First key steps in pipeline rebuild and strong commercial progress
in H1 2022
- First half-year
2022 financial
results:
- Jyseleca® net
sales reached €35.4 million
- Group revenues of
€274.0 million
- Operating loss
of €97.5
million
- Cash and current financial
investments of €4.4
billion on
30 June
2022
- Increased 2022
guidance for Jyseleca
from €65-75 million
to
€75-85
million
- Combined acquisitions
of
CellPoint
and AboundBio in all-cash
transactions positions
company in CAR-T therapy
space
Webcast presentation
tomorrow, 5
August
2022, at
14.00 CET
/ 8 AM ET,
www.glpg.com,
Mechelen, Belgium;
4 August
2022,
22.01 CET; regulated
information – Galapagos NV (Euronext & NASDAQ:
GLPG) today announced
its first half-year
2022 financial
results, a
year-to-date business update
and its outlook for the
remainder of 2022. The results
are further detailed in the
H1
2022 financial
report available
on the financial reports
section of the
website.
“This quarter, we took a first key step in our
strategic transformation by entering the field of oncology with the
acquisitions of CellPoint and AboundBio. The combined transactions
offer the potential for a paradigm shift in CAR-T1 therapy through
CellPoint’s breakthrough, decentralized
point-of-care supply model, developed in a global
strategic collaboration with Lonza,
and AboundBio’s cutting-edge fully
human antibody-based capabilities to design
next-generation CAR-Ts. Patient enrolment in the ongoing Phase 1/2a
trials in rrNHL and rrCLL2 is progressing well, and we expect
topline results in the first half of next year. Our near-term goal
is to bring three additional differentiated, next-generation CAR-T
candidates in the clinic over the next three years,” said Dr. Paul
Stoffels3, CEO and chairman of the board of directors of Galapagos.
“We strongly believe that we are taking the right steps in our
transformation to accelerate value creation, and we look forward to
presenting an in-depth update on our strategy later this year.”
“Our Jyseleca franchise is performing very well
with robust sales momentum, supported by the regulatory approvals
in ulcerative colitis (UC) in Great Britain and Japan earlier this
year. The adoption of Jyseleca is strong across Europe with
reimbursement for rheumatoid arthritis (RA) in 15 and for UC in 6
countries,” added Bart Filius, President, COO and CFO of Galapagos.
“Following the acquisitions of CellPoint and AboundBio, we expect
that second half operating expenses will increase by approximately
€30 million. Therefore, we revised our cash burni guidance of
€450-€490 million for the full year 2022 to €480-€520 million. As a
result of the strong Jyseleca performance, we increase our
full-year net sales guidance of €65-€75 million to €75-€85
million.”
Year-to-date operational
overviewCommercial & regulatory progress:
- Strong adoption across Europe with
reimbursement for RA in 15 countries and for UC in 6 countries
- Sobi, our distribution and
commercialization partner in Eastern and Central Europe, Portugal,
Greece, and the Baltic countries, launched Jyseleca in RA in the
Czech Republic and Portugal, resulting in €2 million milestone
payments to Galapagos in H1
- Filed a type II variation for the
label update for Jyseleca based on data from the MANTA and
MANTA-RAy studies
- At the EULAR4 2022 European
Congress of Rheumatology, Galapagos hosted several expert sessions
and presented 11 abstracts, further establishing us as a key player
in RA
- Article 20 pharmacovigilance
procedure ongoing by the European Medicines Agency’s (EMA)
Pharmacovigilance Risk Assessment Committee (PRAC), investigating
the safety data of all JAK inhibitors for the treatment of certain
chronic inflammatory disorders
Pipeline update:
- Decided to move forward with
GLPG3667 (TYK2 inhibitor) in dermatomyositis with the aim to start
a Phase 2 study before year-end
- Discontinued development of 4
early-stage programs as part of ongoing scientific and strategic
exercise: GLPG3121, a local release formulation JAK1/TYK2 inhibitor
