Key 2020 events:
- Jyseleca approved for rheumatoid arthritis (RA) in Europe &
Japan
- Gilead decided not to pursue the RA indication in the U.S. as a
result of Complete Response Letter (CRL) from the Food and Drug
Administration (FDA)
- Galapagos to assume commercialization of Jyseleca in Europe by
the end of 2021, first sales achieved
- Primary endpoint achieved in SELECTION Phase 3 trial in
ulcerative colitis (UC) with Jyseleca, submitted for approval in UC
in Europe
- Positive topline results in PINTA Phase 2 trial with ‘1205 in
idiopathic pulmonary fibrosis (IPF); no signal with ‘1972 in
ROCCELLA Phase 2b trial in osteoarthritis (OA)
- Initiation of five Proof-of-Concept studies with Toledo program
lead candidate ‘3970, a SIK2/3 inhibitor
- Sale of fee-for-service business Fidelta to Selvita
- Business development deals to complement the inflammation &
fibrosis pipelines
Financial results:
- Group revenues & other income from continuing operations of
€530 million, compared to €886 million in 2019
- Net loss of €305 million, compared to a net profit of €150
million in 2019
- Operational cash burn¡ of €517 million, within the guided
range
- Strong balance sheet with cash and current financial
investments of €5.2 billion and €2.8 billion in deferred
revenues
Audio webcast presentation tomorrow, 19
February 2021 at 14.00 CET/8 AM ET, +32 (0)2 793 3847, code
8873918,
https://www.glpg.com/webcasts
Mechelen, Belgium; 18 February 2021,
22.01 CET, regulated information – Galapagos NV (Euronext
& NASDAQ: GLPG) presents financial results 2020 and reviews the
key events for the full year 2020.
“We are turning the page on an eventful 2020,”
said Onno van de Stolpe, CEO of Galapagos. “We received the very
disappointing CRL from the FDA for Jyseleca for RA, and as a
result, our partner Gilead will not commercialize Jyseleca in the
U.S. in this indication. That being said, 2020 is also marked by
our first ever approval in both Europe and Japan, and with the
renegotiated agreement with Gilead, we are excited to bring
Jyseleca to patients throughout Europe. Moreover, following the
positive Phase 3 results in UC, we are looking forward to
potentially adding a second indication in Europe in 2021.
Our earlier inflammation pipeline continues to
advance, including our Toledo program, where we currently are
conducting 5 patient trials with our SIK2/3 inhibitor ‘3970, with
read-outs of three Proof-of-Concept trials (PoCs) expected mid this
year.
In our fibrosis portfolio we made progress last
year, with the positive topline results in our PINTA trial in IPF,
preclinical candidate nomination of a new Toledo compound directed
toward IPF, and the inlicensing of exciting new molecules. We
recently discontinued all development with ziritaxestat due to an
insufficient risk-benefit profile observed in the ISABELA Phase 3
program.
Given the recent setbacks in our late stage
portfolio, we aim to assess lessons learned and will continue to
reassess the R&D portfolio in light of this learning.”
Bart Filius, COO and CFO of Galapagos, added:
“We ended 2020 with again a very strong balance sheet, providing us
with the capital to leverage our R&D engine to execute on our
novel target based programs. We remain focused on investing in our
maturing clinical pipeline of candidates. We landed our operational
cash burni in 2020 in line with our guidance at €517 million,
including the milestones received for the approval of Jyseleca in
Europe and Japan. Following the very recent discontinuation of the
ziritaxestat trials, we aim to review our plans for 2021, after
which we expect to give cash burn guidance for 2021.”
