Galapagos reports revenue growth and improved net result in 1H 2009
(Thomson Reuters ONE) - * Revenues increased to ?37.7 M (from ?31.6 M on pro forma basis, +19%) * Net loss reduced to ?7.3 M (from ?7.9 M, -7 %) * Cash burn reduced to ?8.6 M (from ?21.9 M, -61%) * BioFocus DPI external revenues growth of 11% * BioFocus DPI operating profit of ?3.4 M (from loss of ?1.2 M) * Cash position of ?18.7 M on 30 June 2009 * Confirmation guidance of ?100 M full year revenues and ?20 M year end cash position * Positive results of clinical Phase I study with GLPG0259 in rheumatoid arthritis * Ongoing clinical Phase I study with GLPG0187 in bone metastasis * Announced two alliances with Merck & Co. for a potential value of ?490 M plus royalties * Achieved milestones in all three bone & joint alliancesClick here to access the live audio webcast presentation at 11.00CET, call number +32.2290.1791Mechelen, Belgium; 7 August 2009 - Galapagos NV (Euronext: GLPG)announces its half year results and reiterates guidance for the fullyear."Galapagos has met all its objectives in the first six months of2009," said Galapagos CEO, Onno van de Stolpe. "Galapagos now hasthree candidate drugs in clinical development, three pre-clinicalprograms, which will enter human trials in 2010, and a broadportfolio of discovery programs moving toward the clinic. Therheumatoid arthritis compound GLPG0259, our first program based on aproprietary Galapagos target, has demonstrated a good safety andpharmacokinetic profile in a Phase I study, supporting once-dailyoral dosing. We have an ongoing Phase I study with bone metastasiscompound GLPG0187, for which we will report the outcome within thenext couple of months. We continue to achieve successes across ouralliances, allowing us to advance one of the largest R&D portfoliosin European biotech.""The Company continues to grow its business and meet its operationalobjectives from a well-controlled cost base. The improvedcontribution of BioFocus DPI, combined with achievement of milestonesin the alliance programs, have helped to reduce substantially theCompany's cash burn and net loss in the first half of 2009," notedGuillaume Jetten, Chief Financial Officer. "With both divisions setto continue their performance in the second half, Galapagos retainsfull year guidance for revenues of ?100 M and a year end cashposition of ?20 M."Key figures half year 2009Note: In November 2008 Galapagos sold BioFocus DPI's San Diegooperations. For better comparison, pro forma figures for June 30,2008 have been presented based on continuing business streams.(? millions, except net loss per share)+-------------------------------------------------------------------+| | | Pro forma[1] | As reported || | June 30, | June 30, | June 30, || | 2009 | 2008 | 2008 ||---------------------------+----------+--------------+-------------|| Revenues | 37.7 | 31.6 | 33.6 ||---------------------------+----------+--------------+-------------|| Cost of sales | -10.3 | -12.2 | -14.2 ||---------------------------+----------+--------------+-------------|| Gross profit | 27.3 | 19.4 | 19.4 ||---------------------------+----------+--------------+-------------|| Other income | 0.5 | 0.3 | 0.3 ||---------------------------+----------+--------------+-------------|| R&D expenditure | -25.8 | -18.0 | -18.0 ||---------------------------+----------+--------------+-------------|| General & administrative | -9.9 | -9.3 | -10.0 ||---------------------------+----------+--------------+-------------|| Sales & marketing | -1.1 | -1.4 | -1.4 ||---------------------------+----------+--------------+-------------|| Integration costs | - | -0.1 | -0.1 ||---------------------------+----------+--------------+-------------|| Operating loss | -8.9 | -9.1 | -9.8 ||---------------------------+----------+--------------+-------------|| Finance costs/income | 0.3 | 0.6 | - ||---------------------------+----------+--------------+-------------|| Taxes and other | 1.3 | 0.6 | 0.4 ||---------------------------+----------+--------------+-------------|| Net loss for the period | -7.3 | -7.9 | -9.4 ||---------------------------+----------+--------------+-------------|| Basic and diluted loss | -0.34 | -0.37 | -0.44 || per share (?) | | | ||---------------------------+----------+--------------+-------------|| Cash and cash equivalents | 18.7 | 27.4 | 27.4 |+-------------------------------------------------------------------+Operational overviewR&D divisionIn March 2009, Galapagos initiated Phase I clinical development ofits novel mechanism of action, first-in-class candidate drug GLPG0259for rheumatoid arthritis (RA), the first small molecule fromGalapagos' target discovery platform to enter the clinic. In thesingle ascending and multiple dose studies completed thus far,GLPG0259 demonstrated good safety and an excellent pharmacokineticprofile, supporting once-daily oral dosing. A multiple ascendingdose trial will be initiated in the third quarter. GLPG0259 is acompound in Galapagos' internal RA program, which falls under theoption agreement with Janssen Pharmaceutica. Upon successfulcompletion of a dose finding Phase II clinical trial for GLPG0259,Janssen has the exclusive option to license the program for ?60 M,with further potential milestones to Galapagos of ?776 M and up todouble-digit royalties on global sales. In its other allianceprograms with Janssen Pharmaceutica, Galapagos achieved milestonesworth ?3.4 M in the first half of the year.In June 2009, Galapagos initiated