UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of August 2015
Commission File Number: 001-37384
GALAPAGOS NV
(Translation of registrant’s name into English)
Generaal De Wittelaan L11 A3
2800 Mechelen, Belgium
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
EXHIBITS
| Exhibit |
Description | |
| 99.1 | Press Release dated August 5, 2015 | |
| 99.2 | Galapagos NV Half-year Report 2015 | |
| 99.3 | Press Release dated August 6, 2015 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GALAPAGOS NV | ||||||
| Date: August 6, 2015 | By: | /s/ Bart Filius | ||||
| Bart Filius | ||||||
| Chief Financial Officer | ||||||
Exhibit 99.1
Regulated information 5 August 2015, 22.00 CET
Galapagos on track to deliver on pipeline in second half 2015
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:
o Group revenues €36.9 M
o Group net loss €34.2 M,reflecting planned increase in pipeline investment
o 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 Total 30 June 2014
Group 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 exceptional items
-35.6
-15.1
Restructuring & integration costs -0.6
Operating result -35.6 -15.7
Net financial result -0.1 1.1
Result on divestment
Taxes 1.5
Net result from continuing operations
-34.2
-14.6
Net result from discontinued operations1
70.5
Net result -34.2 55.9
Basic income/loss per share (€) -1.06 1.87
Cash, Cash equivalents and
Restricted cash
404.6³
231.52
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
o Rheumatoid arthritis
o 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
| 1 |
|
Crédit d’Impôt Recherche refers to an innovation incentive system underwritten by the French government |
o 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.
o Topline 24 week data for DARWIN 2 are expected later this month, with a licensing decision by AbbVie expected following this
o Inflammatory bowel disease
o 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
o 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
o Cystic fibrosis
o AbbVie presented novel assays used by Galapagos and AbbVie to screen for novel
corrector-potentiator combinations at ECFS 2015
o 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
o Topline safety and tolerability results of the Phase 1 with potentiator GLPG1837 are expected next quarter
o Initiation of Phase 2 with GLPG1837 in Class III patients and of Phase 1 with corrector
GLPG2222 are expected before end 2015
o IPF
o 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
o Other
o We announced two grant awards from Flemish IWT: €2.5 million for antibiotic research
and €1.6 million for hepatitis B research
o 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
o Raised €261 million net proceeds from a global offering and concurrent listing on NASDAQ, included participation by AbbVie ($30 million) and JnJ ($25 million)
o Commemorated 10 years as a publicly listed company on Euronext Amsterdam and Brussels
o Fidelity, Federated, and BNP Paribas notified of new major shareholdings
o 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@glpg.com.
Transparency legislation
In accordance with Belgian transparency legislation2, 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
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
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@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.
Exhibit 99.2
Galapagos NV
Half-year Report 2015
Galapagos NV Half-year Report 2015
OTHER INFORMATION
Contents
| 1 |
|
The Galapagos Group |
| 4 |
|
Report of the Auditor |
Letter from the management. 4
At a glance . 7
Risk factors . 9
Related party transactions . 9
Statement by the Board of Directors . 10
The Galapagos share. 10
Disclaimer and other information . 11
Report of the Auditor . 30
| 5 |
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Other information |
Glossary of terms . 31
Financial calendar . 34
Colophon . 35
Contact. 35
| 2 |
|
Financial statements |
Consolidated statements of income and comprehensive income . 14
Consolidated statements of financial position . 16
Consolidated cash flow statements. 18
Consolidated statements of changes in equity . 20
| 3 |
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Notes |
Basis of preparation . 22
Significant accounting policies . 22
Details of the unaudited half-year 2015 results 22
Contingencies and commitments. 27
Events after the end of the reporting period . 28
Approval of interim financial statements . 29
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Galapagos NV Half-year Report 2015
The
Galapagos Group
An overview of Galapagos and our performance in H1 2015
THE GALAPAGOS GROUP
Letter from the management
—
Dear Shareholder,
Our aim is to become a leading global biotechnology company focused on the development and commercialization of medicines for diseases with a high unmet medical need. Our strategy is to leverage our unique and proprietary target discovery platform, which facilitates discovery and development of therapies with novel modes of action. In the first half of 2015, the Galapagos team executed very well and made substantial progress toward achievement of our goals.
Galapagos reported encouraging Phase 2B results with selective JAK1 inhibitor filgotinib in rheumatoid arthritis (RA) in April and July this year, forming a strong basis for Phase
3 trials and creating a new opportunity for safe oral therapy for patients. Furthermore, Galapagos and our partner AbbVie showed promising pre-clinical data on compounds for its potential triple combination therapy for cystic fibrosis, the last ingredient of which should be selected as a candidate later this quarter. On the back of these successes and the promise of our target and drug discovery approach, in May
2015 Galapagos listed on the NASDAQ and attracted
€279 million gross proceeds in new capital. As a result, we completed the first half of 2015 with a very strong balance sheet to progress our pipeline of programs in inflammation, CF, and fibrosis therapies. Operationally in the second half of 2015, we look forward to completing the data package for AbbVie’s licensing decision on filgotinib, and seeing the 10 week primary endpoint results with filgotinib in Crohn’s before year end. We remain on track in our development of a triple combination therapy to Class II patients in cystic fibrosis. We anticipate starting our first patient study in CF in the Class III mutation with GLPG1837 later this year. In Q1
2016 we expect to report Phase 2 Proof-of-Concept results with GPR84 inhibitor GLPG1205 in ulcerative colitis patients and initiate an exploratory Phase 2 study with autotaxin inhibitor GLPG1690 in idiopathic pulmonary fibrosis.
Overview of progress in our pipeline in H1
2015
? 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 topline primary endpoint 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 in Q4
? Initiation of Phase 2 with GLPG1837 in Class III patients and of Phase 1 with corrector GLPG2222 are expected before end 2015
| 4 |
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Galapagos NV Half-year Report 2015
THE GALAPAGOS GROUP
? 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 (IPF) 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 us. 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
Interim financial result
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 division, 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. This increase is primarily due to a higher provision for short term and long term management bonus, amongst other as a result of the recent evolution of Galapagos share price change relative to the Next Biotech Index.
