Galapagos on track to deliver on pipeline in second half 2015
(Thomson Reuters ONE) -
Half-year financial results 2015
* Filgotinib shows promising efficacy and potentially differentiated safety
profile in DARWIN 1 and 2 Phase 2B studies
* Phase 2 readouts expected with filgotinib: DARWIN 2 24 weeks in rheumatoid
arthritis and FITZROY in Crohn's disease
* Nomination of second corrector candidate this quarter in cystic fibrosis.
Initiation of Phase 1 study with GLPG2222 and Phase 2 study with GLPG1837 in
Class III mutation patients expected before end 2015
* First half year financials:
* Group revenues ?36.9 M
* Group net loss ?34.2 M, reflecting planned increase in pipeline
investment
* Half year cash of ?404.6 M, including ?7.2 M in restricted cash
* Full year operational cash burn guidance reiterated: ?110 - ?130 M,
excluding alliance milestones or income from filgotinib
Live audio webcast presentation tomorrow, 6 August 2015, at 14.00 CET,
www.glpg.com, call numbers:
CODE: 5671265
New York: +1-646-254-3366
Toll free - USA: +1-877-280-2342
Amsterdam: +31(0)20 716 8257
Toll free - Netherlands: 0800 020 2576
Brussels: +32(0)2 404 0660
Toll free phone - Belgium: 0800 58032
Mechelen, Belgium; 5 August 2015 - Galapagos NV (Euronext & NASDAQ: GLPG)
announces its non-audited half year results and reiterates guidance for the full
year 2015.
"This has been a phenomenal year for Galapagos so far. Galapagos announced
promising efficacy and the potential for a differentiated safety profile of
filgotinib in rheumatoid arthritis in the DARWIN 1 and 2 studies. We look
forward to completing the data package for AbbVie's licensing decision on
filgotinib," said Galapagos CEO Onno van de Stolpe. "We remain on track to
deliver a triple combination therapy to Class II patients in cystic fibrosis,
with our second corrector to be nominated as a candidate this quarter. We
anticipate starting our first patient study in CF in the Class III mutation with
GLPG1837 later this year."
"Building on the positive 12 week data with filgotinib and newsflow outlook with
our maturing pipeline of novel mode of action therapies, Galapagos attracted
capital in a successful global offering and concurrent listing on NASDAQ. As a
result, Galapagos ended the first half of 2015 with a solid cash balance to
support further development of candidate drugs" said Bart Filius, CFO of
Galapagos. "We retain our initial guidance for full year operational cash burn
of between ?110 - 130 million, and our first half was in line with this
expectation."
Key figures half year 2015
(? millions, except basic income/loss per share)
+------------------------------+----------------------+------------------------+
| | 30 June 2015 Group |30 June 2014 Group Total|
| | Total | |
+------------------------------+----------------------+------------------------+
|Revenues | 36.9 | 45.1 |
+------------------------------+----------------------+------------------------+
|Services cost of sales | | |
+------------------------------+----------------------+------------------------+
|R&D expenditure | -63.3 | -52.8 |
+------------------------------+----------------------+------------------------+
|G&A and S&M expenses | -9.2 | -7.4 |
+------------------------------+----------------------+------------------------+
|Operating result before| -35.6 | -15.1 |
|exceptional items | | |
+------------------------------+----------------------+------------------------+
|Restructuring & integration| | -0.6 |
|costs | | |
+------------------------------+----------------------+------------------------+
|Operating result | -35.6 | -15.7 |
+------------------------------+----------------------+------------------------+
|Net financial result | -0.1 | 1.1 |
+------------------------------+----------------------+------------------------+
|Result on divestment | | |
+------------------------------+----------------------+------------------------+
|Taxes | 1.5 | |
+------------------------------+----------------------+------------------------+
|Net result from continuing| -34.2 | -14.6 |
|operations | | |
+------------------------------+----------------------+------------------------+
|Net result from discontinued| | 70.5 |
|operations(1) | | |
+------------------------------+----------------------+------------------------+
|Net result | -34.2 | 55.9 |
+------------------------------+----------------------+------------------------+
|Basic income/loss per share| -1.06 | 1.87 |
|(?) | | |
+------------------------------+----------------------+------------------------+
|Cash, Cash equivalents and| 404.6³ | 231.5(2) |
|Restricted cash | | |
+------------------------------+----------------------+------------------------+
Notes:
1) Galapagos sold its service operations to Charles River Laboratories Inc. on
1 April 2014. As a result of this sale, the service operations are reported as
discontinued operations.
