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 July 2019

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 office)

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):

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

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):

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

First Half-Year 2019 Results

On July  25, 2019, the Registrant announced its unaudited first half-year results for 2019, which are further described in an H1 2019 report.

 

 

The information contained in this Report on Form 6-K, including the exhibits, except for the quotes of Onno van de Stolpe and the quote of Bart Filius contained in Exhibit 99.1, is hereby incorporated by reference into the Company’s Registration Statements on Forms F-3 (File No. 333-230639) and S-8 (File Nos. 333-204567, 333-208697, 333-211834, 333-215783, 333-218160, 333-225263 and3 33-231765).

 

 

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.

 

Strong clinical progress in H1, and transformative collaboration with Gilead announced

 

Webcast presentation tomorrow, 26 July 2019, at 14.00 CET/8 AM ET, www.glpg.com, +32 2 404 0659, code 6080337

 

Mechelen, Belgium; 25 July 2019, 22.01 CET; regulated information – Galapagos NV (Euronext & NASDAQ: GLPG) announces its unaudited first half-year results, which are further detailed in its H1 2019 report available on the Galapagos website, www.glpg.com.  

 

“It’s our 20th anniversary year, and what a year so far,” said Onno van de Stolpe, CEO. “Our partner Gilead and we announced a transformational global R&D collaboration on 14 July, securing our company’s independent R&D for years to come. This exciting agreement is about maximizing innovation based on the identification and development of new mode of action medicines. In Q1 2019,  together with Gilead, we announced positive data from the first 24 weeks of the FINCH 1 and 3 Phase 3 trials in rheumatoid arthritis, bringing our total patient exposure to beyond 3,000 patient years. The FINCH trial safety data was consistent with the long term safety data observed in the DARWIN 3 long term extension trial, further strengthening our understanding of the impact of selective JAK1 inhibition on patient well-being. Our research engine continues to be extremely productive, with additional late stage trial starts, completion of recruitment in ROCCELLA, and our first Phase 1 trial from the next-generation Toledo program for inflammation.”

 

“Our financial guidance for full year 2019 operational cash burn1 between €320 and €340 million is unchanged, excluding the proceeds from the recent deal announced with Gilead. Upon closing, which is expected before the end of 2019, we are entitled to an upfront payment of $3.95 billion and a $1.1 billion equity investment by our collaboration partner Gilead,” said Bart Filius, CFO and COO of Galapagos.

1The 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 activities and;

 

Outlook 2019

Following the positive Phase 3 FINCH trial results, Gilead discussed submissions for approval of filgotinib in RA with regulatory authorities in 2019. Early July, Gilead announced that following a meeting with the U.S. FDA, a path forward for filing filgotinib in RA in 2019 has been established. Gilead intends to file filgotinib for approval in RA in Europe in Q3 2019. They also anticipate readouts from the proof-of-concept trials in Sjögren's syndrome and cutaneous lupus, and plan to launch a Phase 3 trial in psoriatic arthritis.

We will continue recruitment in our proprietary ISABELA and NOVESA trials with GLPG1690, and plan to finish recruitment of our PINTA trial with GLPG1205. For MOR106, together with our collaboration partners MorphoSys and Novartis, we plan to continue executing the Phase 1 and 2 trials.

With regard to our earlier and fully proprietary programs, we expect the Phase 1 readout of GLPG3312, our first Toledo compound, with a Phase 1 for a second Toledo compound (GLPG3970), scheduled for the second half of the year.

The Gilead transaction, which is expected to close late in the third quarter of 2019, is subject to certain closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Upon closing, we are entitled to an upfront payment of $3.95 billion in addition to a $1.1 billion equity investment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(ii) the net proceeds or cash used, if any, in acquisitions or disposals of businesses; and the movement in restricted cash, 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. 

 

 

 

 

 

Key figures first half-year report 2019 (unaudited)

(€ millions, except basic & diluted loss per share)

 

 

 

First half-year report 2019

Galapagos’ financial report for the first half-year ended 30 June 2019 can be accessed via www.glpg.com/financial-reports.  

