- First three-month 2020 financial
results:
- Group revenues and other income of €106.9
million
- Operating loss of €44.6 million
- Net loss of €50.6 million
- Cash and current financial investments on 31 March 2020
of €5.7 billion
- On track to report on a number of later stage
clinical trials throughout 2020
- Important progress in build-out of commercial
organization for potential market launch of filgotinib in
RA
Webcast presentation tomorrow, 8
May 2020, at 14.00 CET / 8 AM ET,
www.glpg.com, +32 2 404 0659, code
6118715
Mechelen, Belgium; 7 May 2020,
22.01 CET; regulated information – Galapagos NV (Euronext &
NASDAQ: GLPG) announces its unaudited Q1 results and key events,
which are further detailed in its Q1 2020 report available on the
Galapagos website,
www.glpg.com.
“Although the world faces an unprecedented
pandemic, impacting families, businesses and financial markets
globally, we have adapted to the new normal with agility and
resilience,” said Onno van de Stolpe, CEO of Galapagos. “We are in
a very strong position, both financially and operationally, and
remain on track to report on a number of later stage clinical
trials throughout the remainder of 2020. As a consequence of
COVID-19 measures, patient recruitment in some Phase 2 and 3
studies with filgotinib is temporarily halted, and we see an impact
on recruitment rates of the ISABELA Phase 3 program with
ziritaxestat (GLPG1690) in IPF. Importantly, pending approval, we
are confident that we can hit the ground running for the successful
launch of our first novel mode of action drug, filgotinib in RA,
thereby delivering on our promise of becoming a fully integrated
biopharma.”
Bart Filius, COO and CFO added, “From a
financial perspective, we ended the first quarter of 2020 with a
strong cash balance, positioning us well to grow our pipeline
further and deliver on operational excellence for the anticipated
commercial launch of filgotinib. Due to the temporary pause in
recruitment of the filgotinib trials and some delays in the start
of earlier stage programs in light of COVID-19, our cash burni
guidance for FY2020 is expected to be in the range of €400 and €430
million, down versus the previously stated cash burn projection of
€420 and €450 million.”
Outlook 2020
The remainder of the year promises to be
eventful for Galapagos.
We and our collaboration partner Gilead expect
to report Phase 3 SELECTION trial data of filgotinib in ulcerative
colitis in the second quarter. We also anticipate approval of our
first product candidate, filgotinib, in RA in the U.S., Europe, and
Japan in the second half of 2020. Gilead and we plan to start the
Phase 3 program with filgotinib in ankylosing spondylitis later in
2020.
Within our fibrosis portfolio, in the second
half of the year, we anticipate reporting topline results from the
PINTA Phase 2 trial with GLPG1205 in IPF and, together with
collaboration partner Gilead, from the NOVESA Phase 2a trial with
ziritaxestat (GLPG1690) in SSc. In the meantime, we enrolled more
than 1,000 patients and continue recruitment in our landmark Phase
3 ISABELA program with ziritaxestat in IPF, together with Gilead,
for which the outcome of the futility analysis is anticipated in
the first half of 2021.
Also in the second half of 2020, we and Servier
expect to report topline results from the ROCCELLA Phase 2b trial
of GLPG1972 in knee osteoarthritis. Upon successful completion of
this trial, Gilead has the option to license development and
commercialization rights in the U.S. for GLPG1972.
With regard to Toledo, our novel mode of action
program in inflammation, we completed Phase 1 studies with our
Toledo candidate medicines, GLPG3312 and GLPG3970 in healthy
volunteers. Given the superior profile of GLPG3970 observed in
Phase 1, we decided to prioritize the further development of this
compound. Subject to positive developments related to the COVID-19
pandemic, we still anticipate the start of several proof-of-concept
patient trials with GLPG3970 in the second half of the year, with
topline results now expected in the first half of 2021.
Due to the impact of COVID-19 on the recruitment
rate and trial starts, our cash burni guidance has been revised
down and is now expected to be in the range of €400 and €430
million, compared to €420 and €450 million previously guided. The
cash burn includes milestone income from Gilead for potential
regulatory approvals of filgotinib in RA.
Key figures first quarter report
2020 (unaudited)(€ millions,
except basic & diluted loss per share)
|
31 March 2020 group total |
31 March 2019 group total |
Revenues and other income |
106.9 |
40.9 |
R&D expenditure |
(116.8) |
(83.2) |
S&Mii expenses |
(9.8) |
(1.7) |
G&Aiii expenses |
(24.9) |
(9.2) |
Operating loss |
(44.6) |
(53.2) |
Fair value re-measurement of warrants |
(20.5) |
- |
Net other financial result |
14.8 |
4.7 |
Taxes |
(0.3) |
(0.1) |
Net result for the period |
(50.6) |
(48.7) |
Basic and diluted loss per share (€) |
(0.78) |
(0.89) |
|
|
|
Current financial investments and cash and cash
equivalents |
5,722.4 |
1,222.9 |
Revenues and other
income
Revenues and other income for the first three
months of 2020 increased to €106.9 million compared to €40.9
million in the first three months of 2019. The impact of the Gilead
collaboration on our revenues is €91.6 million, and consists of (i)
the access and option rights to our drug discovery platform (€56.2
million), and (ii) the filgotinib revenue recognition (€35.4
million).
As a result of the upfront payment received from
Gilead in the third quarter of 2019, our deferred income on 31
March 2020 includes €2.2 billion allocated to our drug discovery
platform that will be recognized linearly over 10 years, and €0.7
billion allocated to filgotinib (2015 filgotinib contract and
recent revised collaboration combined) that will be recognized over
a period of 4 to 5 years.