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 totalled
€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
| 5 |
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Galapagos NV Half-year Report 2015
THE GALAPAGOS GROUP
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.
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 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.
We thank you, our shareholders, for your support. Galapagos has delivered a phenomenal first half year 2015, with more results to come in the next months. Thank you for staying with us through the years and giving us the opportunity to deliver on our strategic plan.
Onno van de Stolpe
CEO
Raj Parekh
Chairman of the Board of
Directors
[1] Crédit d’Impôt Recherche refers to an innovation incentive system underwritten by the French government
| 6 |
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Galapagos NV Half-year Report 2015
THE GALAPAGOS GROUP
At a glance
—
Key figures (IFRS) Galapagos Group
(thousands of €, if not stated otherwise) 06/30/2015 06/30/2014
Results1
Revenues and other income 36,921 45,053
R&D expenditure (63,283) (52,804)
S, G&A expenses (9,221) (7,397)
Restructuring and integration costs (594)
Personnel expenses (including share-based compensation) (22,048) (19,158)
Capital expenditure 2,464 1,157
Depreciation and amortization of (in)tangible assets 1,804 1,918
EBIT (35,583) (15,742)
EBITDA (37,387) (17,660)
Net loss from continuing operations (34,183) (14,621)
Net income from discontinued operations 70,487
Net income / loss (–) (34,183) 55,866
Galapagos share
Number of shares issued on 30 June 38,894,582 30,098,837
Basic and diluted loss per share from continuing operations (in €) (1.06) (0.49)
Dividend (in €)
Share price on 30 June (in €) 45.80 14.18
Personnel data
Total Group employees on 30 June (Number) 410 424
1 Service activities (sold to Charles River on 1 April 2014) for the six months ended 30 June 2014 are shown on the line item “Net income from discontinued operations”. All other line items consist of amounts from continuing operations, except for line item “Net income / loss (–)”, which includes both continuing and discontinued operations.
Balance sheet
(thousands of €, if not stated otherwise) 06/30/2015 12/31/2014
Total assets 488,263 270,467
Cash, cash equivalents and restricted cash 404,638 198,440
Total liabilities 44,808 64,332
Stockholders’ equity 443,455 206,135
Equity ratio (in %) 91% 76%
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Galapagos NV Half-year Report 2015
THE GALAPAGOS GROUP
Employees per site as of 30 june 2015
139 staff
zagreb (HR)
| 8 |
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Galapagos NV Half-year Report 2015
THE GALAPAGOS GROUP
Risk factors
—
Galapagos’ actual results and timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements included herein. Galapagos cautions you that forward-looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity, and the development of the industry in which it operates may differ materially from any such forward- looking statements. In addition, even if its 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.
Management refers to its description of risk factors in the
2014 Annual Report, pp. 26-32, as updated and supplemented by its description of risk factors in the prospectus filed with the U.S. Securities and Exchange Commission on 14 May 2015 (and included in the listing prospectus approved by the FSMA on 18 May 2015), pp. 11-51. In summary, the principal risks and uncertainties faced by the Group relate to: Galapagos’ financial position and need for additional capital; product development, regulatory approval and commercialization; Galapagos’ reliance on third parties; Galapagos’ competitive position; Galapagos’ intellectual property; Galapagos’ organization, structure and operation (including but not limited to certain risks related to its status as a U.S. publicly listed company following the public offering of its shares (in the form of ADSs) and listing on NASDAQ in May 2015) and market risks relating to the Galapagos shares and ADSs.
Management also refers to the description of the Group’s financial risk management given in the 2014 Annual Report, pp. 108-110, which remains valid.
Because Galapagos’ reporting currency is the euro, the operations and financial position of entities operating in other currencies needs to be translated into euros in the consolidation process. As there is an ongoing fluctuation between these foreign currencies and the euro, a negative impact might occur on the consolidated financial results.
Galapagos cautions readers not to place undue reliance on any forward-looking statements made by it, which speak only as of the date they are made. Galapagos disclaims any obligation, except as specifically required by law, to publicly update or revise any such statements to reflect any change in its expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
Related party transactions
—
In the first six months of 2015, no transactions with related parties which have a material impact on Galapagos’ financial position and results took place. There were also no changes to related party transactions disclosed in the 2014 Annual Report or the prospectus filed with the U.S. Securities and Exchange Commission on 14 May 2015 (and included in the listing prospectus approved by the FSMA on 18 May 2015) that potentially had a material impact on the financials of the first six months of 2015.
9
Galapagos NV Half-year Report 2015
THE GALAPAGOS GROUP
Statement by the Board of Directors
—
The Board of Directors of Galapagos NV declares that, as far as it is aware, the financial statements in this Half-year
The Board of Directors of Galapagos NV further declares that this Half-year Report gives a true and fair view on the important developments and significant transactions with related parties in the period under review and their impact on the interim financial statements, as well as on the most important risks and uncertainties pertaining to the remainder of the current financial year.
On behalf of the Board of Directors
Report, are prepared according to the applicable standards for financial statements, and give a true and fair view of the equity, financial position and the results of Galapagos NV and its consolidated companies.
Onno van de Stolpe
CEO
Raj Parekh
Chairman of the Board of
Directors
The Galapagos share
—
Performance of the Galapagos share on Euronext
The Galapagos share increased in value in the first half of 2015, largely due to appreciation for the DARWIN 1 & 2 results at 12 weeks and the successful NASDAQ transaction.
10
Galapagos NV Half-year Report 2015
THE GALAPAGOS GROUP
Disclaimer and other information
—
Financial calendar 2015
Third quarter results 2015
Full year results 2015
Annual shareholders meeting
13 November 2015
| 4 |
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March 2016 |
26 April 2016
Galapagos NV is a limited liability company organized under the laws of Belgium and has its registered office at Generaal De Wittelaan L11 A3, 2800 Mechelen, Belgium. Throughout this report, the term “Galapagos NV” refers solely to the non- consolidated Belgian company and references to “the Group” or “Galapagos” include Galapagos NV together with its subsidiaries.
