Galapagos acquires ProSkelia from ProStrakan and raises ¤31 million

    Creates drug discovery leader in bone & joint diseases


Webcast Press Conference Scheduled for 10.30 AM CET on 22 December,
2006

*          Preclinical programs in bone disease to expand Galapagos'
  pipeline
*          Phase II menopausal product marks start of Galapagos
  clinical development
*          Acquisition price comprises ¤12.5 million in newly issued
  Galapagos shares plus a future earn-out capped at ¤14.5 million
*          Galapagos raises an additional ¤31 million through a
  private placement
*          Proceeds will be used to fund Galapagos' enhanced
  portfolio in bone & joint diseases through to clinical testing

Mechelen, Belgium, 22 December, 2006; Galapagos NV (Euronext & London
AIM: GLPG), an integrated drug discovery company, today announced  to
have entered  into a  definitive agreement  with UK-based  ProStrakan
Group plc (LSE: PSK) under which Galapagos acquires ProSkelia SASU, a
French subsidiary of ProStrakan.

ProSkelia is  engaged  in  drug discovery  and  development  in  bone
diseases.  ProSkelia was the  2002 spin-out of Aventis' Bone  Disease
Unit  and  was  acquired  in  2004  by  the  Strakan  Group  to  form
ProStrakan.

The assets that Galapagos acquires include ProSkelia's R&D operations
focused on bone  diseases as  well as  a product  portfolio of  three
preclinical  products  in  bone   diseases  (osteoporosis  and   bone
metastasis), and one preclinical product in cachexia (muscle  atrophy
and weight loss).   The combined  product development portfolio  will
contribute to Galapagos' goal of having multiple clinical programs in
bone and joint diseases in 2008.

The  transaction  includes  an   exclusive  option  and  license   to
oestradiol  glucoside  ("E2G"),  a  product  that  has   successfully
completed a  phase IIa  clinical study  for treatment  of  menopausal
symptoms ('hot  flashes').    This  marks  the  start  of  Galapagos'
clinical programs.  With  the acquisition,  ProSkelia's  ongoing  R&D
partnerships with Amgen, Genentech, and Novartis will be  transferred
to Galapagos.  Galapagos will receive all annual revenues from  these
partnerships and will be eligible to 25% of the downstream milestones
and royalties from these partnerships.

The acquisition price
The acquisition price of ProSkelia  comprises ¤12.5 million in  newly
issued Galapagos shares.  This price is partially offset by estimated
cash tax  refunds of  ¤9 million  over  the coming  four years.    In
addition, ProStrakan will be eligible for earn-out payments capped at
¤14.5 million, as part  of future income  that Galapagos will  derive
from the acquired  pre-clinical programs.   For the  license on  E2G,
ProStrakan will receive ¤5 million  plus a fixed amount of  licensing
revenues receivable by Galapagos, as well as single digit royalties.
These payments to ProStrakan for  the E2G program are conditional  to
successful completion of Phase IIb clinical trials and partnering  of
the product.  In addition, ProStrakan  has right of first refusal  on
the  cachexia  program,  should   Galapagos  decide  to  partner   or
out-license this.

Financing
In  conjunction  with  the  acquisition,  Galapagos  has  raised   an
additional ¤31 million in funding through a private placement of  new
shares with  institutional  investors in  the  US and  Europe.    The
proceeds of the offering will be used for the funding of the  further
development of  the  enhanced  portfolio in  bone  &  joint  diseases
through to clinical testing.

"With our  programs  in rheumatoid  arthritis,  our GSK  alliance  in
osteoarthritis, and now the  excellent ProSkelia programs,  Galapagos
is becoming  a  leader in  the  discovery and  development  of  small
molecule drugs to treat bone and joint diseases," commented Onno  van
de Stolpe, CEO of Galapagos.  "With the licensing of ProStrakan's E2G
program, we will be able to execute  a phase IIb trial and build  the
necessary infrastructure  to progress  our  other products  into  and
through  clinical  testing.    Additionally,  Galapagos  expands  its
collaborations with  leading  pharma  and  biotech  companies,  while
operating a fast growing business  unit in drug discovery services.
The substantial capital  inflow through  the issue of  new shares  to
institutional investors in the US  and Europe is expected to  provide
Galapagos with  the necessary  funding to  bring our  bone and  joint
programs into the clinic in 2008 and  2009.  We are gratified by  the
strong  support  from  leading  international  institutions  for  our
plans."

ProSkelia, located in Romainville near  Paris, operates state of  the
art research facilities in discovery research.  It currently  employs
65 people.  The  operations will be  integrated with Galapagos'  drug
discovery division based in Mechelen.   The acquired capabilities  in
preclinical  development  and  in  vivo  pharmacology  will   benefit
Galapagos' current  drug  discovery  programs.    As  a  consequence,
Galapagos expects immediate  cost savings of  about ¤2.5 million  per
year, mainly because of reduced outsourcing needs for Galapagos  drug
development, and in part through operational synergies.