Results
We realized a net loss of €50.6 million for
the first three months of 2020, compared to a net loss of
€48.7 million for the first three months of 2019.
We reported an operating loss amounting to
€44.6 million for the first three months of 2020, compared to
an operating loss of €53.2 million for the first three months
of 2019.
Our R&D expenditure in the first three
months of 2020 amounted to €116.8 million, compared to
€83.2 million for the first three months of 2019. This planned
increase was mainly due to an increase of €19.4 million in
subcontracting costs primarily related to our filgotinib program,
our Toledo program, and other clinical programs. Furthermore,
personnel costs increased explained by a planned headcount increase
following the growth in our R&D investments. 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 €9.8 million and
€24.9 million in the first three months of 2020, compared to
respectively €1.7 million and €9.2 million in the first three
months of 2019.
We reported a non-cash fair value loss from the
re-measurement of initial warrant B issued to Gilead, amounting to
€20.5 million, as result of the increased implied volatility of the
Galapagos share price.
Net other financial income in the first three
months of 2020 amounted to €14.8 million, compared to net
other financial income of €4.7 million for the first three
months of 2019, which was primarily attributable to a
€34.3 million of unrealized exchange gain on our cash position
in U.S. dollars, partly compensated by a fair value loss on current
financial investments of €14.5 million.
Cash
position
Current financial investments and cash and cash
equivalents totaled €5,722.4 million on 31 March 2020.
A total net decrease of €58.4 million in cash
and cash equivalents and current financial investments was recorded
during the first three months of 2020, compared to a net decrease
of €67.9 million during the first three months of 2019. This net
decrease was composed of €83.4 million of operational cash burni,
offset by (i) €5.4 million of cash proceeds from capital and share
premium increase from exercise of warrants in the first three
months of 2020, (ii) €19.6 million unrealized positive exchange
rate differences and fair value losses on current financial
investments.
Finally, our balance sheet as at 31 March 2020 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 €115.2 million.
First quarter report 2020
Galapagos’ financial report for the first three
months ended March 2020, including new accounting policies as a
result of recent transactions and details of the unaudited
consolidated results, is accessible via
www.glpg.com/financial-reports.
Results of annual (ordinary)
and extraordinary shareholders' meetings
On 28 April 2020, Galapagos held its annual
(ordinary) and extraordinary shareholders’ meetings. Due to the
COVID-19 pandemic, the meetings were held behind closed doors, with
advance shareholders’ participation only. All agenda items were
approved, including the appointment of Dr. Elisabeth Svanberg as
independent director, the remuneration policy and -report, the
amendment of the company’s object and the amendment of the articles
of association in light of the new Belgian Code of Companies and
Associations. All documents relating to the shareholders’ meetings
will be posted on our website at
https://www.glpg.com/shareholders-meetings.
Conference call and webcast
presentation
Galapagos will conduct a conference call open to
the public tomorrow, 08 May 2020, 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:
6118715
USA: |
+1
323 794 2093 |
UK: |
+44
330 336 9105 |
Netherlands: |
+31
20 721 9251 |
France: |
+33
1 76 77 2274 |
Belgium: |
+32
2 404 0659 |
Or, select the click-to-join link and you’ll get
connected automatically.
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
6 August
2020
Half year 2020 results (webcast 07 August 2020)5 November
2020 Third quarter
2020 results (webcast 06 November 2020)18 February
2021
Full year 2020 results (webcast 19 February 2021)
About Galapagos
Galapagos (Euronext & NASDAQ: GLPG)
discovers and develops small molecule medicines with novel modes of
action, three of which show promising patient results and are
currently in late-stage development in multiple diseases. Our
pipeline comprises discovery through Phase 3 programs in
inflammation, fibrosis, osteoarthritis 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.
Filgotinib and all other drug candidates mentioned in
this report are investigational; their efficacy and safety have not
been fully evaluated by any regulatory authority.
Contact
Investors:Elizabeth GoodwinVP Investor Relations +1 781 460
1784
Sofie Van GijselDirector Investor Relations+32 485 19 14
15ir@glpg.com
Media:Carmen VroonenSenior Director Communications & Public
Affairs+32 473 824 874
Evelyn FoxDirector Communications +31 6 53 591 999
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 milestone, opt-in and/or royalty payments by
Gilead, Galapagos’ strategic R&D ambitions, the guidance from
management (including guidance regarding the expected operational
cash burn during financial year 2020), financial results, timing
and/or results of clinical trials, mechanisms of action and
potential commercialization of our product candidates, interaction
with regulators, the potential approval process for filgotinib and
statements relating to the build-up and development of commercial
operations, the 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 Galapagos’ expectations
regarding its 2020 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 (including our collaboration partner for filgotinib and
ziritaxestat, Gilead, and our collaboration partner for GLPG1972,
Servier), and estimating the commercial potential of our product
candidates 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.
iThe 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 / 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 / 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 three months ended 31
March 2020 amounted to €83.4 million and can be reconciled to our
cash flow statement by considering the increase in cash and cash
equivalents of €864.7 million, adjusted by (i) the cash proceeds
from capital and share premium increase from the exercise of
warrants by employees for €5.4 million and (ii) the net decrease in
current financial investments amounting to €942.7 million.
ii Sales and marketingiii General and administrative
iv Crédit d’Impôt Recherche refers to an
innovation incentive system underwritten by the French
government
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