According to Belgian law, Galapagos must publish its Half- year Report in Dutch. Galapagos also provides an English translation. In case of differences in interpretation, the Dutch version will take precedence. Galapagos is responsible for the translation and conformity between the Dutch and English versions.
This document is available to the public free of charge and upon request:
Galapagos NV Investor Relations
Generaal De Wittelaan L11 A3
2800 Mechelen, Belgium
Tel: +32 15 34 29 00
Email: ir@glpg.com
An electronic version of the Half-year Report 2015 is available on the website of Galapagos, www.glpg.com.
Galapagos will use reasonable efforts to ensure the accuracy of the electronic version, but does not assume responsibility if inaccuracies or inconsistencies with the printed document arise as a result of any electronic transmission. Therefore, Galapagos considers only the printed version of the Half- year Report 2015 to be legally valid. Other information on the website of Galapagos or on other websites does not form a part of this Half-year Report.
Listings
Euronext Amsterdam and Brussels: GLPG NASDAQ: GLPG
Financial year
The financial year starts on 1 January and ends on
31 December.
Auditor
Deloitte Bedrijfsrevisoren B.V. o.v.v.e. CVBA, represented by
Gert Vanhees
Berkenlaan 8b
1931 Diegem, Belgium
Forward-looking statements
This Half-year Report 2015 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 report include, but are not limited to, the first two paragraphs of the Letter from Management, 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 may 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
11
Galapagos NV Half-year Report 2015
THE GALAPAGOS GROUP
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 Galapagos’ Securities and Exchange Commission filing and reports, including in the prospectus filed with the SEC on May 14, 2015 and future filings and reports by Galapagos. Galapagos also refers to the “Risk Factors” section of this report. 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.
12
Galapagos NV Half-year Report 2015
Financial statements
Consolidated interim financial statements for the first half of 2015
FINANCIAL STATEMENTS
Consolidated statements of income and comprehensive income
—
(unaudited)
Consolidated income statement
(thousands of €, except share and per share data)
Six months ended 30 June,
2015 2014
Revenues 26,666 35,457
Other income 10,255 9,596
Total revenues and other income 36,921 45,053
Research and development expenditure (63,283) (52,804)
General and administrative expenses (8,693) (6,716)
Sales and marketing expenses (528) (682)
Restructuring and integration costs (594)
Total operating costs (72,504) (60,795)
Operating loss (35,583) (15,742)
Finance income 1,241 1,636
Finance expense (1,310) (515)
Loss before tax (35,651) (14,621)
Income taxes 1,468
Net loss from continuing operations (34,183) (14,621)
Net income from discontinued operations 70,487
Net income / loss (–) (34,183) 55,866
Net income / loss (–) attributable to:
Owners of the parent (34,183) 55,866
Basic and diluted income / loss (–) per share (in €) (1.06) 1.87
Basic and diluted loss per share from continuing operations (in €) (1.06) (0.49)
Weighted average number of shares (in thousands of shares) 32,380 29,930
14
Galapagos NV Half-year Report 2015
FINANCIAL STATEMENTS
Consolidated statement of comprehensive income
(thousands of €)
Six months ended 30 June,
2015 2014
Net income / loss (–) (34,183) 55,866
Items that may be reclassified subsequently to profit or loss:
Translation differences, arisen from translating foreign activities 961 (153)
Translation differences, arisen from the sale of service division (1,787)
Other comprehensive income, net of income tax 961 (1,940)
Total comprehensive income attributable to:
Owners of the parent (33,222) 53,926
15
Galapagos NV Half-year Report 2015
FINANCIAL STATEMENTS
Consolidated statements of financial position
—
(unaudited)
(thousands of €) As at
30 June 2015 As at
31 December 2014
Assets
Intangible assets 1,575 2,015
Property, plant and equipment 11,178 10,091
Deferred tax assets 1,761 293
Non-current R&D incentives receivables 50,639 43,944
Non-current restricted cash 306 306
Other non-current assets 559 215
Non-currents assets 66,018 56,864
Inventories 361 281
Trade and other receivables 4,461 3,211
Current R&D incentives receivables 7,340 7,351
Cash and cash equivalents 397,477 187,712
Current restricted cash 6,855 10,422
Other current assets 5,751 4,625
Current assets 422,245 213,603
Total assets 488,263 270,467
16
Galapagos NV Half-year Report 2015
FINANCIAL STATEMENTS
(thousands of €) As at
30 June 2015 As at
31 December 2014
Equity and liabilities
Share capital 184,416 157,274
Share premium account 356,597 114,182
Other reserves (220) (220)
Translation differences (196) (1,157)
Accumulated losses (97,142) (63,944)
Total equity 443,455 206,135
Pension liabilities 3,011 2,865
Provisions 66 72
Finance lease liabilities 89 115
Other non-current liabilities 1,343 923
Non-current liabilities 4,509 3,976
Provisions 36 105
Finance lease liabilities 51 52
Trade and other payables 32,823 30,007
Current tax payable 2,584 2,582
Accrued charges 634 585
Deferred income 4,170 27,026
Current liabilities 40,299 60,356
Total liabilities 44,808 64,332
Total equity and liabilities 488,263 270,467
17
Galapagos NV Half-year Report 2015
FINANCIAL STATEMENTS
Consolidated cash flow statements
—
(unaudited)
(thousands of €)
Six months ended 30 June,
2015 2014
Cash and cash equivalents at beginning of period 187,712 138,175
Net income / loss (–) (34,183) 55,866
Adjustments for:
Tax income (–) / expenses (1,468) 233
Financial income (–) / expenses 68 (1,538)
Depreciation of property, plant and equipment 1,165 2,151
Amortization and impairment of intangible fixed assets 638 647
Net realized gain / loss (–) on foreign exchange transactions (309) 148
Share based compensation 985 1,540
Decrease in provisions (80) (52)
Increase in pension liabilities 146
Gain on sale of service division (67,480)
Operating cash flows before movements in working capital (33,038) (8,485)
Increase in inventories (80) (48)
Increase in receivables (7,847) (12,375)
Decrease in payables (21,681) (21,389)
Cash used in operations (62,647) (42,297)
Interest paid (23) (70)
Interest received 463 571
Net cash flows used in operating activities (62,207) (41,796)
Purchase of property, plant and equipment (2,264) (1,233)
Purchase of and expenditure in intangible fixed assets (200) (150)
Proceeds from disposal of property, plant and equipment 49 9
Disposals of subsidiaries, net of cash disposed 130,845
Increase (–) / decrease in restricted cash 3,000 (7,421)
Net cash flows generated in investing activities 585 122,050
18
Galapagos NV Half-year Report 2015
FINANCIAL STATEMENTS
(thousands of €)
Six months ended 30 June,
2015 2014
Repayment of obligations under finance leases and other debts (20) (139)
Proceeds from Capital and Share premium increases 288,917 2,382
Issue costs of capital increase paid (17,654)
Net cash flows generated in financing activities 271,243 2,243
Effect of exchange rate differences on cash and cash equivalents 144 133
Increase in cash and cash equivalents 209,765 82,630
Cash and cash equivalents at end of period 397,477 220,805
19
Galapagos NV Half-year Report 2015
FINANCIAL STATEMENTS
Consolidated statements of changes in equity
—
(unaudited)
Share
Share premium Translation Other Accumul.