a first-in-human trial for itsintegrin receptor antagonist (IRA), GLPG0187. Pre-clinical studiesdemonstrated that GLPG0187 affects several steps in cancer diseaseprogression and could therefore offer a promising new therapeuticapproach for treating bone metastasis. Based on these studies,Galapagos was granted permission to evaluate this compound's safety,tolerability and pharmacokinetic properties in healthy volunteers.Galapagos' GLPG0187 program is funded by the Company.In its Nanocort® program, Galapagos is preparing for Phase II studiesto evaluate the effectiveness of this therapeutic in treatinginflammatory diseases. This includes production of clinical batchesof the product, trial design, and preparation of the regulatoryfilings. The Phase I/II trial for Nanocort demonstrated safety aswell as faster and more pronounced decrease in rheumatoid arthritissymptoms as compared to a standard steroid treatment. Based on thesefindings, a Phase II trial will be initiated in the fourth quarter toevaluate Nanocort's efficacy in multiple sclerosis, an autoimmunedisease affecting the central nervous system. In addition a Phase IIstudy designed to evaluate Nanocort's effectiveness in targetinginflamed joints is being scheduled. The Nanocort program is fundedby the Company.Galapagos has also moved three programs into pre-clinical developmentin the first half of 2009. Two of these are part of theosteoarthritis alliance with GlaxoSmithKline. The first pre-clinicalcandidate of this alliance is on track to start Phase I testing bythe end of 2009. The second candidate nomination was achieved in thefirst half of 2009. The third pre-clinical program is the SARM(selective androgen receptor modulator) candidate drug which is beingdeveloped for the treatment of cachexia (loss of weight and musclemass). At the start of 2009, Galapagos announced the remarkablesuccess of this program to produce a novel compound that overcame thelimited bioavailability reported at the beginning of 2008. The SARMprogram is funded by the Company.In addition to its clinical and pre-clinical programs, Galapagos isadvancing more than 40 discovery programs across its arthritis,osteoporosis, and infectious diseases alliances. On top of themilestones received in the arthritis alliances, Galapagos received a?2.5 M payment from Eli Lilly for advancing one of the programs inthe osteoporosis alliance to the next stage of drug discovery.Furthermore, Galapagos has initiated an Alzheimer's drug discoveryprogram based on the novel Alzheimer's target described earlier thisyear in the journal Science[2], with the aim to deliver a candidatedrug to treat Alzheimer's disease.In the first half of the year, Galapagos announced alliances withMerck & Co. in diabetes and obesity and in inflammatory diseases. The Company also expanded its anti-infectives alliance with GSK.Through its six risk/reward sharing alliances with big pharma,Galapagos is eligible to receive in excess of ?2.2 billion insuccess-dependent milestone payments plus up to double-digitroyalties on the worldwide sales of medicines that result from theseprograms. In the first half of 2009, Galapagos achieved ?11.1 M inmilestone payments in its alliances, for a total since 2006 of morethan ?77 M in payments to date.BioFocus DPI service divisionBioFocus DPI had a solid first half year, with external sales growthof 11% and the best financial performance in its history. The unitshowed resiliency in a tough economic climate; while the chemistrydivision again reported a strong performance, much of the growth wasdriven by the biology division. BioFocus DPI signed deals withpartners such as Lilly, Medicines for Malaria Venture and OpsonaTherapeutics.Corporate developmentsIn June 2009, Geoff McMillan and Laurent Ganem stepped down as BoardMembers and Werner Cautreels, CEO of Solvay Pharmaceuticals, joinedthe Board as an independent member. In June the Company alsoannounced the resignation of CFO Leo Steenbergen, and the appointmentof Guillaume Jetten as his replacement as per 1 July 2009. Galapagosreceived the Innovative Enterprise qualification in France, openingup the Galapagos investment opportunity to a new category of Frenchinvestors.Details of the financial resultsNote: All comparisons are relative to pro forma figures for June 30,2008 which exclude BioFocus DPI's San Diego operations.RevenuesGalapagos' revenues for the first half of 2009 amounted to ?37.7 Mcompared to ?31.6 M on a pro forma basis in the same period of 2008.The R&D division is on track with revenues of ?18.0 M compared to?14.2 M in the same period last year (+27%). BioFocus DPI reportedtotal revenues of ?26.1 M, including ?6.4 M in inter-companyrevenues. BioFocus DPI external revenues grew by 11% as compared tothe same period last year.ResultsThe net loss for the first half-year of 2009 was ?7.3 M, compared tothe loss of ?7.9 M on a pro forma basis for the first six months of2008. The R&D division reported a segment loss of ?9.9 M, comparedto ?5.8 M the first six months of 2008. The segment profit forBioFocus DPI over the first six months of the year was ?3.4 M,compared to a ?1.2 M segment loss in the same period last year, on apro forma basis. This improvement is the result of higher marginsand further payback of earlier restructuring efforts, and is in linewith management expectations. Visibility in the pipeline and theimproved margins give management confidence that BioFocus DPI remainson track to deliver improved revenues, profit, and