This acquisition also  fits very well  within Galapagos' strategy  to
partner with pharmaceutical  and biotechnology  companies in  turnkey
drug discovery  alliances, as  it further  strengthens the  company's
portfolio of  drug  candidates.   Galapagos  entered such  a  turnkey
alliance with  GlaxoSmithKline in  osteoarthritis  in June  2006  and
intends to complete two more such  turnkey deals in the coming  three
years.

Galapagos will  issue 4,860,331  new shares  as part  of the  capital
increase and the  ProSkelia acquisition,  on the basis  of ¤8.95  per
share (the average Galapagos  share price over  the last thirty  days
prior to 22  December 2006  as quoted  on Euronext  Amsterdam).   The
newly issued  shares to  ProStrakan  will be  subject to  a  12-month
lock-up agreement,  other than  in  certain defined  circumstances.
Galapagos shall apply  for a  listing of the  newly issued  Galapagos
shares on Euronext  Brussels and Euronext  Amsterdam, subject to  the
approval by  the Belgian  Banking  Finance and  Insurance  Commission
(BFIC-CBFA) of a prospectus as required under applicable Belgian law,
as well  as on  London AiM.   Trading  of the  new shares  issued  in
conjunction with the private placement  will be subject to  BFIC-CBFA
approval of the prospectus, which is expected April, 2007.

Kempen & Co advised  Galapagos in the  acquisition of ProSkelia,  and
Kempen &  Co, Fortis  and Whitaker  Securities have  been Joint  Lead
Managers of the private placement.

Webcast Press Conference details

Galapagos will host a press conference and audio webcast call
discussing the transaction on 22 December, 2006 at 10.30 AM CET/ 9.30
AM GMT.  To participate in the call, dial [phone] ten minutes
in advance of the call.  A live webcast of the conference call can be
accessed on the Galapagos website at www.glpg.com.  An archived
version of the webcast will be available later today and archived on
the website for 30 days.

About Galapagos

Galapagos is a publicly traded, genomics-based drug discovery company
(Euronext Brussels,  GLPG;  Euronext Amsterdam,  GLPGA;  London  AiM:
GLPG) that has  drug discovery programs  based on proprietary,  novel
targets in bone and joint diseases - osteoarthritis, osteoporosis and
rheumatoid  arthritis.      Galapagos   offers  a   full   suite   of
target-to-drug discovery products and services to pharmaceutical  and
biotech companies  through its  division BioFocus  DPI,  encompassing
target discovery and drug discovery  services through to delivery  of
pre-clinical  candidates.    In   addition,  BioFocus  DPI   provides
adenoviral reagents for rapid identification and validation of  novel
drug targets,  compound  libraries  for drug  screening  as  well  as
chemogenomics and  ADME  database  products  to  select  targets  and
compounds.  Prior to this  transaction, Galapagos employed more  than
380 people and  operated facilities in  seven countries, with  global
headquarters in Mechelen, Belgium.  More information about  Galapagos
and BioFocus DPI can be found at www.glpg.com.

About ProStrakan

ProStrakan Group  plc is  a rapidly  growing international  specialty
pharmaceutical   company    engaged    in   the    development    and
commercialization of  prescription  medicines for  the  treatment  of
unmet  therapeutic  needs   in  major  markets.     The  company   is
headquartered in Galashiels, Scotland.   EU-wide sales and  marketing
of ProStrakan's  portfolio  of  products are  handled  by  commercial
subsidiaries based in the UK, France, Germany and Spain.   ProStrakan
was listed  on  the  London  Stock  Exchange  in  June  2005.    More
information on ProStrakan can be found at www.prostrakan.com.

Forward Looking Statements

This release contains certain forward-looking statements that involve
risks and  uncertainties  that  could  cause  actual  results  to  be
materially different  from  historical  results or  from  any  future
results expressed or implied by such forward-looking statements.  You
are urged  to  consider  statements that  include  the  words  "may,"
"will,"  "would,"   "could,"   "should,"   "believes,"   "estimates,"
"projects,"   "potential,"    "expects,"   "plans,"    "anticipates,"
"intends,"  "continues,"  "forecast,"  "designed,"  "goal,"  or   the
negative of those words or other comparable words to be uncertain and
forward-looking.  Any forward-looking  statements made by  ProStrakan
or Galapagos  speak  only  as  of the  date  made.    ProStrakan  and
Galapagos  undertake   no   obligation   to   publicly   update   any
forward-looking statements, whether as  a result of new  information,
future events or otherwise.

CONTACT:

Galapagos NV
Onno van de Stolpe
CEO
+31 6 2909
8028
[e-mail]

- ---END OF MESSAGE---






Copyright © Hugin ASA 2006. All rights reserved.