(thousands of €) capital account differences reserves losses
Total
On 1 January 2014 154,542 112,484 170 47 (100,107) 167,137
Net income 55,866 55,866
Other comprehensive income (1,940) (1,940)
Total comprehensive income (1,940) 55,866 53,926
Share-based compensation 1,540 1,540
Exercise of warrants 1,649 733 2,382
Other 3 3
On 30 June 2014 156,191 113,217 (1,770) 47 (42,697) 224,988
On 1 January 2015 157,274 114,182 (1,157) (220) (63,944) 206,135
Net loss (34,183) (34,183)
Other comprehensive income 961 961
Total comprehensive income 961 (34,183) (33,222)
Share-based compensation 985 985
Issue of new shares 40,751 237,952 278,703
Share issue costs (19,360) (19,360)
Exercise of warrants 5,751 4,464 10,214
On 30 June 2015 184,416 356,597 (196) (220) (97,142) 443,455
20
Galapagos NV Half-year Report 2015
Notes
Notes to the unaudited consolidated interim financial statements
NOTES
Basis of preparation
—
The condensed financial statements have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the EU. The condensed financial statements don’t contain all information required for an annual report and should therefore be read in conjunction with the Company’s Annual Financial Report of 2014.
The condensed financial statements were subject to a limited review by the statutory auditor, but have not been audited.
Significant accounting policies
—
There were no significant changes in accounting policies applied by the Group in these condensed consolidated interim financial statements compared to those used in the most recent annual financial statements of 2014, except for the adoption of new standards and interpretations described below.
New standards
Standards and interpretations applicable for the annual period beginning on 1 January 2015
? Improvements to IFRS (2011-2013) (applicable for annual periods beginning on or after 1 January 2015)
? IFRIC 21 Levies (applicable for annual periods beginning on or after 17 June 2014)
The nature and the effect of these changes were taken into consideration, but the above amendments did not affect the interim condensed consolidated financial statements. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
Seasonality
The impact of seasonality or cyclicality on the Galapagos’ operations is not regarded as applicable to the unaudited interim condensed consolidated financial statements.
Details of the unaudited half-year 2015 results
—
General information
Galapagos sold its service division to Charles River Laboratories International, Inc. on 1 April 2014. As a result of this sale the service division is reported as discontinued operations. Group results of 2014 include both continuing and discontinued operations. The components of the operating result of 2014 discussed below are for the continuing operations only, as per IFRS
5 presentation. Following the sale of the service division on 1 April 2014, the continuing operations relate primarily to R&D
activities. Consequently there is one reportable segment.
22
Galapagos NV Half-year Report 2015
NOTES
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
The following table summarizes our revenues for the six months ended 30 June 2015 and 2014.
(thousands of €)
Six months Ended 30 June,
2015 2014
Milestone payments 1,408 10,335
Recognition of non-refundable upfront payments 22,665 23,403
Other revenues 2,593 1,718
Total revenues 26,666 35,457
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. Revenue recognized from upfront non-refundable payments related to the CF collaboration agreement with AbbVie signed in September 2013 and to the contract signed with AbbVie in February 2012 for the filgotinib program.
Other income
The following table summarizes our other income for the six months ended 30 June 2015 and 2014.
(thousands of €)
Six months Ended 30 June,
2015 2014
Grant income 1,853 2,600
Other income 8,402 6,996
Total other income 10,255 9,596
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 division, 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. This increase is primarily due to a higher provision for short term and long term management bonus, amongst other as a result of the recent evolution of Galapagos share price change relative to the Next Biotech Index.
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.
23
Galapagos NV Half-year Report 2015
NOTES
Liquid assets position
Cash, cash equivalents and restricted cash totalled €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 from operating activities of €62.2 million 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.
Capital increase
On 26 March 2015, warrants were exercised at various exercise prices with an average exercise price of €10.18 per warrant resulting in a share capital increase of €3,092 thousand (plus €2,727 thousand in issuance premium) and the issuance of 571,548 new ordinary shares.
On 19 May 2015, Galapagos successfully completed a global offering of 7,532,499 ordinary shares, a concurrent public offering in the US and private placement in Europe. The Company offered 5,746,000 ordinary shares through a public offering in the US in the form of American Depositary Shares, or ADSs, at a price of $42.05 per ADS, before underwriting discounts. The ADSs were evidenced by American Depositary Receipts, or ADRs, and each ADS represents the right to receive one ordinary share. The ADSs are listed on the NASDAQ Global Select Market under the symbol “GLPG.” Galapagos offered 1,786,499 ordinary shares through a European private placement at price of €37.00 per share, before underwriting discounts.