 

Conference call and webcast presentation

Galapagos will conduct a conference call open to the public tomorrow, 26 July 2019 at 14:00 CET / 8 AM ET, which will also be webcast. To participate in the conference call, please call one of the following numbers ten minutes prior to commencement:

 

CODE: 6080337

 

 

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

24 October 2019      Third quarter 2019 results (webcast 25 October 2019)

20 February 2020     Full year 2019 results (webcast 21 February 2020)

 

Filgotinib and all other drug candidates mentioned in this report are investigational; their efficacy and safety have not been fully evaluated by any regulatory authority.

 

About Galapagos

Galapagos (Euronext & NASDAQ: GLPG) discovers and develops small molecule medicines with novel modes of action, three of which show promising patient results and are currently in late-stage development in multiple diseases. Our pipeline comprises Phase 3 through to discovery programs in inflammation, fibrosis, osteoarthritis and other indications. Our ambition is to become a leading global biopharmaceutical company focused on the discovery, development and commercialization of innovative medicines. More information at www.glpg.com.

 

Contacts

 

Investors:

Elizabeth Goodwin

VP Investor Relations

+1 781 460 1784

 

Sofie Van Gijsel

Director IR

+32 485 19 14 15

ir@glpg.com

 

Media:

Carmen Vroonen

Senior Director Communications & Public Affairs

+32 473 824 874

 

Evelyn Fox

Director Communications

+31 6 53 591 999

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 the expected timing of the closing thereof, filings and approvals relating to the transaction, the amount and timing of potential future milestone, opt-in and/or royalty payments by Gilead, Galapagos’ strategic R&D ambitions, the guidance from management (including guidance regarding the expected operational cash burn during financial year 2019), financial results, timing and/or results of clinical trials, mechanisms of action and potential commercialization of our product candidates, interaction with regulators, and build-up and development of commercial operations. 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 uncertainty regarding the ability of the parties to complete the Gilead transaction considering the transaction is subject to closing conditions and any applicable antitrust clearance requirements, that Galapagos’ expectations regarding its 2019 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), Galapagos’ reliance on collaborations with third parties (including its collaboration partner Gilead), and estimating the commercial potential of its development programs. 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.

Exhibit 99.2

Contents

The Galapagos group

 

 

 

 

 

Letter from the management

Dear shareholders,

It’s our 20th anniversary year, and what a year so far! Just recently we signed a truly unique and landmark deal with our great collaboration partner Gilead. Galapagos has been highly effective at target identification and drug discovery, progressing novel molecules from research into the clinic. We will benefit greatly from Gilead’s expertise and infrastructure and believe this collaboration will provide an accelerated path to advance our pipeline. This agreement is about maximizing innovation based on the identification and development of new mode of action medicines. With the capital provided by Gilead, we aim to progress innovation to patients.

The first half year in 2019 was already transformative, before we announced this remarkable deal. Together with Gilead we announced positive 24 week data of the remaining and largest of the FINCH Phase 3 trials in rheumatoid arthritis (RA), FINCH 1  and FINCH 3. This brings our total patient exposure to beyond 3,000 patient-years. The FINCH trial efficacy and safety data were consistent with the long term data observed in the DARWIN 3 trial. This further strengthens our understanding of the impact of selective JAK1 inhibition on patients, and filgotinib’s potentially differentiated safety profile. We are also proud that earlier this week, the FINCH 2 results were published in JAMA1, which is recognition of the importance of the filgotinib program.

 

We also continue our extensive preparations to become a fully integrated biotechnology company: we are well underway with the hiring of our commercial team for Belgium, the Netherlands, and Luxembourg, and will begin hiring for commercial operations in the EU52 as per our revised filgotinib agreement with Gilead.

We are excited about the regulatory and commercial progress made, as it will help us bring filgotinib to patients.

In the first half of 2019, we not only saw the very encouraging research results from FINCH, but also laid further foundation for future results with our late stage portfolio of drug candidates. Our research engine continues to be extremely productive, with additional late stage trial starts, including the GECKO Phase 2 trial with MOR106 in atopic dermatitis, and the completion of recruitment in ROCCELLA, a global Phase 2b trial with ADAMTS-5 inhibitor GLPG1972 in osteoarthritis. Recruitment was wrapped up months ahead of schedule, underlining the large unmet medical need for a disease-modifying drug for OA patients. We also initiated our first Phase 1 trial from the next-generation Toledo program for inflammation. We experience good recruitment of the ISABELA 1 & 2 Phase 3 trials with autotaxin inhibitor GLPG1690 in idiopathic pulmonary fibrosis and hope to give an update on timelines later this year. The enthusiasm for the ISABELA program amongst clinicians, centers, and patients is palpable, and we remain

fully committed to moving ahead to potentially offer help for the large unmet medical need in IPF. We are running approximately 40 clinical trials at Galapagos this year and are gearing up for another big year of clinical trial execution in 2020, especially if the Toledo programs come through Phase 1 with green lights.

