Key 2017 results:
- Expansion of filgotinib franchise:
- Start of 8 new disease area trials
- Opt-in to co-promote in Europe
- Second and third platform successes:
- Halt of disease progression in FLORA trial with
GLPG1690 in IPF patients
- Promising results with MOR106 in atopic dermatitis
patient trial
- ALBATROSS and FLAMINGO trials with GLPG2222 showed
expected activity in cystic fibrosis patients
- Strong biomarker reduction and favorable tolerability
with GLPG1972 in osteoarthritis patients
- Group revenues increased by €4.3 million to €155.9
million
- Operating loss increased by €78.3 million to €89.8
million
- Net loss of €115.7 million, compared to a net profit of
€54.0 million in 2016
- Operational cash burn of €154.1 million
- Net proceeds from capital increase of €353.4
million
- Cash balance increased by €171.5 million
to €1,152.4 million at year-end
Webcast presentation tomorrow, 23 February 2018
at 14.00 CET/8 AM ET, +32 2 404 0659,
www.glpg.com
Mechelen, Belgium; 22 February 2018, 22.01
CET, regulated information - Galapagos NV (Euronext &
NASDAQ: GLPG) presents financial results and highlights the key
events for the full year 2017.
"We look back on another very successful
execution year at Galapagos. Our strategy is to leverage our
innovative target discovery platform to develop breakthrough drugs
and ultimately deliver these to patients with large unmet need. Our
successes with filgotinib in rheumatoid arthritis and Crohn's
trials in previous years showed that JAK1 inhibition can make a
difference. In 2017 we showed that GLPG1690 (autotaxin inhibitor)
halted IPF disease progression in the FLORA trial, as well as a
marked reduction of signs and symptoms with MOR106 (IL-17C
inhibitor) in atopic dermatitis patients, adding two new proofs of
platform for our approach to finding novel medicines," CEO Onno van
de Stolpe commented. "The coming year will be data-rich, as we
expect the first Phase 3 data with filgotinib in rheumatoid
arthritis, along with an interim decision to move to Phase 3 in the
ulcerative colitis trial and readouts in our trials in ankylosing
spondylitis and psoriatic arthritis. In cystic fibrosis, we will
see topline results from the PELICAN trial and a first interim
readout with FALCON, a patient trial of our first triple
combination therapy. We expect to launch pivotal trials with
GLPG1690 in IPF, building our fully proprietary IPF franchise. And
with our planned start of Phase 2 trials for GLPG1205, GLPG1972,
MOR106, and more CF triple combinations, we set the foundations for
the next set of clinical results. Meanwhile, we continue to expand
our organization to be able to execute the increasing number of
clinical trials and to be ready for the anticipated market
introduction of our drug candidates. We consider our progress in
2017 to be just the beginning, as we continue to discover new modes
of action and plan to bring them all the way to patients."
Bart Filius, COO and CFO, added: "Galapagos
ended 2017 with an extraordinarily strong balance sheet. We are
continuing to grow our late stage development organization to
execute on our successful programs. Now with the decision to
co-promote filgotinib in Europe with Gilead, we have started to
build a commercial organization. While key programs are financed by
our partners, the share of proprietary late stage development is
expected to grow. During 2018 we expect to be running 13 Phase 2
trials at Galapagos. All this will contribute to our financial
guidance for operational cash burn between €220 and €240 million
for full year 2018."
Key figures (consolidated)(€ millions, except basic
income/loss per share)
|
31 Dec
2017 Group total |
31 Dec
2016 Group total |
Revenues and other
income |
155.9 |
151.6 |
R&D expenditure |
-218.5 |
-139.6 |
G&A and S&M
expenses |
-27.2 |
-23.5 |
Operating loss |
-89.8 |
-11.5 |
Non-cash adjustment on
short term financial asset1 |
|
57.5 |
Other financial
result |
-25.7 |
8.2 |
Income taxes |
-0.2 |
-0.2 |
Net result for the
period |
-115.7 |
54.0 |
Basic income / loss (-)
per share (€) |
-2.34 |
1.18 |
Cash, Cash equivalents
and Restricted cash at year-end |
1,152.4 |
980.9 |
Notes:
- Reflects non-cash financial asset adjustment resulting from the
Gilead subscription agreement.
Details of the financial results
Revenues and other incomeGalapagos' revenues and
other income for 2017 amounted to €155.9 million, compared to
€151.6 million in 2016. Increased revenues and other income were
mainly driven by higher revenue recognition and R&D incentives
in line with the evolution of the R&D expenses.
Operating resultThe Group realized a net
operating loss in 2017 of €89.8 million, compared to a net
operating loss of €11.5 million in 2016.
R&D expenses for the Group in 2017 were
€218.5 million compared to €139.6 million in 2016. This planned
increase was due mainly to increased efforts on our clinical and
pre-clinical programs, primarily filgotinib, our CF program and the
proprietary pre-clinical programs in inflammation and fibrosis.
G&A and S&M expenses of the Group were
€27.2 million in 2017, compared to €23.5 million in 2016. This
increase was due primarily to a higher liability for short term and
long term management bonuses and higher costs for warrant plans
(non-cash), both mainly as a result of the increase of the
Galapagos share price.
Net resultThe Group realized a net loss in 2017
of €115.7 million, compared to a net profit of €54.0 million in
2016. The net loss in 2017 was negatively influenced for €27.8
million by unrealized currency exchange rate fluctuation on our
cash positions held in U.S. dollars.
2016's result was primarily driven by a €57.5
million non-cash fair value gain from the re-measurement of the
financial asset triggered by the share subscription agreement with
Gilead.