2) including ?10.7 million of restricted cash
3) including ?7.2 million of restricted cash
Details of the financial results
Revenues
Group revenues and other income for the first half of 2015 amounted to ?36.9
million compared to ?45.1 million in the same period of 2014. Revenues (?26.7
million vs ?35.5 million last year) were lower due to reduced milestone
payments, reflecting the increasing proprietary nature of our pipeline
programs. Other income (?10.3 million vs ?9.6 million last year) increased in
H1 '15, driven mainly by R&D incentives in Belgium and France.
Results
The Group realized a net loss for the first half of 2015 of ?34.2 million,
compared to a net loss of ?14.6 million in the first six months of 2014 for
continuing operations.
Following the sale of the service operations, the Group reported a net profit
from discontinued operations of ?70.5 million in the first half of 2014.
Galapagos recorded a result on divestment of ?67.5 million.
R&D expenses for the Group in the first half of 2015 were ?63.3 million compared
to ?52.8 million in 2014. This planned increase is mainly due to increased
efforts on the filgotinib and cystic fibrosis programs.
G&A and S&M expenses of the Group were ?9.2 million in the first half of 2015,
compared to ?7.4 million in the first half of 2014.
Finally, for one subsidiary, a deferred tax asset was set up for an amount of
?1.8 million on 30 June 2015, of which ?1.5 million was additionally recognized
in the first six months of 2015.
Liquid assets position
Cash, cash equivalents and restricted cash totaled ?404.6 million on 30 June
2015, which is the highest cash balance the Company has ever reported.
A net increase of ?209.8 million in cash and cash equivalents was recorded
during the first half of 2015, compared to an increase of ?82.6 million during
the same period last year. Net cash flows from financing activities generated
?261.0 million through a recent global offering and concurrent listing on
NASDAQ, as well as ?10.2 million from warrant exercises. Furthermore, the
Company continued to intensify its R&D investments, with a net cash outflow of
?62.2 million from operating activities in the first six months of 2015.
Restricted cash amounted to ?10.7 million at the end of December 2014, and
decreased to ?7.2 million for the half year ended 30 June 2015. This decrease
is related to (i) the release of the ?3 million bank guarantee issued in 2013
for the rental of the new premises in France which expired on 30 June 2015
following the move to the new offices, and (ii) the payment of a claim to
Charles River by decrease of the escrow account. Restricted cash on 30 June
2015 is related to ?0.3 million bank guarantee on real estate lease obligations
in Belgium, and to ?6.9 million escrow account containing part of the proceeds
from the sale of the service division in 2014 for which the release will be
possible after final agreement between the parties on the exposure regarding one
outstanding claim. An amount of ?0.3 million has been accrued in March 2015
based on a preliminary estimate of the exposure.
Furthermore, Galapagos' balance sheet holds an unconditional and unrestricted
receivable from the French government (Crédit d'Impôt Recherche)[1] now
amounting to ?35.6 million, payable in 4.5 yearly tranches. Galapagos' balance
sheet also holds a receivable from the Belgian Government for R&D incentives now
amounting to ?22.4 million, payable as from 2016 in 5.5 yearly tranches.
Operational overview
Pipeline
* Rheumatoid arthritis
* Galapagos reported promising efficacy, a rapid onset of action, and a
potentially differentiated safety profile in its topline week 12 results
for DARWIN 1 (594 rheumatoid arthritis patients, methotrexate add-on)
and DARWIN 2 (283 RA patients, monotherapy) with filgotinib in April
2015
* In July 2015, Galapagos announced that at week 24, patients treated with
the selective JAK1 inhibitor filgotinib showed further improvement in
signs and symptoms of rheumatoid arthritis activity, as demonstrated by
improved ACR responses, DAS28(CRP), and other scores, compared to week
12 in the DARWIN 1 Phase 2B methotrexate add-on study.
