Galapagos Exits Cell Therapy Business, Triggering Major Industry Shifts and Layoffs

Galapagos NV announced plans to wind down its cell therapy operations, marking a significant shift in the company's strategic direction and triggering ripple effects across the pharmaceutical industry. The decision comes after a failed attempt to sell the business unit and will result in approximately 365 job cuts across Europe, the United States, and China.

Galapagos Restructuring and Industry Impact

Galapagos CEO Henry Gosebruch revealed that despite a thorough search for potential buyers, "no viable proposals were received" for the cell therapy unit. The company will now reallocate resources to other areas of unmet need and pursue "transformative business development opportunities."

The closure will affect seven of the ten indications in Galapagos' pipeline, leaving the company with just three small molecule assets in development. These remaining programs target systemic lupus erythematosus, inflammatory bowel disease, and undisclosed autoimmune and inflammatory conditions.

The restructuring is expected to incur one-time expenses of €150 million to €200 million ($174 million to $232 million) and operating costs of €100 million to €125 million ($116 million to $145 million) from Q4 2025 through 2026. Galapagos will provide an updated cash outlook during its Q3 earnings call on November 6.

This move follows a tumultuous period for Galapagos, which earlier this year had announced plans to split into two entities before changing course. The company's stock price dropped 11% to just over $30 in premarket trading following the announcement.

Broader Industry Trends in Cell Therapy

Galapagos' exit from cell therapy reflects a broader trend in the pharmaceutical industry. Earlier this month, Novo Nordisk announced it would no longer invest in cell therapy, including a program for type 1 diabetes. Similarly, Takeda recently made the decision to cease its cell therapy efforts.

These moves by major players suggest a reevaluation of the cell therapy field, potentially due to challenges in development, manufacturing, or market dynamics. The layoffs at Galapagos, Novo Nordisk, and Takeda - totaling over 750 positions - highlight the human impact of these strategic shifts.

Ongoing Industry Restructuring and Layoffs

The pharmaceutical and biotech sectors continue to see significant workforce reductions and restructuring efforts. Notable recent announcements include:

• Merck's projection of 6,000 layoffs globally as part of a $3 billion cost-cutting initiative
• Moderna's 10% global workforce reduction, affecting approximately 500 employees
• Bristol Myers Squibb's ongoing layoffs, with 68 additional cuts in Lawrenceville, New Jersey
• Sarepta Therapeutics' termination of 500 employees following clinical setbacks

These layoffs reflect broader industry trends of cost-cutting, pipeline reprioritization, and strategic realignment in response to changing market conditions and research outcomes.

As the industry continues to evolve, companies are increasingly focusing on high-potential programs and exploring new technologies and therapeutic modalities. The coming months will likely see further strategic shifts as pharmaceutical and biotech firms adapt to the challenging funding environment and seek to maximize their research and development investments.