Galapagos received €278.7 million of gross proceeds from the global offering, decreased by €19.4 million of underwriter discounts and commission, and offering expenses, of which €17.7 million has been paid at 30 June 2015 and €1.7 million remains to be settled in cash. Total net cash proceeds from the global offering after remaining settlements will amount to €259.3 million.
On 19 June 2015, following warrant exercises at an average exercise price of €8.94 per warrant, Galapagos issued 491,406 new ordinary shares for a total capital increase (including issuance premium) of €4,395 thousand. CEO Onno van de Stolpe exercised
108,126 warrants, half of which he retained as shares. These exercised warrants were due to expire on 27 June 2015. Onno van de Stolpe has consequently increased his holding to a total of 518,289 shares, representing 1.3% of the outstanding Galapagos shares.
[1] Crédit d’Impôt Recherche refers to an innovation incentive system underwritten by the French government
24
Galapagos NV Half-year Report 2015
NOTES
Issued capital:
(thousands of €, except share data) Number of Shares Share Capital Share Premium
Share Capital and
Share Premium
On 1 January 2015 30,299,129 157,274 114,182 271,456
26 March 2015:
Exercise of Warrants 571,548 3,092 2,727 5,819
19 May 2015: Global Offering
Ordinary shares (fully paid) 1,786,499 9,665 56,436 66,100
ADSs (fully paid) 5,746,000 31,086 181,516 212,602
Underwriter discounts and offering
expenses (fully paid) (17,654) (17,654)
Offering expenses not yet settled in
cash at 30 June 2015 (1,706) (1,706)
Total Global Offering 7,532,499 21,391 237,952 259,343
19 June 2015:
Exercise of Warrants 491,406 2,659 1,737 4,395
On 30 June 2015 38,894,582 184,416 356,597 541,013
Discontinued operations
The following disclosure illustrates the results from our discontinued operations reported in the 30 June 2014 interim financial statements. In the first half of 2015, Galapagos does not hold discontinued operations to be disclosed in its financial statements.
On 1 April 2014, the Group sold its service division—comprising all service operations of BioFocus and Argenta in the UK and The Netherlands—to Charles River Laboratories International, Inc. In particular, the Group disposed of following companies which were previously fully consolidated: BioFocus DPI (Holdings) Ltd. and BioFocus DPI Ltd. (Saffron Walden, UK), Argenta Discovery
2009 Ltd. (Harlow, UK) and its subsidiary Cangenix Ltd. (Canterbury, UK). In addition, also certain assets from the Galapagos BV
(Leiden, The Netherlands) have been acquired by Charles River Laboratories International, Inc.
Consideration received
(thousands of €)
| 1 |
|
April, |
2014
Consideration received in cash and cash equivalents 137,760
Total consideration 137,760
Analysis of assets and liabilities over which control was lost
(thousands of €)
| 1 |
|
April, |
2014
Cash 6,115
Trade and other receivables 18,165
Current assets 24,280
25
Galapagos NV Half-year Report 2015
NOTES
(thousands of €)
| 1 |
|
April, |
2014
Goodwill 39,246
Fixed assets 13,397
Deferred tax assets 4,588
Non-current assets 57,231
Trade payables (2,569)
Other payables (4,527)
Current liabilities (7,096)
Provisions (604)
Deferred tax liabilities (1,996)
Other non-current liabilities (549)
Non-current liabilities (3,149)
Net assets disposed of 71,267
Gain on disposal of subsidiaries
(thousands of €)
| 1 |
|
April, |
2014
Total consideration 137,760
Net assets disposed of (71,267)
Effect from Cumulative Translation Adjustments reclassified from equity 1,787
Costs associated to sale (800)
Gain on disposal 67,480
The gain on disposal is included in the profit from discontinued operations for the six months ended 30 June 2014.
Net cash inflow on disposal of subsidiaries
(thousands of €)
| 1 |
|
April, |
2014
Consideration received in cash and cash equivalents 137,760
Less: cash and cash equivalent balances disposed (6,115)
Total consideration received 131,645
Costs associated to sale (800)
Cash in from disposal of subsidiaries, net of cash disposed 130,845
Result from discontinued operations for six months ended 30 June
(thousands of €, except share and per share data)
Six months ended 30 June,
2014
Service revenues 17,502
Other income 669
Total revenues and other income 18,171
Services cost of sales (11,288)
General and administrative expenses (3,768)
26
Galapagos NV Half-year Report 2015
NOTES
(thousands of €, except share and per share data)
Six months ended 30 June,
2014
Sales and marketing expenses (255)
Restructuring and integration costs (38)
Gain on sale of service division 67,480
Operating income 70,303
Finance income 417
Income before tax 70,720
Income taxes (233)
Net income from discontinued operations 70,487
Basic and diluted income per share from discontinued operations (in €) 2.36
Weighted average number of shares (in thousands of shares) 29,930
Cash flows from discontinued operations for six months ended 30 June
(thousands of €)
Six months ended 30 June,
2014
Net cash flows used in operating activities (2,162)
Net cash flows generated in investing activities 122,647
Net cash flows generated in financing activities
Net cash generated 120,486
Contingencies and commitments
—
Contractual obligations and commitments
The Group entered into lease agreements for office and laboratories which qualify as operating leases. The Group also has certain purchase commitments with CRO subcontractors principally. On 30 June 2015, the Group had outstanding obligations for future minimum rent payments and purchase commitments, which become due as follows:
Payments due by period
(thousands of €)
Total Less than More than
| 1 |
|
year 1–3 years 3–5 years 5 years |
Operating lease obligations 34,079 3,799 8,379 5,553 16,348
Purchase commitments 27,307 23,241 4,066
Total contractual obligations & commitments 61,386 27,040 12,445 5,553 16,348
The purchase commitments payable within one year are mainly comprised of engagements related to clinical studies for
€11.8 million (or 51% of our total purchase commitments in less than one year). Other purchase commitments relate to contracts with CROs and academics for R&D activities such as chemistry work, biology work and batch production.
