LICENSING

Galapagos Enters Strategic Alliance in Diabetes
and Obesity

Galapagos to Discover Small Molecule Candidate Drugs for
Preclinical Development

Upfront Fee, Milestones on Preclinical and Clinical Development of Small Molecule Candidates, Plus Royalties on Worldwide Sales

MECHELEN, BELGIUM, January 9, 2009 - Galapagos NV (Euronext: GLPG) announced that it has entered into a multiyear global strategic alliance with Merck & Co., Inc. to develop potential new therapies in obesity and diabetes.

Galapagos will be responsible for the discovery and preclinical development of new small molecule candidate drugs based on novel Galapagos targets. Merck will have the exclusive option to license each candidate for clinical development and commercialization on a worldwide basis. The alliance will make use of Galapagos´ proprietary SilenceSelect^® target discovery platform for identification of novel targets in obesity and diabetes. After validation, targets will be selected by a joint steering committee and entered into screening and chemistry by Galapagos. Merck has the option to acquire an exclusive license to each candidate drug, and upon exercise of such an option, Merck will be responsible for the development and commercialization of the candidate drug. Galapagos may execute phase I clinical studies and will have the right to further develop and commercialize certain compounds for which Merck does not exercise its exclusive option.

Under the terms of the agreement, Galapagos will receive an upfront fee of €1.5 million from Merck. In addition, Galapagos is eligible to receive discovery, development and regulatory milestone payments that could potentially exceed €170 million total for multiple products, as well as specific sales milestones and royalties upon commercialization of any products covered under the agreement.

“The alliance with Merck in obesity and diabetes further demonstrates Galapagos´ ability to expand into new therapeutic areas,” said Onno van de Stolpe, CEO. “Galapagos has a proven track record of delivering on its alliance programs, making us attractive to potential pharma partners seeking to fill their pipelines with medicines based on novel modes of action. Galapagos has been successful through careful management of its R&D programs; this early stage alliance with Merck fits nicely into our alliance infrastructure as other programs advance into later stages.”

“By combining Galapagos´ novel target identification strategy with Merck´s drug development expertise, this collaboration provides a unique opportunity to discover and develop potential new therapies for diabetes and obesity,” said Catherine Strader, Vice President, External Basic Research, Merck Research Laboratories.

About Diabetes and Obesity

Diabetes mellitus is a disorder in which blood sugar (glucose) levels are abnormally high because the body does not produce enough insulin to meet its needs. Patients with diabetes type 1 (10% of diabetes patients) have lost the ability to produce insulin themselves. In type 2 diabetes, patients develop resistance to the effects of insulin; obesity is the chief risk factor in developing this type, as 80-90% of patients with type 2 diabetes are obese. Diabetes symptoms include increased urination, thirst, and weight loss. Diabetes also can lead to nerve damage, blood vessel damage, and increased risk of heart attack, stroke, and kidney failure. About 15% of people over the age of 70 develop Type 2 diabetes. Treatment of diabetes involves diet, exercise, education, and, for most people, drugs. Global sales of diabetes drugs totaled $15 billion in 2005.¹

Obesity is the excess accumulation of body fat and is defined as having a Body Mass Index² > 30. Being obese increases the risk of many disorders, such as diabetes, heart disease, and certain cancers, and can result in high blood pressure and early death. Increasing activity and reducing caloric intake are essential to treating obesity, but some people also need to take drugs. Around 10% of the world population is obese,³ and sales of obesity drugs in the world's largest markets are expected to grow from $500 million in 2006 to more than $2 billion by 2016.⁴

References
¹ “The Global Diabetes Market – Therapeutics, Diagnostics, and Complications” Arrowhead Publishers
² Body Mass Index = (weight in kilograms)/(length in meters)^2
3 World Health Organization estimates from 2005
⁴ Decision Resources, March 2008

Forward-Looking Statement for Merck & Co., Inc.

This news release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding product development, product potential, or financial performance. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this booklet should be evaluated together with the many uncertainties that affect Merck's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of Merck's Form 10-K for the year ended Dec. 31, 2008, and in any risk factors or cautionary statements contained in the Company's periodic reports on Form 10-Q or current reports on Form 8-K, which the Company incorporates by reference.

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