with potential in inflammatory diseases; GLPG0555, a JAK1 inhibitor
evaluated in osteoarthritis; GLPG4586, a compound with undisclosed
mode of action directed toward fibrosis; and GLPG4716, a chitinase
inhibitor directed toward idiopathic pulmonary fibrosis
Corporate update:
- Entered the field of oncology
through the combined acquisitions of CellPoint and AboundBio in
all-cash transactions
- Received a transparency notification from FMR LLC in Q2
indicating that its shareholding in Galapagos increased and crossed
the 5% threshold, to 5.04% of the current outstanding Galapagos
shares
- Raised €3.6 million through the exercise of subscription
rights
- Created new subscription rights plans, offering all Galapagos
employees the opportunity to participate
- All proposed resolutions regarding the extraordinary and annual
shareholders’ meetings were adopted by Galapagos’ shareholders on
26 April 2022
First
half-year 2022
financial highlights
(unaudited)(€ millions, except
basic & diluted
income/loss
per share)
|
30 June
2022 group total |
30 June
2021 group total |
Variance |
Product net sales |
35.4 |
0.5 |
34.9 |
Collaboration revenues |
238.6 |
253.2 |
(14.6) |
Total net revenues |
274.0 |
253.7 |
20.3 |
Cost of sales |
(5.5) |
(0.1) |
(5.4) |
R&D expenditure |
(249.5) |
(268.8) |
19.3 |
G&Aii and S&Miii expenses |
(134.0) |
(105.8) |
(28.2) |
Other operating income |
17.6 |
23.6 |
(5.9) |
Operating loss |
(97.5) |
(97.6) |
0.1 |
|
|
|
|
Net financial result |
67.7 |
19.9 |
47.8 |
Income taxes |
(2.5) |
0.5 |
(3.0) |
Net loss from continuing operations |
(32.3) |
(77.2) |
44.9 |
Net profit from discontinued operations |
- |
22.2 |
(22.2) |
Net loss of the period |
(32.3) |
(55.0) |
22.7 |
Basic and diluted loss per share (€) |
(0.49) |
(0.84) |
|
Basic and diluted loss per share from continuing operations
(€) |
(0.49) |
(1.18) |
|
|
|
|
|
Current financial investments and cash and cash
equivalents |
4,429.0 |
5,006.6 |
|
H1 2022
financial resultsWe reported
product net sales of Jyseleca in Europe for the first six months of
2022 amounting to €35.4 million (€0.5 million in the first six
months of 2021). Our counterparties for the sales of Jyseleca were
mainly hospitals and wholesalers located in Belgium, the
Netherlands, France, Italy, Spain, Germany, Great Britain, Ireland,
Austria, Norway, Sweden and Finland.
Cost of sales related to Jyseleca net sales in
the first six months of 2022 amounted to €5.5 million.
Collaboration revenues amounted to €238.6
million for the first six months of 2022, compared to €253.2
million for the first six months of 2021.
Revenues recognized related to the collaboration
agreement with Gilead for the filgotinib development were €115.3
million in the first six months of 2022 compared to €136.1 million
for the same period last year. This decrease was due to a lower
increase in the percentage of completion, partly offset by a higher
revenue recognition of milestone payments, strongly influenced by
the milestone achieved related to the regulatory approval in Japan
for UC in the first half-year of 2022. The revenue recognition
related to the exclusive access rights for Gilead to our drug
discovery platform amounted to €114.9 million for the first six
months of 2022 (€115.7 million for the same period last year).
We have recognized royalty income from Gilead
for Jyseleca for €6.3 million in the first six months of 2022
(compared to €1.4 million in the same period last year) of which
€3.6 million royalties on milestone income for UC approval in
Japan.
Additionally, we recorded milestones of €2.0
million triggered by the first sale of Jyseleca in the Czech
Republic and Portugal by our distribution and commercialization
partner Sobi, in the first half-year of 2022.
Our deferred income balance on 30 June 2022
includes €1.6 billion allocated to our drug discovery platform that
is recognized linearly over the remaining period of our 10-year
collaboration, and €0.5 billion allocated to the filgotinib
development that is recognized over time until the end of the
development period.