27
Galapagos NV Half-year Report 2015
NOTES
Contingent liabilities and assets
The French entity has signed a lease agreement in October 2013 for new office premises in the “Parc Biocitech” in Romainville, France (with effect from 1 February 2015) to replace the current premises in Romainville. The agreement is entered into for a
12-year period. The net rent amounts to €1.4 million on an annual basis. Galapagos NV, as the parent company, has issued a guarantee on first demand for €2 million to lessor of the building. Additionally a bank guarantee, amounting to €3 million, was issued for the rental of the new premises. These guarantees have been released on June 30, 2015 after the move into the new facilities.
On 13 March 2014, the Group announced the signing of a definitive agreement to sell the service division operations to Charles River Laboratories International, Inc. (the “Buyer”) for a total consideration of up to €134 million. Charles River agreed to pay Galapagos an immediate cash consideration of €129 million. The potential earn out of €5 million due upon achievement of a target 12 months after transaction closing has not been achieved.
Approximately 5% of the total price consideration, including price adjustments, is being held on an escrow account which would have been released on 30 June 2015 if no claim had been introduced by the Buyer. To date, four claims have been introduced by the Buyer, of which three claims have been settled for a total amount of €1.0 million. One claim, which has been introduced by the Buyer in March 2015, is still being investigated. An amount of €0.3 million has been accrued in March
2015 based on a preliminary estimate of the exposure. The release of the escrow account will be possible after final agreement between the parties on the amounts at stake.
Following the divestment, we remain a guarantor for a limited transitional period in respect of the lease obligations for certain U.K. premises amounting to £40 million future rent payments. The Buyer will fully indemnify Galapagos NV against all liabilities arising in connection with the lease obligation. We evaluated the risk to be remote.
Finally, following common practice, Galapagos NV has given customary representations and warranties which are capped and limited in time.
In the course of 2008, a former director of one of our subsidiaries sued for wrongful termination and seeks damages of
€1.1 million. The Company believes that the amount of damages claimed is unrealistically high. In 2014, the Court requested an external advisor to evaluate the exact amount of damages. This analysis is still ongoing. Considering the defence elements provided in favor of Galapagos and also the latest evolution in the Court, the Board and management evaluated the risk to be remote to possible, but not likely. Accordingly, it was decided not to record any provision as the exposure is considered to be limited.
Events after the end of the reporting period
—
Material events subsequent to the end of the interim reporting period that have not been reflected in the financial statements for the interim period:
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.
By notary deed of 14 July 2015, it was established that a total number of 532,053 warrants were accepted and issued under Warrant Plan 2015, with an exercise price of EUR 28.75 per warrant. The Board of Directors of Galapagos approved the “Warrant Plan 2015” within the framework of the authorized capital on 30 April 2015. The warrants were offered mainly to employees of
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Galapagos NV Half-year Report 2015
NOTES
Galapagos and its subsidiaries and in secondary order to its directors and an independent consultant. The offer of warrants to
directors has been pre-approved by the Annual Shareholders’ Meeting held on 28 April 2015.
Approval of interim financial statements
—
The interim financial statements were approved by the Board of Directors on 4 August 2015.
29
Galapagos NV Half-year Report 2015
REPORT OF THE AUDITOR
Report on review of the consolidated interim financial information for the six-month period ended 30 June 2015
—
To the board of directors
In the context of our appointment as the company’s statutory auditor, we report to you on the consolidated interim financial information. This consolidated interim financial information comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of income and comprehensive income, the consolidated cash flow statement and the consolidated statement of changes in equity for the period of six months then ended, as well as selective notes.
Report on the consolidated interim financial information
We have reviewed the consolidated interim financial information of Galapagos NV (“the company”) and its subsidiaries (jointly “the group”), prepared in accordance with International Financial Reporting Standard IAS 34 – Interim Financial Reporting as adopted by the European Union.
The consolidated condensed statement of financial position shows total assets of 488.263 (000) EUR and the consolidated condensed income statement shows a consolidated loss for the period then ended of 34.183 (000) EUR.
The board of directors of the company is responsible for the preparation and fair presentation of the consolidated interim financial information in accordance with IAS 34 – Interim Financial Reporting as adopted by the European Union. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.
Scope of review
We conducted our review of the consolidated interim
financial information in accordance with International Standard on Review Engagements (ISRE) 2410 – Review of interim financial information performed by the independent auditor of the entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit performed in accordance with the International Standards on Auditing (ISA) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated interim financial information.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the consolidated interim financial information of Galapagos NV has not been prepared, in all material respects, in accordance with IAS 34 – Interim Financial Reporting as adopted by the European Union.
Diegem, 4 August 2015
The statutory auditor
DELOITTE Bedrijfsrevisoren / Reviseurs d’Entreprises
BV o.v.v.e. CVBA / SC s.f.d. SCRL Represented by Gert Vanhees
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Galapagos NV Half-year Report 2015
OTHER INFORMATION
Glossary of terms
—
ACR
American College of Rheumatology
ACR50
American College of Rheumatology 50% response rate signifies a 50% or greater improvement in the number of swollen and tender joints as well as a 50% or greater improvement in three out of five other disease-activity measures
ACR70
American College of Rheumatology 70% response rate signifies a 70% or greater improvement in the number of swollen and tender joints as well as a 70% or greater improvement in three out of five other disease-activity measures
ADR
American Depositary Receipt; Certificate representing an
American Depositary Share.