Key figures (consolidated)(€ millions, except
basic & diluted income/loss (-) per share)
|
31 Dec 2020 Group total |
31 Dec 2019 Group total (*) |
Revenues
and other income |
530.3 |
885.8 |
R&D
expenditure |
-523.7 |
-420.1 |
G&Aii and
S&M expensesiii |
-185.2 |
-97.0 |
Operating
profit / loss (-) |
-178.6 |
368.7 |
Fair value
re-measurement of financial instruments |
3.0 |
-181.6 |
Other financial
result |
-134.2 |
-38.6 |
Income taxes |
-1.2 |
0.2 |
Net
profit / loss (-) from continuing operations
Net profit from discontinued operations
Net profit / loss (-) of the year
|
-311.0 5.6
-305.4 |
148.7 1.1
149.8 |
Basic
income / loss (-) per share (€) Diluted income /
loss (-) per share (€) |
-4.69 -4.69 |
2.60 2.49 |
Current
financial investments and cash and cash equivalents at
year-end |
5,169.3 |
5,780.8 |
(*) The 2019 comparatives have been restated to
consider the impact of classifying the Fidelta business as
discontinued operations in 2020.
Details of the financial
results
We previously held two operating segments. Due
to the completion of the sale of our fee-for-service business
(Fidelta) to Selvita on the 4th January 2021 for an enterprise
value of €31.2 million (plus the customary adjustments for net cash
and working capital), the results of Fidelta are presented as “Net
results from discontinued operations” in our consolidated income
statements for the year 2020 and 2019.
Revenues and other income from
continuing operations
Our revenues and other income from continuing
operations for 2020 amounted to €530.3 million, compared to €885.8
million in 2019. Revenues (€478.1 million in 2020 compared to
€834.9 million in 2019) were lower due to the one-time revenue
recognition in 2019 of the upfront payment received from Gilead in
August 2019 related to ziritaxestat for €667.0 million. In 2020,
our revenues from the Gilead collaboration (€473.9 million) related
to (i) the exclusive access to our drug discovery platform
(€229.6 million) and (ii) the filgotinib revenue recognition
(€228.1 million). Additionally we have recognized royalty income
from Gilead for Jyseleca for €16.2 million.
Due to the approval of Jyseleca by both the
Japanese and European authorities on 25 September 2020, we received
a total milestone of $105.0 million (€90.2 million) from Gilead. As
a consequence of the recently renegotiated collaboration for
filgotinib, we also have accrued for a €160 million payment
expected from Gilead in our 2020 financial statements. Both amounts
are recognized in revenue over time until the end of the
development period.
Our deferred income balance on 31 December 2020
includes €2.0 billion allocated to our drug discovery platform that
is recognized linearly over 10 years, and €0.8 billion for the
filgotinib development (including considerations for the previous
and the renegotiated collaboration combined) that is recognized
over time until the end of the development period.
Other income (€52.2 million vs €50.9 million for
the same period last year) mainly consists of incentives income
from the government for our R&D activities.
Results from continuing
operations
We realized a net loss from continuing
operations in 2020 of €311.0 million, compared to a net profit of
€148.7 million in 2019.
We reported a net operating loss in 2020 of
€178.6 million, compared to a net operating profit of €368.7
million in 2019.
Our R&D expenditure increased by 25% in 2020
to €523.7 million compared to €420.1 million in 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 Jyseleca in Europe,
contributed to the increase in our S&M and G&A expenses
which were respectively €66.5 million and €118.8 million in 2020,
compared to €24.6 million and €72.4 million in 2019.
We reported a non-cash fair value gain amounting
to €3.0 million resulting from the re-measurement of initial
warrant B issued to Gilead, primarily due to the evolution of the
Galapagos share price and its implied volatility.
Net other financial loss in 2020 amounted to
€134.2 million, compared to net other financial loss of €38.6
million in 2019, and was primarily attributable to €106.4 million
of unrealized exchange loss on our cash and cash equivalents and
current financial investments in U.S. dollars (€10.6 million of
unrealized exchange loss in 2019), and to €15.9 million of negative
changes in (fair) value of current financial investments (€3.1
million of net negative changes in (fair) value in 2019).
Group net results
We reported a group net loss in 2020 of €305.4
million, compared to a group net profit of €149.8 million in
2019.