cash generationfor the full year.R&D expenses for the group in the first half year of 2009 were ?25.8M compared to ?18.0 M in the same period of 2008. This plannedincrease was due to the broader portfolio of research programs andincreased costs of later stage clinical programs.General and administrative expenses for the group were ?9.9 M in thefirst half of 2009, compared to the ?9.3 M in the first six months of2008. The general and administrative expenses decreased as apercentage of revenues from 29% in 2008 to 26% in 2009.Cash flow and cash positionA net decrease of ?8.6 M in cash and cash equivalents was recordedduring the first half of 2009, compared to a decrease of ?21.9 M inthe same period last year. The net cash flow used in operatingactivities was ?5.4 M, as compared to ?17.7 M during the same periodin 2008; this decrease is due to a larger tax refund received fromthe French government for research investments, an additionalnon-cash provision for share-based compensation, as well asdifferences in timing between revenue recognition and cash receivedin the two periods. Galapagos' cash and cash equivalents amounted to?18.7 M on 30 June 2009.Outlook 2009The Company reiterates full-year 2009 guidance figures: revenues of?100 M, a 30% increase in annual consolidated sales of 2008; R&Drevenues of approximately ?60 M; an improved cash contribution fromBioFocus DPI and, based on the contracts in the pipeline andanticipated R&D payments, a maximum cash burn of ?7 M, resulting in ayear end cash position of ?20 M.The Company continues to advance toward achievement of its strategicobjectives for 2009: * Completion Phase Ia, initiation of Phase Ib for GLPG0259 first-in-class molecule * Completion Phase Ia for GLPG0187 bone metastasis molecule * Initiation Phase II trial for Nanocort * Finalization of pre-clinical testing for SARM & osteoarthritis candidates * Increased revenues, profit, and cash flow from the BioFocus DPI service division * Further capitalize on target discovery platformInterim Report 2009The electronic version of Galapagos' Interim Report for half year2009 is now available online atwww.glpg.com/investor/financial_reports.htm. Printed versions of thereport can be requested by e-mailing ir(at)glpg.com.Conference call and webcast presentationGalapagos will conduct a conference call open to the public today at11.00 Central European Time (CET), which will also be webcast. Toparticipate in the conference call, please call +32 2290 1791, tenminutes prior to commencement. A question and answer session willfollow the presentation of the results. Click here to access thelive audio webcast. The archived webcast also will be available forreplay shortly after the close of the call.Financial calendar 20093Q09 interim update 13 November 2009Annual results 2009 5 March 2010Annual shareholders meeting 27 April 2010About GalapagosGalapagos (Euronext: GLPG; OTC: GLPYY) is a drug discovery anddevelopment company with small molecule programs in bone and jointdiseases, bone metastasis, cachexia, anti-infectives and metabolicdiseases. It has established risk sharing alliances with GSK,Janssen Pharmaceutica, Eli Lilly and Merck and Co. Through analliance with MorphoSys, Galapagos is also developing new antibodytherapies in bone and joint diseases. Its division BioFocus DPIoffers a full suite of target-to-drug discovery products and servicesto pharmaceutical and biotech companies and to patient foundations,encompassing target discovery and validation, screening and drugdiscovery through to delivery of pre-clinical candidates. Galapagoscurrently employs 495 people and operates facilities in sixcountries, with global headquarters in Mechelen, Belgium. More infoat: www.glpg.com.CONTACTGalapagos NVOnno van de Stolpe, CEOTel: +31 6 2909 8028ir(at)glpg.comThis release may contain forward-looking statements, including,without limitation, statements containing the words "believes,""anticipates," "expects," "intends," "plans," "seeks," "estimates,""may," "will," "could," "stands to," and "continues," as well assimilar expressions. Such forward-looking statements may involveknown and unknown risks, uncertainties and other factors which mightcause the actual results, financial condition, performance orachievements of Galapagos, or industry results, to be materiallydifferent from any historic or future results, financial conditions,performance or achievements expressed or implied by suchforward-looking statements. Given these uncertainties, the reader isadvised not to place any undue reliance on such forward-lookingstatements. These forward-looking statements speak only as of thedate of publication of this document. Galapagos expressly disclaimsany obligation to update any such forward-looking statements in thisdocument to reflect any change in its expectations with regardthereto or any change in events, conditions or circumstances on whichany such statement is based, unless required by law or regulation.[1] Excludes BioFocus DPI's San Diego operations[2] Full reference: Thathiah, A., Spittaels, K., Hoffmann, M., Staes,M., Cohen, A., Horré, K., Vanbrabant, M., Coun, F., Baekelandt, V.,Delecourte, A., Fischer, D.F., Pollet, D., De Strooper, B., andMerchiers, P. The orphan G protein-coupled receptor 3 modulatesamyloid-beta peptide generation in neurons. Science 323 (2009),946-951.This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 07.08.2009 - 07:31 Uhr
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