While making substantial progress in R&D, Galapagos ended the first half of 2019 with a very strong balance sheet. We continue to grow our organization to support this broad pipeline, while we continue to build a commercial organization for potential launch of filgotinib in Europe next year. Our late stage development is growing, leading to increased costs for our company. Our financial guidance for full year 2019 operational cash burn 3 between €320 and €340 million is unchanged, excluding the proceeds from the recent deal announced with Gilead. Upon closing, we will receive an upfront payment of $3.95 billion and a $1.1 billion equity investment, which are expected before the end of 2019.

Operational overview Q1 2019

We refer to our Q1 2019 report.

Operational overview Q2 2019

Inflammation

Corporate & other

Recent events

H1 2019 financial result

Revenues and other income

Our revenues and other income for the first six months of 2019 amounted to €108.5 million, compared to €101.9 million for the first six months of 2018. Revenues (€91.8 million for the first six months of 2019 vs  €87.6 million for the first six months of 2018) were higher due to a milestone achieved in June 2019 related to the CF program with AbbVie and higher reimbursement income mainly from Novartis in the scope of our collaboration for MOR106. This was partly compensated by a lower over time recognition in revenue of the upfront payments and milestone payments related to the filgotinib program with Gilead.

Other income increased (€16.7 million for the first six months of 2019 vs €14.3 million for the first six months of 2018), mainly driven by higher income from R&D incentives.

Results

We realized a net loss of €95.9 million for the first six months of 2019, compared to a net loss of €59.1 million in the first six months of 2018.

We reported an operating loss amounting to €97.6 million for the first six months of 2019, compared to an operating loss of €65.8 million for the first six months of 2018.

Our R&D expenditure in the first six months of 2019 amounted to  €177.6 million, compared to €151.4 million for the first six months of 2018. This planned increase was mainly due to an increase of €10.2 million in subcontracting costs primarily related to our IPF program and other proprietary programs. Furthermore, personnel costs increased explained by a planned headcount increase and higher costs related to the warrant plans as a result of the increase in the number of beneficiaries and of the Galapagos share price. These also explained the increase in our G&A and S&M expenses, which were €28.6 million in the first six months of 2019, compared to €16.2 million in the first six months of 2018.

Net financial income in the first six months of 2019 amounted to €1.8 million, compared to net financial income of €6.9 million for the first six months of 2018,  which was primarily attributable to €1.9 million of unrealized exchange gain on our cash position in U.S. dollars (€5.3 million of unrealized exchange gain on our cash position in U.S. dollars in the first six months of 2018).  

Liquid assets position

Cash and cash equivalents totaled €1,147.9 million on June 30, 2019.

A net decrease of €142.9 million in cash and cash equivalents was recorded during the first six months of 2019, compared to a net decrease of €84.4 million during the first six months of 2018.  This net decrease was composed of €152.5 million of operational cash burn, offset by (i) €7.8 million of cash proceeds from capital and share premium increase from exercise of warrants in the first six months of 2019 and (ii) €1.9 million of unrealized positive exchange rate differences.

Finally, our balance sheet as at June 30, 2019 held a receivable from the French government (Crédit d’Impôt Recherche4), payable in 4 yearly tranches, and a receivable from the Belgian Government for R&D incentives for a total of €94.3 million.

Outlook 2019

Following on the positive Phase 3 FINCH trial results, Gilead discussed submissions for approval of filgotinib in RA with regulatory authorities in 2019. Early July, Gilead announced that following a meeting with the U.S. FDA, a  path forward for filing filgotinib in RA in 2019 has been established. Gilead intends to file filgotinib for approval   in RA in Europe in Q3 2019. They also anticipate readouts from the proof-of-concept trials in Sjögren's syndrome and cutaneous lupus, and plan to launch a Phase 3 trial in psoriatic arthritis.