Cash position
Current financial investments and cash and cash
equivalents totaled €5,169.3 million on 31 December 2020, as
compared to €5,780.8 million on 31 December 2019.
The net decrease comprises (i) €517.4 million of
operational cash burn, within the guided range, (ii) offset by
€28.3 million of cash proceeds from capital and share premium
increase from the exercise of subscription rights in 2020, and
(iii) €106.4 million of unrealized negative exchange rate
differences and €15.9 million of negative changes in (fair) value
of current financial investments.
Furthermore, our balance sheet on 31 December
2020 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 €135.7
million.
Outlook 2021
We anticipate a year filled with announcements
on regulatory developments with Jyseleca as well as progress in our
deep pipeline of novel target-based candidates.
In early 2021, Jyseleca received a
recommendation by NICE in the UK for use in moderate to severe
active RA patients. This is a landmark decision, as Jyseleca is the
first JAK inhibitor and first advanced therapy recommended by NICE
in the moderate disease population. Going forward, we anticipate
reimbursement decisions in most key European markets for Jyseleca
in RA this year, as we complete the transition to a full European
commercial operation by year end. We anticipate a Committee for
Medicinal Products for Human Use (CHMP) opinion and a European
Commission (EC) approval decision for Jyseleca in UC, as well
as Gilead’s submission for approval of Jyseleca in UC in Japan. We
expect to update the markets on the MANTA/RAy semen parameter
studies, which determines the path forward for inflammatory bowel
disease (IBD) indications with Jyseleca in the U.S. We expect that
our collaboration partner Gilead will complete recruitment for the
global DIVERSITY Phase 3 trial in Crohn’s disease this year.
Within our broader inflammation portfolio, we
expect to report topline results from several trials this year,
including a Phase 1b trial with TYK2 inhibitor ‘3667 in psoriasis,
a Phase 1b trial with JAK1 inhibitor ‘555 via intra-articular
injection in OA, and three proof-of-concept studies with lead
Toledo candidate SIK2/3 inhibitor ‘3970 in psoriasis, UC and
RA.
Within our fibrosis portfolio, we expect to
progress early clinical compounds with novel mechanisms of action,
casting a wide net with the aim to develop novel treatments to help
patients suffering from this debilitating disease.
Following the very recent discontinuation of the
ziritaxestat trials, we aim to review our plans for 2021, after
which we expect to give cash burn guidance for 2021.
Annual report 2020
Galapagos is currently finalizing its financial
statements for the year ended 31 December 2020. The auditor has
confirmed that his audit procedures, which are substantially
completed, have not revealed any material corrections required to
be made to the financial information included in this press
release. Should any material changes arise during the audit
finalization, an additional press release will be issued. Galapagos
expects to be able to publish its fully audited annual report for
the full year 2020 on or around 25 March 2021.
Conference call and webcast
presentation
Galapagos will conduct a conference call open to
the public tomorrow, 19 February 2021, 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
scheduled start of the call:
Confirmation
Code:
8873918
Belgium: |
+32 2 793 3847 |
France: |
+33 1 70 700 781 |
Netherlands: |
+31 20 795 6614 |
United Kingdom: |
+44 2071 928338 |
United States: |
+1 646 741 3167 |
A question and answer session will follow the
presentation of the results. Go to https://www.glpg.com/webcasts to
access the live audio webcast. The archived webcast will also be
available for replay shortly after the close of the call.
Financial calendar
25 March
2021
Publication Annual Report and 20-F 202028 April
2021
Annual Shareholders’ meeting in Mechelen, Belgium6 May
2021
First quarter 2021 results (webcast 7 May)5 August
2021
Half year 2021 results (webcast 6 August)4 November
2021 Third
quarter 2021 results (webcast 5 November)24 February
2022
Full year 2021 results (webcast 25 February)
About Galapagos
Galapagos (Euronext & NASDAQ: GLPG)
discovers and develops small molecule medicines with novel modes of
action, several of which showed promising patient results and are
currently in late-stage development in multiple diseases.
