FILE PHOTO: The logo of Gilead Sciences Inc is pictured during a news conference in New Delhi September 15, 2014. REUTERS/Anindito Mukherjee

(Reuters) – Gilead Sciences Inc (GILD.O) will invest $5.1 billion to increase its stake in Galapagos NV (GLPG.AS) and partner with the Belgian-Dutch biotech firm to develop and commercialize its treatments for a ten-year period, the companies said on Sunday.

Gilead will receive an exclusive product license and option rights to develop and commercialize all current and future programs in countries outside Europe, according to a statement from the companies.

The investment in Galapagos includes an upfront payment of $3.95 billion and a $1.1 billion equity investment from the U.S. drugmaker.

Gilead will pay 140.59 euros ($158.43) per new share in Galapagos to increase its stake to 22% from 12.3%. That represents a premium of nearly 10% to the close of Galapagos shares on Friday.

Galapagos said it would also seek shareholder approval to allow Gilead to further increase its ownership to up to 29.9%. After that, their agreement includes a 10-year standstill clause that would prevent Gilead from accumulating any additional stake.

The Wall Street Journal reported the deal earlier on Sunday.

Reporting by Ismail Shakil in Bengaluru; Editing by Rosalba O’Brien and Daniel Wallis

Our Standards:The Thomson Reuters Trust Principles.

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