Our R&D expenditure in the first six months
of 2022 amounted to €249.5 million, compared to €268.8 million for
the first six months of 2021. This decrease was primarily explained
by a decrease in subcontracting costs from €139.2 million in the
first six months of 2021 to €104.1 million in the first six months
of 2022, primarily due to the winding down of the ziritaxestat
(IPF) program and reduced spend on our Toledo (SIKi) and TYK2
programs. This was partly offset by cost increases for our
filgotinib program, on a six month basis compared to the same
period in 2021. Personnel costs decreased from €94.2 million in the
first half of 2021 to €86.0 million for the same period this year
mainly due to a lower number of FTEs as well as lower costs for our
subscription right plans. Depreciation and impairment amounted to
€32.6 million for the first six months of 2022 (€8.1 million for
the same period last year). This increase was primarily due to an
impairment of €26.7 million of previously capitalized upfront fees
related to our collaboration with Molecure on the dual chitinase
inhibitor OATD-01 (GLPG4716). As part of an ongoing strategic
exercise to renew and accelerate our portfolio, we decided to
return all rights to OATD-01 to Molecure.
Our G&A and S&M expenses amounted to
€134.0 million in the first six months of 2022, compared to €105.8
million in the first six months of 2021. This increase was
primarily due to the termination of our 50/50 filgotinib
co-commercialization cost sharing agreement with Gilead for
filgotinib in 2022. The cost increase was also explained by an
increase in personnel costs for the first six months of 2022
compared to the same period last year explained by an increase in
the commercial work force driven by the commercial launch of
filgotinib in Europe.
Other operating income (€17.6 million vs
€23.6 million for the same period last year) decreased, mainly
driven by lower grant and R&D incentives income.
Net financial income in the first six months of
2022 amounted to €67.7 million, compared to net financial
income of €19.9 million for the first six months of 2021. Net
financial income in the first six months of 2022 was primarily
attributable to €57.4 million of unrealized currency exchange gains
on our cash and cash equivalents and current financial investments
at amortized cost in U.S. dollars, and to €11.8 million of positive
changes in (fair) value of current financial investments. The
financial expenses also contained the effect of discounting our
long term deferred income of €3.8 million.
We realized a net loss from continuing
operations of €32.3 million for the first six months of 2022,
compared to a net loss of €77.2 million for the first six months of
2021.
The net profit from discontinued operations for
the six months ended 30 June 2021 consisted of the gain on the sale
of Fidelta, our fee-for-services business, for €22.2 million.
We reported a group net loss for the first six
months of 2022 of €32.3 million, compared to a group net loss of
€55.0 million for the first six months of 2021.
Cash
positionCurrent financial investments and cash and
cash equivalents totaled €4,429.0 million on 30 June 2022, as
compared to €4,703.2 million on 31 December 2021.
Total net decrease in cash and cash equivalents
and current financial investments amounted to €274.2 million during
the first six months of 2022, compared to a net decrease of €162.7
million during the first six months of 2021. This net decrease was
composed of (i) €217.1 million of operational cash burn, (ii)
offset by €3.6 million of cash proceeds from capital and share
premium increase from exercise of subscription rights in the first
six months of 2022, (iii) €11.8 million positive changes in (fair)
value of current financial investments and €60.4 million of mainly
positive exchange rate differences, and (iv) the cash out from the
acquisitions of CellPoint and AboundBio, net of cash acquired, of
€132.9 million.
Acquisitions
of
CellPoint
and AboundBioThe preliminary
accounting of the acquisitions of CellPoint and AboundBio are
included in our H1 2022 condensed consolidated financial
statements. To date, we have performed a preliminary fair value
analysis of the business combinations. We expect the provisional
amount of goodwill to change significantly upon the completion of
the purchase price allocation, resulting from the valuation of the
different assets and liabilities acquired.
Outlook
2022Financial guidance:Following the
acquisitions of CellPoint and AboundBio, we revised our cash burn
guidance for full year 2022 from €450-€490 million to €480-€520
million. Additionally, we increased our anticipated net sales
guidance for Jyseleca from €65-€75 million to between €75 and €85
million.
Expected regulatory events:We anticipate a
Committee for Medicinal Products for Human Use (CHMP) opinion on
the type II variation for the Jyseleca label, based on the data
from the MANTA and MANTA-RAy studies around year-end. We also
expect reimbursement decisions in most key European markets in UC
and anticipate that Sobi will further progress with reimbursement
discussions in RA and UC in Eastern and Central Europe, Greece, and
the Baltic countries. As part of the ongoing article 20
pharmacovigilance procedure on all JAK inhibitors approved in
Europe, we expect a CHMP opinion by the end of the year, followed
by an adoption by the European Commission shortly afterwards.
