Key 2016 results:
- Group revenues increased by €91.0 million to €151.6
million
- Operating loss reduced by €77.9 million to €11.5
million
- Net profit of €54.0 million, compared to a net loss of
€118.4 million in 2015
- Cash balance increased by €632.7 million
to €980.9 million at year-end
- Start of three Phase 3 studies with
filgotinib
- Competitive patient data in CF program and good
progress towards triple combination therapy
Financial guidance 2017:
- Cash burn of €135-155 million
Webcast presentation tomorrow, 24 February
2017, at 14.00 CET/8 AM ET, +32 2 400 6926,
www.glpg.com
Mechelen, Belgium; 23 February 2017,
regulated information - Galapagos NV (Euronext & NASDAQ:
GLPG) presents financial results and highlights the key events for
the full year 2016.
"Galapagos remains on track to become an
integrated biopharmaceutical company. In collaboration with Gilead,
three Phase 3 programs with filgotinib were launched last year. Our
FITZROY studies demonstrated the potential for filgotinib in
Crohn's disease, with encouraging endoscopy and histopathology
results. We initiated critical path safety studies for our triple
combination therapy in cystic fibrosis, keeping us on track to
evaluate safety of our triple combination in the first half of this
year, with a goal to move into patient evaluations by mid-2017. The
CF program was substantially strengthened by the competitive
patient data shown in the SAPHIRA Phase 2 studies. We ended the
year with a rich portfolio of late stage programs in which we
expect to generate new patient data over the next 18 months. We are
in a very strong position, both financially and operationally," CEO
Onno van de Stolpe commented.
Bart Filius, CFO, added: "Galapagos had an
extraordinary year with strong financial results. We ended 2016
with the largest cash balance in our history, and with cash burn
well under control. Our cash balance now exceeds the cumulative
investments made by all investors in Galapagos since its inception
in 1999. We will continue to ramp up our late stage development
activities this year, as we plan to increase our investments in
filgotinib and CF and initiate more clinical studies with our
proprietary programs. All this will contribute to our financial
guidance for operational cash burn of €135-155 million for full
year 2017."Key figures (consolidated)(€ millions, except
basic income/loss per share)
|
31 Dec
2016 Group Total |
31 Dec
2015 Group Total |
Revenues |
151.6 |
60.6 |
R&D expenditure |
-139.6 |
-129.7 |
G&A and S&M
expenses |
-23.5 |
-20.3 |
Operating loss |
-11.5 |
-89.4 |
Non-cash adjustment on
short term financial asset1 |
57.5 |
-30.6 |
Other financial
result |
8.2 |
0.4 |
Income taxes |
-0.2 |
1.2 |
Net result for the
period |
54.0 |
-118.4 |
Basic income / Loss (-)
per share (€) |
1.18 |
-3.32 |
Cash, Cash equivalents
and Restricted cash at year-end |
980.9 |
348.2 |
Notes:1) Reflects non-cash financial asset
adjustment resulting from the Gilead subscription agreement.
Details of the financial results
RevenuesGalapagos' revenues and other income for
2016 amounted to €151.6 million, compared to €60.6 million in 2015.
Increased revenues were mainly driven by a substantial increase in
milestone payments from our collaboration partners.
Operating resultThe Group realized a net
operating loss in 2016 of €11.5 million, compared to a net
operating loss of €89.4 million in 2015.
R&D expenses for the Group in 2016 were
€139.6 million compared to €129.7 million in 2015. This planned
increase was due mainly to increased efforts on our clinical and
pre-clinical programs, primarily the cystic fibrosis program and
the proprietary pre-clinical programs in inflammation, HBV and
fibrosis.
G&A and S&M expenses of the Group were
€23.5 million in 2016, compared to €20.3 million in 2015. This
increase was due primarily to non-cash items such as a higher
liability for short term and long term management bonus and higher
costs for warrant plans, mainly as a result of the increase of the
Galapagos share price.
Non-cash adjustment on short term financial
assetIn 2015 Galapagos recognized a short term financial asset
worth €39 million and an offsetting deferred income of €39 million
upon signing of the share subscription agreement with Gilead, as
required under IAS 39. This financial asset initially reflected the
share premium that Gilead committed to pay above the closing stock
price of Galapagos on the day of signing of the subscription
agreement. Under IAS 39, the fair value of the financial asset
needed to be re-measured at year end 2015 and again upon entering
into force of the subscription agreement on 19 January 2016, when
the financial asset expired. Variations in fair value of the
financial asset were recorded in the income statement.
