Galapagos reports H1 financial results with refocused pipeline and
operational progress
- First half-year
2021 financial
results:
- Group revenues and other
income of €277.2
million
- Operating loss of
€97.6 million
- Net loss of
€55.0 million
- Cash and current financial
investments of
€5.0
billion on
30 June
2021
- Advancing refocused
pipeline; encouraging clinical read-outs
reported in earlier-stage inflammatory programs
- Commercial launch of
filgotinib in Europe on
track
- Executing on operational restructuring and
savings program
Webcast presentation
tomorrow, 6
August
2021, at
14.00 CET / 8 AM ET,
www.glpg.com,
+32 2 793 38 47,
code 8245817
Mechelen, Belgium;
5 August
2021,
22.01 CET; regulated
information – Galapagos NV (Euronext & NASDAQ:
GLPG) is pleased to report progress on
earlier-stage programs as well as
its commercial launch of
filgotinib in
Europe. Following
recent setbacks, the
company is moving forward with its revised
strategy and operational
restructuring announced in
May. The
unaudited H1 financial
and operational results are further detailed
in the
H1
2021 report
available on
the website,
www.glpg.com.
“Multiple assets are moving through clinical
development, and we recently reported positive topline data on our
TYK2 compound GLPG3667. In a Phase 1b trial in psoriasis (Pso),
clinical activity was observed at 4 weeks, combined with an
encouraging safety and tolerability profile. We currently are
running an extended dose escalation study in healthy volunteers,
and plan to progress GLPG3667 to a Phase 2b dose finding study in
Pso as well as a Phase 2 study in ulcerative colitis (UC) in
2022.
We continue to develop our SIK portfolio of
molecules, and recently reported encouraging early data from the
first patient studies with SIK2/3 inhibitor GLPG3970. In a Phase 1b
trial in Pso (CALOSOMA), clinical activity was observed at 6 weeks,
and in a Phase 2a trial in UC (SEA TURTLE), biologically important
effects were observed on a number of objective endpoints, both of
which point to the potential of SIK inhibition as a novel mode of
action in inflammation. No activity was observed in the LADYBUG
study in rheumatoid arthritis (RA). GLPG3970 was generally safe and
well tolerated. Based on these encouraging data, we work on
optimizing the pharmacology of follow-up compounds from our SIK
portfolio, and plan to bring an improved SIK2/3 molecule into the
clinic in 2022.
On the commercial side, we report rapid progress
in establishing our commercial operations for Jyseleca across
Europe, with 11 countries launched to date. Reimbursement
procedures are on track, and we are on target to achieve our
commercial objectives.
We remain excited about the potential of our
target discovery platform, our drug development capabilities, and
the strength of our teams. We want to thank our shareholders for
their continued support and patience as we are working hard to
build our pipeline and establish Galapagos as a fully integrated
European biopharma,” said Onno van de Stolpe, CEO of Galapagos.
Bart Filius, President and COO, added,
“Following the strategic exercise announced at Q1, we are focused
on advancing our pipeline, implementing our savings program, and
diligently evaluating business development opportunities. At the
same time, we have been delivering on the launch of Jyseleca,
building out our organization in new European markets. In line with
our review, we reiterate our 2021 operational cash burni guidance
of between €580 million and €620 million. We believe that the
decisions and actions taken put us on the strongest footing for the
future. We look forward to a busy second half of the year, not the
least of which is the expected outcome of the regulatory review in
Europe of Jyseleca in UC.”
Key figures
first half-year
report
2021
(unaudited)(€ millions, except
basic & diluted loss
per share)
|
|
30 June
2021
group
total |
30 June
2020
group
total (*) |
|
Revenues and other income |
277.2 |
217.2 |
|
R&D expenditure |
(268.8) |
(262.9) |
|
G&Aii and S&Miii expenses |
(106.0) |
(88.7) |
|
Operating
loss |
(97.6) |
(134.4) |
|
Fair value re-measurement of financial instruments |
2.8 |
(21.1) |
|
Net other financial result |
17.1 |
(13.0) |
|
Income taxes |
0.5 |
(0.7) |
|
Net loss from continuing operations |
(77.2) |
(169.2) |
|
Net profit from discontinued operations |
22.2 |
3.6 |
|
Net loss of
the period |
(55.0) |
(165.6) |
|
Basic and diluted loss per share (€) |
(0.84) |
(2.55) |
|
|
|
|
|
Current financial investments and cash and
cash equivalents |
5,006.6 |
5,566.5 |
(*) The 2020 comparatives have been restated to
consider the impact of classifying the Fidelta business as
discontinued operations in 2020.