We will continue recruitment in our proprietary ISABELA, NOVESA and PINTA trials, and plan to provide an update on recruitment timelines for the ISABELA program in H2 2019. For MOR106, together with our collaboration partners MorphoSys and Novartis, we plan to continue executing the Phase 1 and 2 trials running.

With regard to our earlier and fully proprietary programs, we expect the Phase 1 readout of GLPG3312, our first Toledo compound, with a Phase 1 start for a second Toledo compound (GLPG3970) scheduled for the second half of the year.

Our guidance for an operational cash burn between €320 - €340 million in 2019 is unchanged, excluding the proceeds from the recent deal announced with Gilead.

The Gilead transaction, which is expected to close late in the third quarter of 2019, is subject to certain closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and receipt of merger control approval from the Austrian Federal Competition Authority.

Upon closing, we are entitled to an upfront payment of $3.95 billion and a $1.1 billion equity investment.

We thank you again for your support of Galapagos, as we aim to discover and to develop more novel medications, bring the successful therapies to the market, and improve patients’ lives.

Onno van de Stolpe

CEO

This alternative performance measure is in our view an important metric for a biotech company in the development stage.

 

At a glance

Key figures (IFRS) Galapagos group (unaudited)

(*)We refer to the notes of the condensed consolidated interim financial report for additional information. 

 

Risk factors

We refer to the description of risk factors in the 2018 annual report, pp. 57‑66, as supplemented by the description of risk factors in our annual report on Form 20‑F filed with the U.S. Securities and Exchange Commission, pp. 4‑45 and the additional risk identified below. In summary, the principal risks and uncertainties faced by us relate to: product development, regulatory approval and commercialization; our financial position and need for additional capital; our reliance on third parties; our competitive position; our intellectual property; our organization, structure and operation (including but not limited to certain risks related to our status as a U.S. publicly listed company) and market risks relating to our shares and ADSs.

In addition  to the risk factors referred to above, we are subject to the following risk:

On July 14, 2019, we and Gilead announced the signing of a global research and development collaboration and option agreement (the “Transaction”). Under the terms of the Transaction, Galapagos will receive a $3.95 billion upfront payment and a $1.1 billion equity investment from Gilead. The completion of the Transaction is subject to certain conditions, including as to anti-trust clearances, and there can be no certainty that such conditions will be satisfied so as to allow the Transaction to be completed within the anticipated timeframe or at all. The potential uncertainty due to these or other factors may have a material adverse effect on our results of operations, and may cause increased volatility in our stock price.

We also refer to the description of the group’s financial risk management given in the 2018 annual report, pp. 161‑163, which remains valid.

The Galapagos share

 

 

 

 

Related party transactions
We refer to the statements included under the heading “Related party transactions” in the “Notes to the unaudited condensed consolidated interim financial statements for the first six months of 2019” part of this report. 

Disclaimer and other information

Galapagos NV is a limited liability company organized under the laws of Belgium, having 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 “we,” “our,” “the group” or “Galapagos” include Galapagos NV together with its subsidiaries.

Filgotinib and all other drug candidates mentioned in this report are investigational; their efficacy and safety have not been fully evaluated by any regulatory authority.

This report is published in Dutch and in English. In case of inconsistency between the Dutch and the English versions, the Dutch version shall prevail. Galapagos is responsible for the translation and conformity between the Dutch and English version.

This report is available free of charge and upon request to be addressed to:

Galapagos NV

Investor Relations

Generaal De Wittelaan L11 A3 2800 Mechelen, Belgium

Tel: +32 15 34 29 00

Email: ir@glpg.com

A digital version of this report is available on our website, www.glpg.com.

We will use reasonable efforts to ensure the accuracy of the digital version, but do not assume responsibility if inaccuracies or inconsistencies with the printed document arise as a result of any electronic transmission. Therefore, we consider only the printed version of this report to be legally valid. Other information on our website or on other websites does not form a part of this report.

