- First half-year 2020 financial results:
- Group revenues and other income of €224.6
million
- Operating loss of €130.8 million
- Net loss of €165.6 million
- Cash and current financial investments on 30 June 2020
of €5.6 billion
- Positive CHMP opinion for filgotinib in rheumatoid
arthritis (RA)
- Positive SELECTION Phase 3 results for filgotinib in
ulcerative colitis (UC)
- Commercial readiness for potential European approval of
filgotinib in RA in Q3
- On track to report topline results from three patient
trials later this year
Webcast presentation tomorrow, 7 August
2020, at 14.00 CET / 8 AM ET, www.glpg.com, +32 2 404 0659, code
8997710
Mechelen, Belgium; 6 August 2020, 22.01
CET; regulated information – Galapagos NV (Euronext & NASDAQ:
GLPG) announces its unaudited H1 results and key events, which are
further detailed in its H1 2020 report available on the Galapagos
website, www.glpg.com.
“During the past six months, we made substantial
progress despite the global pandemic. We ended the period with
important achievements, including a positive opinion from the
European Medicines Agency’s Committee for Medicinal Products for
Human Use (CHMPi) for our investigational rheumatoid arthritis (RA)
drug filgotinib and positive topline data for the SELECTION Phase 3
program in ulcerative colitis (UC). We added two preclinical
candidates to our early stage pipeline and completed preparation
for a number of new clinical trials, building further on our
innovative pipeline for future growth,” said Onno van de Stolpe,
CEO of Galapagos.
Bart Filius, COO and CFO added, “We ended the
first half of 2020 with a strong cash balance, positioning us well
to further grow our pipeline and deliver on operational excellence
for the anticipated commercial launch of filgotinib. We maintain
our 2020 operational cash burn guidance of €400-€430 million.”
Key figures first half-year report 2020
(unaudited)(€ millions, except basic & diluted
loss per share)
|
30 June 2020 group total |
30 June 2019 group total |
Revenues and other income |
224.6 |
108.5 |
R&D expenditure |
(265.9) |
(177.6) |
S&Mii expenses |
(26.9) |
(5.6) |
G&Aiii expenses |
(62.6) |
(22.9) |
Operating loss |
(130.8) |
(97.6) |
Fair value re-measurement of warrants |
(21.1) |
- |
Net other financial result |
(13.0) |
1.8 |
Taxes |
(0.7) |
(0.1) |
Net result for the period |
(165.6) |
(95.9) |
Basic and diluted loss per share (€) |
(2.55) |
(1.76) |
|
|
|
Current financial investments and cash and cash
equivalents |
5,566.5 |
1,147.9 |
Revenues and other
income
Revenues and other income for the first
half-year of 2020 increased to €224.6 million compared to €108.5
million in the first half-year of 2019. The impact of the Gilead
collaboration on our revenues is €187.7 million and consists of (i)
the access and option rights to our drug discovery platform (€112.7
million), and (ii) the filgotinib revenue recognition (€75.0
million).
As a result of the upfront payment received from
Gilead in the third quarter of 2019, our deferred income on 30 June
2020 includes €2.1 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 €165.6 million
for the first half-year of 2020, compared to a net loss of
€95.9 million for the first half-year of 2019.
We reported an operating loss amounting to
€130.8 million for the first half-year of 2020, compared to an
operating loss of €97.6 million for the first half-year of
2019.
Our R&D expenditure in the first half-year
of 2020 amounted to €265.9 million, compared to
€177.6 million for the first half-year of 2019. This planned
increase was mainly due to an increase 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, and increased cost of the 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 €26.9 million
and €62.6 million in the first half-year of 2020, compared to
respectively €5.6 million and €22.9 million in the first
half-year of 2019.
We reported a non-cash fair value loss from the
re-measurement of initial warrant B issued to Gilead, amounting to
€21.1 million, as result of the increased implied volatility of the
Galapagos share price.
Net other financial loss in the first half-year
of 2020 amounted to €13.0 million, compared to net other
financial income of €1.8 million for the first half-year of
2019, which was primarily attributable to a negative change in
(fair) value of current financial investments of €12.5 million.
Cash
position
Current financial investments and cash and cash
equivalents totaled €5,566.5 million on 30 June 2020.
A total net decrease of €214.3 million in cash
and cash equivalents and current financial investments was recorded
during the first half-year of 2020, compared to a net decrease of
€142.9 million during the first half-year of 2019. This net
decrease was composed of (i) €230.5 million of operational cash
burniv, (ii) €23.3 million of cash proceeds from capital and share
premium increase from exercise of subscription rights in the first
half-year of 2020, and (iii) €7.1 million negative changes in
(fair) value of current financial investments and unrealized
positive exchange rate differences.
Finally, our balance sheet on 30 June 2020 held
a receivable from the French government (Crédit d’Impôt Recherchev)
and a receivable from the Belgian Government for R&D
incentives, for a total of both receivables of €116.6 million.
Outlook 2020
The remainder of the year will be a newsflow
rich period for Galapagos.
Following the positive CHMP opinion for
filgotinib in RA, we anticipate the potential approval of
filgotinib by the European Commission in 2020. We also expect
decisions from the U.S. and Japanese authorities before year-end,
and continue full steam ahead with the preparations for commercial
launch in the Benelux and EU5, hand in hand with our
co-commercialization partner Gilead. We anticipate that Gilead will
start with the global Phase 3 program with filgotinib in ankylosing
spondylitis (AS) in the second half of 2020.
We expect to report topline results from three
patient trials later in 2020. Within our fibrosis portfolio we
anticipate reporting topline results from the PINTA Phase 2 trial
with GLPG1205 in idiopathic pulmonary fibrosis (IPF) and, together
with collaboration partner Gilead, from the NOVESA Phase 2a trial
with ziritaxestat in systemic sclerosis (SSc). 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
(OA), and 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 program in
inflammation, we still expect to launch several proof-of-concept
patient trials with GLPG3970 in the second half of this year, with
topline data expected in the first half year of 2021. Pending the
successful start of these trials, we intend to share more
information on the Toledo program, including the target and more
preclinical data, before year-end.
We retain our 2020 operational cash burn
guidance of €400-€430 million, which includes $205 million in
potential milestone payments subject to regulatory approvals of
filgotinib.
First half-year report 2020
Galapagos’ financial report for the first
half-year ended 30 June 2020, 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, 7 August 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: 8997710
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
5 November 2020
|
Third quarter 2020 results (webcast 6 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 press
release 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 GijselSenior Director 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 milestones, 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 timing of the approval process for filgotinib
or expectations regarding receipt of regulatory approval,
statements relating to the build-up of our commercial
organization 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 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.
i Committee for Medicinal Products for Human Use
ii Sales and marketing
iii General and administrative
iv 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 / 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 six months ended 30 June
2020 amounted to €230.5 million and can be reconciled to our cash
flow statement by considering the increase in cash and cash
equivalents of €523.2 million, adjusted by (i) the cash proceeds
from capital and share premium increase from the exercise of
subscription rights by employees for €23.3 million and (ii) the net
sale of current financial investments amounting to €730.4 million.
v Crédit d’Impôt Recherche refers to an innovation incentive
system underwritten by the French government
- Galapagos reports solid H1 2020 progress
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