(Bloomberg) -- More than 20 years ago, Paul Stoffels helped form Belgian biotechnology company Galapagos NV. Now he’s headed back to lead an effort to revive it.

A prominent drug developer and public-health specialist who stepped down from his role as Johnson & Johnson’s top scientist in December, Stoffels will now seek to bolster Galapagos’s pipeline after research and development setbacks pushed its shares down about 80% from an early 2020 peak. News of his appointment as chief executive officer sent Galapagos shares up as much as 19% Thursday, their biggest intraday gain since July 2019.

Now the spotlight shifts to potential deals for the company and what it will do with almost 5 billion euros ($5.6 billion) in cash. The Belgian infectious disease physician pointed to Galapagos’s financial firepower and partnership with Gilead Sciences Inc., its largest shareholder.

“The cash is there to get after internal opportunities, but also external opportunities,” Stoffels, 59, said in an interview Thursday. “It’s not building from the ground up. It’s a strong foundation with existing cash, which helps to kick off very quickly and accelerate new ideas.”

Galapagos was already looking for ways to expand, especially in inflammatory diseases, said co-founder and current CEO Onno van de Stolpe, who reached out to Stoffels last summer about replacing him after announcing his own retirement. In the coming months, the company will likely “widen the net” for deals, he said.

“The chance that we will be able to come up with good deals that make sense for the company and create value for investors is actually increased,” van de Stolpe said in the interview. “I’m sure the company will be able to land a couple of deals that will strengthen the pipeline to rebuild.”

Africa Stint

Stoffels launched his career in Africa, where he researched HIV and tropical diseases. He served on the board of directors of Galapagos -- started as a joint venture between two other drugmakers -- until 2002, when he joined J&J. There, he led development HIV drugs as well as vaccines for viruses such as Ebola and Zika. 

In early 2020, the U.S. agency responsible for developing emergency medical countermeasures summoned Stoffels and his team for a meeting that led to a partnership to develop a single-shot Covid vaccine. When Galapagos called, Stoffels said he had already been planning to retire from J&J and return to Europe. 

“When Onno decided to retire, it was not a very difficult choice,” to return to Galapagos, said Stoffels, who will fully take over in April. 

In his next assignment, he’ll look to build on the collaboration with Gilead and overcome the drug disappointments of recent years. In 2019, Gilead agreed to pay $5.1 billion to raise its stake in the Belgian company and deepen its research into inflammatory diseases and other disorders.

Galapagos lost about a third of its market value in August 2020 after U.S. regulators failed to approve a rheumatoid arthritis treatment developed with Gilead that was cleared in Europe. In early 2021, the companies stopped late-stage clinical trials of an experimental treatment for a progressive lung disease following a recommendation by the study’s independent monitors.

“It’s clear we need more products in the pipeline,” Stoffels said, “and in different areas, maybe different technologies.”

(Updates to add detail in paragraphs 10-12)

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