• Discovery and development of novel anti-infective medicines based on Galapagos’ natural product drug discovery platform

• Up to €3.5 million in total technology access fees, up to €215 million in total payments for one marketed product and up to double digit royalties on commercial sales of alliance products

GlaxoSmithKline (GSK) and Galapagos NV (Euronext & LSE: GLPG) announced today the creation of a multi-year strategic alliance to develop novel anti-infective drug candidates.

Webcast audio conference presentation 9.30 CET today

GlaxoSmithKline will participate in the alliance through its Infectious Diseases Centre of Excellence for Drug Discovery (ID CEDD). Under the terms of the agreement, Galapagos will grant GlaxoSmithKline options to license product candidates that are directed against up to six anti-infective discovery targets. Galapagos will be responsible for the discovery and development of natural product small molecule drug candidates through to clinical Proof of Concept, at which point GSK will have exclusive option to license each compound for further development and commercialisation on a worldwide basis. The alliance will utilise the natural product compound collection and chemistry capabilities of BioFocus DPI, Galapagos’ services division. Galapagos will have the right to further develop and commercialise compounds for which GSK does not exercise its option.

Galapagos will receive total upfront fees of up to €3.5 million from GSK, depending on the total number of programmes within the collaboration. Galapagos could be eligible to receive up to €95 million in upfront fees, development and regulatory milestones payments for each product candidate. If a product is commercialised, Galapagos may receive up to €120 million for achievement of specific sales milestones. Galapagos is also eligible to receive up to double-digit royalties on worldwide sales of alliance products.

“This is our first alliance outside bone and joint diseases. It shows that Galapagos can generate significant business in new therapeutic areas,” said Onno van de Stolpe, Galapagos’ CEO. “The alliance will rely heavily on BioFocus DPI’s natural product discovery capabilities. This alliance fits within our strategy of executing risk/reward sharing deals with big pharma and at the same time underscores our M&A approach and successful integration of DPI into the BioFocus service division.”

“Our newly created ID CEDD has been focusing on discovering novel antibiotics and antivirals, and the natural product collections from BioFocus DPI have the potential to address our needs,” said Zhi Hong, Senior Vice President and Head of GlaxoSmithKline’s ID CEDD. “We recognise the significant unmet medical needs in hospital or community-acquired bacterial infections plus life-threatening viral diseases. It is therefore prudent to explore novel chemical space and targets that offer new prospects for treatments across a range of infectious diseases. Galapagos has been a productive collaborator for GSK in the existing osteoarthritis alliance, and we are confident this new alliance based on natural products will contribute to the advancement of our drug discovery and development programmes in infectious diseases.”

About infectious diseases
Infectious diseases are caused by pathogenic micro-organisms such as bacteria, viruses, parasites or fungi. The diseases can be spread, directly or indirectly, from one person to another . Infectious diseases are a leading cause of death worldwide. Existing therapies against infectious diseases currently account for an estimated €45 billion in annual global sales . The need for new therapies is on the rise due to increasing resistance of micro-organisms to available therapies.

About BioFocus DPI natural product compounds
Natural products represent a major source of new medicines, as nearly half of all new drugs brought to market in the last 20 years are derived from compounds of natural origin. With their unique organic characteristics, natural compounds are especially important for drug development against certain target classes. BioFocus DPI’s natural compound collections are based on bacterial and fungal sources, offering characteristics differentiating these from synthetic chemistry collections, including high chemical and functional diversity, potent pharmacological activities over a broad range of biological targets, and desirable physicochemical properties.

About GlaxoSmithKline
GlaxoSmithKline – one of the world’s leading research-based pharmaceutical and healthcare companies – is committed to improving the quality of human life by enabling people to do more, feel better and live longer. More information can be found at www.gsk.com.

ABOUT THE ID CEDD
The Infectious Diseases Centre of Excellence for Drug Discovery is a global research unit within GlaxoSmithKline Drug Discovery dedicated to discovering therapies for infectious diseases including bacterial, viral and diseases of the developing world such as TB and Malaria. It is designed to integrate and better coordinate the progression of infectious diseases medicines from therapeutic hypothesis to clinical proof of concept. It focuses on building an innovative pipeline through both internal efforts and external alliances with other companies and research institutions and will focus on 'virtualising' a portion of the infectious diseases pipeline by forming multiple risk-sharing/reward-sharing alliances.

About Galapagos
Galapagos (Euronext Brussels, GLPG; Euronext Amsterdam, GLPGA; London AiM: GLPG) is a drug discovery company with pre-clinical programs in bone and joint diseases and cachexia. Its division BioFocus DPI 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 460 people and operates facilities in seven countries, with global headquarters in Mechelen, Belgium. More information about Galapagos and BioFocus DPI can be found at www.glpg.com and www.biofocusdpi.com.

Conference call and webcast presentation
Galapagos will host a conference call open to the public today at 09.30 Central European Time (CET), which will also be webcast. To participate in the conference call, please call +32 2290 1791 ten minutes prior to commencement. A question and answer session will follow the presentation of the results. To access the webcast, please click here
The archived webcast also will be available for replay shortly after the close of the call.

GlaxoSmithKline Forward-looking Statements
Under the safe harbour provisions of the U.S. Private Securities Litigation Reform Act of 1995, the company cautions investors that any forward-looking statements or projections made by the company, including those made in this Announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect the Group's operations are described under 'Risk Factors' in the `Business Review’ in the company's Annual Report on Form 20-F for 2006.

Galapagos Forward-looking Statements
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.