Anticipated R&D milestones:Patient enrolment
in the Phase 1/2a trials in rrNHL and rrCLL is progressing well and
we anticipate that additional clinical sites will be active by
year-end. We are on track to report topline results of both trials
in the first half of next year. We plan to progress TYK2 inhibitor
GLPG3667 into a Phase 2 program in dermatomyositis with first
patients potentially recruited around year-end.
We continue to explore additional business
development opportunities to further leverage our internal
capabilities and renew our portfolio, and we look forward to
presenting an in-depth update on our corporate strategy later this
year.
First half-year
2022 financial
report
Galapagos’ financial report for the first six
months ended 30 June 2022, including details of the unaudited
consolidated results, is accessible on the financial reports
section of our website.
Conference call and webcast
presentation
Management will host a conference call and
webcast presentation followed by Q&A tomorrow 5 August 2022, at
14:00 CET / 8 AM ET. To participate in the
conference call, please register in advance using this link. Upon
registration, the dial-in numbers will be provided. The conference
call can be accessed 10 minutes prior to the start time by using
the conference access information provided in the e-mail received
at the point of registering, or by selecting the call me
feature.
The live webcast can be accessed on the
investors section of the Galapagos website, and a replay will be
made available shortly after the close of the call.
Financial
calendar 2022
3 November 202223
February 2023 |
Third quarter
2022 resultsFull year 2022 results |
(webcast 4 November
2022)(webcast 24 February 2023) |
About Galapagos
Galapagos is a fully integrated biotechnology
company focused on discovering, developing, and commercializing
innovative medicines. We are committed to improving patients’ lives
worldwide by targeting diseases with high unmet needs. Our R&D
capabilities cover multiple drug modalities, including small
molecules and cell therapies. Our portfolio comprises discovery
through to Phase 3 programs in inflammation, oncology, fibrosis,
and other indications. Our first medicine for rheumatoid arthritis
and ulcerative colitis is approved and available in the European
Union (including Norway), Great Britain and Japan. For additional
information, please visit www.glpg.com or follow us on
LinkedIn or Twitter.
Except for filgotinib’s approval as Jyseleca®
for the treatment of rheumatoid arthritis and ulcerative colitis 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:Sofie Van GijselHead of Investor
Relations+1 781 296 1143
Sandra CauwenberghsDirector Investor Relations+32 495 58 46
63ir@glpg.com
Media:Marieke VermeerschHead of Corporate
Communication
+32 479 490 603media@glpg.com
Forward-looking statements
This press release includes forward-looking
statements. These statements are often, but are not always, made
through the use of words or phrases such as “believe,”
“anticipate,” “expect,” “intend,” “plan,” “seek,” “estimate,”
“may,” “will,” “could,” “would,” “potential,” “forward,” “goal,”
“next,” “stand to,” “continue,” “should,” “encouraging,” “aim,”
“explore,” “further,” as well as similar expressions. These
statements include, but are not limited to, the information provide
in the sections “Year-to-date operation overview” and “outlook
2022”, the statements regarding the global R&D collaboration
with Gilead and the amendment of our arrangement with Gilead for
the commercialization and development of filgotinib, statements
regarding the amount and timing of potential future milestones,
opt-in and/or royalty payments, our R&D strategy, including
progress on our fibrosis, inflammation, CAR-T portfolio, kidney
disease and SIK platform, and potential changes of such ambitions,
statements regarding our pipeline and complementary technology
platforms driving future growth, the guidance from management
(including guidance regarding the expected financial results,
expected operational use of cash during financial year 2022 and our
strategic and capital allocation priorities), statements regarding
the acquisition of CellPoint and AboundBio (including statements
regarding anticipated benefits of the acquisition and integration
of CellPoint and AboundBio into our portfolio and strategic plans),
statements regarding the expected timing, design and readouts of
ongoing and planned clinical trials (or the discontinuation
thereof), including recruitment for trials and topline results for
our trials and studies in our portfolio, statements regarding the
strategic re-evaluation, statements related to the EMA’s safety
review of JAK inhibitors used to treat certain inflammatory
disorders, including filgotinib, initiated at the request of the
European Commission (EC) under article 20 of Regulation (EC) No
726/2004, 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 for filgotinib in Europe, Great
Britain, Japan, and the U.S., such additional regulatory
authorities requiring additional studies, 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, and statements regarding our strategy, business plans
and focus. We caution the reader that forward-looking statements
are based on our management’s current beliefs and expectations and
are not guarantees of future performance. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which might cause our actual results, financial condition