ADS
American Depositary Share; One Galapagos ADS represents the right to receive, and to exercise the beneficial ownership interests in, one ordinary share in Galapagos NV on deposit with depositary Citibank, N.A.; Galapagos’ ADSs are listed on NASDAQ under the symbol “GLPG”
Bioavailability
Assessment of the amount of (candidate) drug that reaches a body’s systemic circulation after administration
Candidate drug
Substance that has satisfied the requirements of pre-clinical testing and has been selected for clinical testing for the treatment of a certain disorder in humans
CIR
Credit Impot Recherche, or research credit. Under the CIR, the French government refunds up to 30% of the annual investment in French R&D operations, over a period of three years. Galapagos benefits from the CIR through its operations in Romainville, just outside Paris
Clinical Proof of Concept (PoC)
Point in the drug development process where the candidate drug shows efficacy in a therapeutic setting
Colitis ulcerosa/ulcerative colitis (UC)
see IBD
Compound
A chemical substance, often a small molecule with drug-like properties
Contract research organization
Organization which provides drug discovery and development services
Corrector drug
Drug that restores the protein forming the ion channel opening in cystic fibrosis patients. In most CF patients, a potentiator and corrector drug are needed in combination to restore the genetic defect causing CF
Crohn’s (CD)
see IBD
CRP
C-reactive protein is a protein found in the blood, the levels of which rise in response to inflammation
Cystic fibrosis (CF)
A life-threatening genetic disease that affects approximately
80,000 people worldwide. Although the disease affects the entire body, difficulty breathing is the most serious symptom as a result of frequent lung infections
DAS28
DAS28 is an RA Disease Activity Score based on C-reactive protein, tender and swollen joint counts of 28 defined joints and physician’s global health assessment
Development
Process of bringing a new drug to the market. At Galapagos, this is the department which performs pre-clinical and clinical development research, clinical batch scale-up, and regulatory filings of Galapagos’ drug candidates
Discovery
Process by which new medicines are discovered and/or designed. At Galapagos, this is the department that oversees target and drug discovery research through to nomination of pre-clinical candidates
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Galapagos NV Half-year Report 2015
OTHER INFORMATION
Drug development
Process of bringing a new drug to the market; includes both pre-clinical development and human clinical trials
Drug discovery
Process by which a (potential) therapeutic is either discovered or designed
Efficacy
Effectiveness for intended use
Fee-for-service
Payment system where the service provider is paid a specific amount for each procedure or service performed
FIH
First-in-human clinical trial, usually conducted in healthy volunteers with the aim to assess the safety, tolerability and bioavailability of the candidate drug
filgotinib
Also known as GLPG0634. Small molecule selective JAK1 inhibitor which showed excellent efficacy and safety in rheumatoid arthritis patients in Phase 2 trials in November
2011 and November 2012, partnered with AbbVie in 2012. Currently in a Phase 2b study in rheumatoid arthritis and Phase 2 study in Crohn’s disease
FSMA
The Belgian market authority: Financial Services and Markets
Authority, or Autoriteit voor Financiële Diensten en Markten
GLPG0634
Also known as filgotinib. Small molecule selective JAK1 inhibitor which showed excellent efficacy and safety in rheumatoid arthritis patients in Phase 2 trials in November
2011 and November 2012, partnered with AbbVie in 2012. Currently in a Phase 2b study in rheumatoid arthritis and Phase 2 study in Crohn’s disease
GLPG1205
Novel mode of action medicine in inflammatory bowel disease, fully owned by Galapagos, currently in a Phase 2
Proof-of-Concept study in ulcerative colitis
GLPG1690
A novel drug targeting autotaxin, with potential applications in idiopathic pulmonary fibrosis. Fully proprietary to Galapagos. Currently in preparations for the start of a Phase
| 2 |
|
Proof of concept study in IPF |
GLPG1837
A potentiator drug which entered Phase 1 in December 2014. Galapagos and AbbVie are planning to combine GLPG1837 with GLPG2222 and another corrector drug to treat the largest mutation of CF
GLPG2222
A corrector drug currently in pre-clinical candidate stage, which is expected to enter Phase 1 before end 2015. Galapagos and AbbVie are planning to combine GLPG1837 with GLPG2222 and another corrector drug to treat the largest mutation of CF
IBD
Inflammatory Bowel Disease. This is a general term for autoimmune disease affecting the bowel, including Crohn’s disease and ulcerative colitis. Crohn’s disease affects the small intestine primarily, while ulcerative colitis affects the large intestine. Both diseases involve inflammation of the intestinal wall, leading to pain, bleeding, and ultimately in some cases removal of bowel tissue
IPF
Idiopathic pulmonary fibrosis. A chronic and ultimately fatal disease characterized by a progressive decline in lung function. Pulmonary fibrosis involves scarring of lung tissue and is the cause of shortness of breath. Fibrosis is usually associated with a poor prognosis. The term “idiopathic” is used because the cause of pulmonary fibrosis is still unknown.
Inflammatory diseases
A large, unrelated group of disorders associated with abnormalities in inflammation
In-/out-licensing
Receiving/granting permission from/to another company or institution to use a brand name, patent, or other proprietary right, in exchange for a fee and/or royalty
Intellectual property
Creations of the mind that have commercial value and are protected by patents, trademarks or copyrights
JAK
Janus kinases (JAK) are critical components of signaling mechanisms utilized by a number of cytokines and growth factors, including those that are elevated in rheumatoid arthritis
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Galapagos NV Half-year Report 2015
OTHER INFORMATION
Milestone
Major achievement in a project or program; in Galapagos’
alliances, this is usually associated with a payment
MTX
Methotrexate
Oral dosing
Administration of medicine by the mouth, either as a solution or solid (capsule, pill) form
Pharmacokinetics (PK)
Study of what a body does to a drug; the fate of a substance delivered to a body
Phase 1
First stage of clinical testing of a potential new treatment designed to assess the safety and tolerability of a drug, usually performed in a small number of healthy human volunteers
Phase 2
Second stage of clinical testing, usually performed in 20-300 patients, in order to determine efficacy, tolerability and the most effective dose to use
Phase 3
Large clinical trials, usually conducted in 300-3000 patients to gain a definitive understanding of the efficacy and tolerability of the candidate treatment by comparing it to the “gold standard” treatment; serves as the principal basis for regulatory approval
Potentiator drug
Drug that restores the ion channel opening in cystic fibrosis patients. In most CF patients, a potentiator and corrector drug are needed in combination to restore the genetic defect causing CF
Pre-clinical
Stage of drug research development, undertaken prior to the administration of the drug to humans. Consists of in vitro and in vivo screening, pharmaco-kinetics, toxicology, and chemical upscaling
Pre-clinical candidate (PCC)
A potential drug that meets chemical and biological criteria to begin the development process
Rheumatoid arthritis (RA)
A chronic, systemic inflammatory disease that causes joint inflammation, and usually leads to cartilage destruction, bone erosion and disability
R&D operations
Research and development operations; unit responsible for discovery and developing new candidate drugs for internal pipeline or as part of risk/reward sharing alliances with partners
Screening
Method usually applied at the beginning of a drug discovery campaign, where a target is tested in a biochemical assay against a series of small molecules or antibodies to obtain an initial set of “hits” that show activity against the target. These hits are then further tested or optimized
Service operations
Business unit primarily focused on delivering products and conducting fee-for-service work for clients. Galapagos’ service operations included the BioFocus and Argenta business units, which were both sold in April 2014 to Charles River Laboratories
Target
Protein that has been shown to be involved in a disease process and forms the basis of therapeutic intervention or drug discovery
Target discovery
Identification and validation of proteins that have been shown to play a role in a disease process
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Galapagos NV Half-year Report 2015