Details of the financial
resultsDue to the sale of our fee-for-service business
(Fidelta) to Selvita on 4 January 2021 for a total consideration of
€37.1 million (including customary adjustments for net cash and
working capital), the results of Fidelta are presented as “Net
profit from discontinued operations” in our unaudited condensed
consolidated income statements for the six months ended 30 June
2021 and 30 June 2020.
Revenues and other income
from continuing operationsOur revenues and other
income from continuing operations for the first six months of 2021
increased to €277.2 million compared to €217.2 million in the first
six months of 2020. Our revenues from the Gilead collaboration in
the first six months of 2021 (€253.2 million) related to (i) the
exclusive access to our drug discovery platform (€115.7 million),
(ii) the filgotinib revenue recognition (€136.1 million) and (iii)
royalties (€1.4 million).
Our deferred income balance on 30 June 2021
includes €1.9 billion allocated to our drug discovery platform that
is recognized linearly over 10 years, and €0.7 billion allocated
for the filgotinib development (including considerations for the
previous and the renegotiated collaboration combined) that is
recognized over time until the end of the development period.
Results from continuing
operationsWe realized a net loss from continuing
operations of €77.2 million for the first six months of 2021,
compared to a net loss of €169.2 million for the first six
months of 2020.
We reported an operating loss amounting to
€97.6 million for the first six months of 2021, compared to an
operating loss of €134.4 million for the same period last
year.
Our R&D expenditure in the first six months
of 2021 amounted to €268.8 million, compared to
€262.9 million for the first six months of 2020. This
increase, primarily related to our filgotinib program and our
Toledo program, was compensated by a decrease for ziritaxestat, the
osteoarthritis (OA) program with GLPG1972, and the program in
atopic dermatitis (AtD) with MOR106. Personnel costs increased due
to an increase in headcount compared to the same period last year
and increased costs of our subscription right plans. This
factor, and the increased cost of the commercial launch
of filgotinib in Europe, contributed to the increase
in our S&M and G&A expenses, which
were respectively €29.1 million
and €76.9 million in the
first six months of 2021, compared
to respectively €26.9 million and
€61.8 million in the first six months of
2020.
We reported a non-cash fair value gain from the
re-measurement of initial warrant B issued to Gilead, amounting to
€2.8 million, mainly due to the decreased implied volatility of the
Galapagos share price and its evolution between 31 December 2020
and 30 June 2021.
Net other financial income in the first six
months of 2021 amounted to €17.1 million, compared to net
other financial loss of €13.0 million for the first six months
of 2020, which was primarily attributable to €33.4 million of
currency exchange gain on our cash and cash equivalents and current
financial investments in U.S. dollars, to €8.7 million of negative
changes in (fair) value of current financial investments and
financial assets and to €4.4 million of interest expenses. The
other financial expenses also contained the effect of discounting
our long term deferred income of €4.8 million.
Results from discontinued
operationsThe net profit from discontinued
operations for the six months ended 30 June 2021 consisted of the
gain on the sale of Fidelta, our fee-for-services business, for
€22.2 million.
Group net
resultsWe reported a group net loss for the first
six months of 2021 of €55.0 million, compared to a group net loss
of €165.6 million for the first six months of 2020.
Cash
positionCurrent financial investments and cash and
cash equivalents totaled €5,006.6 million on 30 June 2021, as
compared to €5,169.3 million on 31 December 2020.
Total net decrease in cash and cash equivalents
and current financial investments amounted to €162.7 million during
the first six months of 2021, compared to a net decrease of €214.3
million during the first six months of 2020. This net decrease was
composed of (i) €223.2 million of operational cash burn, (ii)
offset by €2.6 million of cash proceeds from capital and share
premium increase from exercise of subscription rights in the first
six months of 2021, (iii) €5.8 million negative changes in (fair)
value of current financial investments and €35.0 million of mainly
positive exchange rate differences, (iv) €28.7 million cash in from
disposal of subsidiaries, net of cash disposed.