Listings

Euronext Amsterdam and Brussels: GLPG

NASDAQ: GLPG

 

Forward-looking statements

This report 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 “believe,” “anticipate,” “expect,” “intend,” “plan,” “seek,” “estimate,” “may,” “will,” “could,” “stand to,” “continue,” as well as similar expressions. Forward-looking statements contained in this report include, but are not limited to, statements made in the “Letter from the management”, the information  provided  in  the  section  captioned “Outlook 2019”, guidance from management regarding the expected operational use of cash during financial year 2019, statements regarding the expected timing of closing of the transaction with Gilead, filings and approvals relating to the transaction, the amount and timing of potential future milestone, opt-in and/or royalty payments by Gilead, regarding the expected timing, design and readouts of ongoing and planned clinical trials (i) with filgotinib in rheumatoid arthritis, Crohn’s disease, ulcerative colitis and other indications, (ii) with GLPG1690 in IPF and SSc and GLPG1205 in IPF, (iii) with GLPG1972 in osteoarthritis, (iv) with MOR106 in atopic dermatitis, and (v) with GLPG3312 in inflammation, and statements regarding the regulatory pathway for filgotinib and the timing of regulatory filings. We caution 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 our actual results, financial condition and liquidity, performance or achievements, or the development of the industry in which we operate, 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 our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with such forward-looking statements, they may not be predictive of results or developments in future periods. Among the factors that may result in differences are uncertainty regarding the ability of the parties to complete the Gilead transaction considering the transaction is subject to closing conditions and any applicable antitrust clearance requirements, that our expectations regarding our 2019 revenues and financial results and our 2019 operating expenses may be incorrect (including because one or more of our assumptions underlying our 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 our clinical research programs in rheumatoid arthritis, Crohn’s disease, ulcerative colitis, idiopathic pulmonary fibrosis, systemic sclerosis, osteoarthritis, atopic dermatitis, and other inflammatory indications may not support registration or further development of our product candidates due to safety, efficacy or other reasons), our reliance on collaborations with third parties (including our collaboration partner for filgotinib, Gilead, our collaboration partner for GLPG1972, Servier, and our collaboration partners for MOR106, Novartis and MorphoSys), 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 our Securities and Exchange Commission filings and reports, including in our most recent annual report on Form 20-F filed with the SEC and our other filings and reports. We also refer 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. We expressly disclaim any obligation to update any such forward-looking statements in this document to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements, unless specifically required by law or regulation.

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Consolidated statements of income and comprehensive income

(unaudited)

Consolidated income statement

 

The accompanying notes form an integral part of these condensed consolidated financial statements.

 

 

 

Consolidated statement of comprehensive income / loss (-)

 

The accompanying notes form an integral part of these condensed consolidated financial statements.

 

 

 

Consolidated statement of financial position

(unaudited)

 

The accompanying notes form an integral part of these condensed consolidated financial statements.

 

Consolidated cash flow statement

(unaudited)

The accompanying notes form an integral part of these condensed consolidated financial statements.

 

Consolidated statements of changes in equity

(unaudited)

 

The accompanying notes form an integral part of these condensed consolidated financial statements.

 

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE FIRST SIX MONTHS OF 2019

Basis of preparation

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the European Union and as issued by the IASB. The condensed consolidated interim financial statements do not contain all information required for an annual report and should therefore be read in conjunction with Galapagos’ annual report 2018.

Significant accounting policies

There were no significant changes in accounting policies applied by us in these condensed consolidated interim financial statements compared to those used in the most recent annual consolidated financial statements of December 31, 2018, except for the adoption of new standards and interpretations described below.

The nature and the effect of these changes were taken into consideration, and the above amendments affected the condensed consolidated interim financial statements as follows:

We adopted IFRS 16 on January 1, 2019, in accordance with the transitional provisions of IFRS 16, using the modified retrospective approach. Consequently, the cumulative effect of adopting IFRS 16 was recognized as an adjustment to the opening balance of retained earnings as at January 1, 2019, with no restatement of the comparative figures. On adoption of IFRS 16, we recognized lease liabilities in relation to leases which had previously been classified as ‘operating leases’ under IAS 17. These liabilities were measured at the present value of the remaining lease payments and discounted using our incremental borrowing rate as of January 1, 2019. Our weighted average incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 1.55%.

The differences between our total operating lease commitments as reported in note 25 of our consolidated financial statements of December 31, 2018 and the total lease liabilities recognized in our statement of financial position as at January 1, 2019 are summarized below.

 

 

 

The change in accounting policy affected the statement of financial position as at January 1, 2019 as follows: