- First nine months
2021 financial
results:
- Group revenues of €317.9
million
- Operating loss of
€175.7 million
- Net loss of
€119.6 million
- Cash and current financial
investments of €4.9
billion on
30 September
2021
- Filgotinib
launch in RA on track
with reimbursement
secured in
14
countries
- Reduced 2021 cash burn guidance by €50
million to
€530-€570
million
Webcast presentation
tomorrow, 5
November
2021, at
13.00 CET
/ 8 AM ET,
www.glpg.com, +32 2 793
38 47, code 4987105
Mechelen, Belgium;
4 November
2021,
22.01 CET; regulated
information – Galapagos NV (Euronext & NASDAQ:
GLPG) is pleased to report on
its commercial launch of
filgotinib in
Europe. The
company is moving forward with its
revised R&D strategy
and operational restructuring
announced in May,
resulting in a downward adjustment of the
cash burn by €50 million.
The unaudited Q3
financial and operational results are
further detailed in the
Q3 2021
report available
on the website,
www.glpg.com.
“This quarter we achieved key steps in our
growing commercial business in Europe, while moving earlier-stage
R&D programs forward. We continue to deliver on our revised
strategy, accelerating the savings program announced at the first
quarter results. We are focused on nominating a successor to lead
our company going forward following my eventual retirement as CEO,”
said Onno van de Stolpe, CEO of Galapagos. “Supported by our strong
balance sheet and long-term R&D collaboration with Gilead, we
believe that Galapagos remains well-positioned for future
growth.”
“After years of hard work by so many, we are
very excited to bring Jyseleca to market as a new treatment option
for people living with rheumatoid arthritis (RA). As per 30
September 2021, we booked €6.1 million in net sales for Jyseleca,
for a total of €15.8 million together with Gilead. Encouraged by
these sales of our first commercial product and its positioning in
the growing JAK market in Europe, we are confident in the
commercial potential of our Jyseleca franchise in Europe. Following
the positive CHMP opinion for filgotinib for the treatment of
patients with ulcerative colitis (UC), we expect a decision by the
European Commission (EC) before year-end, and if granted, we are
ready to go full steam ahead with the commercial roll-out in a
second indication,” added Bart Filius, President and COO of
Galapagos. “Following our strategic operational review in March
2021, we implemented a cost savings program of €150 million on a
full year basis. As a result of an acceleration of this program, we
revise our guidance for full year 2021 operational cash burni from
€580 to €620 million to €530 to €570 million.”
Key figures third
quarter report
2021
(unaudited)(€ millions, except
basic & diluted loss
per share)
|
30 September
2021
group
total |
30 September
2020
group
total (*) |
Product net salesCollaboration revenuesTotal
revenues |
6.1311.7317.9 |
-321.9321.9 |
Cost of salesR&D expenditure |
(0.7)(378.0) |
-(392.2) |
G&Aii and S&Miii expensesOther operating income |
(151.3)36.3 |
(132.4)35.0 |
Operating
loss |
(175.7) |
(167.7) |
Fair value re-measurement of financial instruments |
3.0 |
(8.1) |
Net other financial result |
30.6 |
(75.3) |
Income taxes |
0.3 |
(0.7) |
Net loss from continuing operations |
(141.8) |
(251.8) |
Net profit from discontinued operations |
22.2 |
4.2 |
Net loss of
the period |
(119.6) |
(247.6) |
Basic and diluted loss per share (€) |
(1.83) |
(3.81) |
|
|
|
Current financial investments and cash and
cash equivalents |
4,874.2 |
5,308.6 |
(*) 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 nine months ended 30
September 2021 and 30 September 2020.
Revenues from
continuing operationsOur revenues from continuing
operations for the first nine months of 2021 amounted to €317.9
million compared to €321.9 million in the first nine months of
2020.
We reported net sales of Jyseleca for the first nine months of
2021 amounting to €6.1 million (€5.7 million in the third quarter
of 2021), which reflects the sales booked by Galapagos after the
transition from Gilead. Total sales of Jyseleca in Europe by both
companies for the first nine months of 2021 is €15.8 million.
Collaboration revenues amounted to €311.7
million for the first nine months of 2021, compared to €321.9
million for the same period last year. This was mainly driven by
the recognition of upfront consideration and milestone payments
received in the scope of the collaboration with Gilead for
filgotinib, amounting to €136.4 million for the first nine
months of 2021 (€145.9 million for the same period last year).
The decrease in revenue recognition was primarily due to a negative
cumulative catch up of revenue triggered by the recent agreement
under which Galapagos will assume operational and financial
responsibility for the ongoing DIVERSITY clinical study. This
decrease was partly compensated by additional consideration from
Gilead related to the renegotiated collaboration, when compared to
the same period last year. The revenue recognition related to the
exclusive access rights for Gilead to our drug discovery platform
amounted to €173.3 million for the first nine months of 2021
(€170.7 million for the same period last year).
Our deferred income balance on 30 September 2021
includes €1.8 billion allocated to our drug discovery platform that
is recognized linearly over 10 years, and €0.7 billion allocated to
the filgotinib development that is recognized over time until the
end of the development period.
Results from continuing
operationsWe realized a net loss from continuing
operations of €141.8 million for the first nine months of
2021, compared to a net loss of €251.8 million for the first
nine months of 2020.
We reported an operating loss amounting to
€175.7 million for the first nine months of 2021, compared to
an operating loss of €167.7 million for the same period last
year.
Cost of sales related to Jyseleca net sales in the first nine
months of 2021 amounted to €0.7 million.
Our R&D expenditure in the first nine months
of 2021 amounted to €378.0 million, compared to
€392.2 million for the first nine months of 2020. This
decrease was primarily explained by winding down of our
ziritaxestat (IPF), MOR106 (atopic dermatitis), and GLPG1972 (OA)
programs and by reduced spend on our other programs. This was
partly offset by costs increases for our filgotinib and Toledo
(SIKi) programs, on a nine months comparison basis. Personnel costs
increased primarily because of an increased average headcount
compared to the same period last year, and increased costs of our
subscription right plans.
Our S&M and G&A expenses
were respectively €46.6 million
and €104.7 million in the
first nine months of 2021, compared
to respectively €44.1 million and
€88.3 million in the first nine months of
2020. This increase was primarily due to an increase in
personnel costs and other operating expenses mainly driven by the
commercial launch of filgotinib in Europe. This increase was partly
compensated by higher cost recharges from us to Gilead in the scope
of our commercial cost sharing for filgotinib in Europe.
Other income (€36.3 million vs
€35.0 million for the same period last year) increased, mainly
driven by higher grant income.
We reported a non-cash fair value gain from the
re-measurement of initial warrant B issued to Gilead, amounting to
€3.0 million, mainly due to the decreased implied volatility of the
Galapagos share price and its evolution between 31 December 2020
and 30 September 2021.
Net other financial income in the first nine
months of 2021 amounted to €30.6 million, compared to net
other financial loss of €75.3 million for the first nine
months of 2020, which was primarily attributable to €54.9 million
of currency exchange gain on our cash and cash equivalents and
current financial investments in U.S. dollars, to €10.1 million of
negative changes in (fair) value of current financial investments
and financial assets and to €8.5 million of interest expenses. The
other financial expenses also contained the effect of discounting
our long term deferred income of €7.2 million.
Results from discontinued
operationsThe net profit from discontinued
operations for the nine months ended 30 September 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
nine months of 2021 of €119.6 million, compared to a group net loss
of €247.6 million for the first nine months of 2020.
Cash
positionCurrent financial investments and cash and
cash equivalents totaled €4,874.2 million on 30 September 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 €295.2 million during
the first nine months of 2021, compared to a net decrease of €472.2
million during the first nine months of 2020. This net decrease was
composed of (i) €376.7 million of operational cash burn, (ii)
offset by €2.7 million of cash proceeds from capital and share
premium increase from exercise of subscription rights in the first
nine months of 2021, (iii) €7.2 million negative changes in (fair)
value of current financial investments and €57.3 million of mainly
positive exchange rate differences, (iv) €28.7 million cash in from
disposal of subsidiaries, net of cash disposed.
Our balance sheet on 30 September 2021 also 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 €149.3
million.
Outlook
2021Going forward, we continue to build
our filgotinib franchise throughout Europe, and remain on track to
complete the transition of the full European commercial operations
for filgotinib from our collaboration partner Gilead to us by
year-end. We anticipate an approval decision from the EC and Great
Britain’s Medicines and Healthcare products Regulatory Agency
(MHRA) for filgotinib for the treatment of UC, which, if approved,
would add a second indication to our growing commercial footprint
in Europe.
Following the positive topline Phase 1b data
from our TYK2 inhibitor GLPG3667, we are running an extended dose
escalation study in healthy volunteers, and we are preparing to
launch a Phase 2b trial in Psoriasis and a Phase 2 trial in UC in
2022.
We are advancing our SIK3 inhibitor GLPG4399 in
healthy volunteers this year, and we aim to move a follow-up SIK2/3
preclinical candidate into the clinic in 2022.
By year-end we also intend to finalize
recruitment into the GLPG2737 Phase 2a trial in autosomal dominant
polycystic kidney disease (ADPKD), an indication with important
unmet medical need.
Meanwhile we continue to apply lessons learned
from the strategic exercise announced at Q1 to the development of
our deep pipeline, and we diligently evaluate business development
opportunities in our core therapeutic areas of inflammation and
fibrosis.
Following our strategic review of operations in
March 2021, we implemented a cost savings program of €150 million
on a full year basis. As a result of an acceleration of this
program, we revise our guidance for full year 2021 operational cash
burn from €580 to €620 million to €530 to €570 million.
Third quarter report
2021
Galapagos’ financial report for the first nine
months ended 30 September 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, 5 November 2021, at
13:00 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:
4987105
Standard International: |
+44 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
24 February
2022 |
Full year 2021
results |
(webcast 25 February
2022) |
About Galapagos
Galapagos NV discovers, develops, and
commercializes small molecule medicines with novel modes of action.
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:Evelyn FoxDirector Executive
Communications
+31 65 3591 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, including progress
on our fibrosis portfolio and SIK 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
indications for filgotinib in Europe, Great-Britain, Japan, and the
U.S., such additional regulatory authorities requiring additional
studies, statements regarding changes in our management board and
key personnel, our ability to effectively transfer knowledge during
this period of transition, the search and recruitment of a suitable
successor to lead our organization and a CSO, the risk that
Galapagos will be unable to successfully achieve the anticipated
benefits from its leadership transition plan, the possibility that
Galapagos will encounter challenges retaining or attracting talent,
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 or
efficacy concerns 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, the risk that the
transition will not be completed on the currently contemplated
timeline or at all, including the transfer of the supply chain, and
the risk that the transition will not have the currently expected
results for our business and results of operations, 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, the risk that Galapagos will not be able to continue to
execute on its currently contemplated business plan and/or will
revise its business plan, 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 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 nine months ended 30 September 2021
amounted to €376.7 million and can be reconciled to our cash flow
statement by considering the increase in cash and cash equivalents
of €650.7 million, adjusted by (i) the cash proceeds from capital
and share premium increase from the exercise of subscription rights
by employees for €2.7 million, (ii) the net sale of current
financial investments amounting to €996.0 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 commercial and operational progress at Q3
financial results
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