Finally, our balance sheet on 30 June 2021 held
a receivable from the French government (Crédit d’Impôt
Rechercheiv) and a receivable from the Belgian Government for
R&D incentives, for a total of both receivables of €142.7
million.
Outlook 2021In
2021, we expect the European regulatory assessment of filgotinib
for the treatment of UC and anticipate both an opinion from the
Committee for Medicinal Products for Human Use (CHMP) and a
decision from the European Commission later this year. We also
expect additional reimbursement decisions for filgotinib in RA
across a number of European countries. We are on track to complete
the transition from our collaboration partner Gilead to us of the
full European commercial operations for filgotinib by year-end, and
we anticipate reporting on our own European sales of filgotinib
starting in the second half of the year.
Completion of the recruitment in the global
DIVERSITY Phase 3 trial with filgotinib in Crohn’s disease by our
collaboration partner Gilead is also expected later this year.
With regard to our SIK portfolio, we are
advancing our SIK3 inhibitor GLPG4399 in healthy volunteers this
year, and we aim to advance a follow-up SIK2/3 preclinical
candidate into the clinic in 2022.
Following the positive topline data from our
TYK2 inhibitor, GLPG3667, we currently are running an extended dose
escalation study in healthy volunteers, and we are preparing for a
Phase 2b trial in Pso and a Phase 2 trial in UC next year.
In our other programs, by year-end we intend to
finalize recruitment into the GLPG2737 Phase 2a trial in polycystic
kidney disease.
Following the previously announced review of our
plans for 2021, we reiterate our guidance for full year 2021
operational cash burn of €580 to €620 million.
First half-year
report
2021
Galapagos’ financial report for the first
half-year ended 30 June 2021, including details of the unaudited
consolidated results, is accessible via
www.glpg.com/financial-reports.
Conference call and webcast
presentation
Galapagos will conduct a conference call open to
the public tomorrow, 6 August 2021, at
14:00 CET / 8 AM ET, which will also be
webcasted. To participate in the conference call, please call one
of the following numbers ten minutes prior to commencement:
CODE:
8245817
|
Standard International: |
+44 (0) 2071 928338 |
|
USA: |
+1 646 741 3167 |
|
UK: |
+44 844 481 9752 |
|
Netherlands: |
+31 207 95 66 14 |
|
France: |
+33 1 70 70 0781 |
|
Belgium: |
+32 2 793 38 47 |
A question and answer session will follow the
presentation of the results. Go to www.glpg.com to access the live
audio webcast. The archived webcast will also be available for
replay shortly after the close of the call.
Financial
calendar
| 4 November
2021 |
Third quarter
2021 results |
(webcast 5 November
2021) |
| 24 February
2022 |
Full year 2021
results |
(webcast 25 February
2022) |
About Galapagos
Galapagos NV discovers and develops small
molecule medicines with novel modes of action, several of which
show promising patient results and are currently in clinical
development in multiple diseases. Our pipeline comprises discovery
through Phase 3 programs in inflammation, fibrosis and other
indications. Our ambition is to become a leading global
biopharmaceutical company focused on the discovery, development,
and commercialization of innovative medicines. More information at
www.glpg.com.
Except for filgotinib’s approval for the treatment of rheumatoid
arthritis by the European Commission, Great Britain’s Medicines and
Healthcare products Regulatory Agency and Japanese Ministry of
Health, Labour and Welfare, our drug candidates are
investigational; their efficacy and safety have not been fully
evaluated by any regulatory authority.
Jyseleca® is a trademark of Galapagos NV and Gilead Sciences,
Inc. or its related companies.