* Topline 24 week data for DARWIN 2 are expected later this month, with a
licensing decision by AbbVie expected following this
* Inflammatory bowel disease
* We expect to report 10 week, primary endpoint topline results before end
2015 from the FITZROY Phase 2 study with filgotinib: a 20 week, 175
patient study in Crohn's disease
* Galapagos completed recruitment for ORIGIN, a Phase 2 Proof-of-Concept
study with GLPG1205, a selective inhibitor of GPR84, in 60 ulcerative
colitis patients. We expect to announce topline results from ORIGIN in
Q1 2016
* Cystic fibrosis
* AbbVie presented novel assays used by Galapagos and AbbVie to screen for
novel corrector-potentiator combinations at ECFS 2015
* Nomination of a second corrector as a pre-clinical candidate is expected
later this quarter, thereby completing the discovery phase of our
potential triple combination therapy for Class II patients in cystic
fibrosis
* Topline safety and tolerability results of the Phase 1 with potentiator
GLPG1837 are expected next quarter
* Initiation of Phase 2 with GLPG1837 in Class III patients and of Phase
1 with corrector GLPG2222 are expected before end 2015
* IPF
* Galapagos reported promising safety and tolerability, and favourable
drug-like properties from a Phase 1 First-In-Human study with GLPG1690,
a selective autotaxin inhibitor fully owned by Galapagos. Filing of an
exploratory Phase 2 study protocol for evaluation in patients with
idiopathic pulmonary fibrosis expected before year end
* Other
* We announced two grant awards from Flemish IWT: ?2.5 million for
antibiotic research and ?1.6 million for hepatitis B research
* JnJ terminated the inflammation alliance with Galapagos and returned
GLPG1205 and GLPG1690 to Galapagos. Both assets are in Phase 2 clinical
development and are now fully proprietary to Galapagos
Corporate developments
* Raised ?261 million net proceeds from a global offering and concurrent
listing on NASDAQ, included participation by AbbVie ($30 million) and JnJ
($25 million)
* Commemorated 10 years as a publicly listed company on Euronext Amsterdam and
Brussels
* Fidelity, Federated, and BNP Paribas notified of new major shareholdings
* Raised ?10.2 million cash through warrant exercises
Outlook 2015
The DARWIN 2 week 24 topline results with filgotinib are expected to be
disclosed later this month. AbbVie is expected to make a licensing decision
following delivery of the DARWIN 2 final week 24 data. We expect to nominate a
second corrector pre-clinical candidate in CF later this quarter and report
topline Phase 1 results with GLPG1837 in Q4. We plan to report 10 week results
with filgotinib in Crohn's disease, initiation of Phase 2 with potentiator
GLPG1837 in Class III CF patients, and initiation of Phase 1 with corrector
GLPG2222 before end 2015. Galapagos expects to make significant progress in
earlier stage R&D programs. With a solid cash balance in excess of ?400
million, we remain well positioned to support this pipeline development.
Based on the forecast for the remainder of the year, management retains 2015
guidance for operational cash burn: ?110 - 130 million, excluding alliance
milestones or income from filgotinib.
Auditor opinion
The statutory auditor, Deloitte Bedrijfsrevisoren/Reviseurs d'Entreprises,
represented by Gert Vanhees, confirms that the limited review, which has been
substantially completed, did not reveal any significant adjustments to the
consolidated half-year financial information included in this press release.
Half-year Report 2015
The electronic version of Galapagos' Half-year Report for 2015 is now available
online at www.glpg.com/index.php/companyoverview/financialskey-
financials/financial-reports. Printed versions of the report can be requested
by e-mailing ir(at)glpg.com.
Transparency legislation
In accordance with Belgian transparency legislation[2], Galapagos notes that the
total number of rights (warrants) to subscribe to not yet issued securities
conferring voting rights amounts to 3,007,452 following the acceptance of the
warrants offered under Warrant Plan 2015. This equals the total number of
voting rights that may result from the exercise of these warrants. Galapagos
does not have any convertible bonds or shares without voting rights
outstanding. Galapagos' total share capital currently amounts to
?210,405,535.62; the total number of securities conferring voting rights is
38,894,582, which is also the total number of voting rights (the "denominator"),
and all securities conferring voting rights and all voting rights are of the
same category.
