier this year, GILD upped its partnership stake in GLPG via a nearly $4 billion payment as well as a $1.1 billion equity stake. All in all, Gilead will now own 22% of Galapagos.
There’s a good reason why GILD would want to pony up that kind of cash for the biotech firm. It needs to fill potential revenue holes in its aging pipeline and GLPG has the goods.
Galapagos has one of the richest and largest development pipelines around. The drug company has multiple late-stage programs as well as 25 different drugs in discovery/early trial stages. This includes its potential blockbuster in Filgotinib. This was the first partnership with Gilead and after impressive phase-3 data for the rheumatoid arthritis drug, the duo submitted a marketing application with the FDA earlier this month. Meanwhile, successful initial idiopathic pulmonary fibrosis data, as well as beginning trials for new cystic fibrosis medicines, could all bare significant fruit for GLPG.
That’s an impressive amount of “shots on goal” for a clinical-stage biotech stock. The best part is, based on the rich deal, the speculation is that Galapagos wanted to stay independent rather than receive a full buyout from GILD. This means it can make the full use of that pipeline with future royalty and milestone payments. It also means investors in GLPG stock can as well.