Contact
Investors:Elizabeth GoodwinVP Investor
Relations +1 781 460 1784
Sofie Van GijselSenior Director Investor Relations+1 781 296
1143
Sandra CauwenberghsDirector Investor Relations+32 495 58 46
63ir@glpg.com
Media:Carmen VroonenGlobal Head of
Communications & Public Affairs+32 473 824 874
communications@glpg.com
Forward-looking statements
This release may contain forward-looking
statements, including, among other things, statements regarding the
global R&D collaboration with Gilead, the amount and timing of
potential future milestones, opt-in and/or royalty payments by
Gilead, Galapagos’ strategic R&D ambitions, including progress
on our fibrosis portfolio and Toledo platform, and potential
changes of such ambitions, the guidance from management (including
guidance regarding the expected operational use of cash during
financial year 2021), financial results, statements regarding the
expected timing, design and readouts of ongoing and planned
clinical trials, including recruitment for trials and topline
results for our trials and studies in our inflammation portfolio,
statements regarding the strategic re-evaluation, statements
relating to interactions with regulatory authorities, the timing or
likelihood of additional regulatory authorities’ approval of
marketing authorization for filgotinib for RA, UC or any other
indication, including UC and IBD indication for filgotinib in
Europe, Great-Britain, Japan, and the U.S., such additional
regulatory authorities requiring additional studies, the timing or
likelihood of pricing and reimbursement interactions for
filgotinib, statements relating to the build-up of our commercial
organization, statements and expectations regarding commercial
sales for filgotinib, the expected impact of COVID-19, and our
strategy, business plans and focus. Galapagos cautions the reader
that forward-looking statements are not guarantees of future
performance. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which might cause the actual
results, financial condition and liquidity, performance or
achievements of Galapagos, or industry results, to be materially
different from any historic or future results, financial conditions
and liquidity, performance or achievements expressed or implied by
such forward-looking statements. In addition, even if Galapagos’
results, performance, financial condition and liquidity, and the
development of the industry in which it operates are consistent
with such forward-looking statements, they may not be predictive of
results or developments in future periods. Among the factors that
may result in differences are that our expectations regarding our
2021 revenues and financial results and our 2021 operating expenses
may be incorrect (including because one or more of its assumptions
underlying its expense expectations may not be realized),
Galapagos’ expectations regarding its development programs may be
incorrect, the inherent uncertainties associated with competitive
developments, clinical trial and product development activities and
regulatory approval requirements (including the risk that data from
Galapagos’ ongoing and planned clinical research programs in
rheumatoid arthritis, Crohn’s disease, ulcerative colitis,
idiopathic pulmonary fibrosis, osteoarthritis, other inflammatory
indications and kidney disease may not support registration or
further development of its product candidates due to safety,
efficacy or other reasons), Galapagos’ reliance on collaborations
with third parties (including our collaboration partner Gilead),
the timing of and the risks related to the implementation of the
transition of the European commercialization responsibility of
filgotinib from Gilead to us, estimating the commercial potential
of our product candidates and Galapagos’ expectations regarding the
costs and revenues associated with the transfer of European
commercialization rights to filgotinib may be incorrect, and the
uncertainties relating to the impact of the COVID-19 pandemic. A
further list and description of these risks, uncertainties and
other risks can be found in Galapagos’ Securities and Exchange
Commission (SEC) filings and reports, including in Galapagos’ most
recent annual report on Form 20-F filed with the SEC and other
filings and reports filed by Galapagos with the SEC. Given these
uncertainties, the reader is advised not to place any undue
reliance on such forward-looking statements. These forward-looking
statements speak only as of the date of publication of this
document. Galapagos expressly disclaims any obligation to update
any such forward-looking statements in this document to reflect any
change in its expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is
based or that may affect the likelihood that actual results will
differ from those set forth in the forward-looking statements,
unless specifically required by law or regulation.
i The operational cash burn (or operational cash flow if this
performance measure is positive) is equal to the increase or
decrease in our cash and cash equivalents (excluding the effect of
exchange rate differences on cash and cash equivalents), minus:
- the net proceeds, if any, from share capital and share premium
increases included in the net cash flows generated from/used in (-)
financing activities
- the net proceeds or cash used, if any, in acquisitions or
disposals of businesses; the movement in restricted cash and
movement in current financial investments, if any, included in the
net cash flows generated from/used in (-) investing
activities.
This alternative performance measure is in our
view an important metric for a biotech company in the development
stage. The operational cash burn for the six months ended 30 June
2021 amounted to €223.2 million and can be reconciled to our cash
flow statement by considering the increase in cash and cash
equivalents of €477.4 million, adjusted by (i) the cash proceeds
from capital and share premium increase from the exercise of
subscription rights by employees for €2.6 million, (ii) the net
sale of current financial investments amounting to €669.4 million,
and (iii) the cash in from sale of subsidiaries, net of cash
disposed, of €28.7 million. ii General and
administrativeiii Sales and marketingiv Crédit d’Impôt Recherche
refers to an innovation incentive system underwritten by the French
government
- Galapagos reports H1 financial results with refocused pipeline
and operational progress
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