Cash positionCash, cash equivalents, and
restricted cash totaled €1,152.4 million on 31 December
2017.
A net increase of €171.5 million in
cash, cash equivalents and restricted cash was recorded in 2017.
Net cash flows from financing activities generated €348.1 million
through a public offering in the United States, as well as €5.3
million from warrant exercises. Furthermore, a net cash outflow
from operating activities was realized for €147.0 million in 2017.
Finally, €7.1 million was used in investing activities (when
excluding the movement in restricted cash) and €27.8 million
unrealized negative exchange rate differences were generated on
cash and cash equivalents.
The operational cash burn[1]
amounted to €154.1 million, within the guided
range for 2017 of €135 - 155 million.
Furthermore, Galapagos' balance sheet
holds a receivable from the French government (Crédit d'Impôt
Recherche[2]) now amounting to €36.4 million,
payable in 4 yearly tranches. Galapagos' balance sheet also holds a
receivable from the Belgian Government for R&D incentives now
amounting to €39.4 million.
Outlook 2018Galapagos aims to report
topline results with the FINCH 2 (rheumatoid arthritis), EQUATOR
(psoriatic arthritis), TORTUGA (ankylosing spondilitis) filgotinib
trials as well as a decision to continue to Phase 3 in SELECTION
(ulcerative colitis). Our collaboration partner Gilead expects to
complete recruitment of FINCH 1 and FINCH 3, the remaining RA Phase
3 trials with filgotinib. In cystic fibrosis we anticipate the
readout of the PELICAN patient trial and an interim readout in
FALCON. Galapagos aims to initiate pivotal trials with GLPG1690
(IPF) and Phase 2 trials with GLPG1205 (IPF), an additional CF
triple combination, GLPG1972 (osteoarthritis), and MOR106 (atopic
dermatitis).
The Company expects an operational cash burn
between €220 and €240 million in 2018.
Annual report 2017Galapagos is currently
finalizing its financial statements for the year ended 31 December
2017. The auditor has confirmed that his audit procedures, which
are substantially completed, have not revealed any material
corrections required to be made to the financial information
included in this press release. Should any material changes arise
during the audit finalization, an additional press release will be
issued. Galapagos expects to be able to publish its fully audited
annual report for the full year 2017 on or around 23 March
2018.
Conference call and webcast
presentation
Galapagos will conduct a conference call open to
the public tomorrow, 23 February 2018, at 14:00 CET/8 AM ET, which
will also be webcast. To participate in the conference call, please
call one of the following numbers ten minutes prior to
commencement:
Confirmation Code:
9171161
Belgium:
+32 2 404 0659France:
+33 1 76 77 2274Netherlands:
+31 20 721 9251United Kingdom:
+44
330 336 9105USA:
+1 323 701 0225
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 calendar24 April
2018
Annual shareholders' meeting in Mechelen, Belgium25 April
2018
First quarter 2018 results (webcast 26 April 2018)2 August
2018 Half
year 2018 results (webcast 3 August 2018)25 October
2018
Third quarter 2018 results (webcast 26 October 2018)21 February
2019
Full year 2018 results (webcast 22 February 2019)
About GalapagosGalapagos (Euronext & NASDAQ: GLPG) is
a clinical-stage biotechnology company specialized in the discovery
and development of small molecule medicines with novel modes of
action. Galapagos' pipeline comprises Phase 3 through to discovery
programs in cystic fibrosis, inflammation, fibrosis, osteoarthritis
and other indications. Our target discovery platform has delivered
three novel mechanisms showing promising patient results in,
respectively, inflammatory diseases, pulmonary idiopathic fibrosis
and atopic dermatitis. Galapagos is focused on the development and
commercialization of novel medicines that will improve people's
lives. The Galapagos group, including fee-for-service subsidiary
Fidelta, has approximately 600 employees, operating from its
Mechelen, Belgium headquarters and facilities in the Netherlands,
France, Switzerland, the US and Croatia. More information at
www.glpg.com.
All the drug candidates mentioned in this press
release are investigational; their efficacy and safety are yet to
be established.
Contacts
Investors: |
Media: |
Elizabeth Goodwin |
Evelyn
Fox |
VP IR
& CorporateCommunications+1 781 460 1784 |
Director
Communications +31 6 53 591 999 communications@glpg.com |
Paul van der HorstDirector IR & BusinessDevelopment+31 71 7506
707 |
|
ir@glpg.com |
|
Forward-looking statementsThis release may contain
forward-looking statements, including, among other things,
statements regarding the guidance from management (including
guidance regarding the expected operational cash burn during
financial year 2018), financial results, the timing of audited
financial results, timing and/or results of clinical trials,
investment in commercial capabilities, and interaction with
regulators, including the potential approval of our current or
future drug candidates. 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 Galapagos' expectations
regarding its 2018 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 that data from Galapagos' ongoing clinical
research programs 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, and estimating the commercial potential of its development
programs. 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.
[1] The operational cash burn (or operational
cash flow if this performance measure is positive) is equal to the
sum of the net cash flows generated / used (-) in operating
activities and the net cash flows generated / used (-) in investing
activities minus (i) the proceeds or cash used, if any, in
acquisitions or disposals of businesses; and (ii) the movement in
restricted cash, if any. This alternative performance measure is in
our view an important metric for a biotech company in the
development stage. For 2016, the operational cash flow generated
represented €231.9 million, which was significantly impacted by the
upfront payment from Gilead of €275.6 million.
[2] Crédit d'Impôt Recherche refers to an
innovation incentive system underwritten by the French
government.
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