STOCKS NEWS EUROPE-Galapagos surges on Glaxo payment

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11:45GMT 06Jan2009-Galapagos surges on Glaxo payment

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Shares in Belgian biotechnology firm Galapagos (GLPG.BR) (GLPG.AS) surge following Monday's after-market news that it received 7.6 million euros in milestone payments from GlaxoSmithKline (GSK.L). With those latest payments, Galapagos said it has earned a total of 25.5 million euros through its GlaxoSmithKline partnership.

Galapagos's shares soar as much as 10.42 percent to 4.45 euros, against the DJ Stoxx European Health Care Index .SXDP which is up 3.42 percent.

The news is positive and boosts confidence that Galapagos can deliver results in its partnerships, KBC Securities analyst Jan de Kerpel writes in a research note to clients. He adds, however, that Galapagos still has a long way to go before delivering on the full potential of the alliance.

"Although each milestone achievement is important, for a pre-clinical compound the path towards commercialisation is still long," De Kerpel writes, keeping his accumulate rating and 5 euro target price for Galapagos.

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