and liquidity, performance or achievements of , 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, including, but not limited to, the risk that our
expectations regarding our 2022 revenues and financial results and
our 2022 operating expenses may be incorrect (including because one
or more of its assumptions underlying its expense expectations may
not be realized), our expectations regarding its development
programs may be incorrect, the inherent risks and uncertainties
associated with competitive developments, clinical trial and
product development activities and regulatory approval requirements
(including the risk that data from our ongoing and planned clinical
research programs in RA, rrNHL, rrCLL, Crohn’s disease, UC, IPF ,
other inflammatory indications, dermatomyositis, and kidney
disease or any other indication or disease, may not support
registration or further development of its product candidates due
to safety or efficacy concerns or other reasons), risks related to
the acquisition of CellPoint and AboundBio, including the risk that
we may not achieve the anticipated benefits of the acquisition of
CellPoint and AboundBio, the inherent risks and uncertainties
associated with target discovery and validation and drug discovery
and development activities, our 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 our expectations regarding
the costs and revenues associated with the transfer of European
commercialization rights to filgotinib may be incorrect, the risk
that we will not be able to continue to execute on our currently
contemplated business plan and/or will revise our business plan,
including the risk that our plans with respect to CAR-T may not be
achieved on the currently anticipated timeline or at all, the risk
that our projections and expectations regarding the costs and
revenues with the commercialization rights may be inaccurate, the
risk that we will be unable to successfully achieve the anticipated
benefits from our leadership transition plan, the risk that we will
encounter challenges retaining or attracting talent, risks related
to disruption in our operations and ongoing studies (including our
DIVERSITY 1 study) due to the conflict between Russia and Ukraine,
the risks related to continued regulatory review of filgotinib
following approval by relevant regulatory authorities and the EMA’s
safety review of JAK inhibitors used to treat certain inflammatory
disorders, including the risk that the EMA and/or other regulatory
authorities determine that additional non-clinical or clinical
studies are required with respect to filgotinib, the risk that the
EMA may require that the market authorization for filgotinib in the
EU be amended, the risk that the EMA may impose JAK class-based
warnings, the risk that the EMA’s safety review may negatively
impact acceptance of filgotinib by patients, the medical community
and healthcare payors and the risks and uncertainties related to
the impact of the COVID-19 pandemic. A further list and description
of these risks, uncertainties and other risks can be found in our
Securities and Exchange Commission (SEC) filings and reports,
including in our most recent annual report on Form 20-F filed with
the SEC and other filings and reports filed by us with the SEC.
Given these risks and uncertainties, the reader is advised not to
place any undue reliance on such forward-looking statements. In
addition, even if our results, performance, financial condition and
liquidity, and the development of the industry in which we operate,
are consistent with such forward-looking statements, they may not
be predictive of results, performance or achievements in future
periods. These forward-looking statements speak only as of the date
of publication of this document. We expressly disclaim any
obligation to update any such forward-looking statements in this
document to reflect any change in our 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 Chimeric antigen receptor T-cell2 rrNHL:
relapsed/refractory non-Hodgkin Lymphoma, rrCLL:
relapsed/refractory Chronic Lymphocytic Leukemia3 Acting via
Stoffels IMC BV4 European Alliance of Associations for
Rheumatology
i The operational cash burn (or operational cash flow if this
liquidity 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, related to the
acquisitions or disposals of businesses; the movement in restricted
cash and movement in current financial investments, if any, the
cash advances and loans given to third parties, if any, included in
the net cash flows generated from/used in (-) investing
activities
- the cash used for other liabilities related to the acquisition
of businesses, if any, included in the net cash flows generated
from/used in (-) operating activities.
This alternative liquidity 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 2022
amounted to €217.1 million and can be reconciled to our cash flow
statement by considering the decrease in cash and cash equivalents
of €1,285.2 million, adjusted by (i) the cash proceeds from capital
and share premium increase from the exercise of subscription rights
by employees for €3.6 million, (ii) the net purchase of current
financial investments amounting to €938.7 million, (iii) the cash
out from acquisition of subsidiaries, net of cash acquired, of
€132.9 millionii General and administrativeiii Sales and
marketing
- First key steps in pipeline rebuild and strong commercial
progress in H1 2022
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