Conference call and webcast presentation
Galapagos will conduct a conference call open to the public tomorrow (6 August
2015) at 14:00 Central European Time (CET), which will also be webcast. To
participate in the conference call, please call one of the following numbers ten
minutes prior to commencement:
CODE: 5671265
London: +44(0)20 3427 0503
Toll free - UK: 0800 279 5004
New York: +1 646 254 3366
Toll free - USA: +1 877 280 2342
Amsterdam: +31(0)20 716 8257
Toll free - Netherlands: 0800 020 2576
Brussels: +32(0)2 404 0660
Toll free phone - Belgium: 0800 58032
Paris: +33(0)1 76 77 22 31
Toll free - France: 0805 631 579
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 2015
Third quarter results 2015 13 November 2015
Full year results 2015 4 March 2016
Annual shareholders meeting 26 April 2016
About Galapagos
Galapagos (Euronext & NASDAQ: GLPG) is a clinical-stage biotechnology company
specialized in the discovery and development of small molecule medicines with
novel modes of action, with a pipeline comprising three Phase 2 programs, two
Phase 1 trials, five pre-clinical studies, and 20 discovery small-molecule and
antibody programs in cystic fibrosis, inflammation, and other indications. In
the field of inflammation, AbbVie and Galapagos signed a collaboration agreement
for the development and commercialization of filgotinib. Filgotinib is an
orally-available, selective inhibitor of JAK1 for the treatment of rheumatoid
arthritis and potentially other inflammatory diseases, currently in Phase 2B
studies in RA and in Phase 2 in Crohn's disease. Galapagos reported good
activity and a favorable safety profile in both the DARWIN 1 and 2 trials in
RA. AbbVie and Galapagos also signed a collaboration agreement in cystic
fibrosis to develop and commercialize molecules that address mutations in the
CFTR gene. Potentiator GLPG1837 is currently in a Phase 1 trial, and corrector
GLPG2222 is at the pre-clinical candidate stage. GLPG1205, a first-in-class
inhibitor of GPR84 and fully-owned by Galapagos, is currently being tested in a
Phase 2 proof-of-concept trial in ulcerative colitis patients. GLPG1690, a
fully proprietary, first-in-class inhibitor of autotaxin, has shown favorable
safety in a Phase 1 trial and is expected to enter Phase 2 in idiopathic
pulmonary fibrosis. The Galapagos Group, including fee-for-service subsidiary
Fidelta, has approximately 400 employees, operating from its Mechelen, Belgium
headquarters and facilities in The Netherlands, France, and Croatia. More info
at www.glpg.com
CONTACT
Galapagos NV
Elizabeth Goodwin, Head of Corporate Communications & IR
Tel: +31 6 2291 6240
ir(at)glpg.com
Galapagos forward-looking statements
This release contains forward-looking statements, all of which involve certain
risks and uncertainties. These statements are often, but are not always, made
through the use of words or phrases such as "believes," "anticipates,"
"expects," "intends," "plans," "seeks," "estimates," "may," "will," "could,"
"stands to," "continues," "we believe," "we intend," as well as similar
expressions. Forward-looking statements contained in this release include, but
are not limited to, Mr. Van de Stolpe's statements and Mr. Filius' statements in
the last two paragraphs of the first page of the press release, the information
provided in the section captioned "Outlook 2015", statements regarding the
development of a triple combination therapy for Class II cystic fibrosis
patients, and statements regarding the expected timing, design and readouts of
ongoing and planned clinical trials (i) with filgotinib in rheumatoid arthritis
and Crohn's disease (Phase 2), (ii) with GLPG2222 in cystic fibrosis (Phase 1),
(iii) with GLPG1837 in Class III cystic fibrosis patients (Phase 2), (iv) with
GLPG1205 in ulcerative colitis (Phase 2) and (v) with GLPG1690 in IPF (Phase
2). 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 the development of the industry in which it operates, to be
materially different from any historic or future results, financial conditions,
performance or achievements expressed or implied by such forward-looking
statements. In addition, even if Galapagos' results of operations, 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 2015
revenues and financial results and its 2015 operating expenses may be incorrect
(including because one or more of its assumptions underlying its revenue or
expense expectations may not be realized), the inherent uncertainties associated
with competitive developments, clinical trial and product development activities
and regulatory approval requirements (including that data from the company's
development programs may not support registration or further development of its
compounds due to safety, efficacy or other reasons), Galapagos' reliance on
collaborations with third parties (including its collaboration partner for
filgotinib and cystic fibrosis, AbbVie, who may not in-license filgotinib or, if
it does, may not devote sufficient resources to the development and
commercialization of filgotinib), and estimating the commercial potential of our
product candidates. A further list and description of these risks,
uncertainties and other risks can be found in the company's Securities and
Exchange Commission filing and reports, including in the company's prospectus
filed with the SEC on May 14, 2015 and future filings and reports by the
company. 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
[2]Belgian Act of 2 May 2007 on the disclosure of major shareholdings in issuers
whose shares are admitted to trading on a regulated market
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Galapagos NV via GlobeNewswire
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