OTHER INFORMATION
Financial calendar
—
13 November 2015
Third quarter results 2015
| 4 |
|
March 2016 |
Full year results 2015
26 April 2016
Annual shareholders meeting
Financial year
The financial year starts on 1 January and ends on
31 December.
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Galapagos NV Half-year Report 2015
OTHER INFORMATION
Colophon
—
Concept, design, and online programming
nexxar GmbH, Vienna—Online annual reports and online sustainabilty reports
www.nexxar.com
Photography
Frank van Delft
Copy deadline 5 August 2015
This Half-year Report 2015 is also available in Dutch and available for download in the Downloads section of this report or at www.glpg.com
Contact
—
Elizabeth Goodwin
Head of Corporate Communications & Investor Relations
Galapagos NV
Generaal De Wittelaan L11 A3
B-2800 Mechelen, Belgium
Tel. +32 15 34 29 00
Mob. +31 6 2291 6240
Email: ir@glpg.com
Galapagos NV Half-year Report 2015
Exhibit 99.3
| Regulated information | 6 August 2015, 7.30 CET |
Patient recruitment completed in FITZROY
Phase 2 Crohn’s disease study with filgotinib
| • | First selective JAK1 inhibitor in Phase 2 in Crohn’s disease |
| • | 175 patients randomized for 20 weeks of treatment |
| • | Topline primary endpoint data expected in December 2015 |
Mechelen, Belgium; 6 August 2015 – Galapagos NV (Euronext & NASDAQ: GLPG) announced that the last patient has been randomized in the FITZROY Phase 2 clinical study. The study evaluates the efficacy and safety of filgotinib, a selective JAK 1 inhibitor, during 20 weeks of treatment in 175 patients with Crohn’s disease. Galapagos is eligible to receive $50 M fee from AbbVie if AbbVie elects to in-license filgotinib after receipt of the full RA DARWIN 1 and 2 data and elects to move forward with filgotinib in Crohn’s disease.
Filgotinib is the first selective JAK1 inhibitor in development for Crohn’s disease. The innovative design of the Phase 2 study with filgotinib evaluates induction of disease remission and explores early maintenance of its beneficial effects, potentially enabling a rapid entry into Phase 3 studies. Galapagos funded and conducted the Phase 2 study, recruiting patients with active Crohn’s disease in 66 clinical centers in 9 countries throughout Western and Eastern Europe. Galapagos expects to announce topline primary endpoint results following 10 weeks of treatment in December 2015, with 20 weeks results expected in Q1 2016. Full details of the study design can be found on www.clinicaltrials.gov.
The Phase 2 study in Crohn’s disease is being performed in parallel with the DARWIN Phase 2B program for filgotinib in rheumatoid arthritis (RA). Galapagos expects to report final 24-week data from the second DARWIN study, evaluating filgotinib in a monotherapy setting, in August 2015. AbbVie has the exclusive right to license filgotinib upon its receipt of the final data package from the Phase 2B RA studies. In the event that AbbVie in-licenses filgotinib following receipt of the full data package from the DARWIN 1 and DARWIN 2 Phase 2B studies in RA, Galapagos will also be eligible to receive an additional $50 million payment if AbbVie elects to move forward with filgotinib in Crohn’s disease after receipt of the complete data set from the Crohn’s study.
About Crohn’s disease
Crohn’s disease is a type of inflammatory bowel disease in which the well-controlled balance of the intestinal immune system is disturbed. The disease causes ulcerations of the small and large intestines in particular, but may affect any part of the digestive system from mouth to anus. The cause of the disease is unknown, with onset usually between the ages of 15 and 35. Patients suffer from abdominal pain, diarrhea (often bloody), vomiting, fever, and weight loss. There is no cure for Crohn’s disease; treatment options today are restricted to controlling symptoms, maintaining remission, and preventing relapse by the use of drugs that suppress the inflammation or the immune system, antibiotics, and eventually surgical removal of the inflamed bowels. Driven by new therapies in development, Decision Resources estimates that the market for Crohn’s disease treatment will grow from $3.8 billion in 2011 to $5.6 billion in 2021.
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 positive activity and a favorable safety profile in both the DARWIN 1 and DARWIN 2 studies 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 & Investor Relations
Tel: +31 6 2291 6240
ir@glpg.com
Galapagos forward-looking statements
This release may contain forward-looking statements, including statements regarding the expected timing of topline results from 10 weeks and 20 weeks of treatment in the FITZROY Phase 2 clinical study, the potential for and timing of a possible Phase 3 clinical study with filgotinib in Crohn’s disease, the timing of the availability of final 24-week data from the second DARWIN study, AbbVie’s licensing decision regarding filgotinib and Galapagos’ potential eligibility for a success payment from AbbVie. 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 the inherent uncertainties associated with competitive developments, clinical trial and product development activities and regulatory approval requirements (including that data from Galapagos’ ongoing DARWIN and FITZROY programs with filgotinib may not support registration or further development of filgotinib due to safety, efficacy or other reasons), Galapagos’ reliance on collaborations with third parties (including its collaboration partner for filgotinib, AbbVie) 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.