Galapagos (GLPG) said Wednesday that it plans to split into two entities, with a new company, or SpinCo, focusing on developing a pipeline of "innovative medicines", and Galapagos concentrating on advancing its cell therapy platform in oncology.

Under the planned separation, Galapagos and Gilead Sciences (GILD) will amend their 2019 agreement, granting Galapagos full global rights to its pipeline, in exchange for Gilead receiving single-digit royalties on certain product sales.

Galapagos said SpinCo will apply for Euronext listing, with Galapagos shareholders receiving SpinCo shares on a pro-rata basis. Gilead will retain a 25% stake in both SpinCo and Galapagos following the separation.

SpinCo will receive 2.45 billion euros ($2.52 billion) from Galapagos' cash reserves and will focus on oncology, immunology, and virology via strategic business development transactions. Following the separation, Galapagos expects to have 500 million euros in cash.

Galapagos said it plans to prioritize its decentralized cell therapy manufacturing platform, advancing its CAR-T candidate, GLPG5101, while discontinuing its small molecule discovery programs.

Galapagos said it will also cut 300 jobs in Europe, accounting for 40% of its workforce, with "meaningful reductions in staff in Belgium" and closing its site in France to focus on its main hubs in the US, the Netherlands, and Belgium. The move is expected to reduce the company's annual cash burn by between 175 million euro and 225 million euros, excluding restructuring costs.

The separation is expected to occur by mid-2025.

Shares of Galapagos were down less than 1% in recent Wednesday premarket activity.