Galapagos’ pipeline comprises discovery programs through Phase 3
programs in inflammation, fibrosis, osteoarthritis and other
indications. The Company’s ambition is to become a leading global
biopharmaceutical company focused on the discovery, development and
commercialization of innovative medicines.
With the exception of filgotinib's approval for
the treatment of RA by the European Commission and Japanese
Ministry of Health, Labour and Welfare, all of our drug candidates
are investigational; their efficacy and safety have not been
fully evaluated by any regulatory authority and they are not yet
approved for any use outside of clinical trials.
Contacts
Investors:
Elizabeth GoodwinVP Investor Relations+1 781 460
1784
Sofie Van GijselSenior Director Investor
Relations+32 485 19 14 15ir@glpg.com
Media:
Carmen VroonenGlobal Head Communications & Public Affairs+32
473 824 874
Anna GibbinsSenior Director Therapeutic Areas Communications+44
7717 801900
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 and regarding the
amendment of our arrangement with Gilead for the commercialization
and development of Jyseleca (filgotinib), including Gilead’s
recruitment in the Phase 3 trial in Crohn’s disease, the amount and
timing of potential future milestones, opt-in and/or royalty
payments by Gilead, Galapagos’ strategic R&D ambitions and
potential changes of such ambitons, the guidance from
management (including the timing and/or outcome of the review of
our plans for 2021, and of the guidance regarding the expected
operational cash burn during financial year 2021),
commercialization of Jyseleca, including in Europe, financial
results, timing and/or results of clinical trials, including trials
with our SIK2/3 inhibitor ‘3970 (Toledo), TYK2 inhibitor ‘3667,
JAK1 inhibitor ‘555, and ziritaxestat and the MANTA/MANTA-RAy
trials with filgotinib, mechanisms of action and potential
commercialization of our product candidates, interaction with
regulators, 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 indication for
Jyseleca in Europe, Japan, and the US, such additional regulatory
authorities requiring additional studies, the timing or
likelihood of reimbursement decisions for filgotinib, including in
key European markets, 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 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 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, including ziritaxestat for IPF, systemic sclerosis
or any other indication), Galapagos’ reliance on collaborations
with third parties (including our collaboration partner for
filgotinib and ziritaxestat, Gilead), that Galapagos’ expectations
regarding the timing of and the risks related to completing and
implementing the amendment of our arrangement with Gilead for the
commercialization and development of Jyseleca (filgotinib) and
Galapagos’ expectations regarding the costs and revenues associated
with the transfer of European commercialization rights to
filgotinib may be incorrect, and the inherent uncertainty
associated with estimating the commercial potential of our product
candidates, including Galapagos’ estimates regarding the commercial
potential of ziritaxestat, and the possibility that Galapagos and
Gilead may make a strategic decision to discontinue development of
ziritaxestat and that ziritaxestat may as a result never be
successfully commercialized, including unanticipated expenses in
connection with such decision and the potential effects on
Galapagos’ revenues and earnings, 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.
Jyseleca®, Gilead and the Gilead logo are
trademarks of Gilead Sciences, Inc. or its related companies.
i 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:
i.the net proceeds, if any, from share capital
and share premium increases included in the net cash flows
generated / used (–) in financing activitiesii.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 2020 amounted
to €517.4 million and can be reconciled to our cash flow statement
by considering the increase in cash and cash equivalents of €352.0
million, adjusted by (i) the cash proceeds from capital and share
premium increase from the exercise of subscription rights by
employees for €28.3 million and (ii) the net sale of current
financial investments amounting to €841.1 million.ii General and
administrativeiii Sales and marketing
iv Crédit d’Impôt Recherche refers to an
innovation incentive system underwritten by the French
government.
- GLPG FY20 financial tables
- Pipeline and capital for growth
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