The decrease in the fair value of the financial
asset resulting from the increase in the Galapagos share price
between signing of the subscription agreement and 31 December 2015,
resulted in a negative, non-cash fair value charge of €30.6 million
in the 2015 financial results. The subsequent increase in the fair
value of the financial asset resulting from the decrease in the
Galapagos share price between 1 January 2016 and 19 January 2016
resulted in a positive non-cash gain of €57.5 million in the
financial result of 2016.
The €65.9 million current financial asset from
the Share Subscription Agreement reflected the premium that Gilead
paid compared to the closing price of the Galapagos share on the
day of the capital increase. This financial asset expired on 19
January 2016, the effective date of the Share Subscription
Agreement and was derecognized through the share premium
account.
Cash positionCash, cash equivalents, and
restricted cash totaled €980.9 million on 31 December
2016.
A net increase of €632.7 million in
cash, cash equivalents and restricted cash was recorded in 2016.
Net cash flows from financing activities generated €391.8 million
through a subscription of Galapagos shares by Gilead, as well as
€4.3 million from warrant exercises. Furthermore, a net cash inflow
from operating activities was realized for €239.4 million in 2016
resulting from the license fee of $300 million (€275.6 million)
received from Gilead and, by difference, from an operating cash
burn of €36.2 million. Finally, €7.3 million was used in investing
activities and €4.8 million positive exchange rate differences were
generated on cash and cash equivalents.
When excluding the license fee and
milestone payments from Gilead (€56.4 million), the net cash
outflows used in operating and investing activities amount to
€100.3 million, within our cash burn guidance for 2016 of €100 -
120 million.
Furthermore, Galapagos' balance sheet
holds an unconditional and unrestricted receivable from the French
government (Crédit d'Impôt Recherche[1]) now
amounting to €34.2 million, payable in 4 yearly tranches.
Galapagos' balance sheet also holds a receivable from the Belgian
Government for R&D incentives now amounting to €30.2
million.
Outlook 2017Galapagos aims to initiate a
CF patient evaluation of its triple combination therapy in
mid-2017, as well as multiple new clinical studies with CF
candidates and combinations throughout the year. Together with our
collaboration partner Gilead we plan to start multiple
proof-of-concept studies with filgotinib. Topline results from the
FLORA Phase 2a study with GLPG1690 in IPF and from the Phase 1b
study with MOR106 in atopic dermatitis patients are expected in the
second half of 2017. Galapagos expects to initiate a Phase 1b study
with GLPG1972 in osteoarthritis patients in the United States, as
well as Phase 1 studies with GLPG2938 and GLPG2534.
The Company expects an operational use of cash
of €135-155 million during 2017.
Annual Report 2016 Galapagos is currently
finalizing its financial statements for the year ended 31 December
2016. 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 2016 on or around 24 March
2017.
Conference call and webcast
presentation
Galapagos will conduct a conference call open to
the public tomorrow, 24 February 2017, 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:
9245880
United Kingdom:
+44 330 336 9412France:
+33 1 76 772 257Belgium:
+32 2 400 6926USA:
+1 719 325 2385Netherlands:
+31 20 703 8261
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 calendar25 April
2017 Annual
General Meeting of Shareholders in Mechelen, Belgium27 April
2017 First
Quarter 2017 Results (webcast 28 April 2017)27 July
2017 First
Half 2017 Results (webcast 28 July 2017)26 October
2017
Third Quarter 2017 Results (webcast 27 October 2017)22 February
2018
Full Year 2017 Results (webcast 23 February 2018)
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. Our pipeline comprises Phase 3, Phase 2, Phase 1,
pre-clinical, and discovery programs in cystic fibrosis,
inflammation, fibrosis, osteoarthritis and other indications. We
have discovered and developed filgotinib: in collaboration with
Gilead we aim to bring this JAK1-selective inhibitor for
inflammatory indications to patients all over the world. 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 510
employees, operating from its Mechelen, Belgium headquarters and
facilities in The Netherlands, France, and Croatia. More
information at www.glpg.com.
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 6 53 725
199 |
|
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 2017), financial results, the timing of audited
financial results, timing and/or results of clinical trials, and
interaction with regulators. 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 2017 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] Crédit d'Impôt Recherche refers to an
innovation incentive system underwritten by the French
government.
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