Galapagos delivers solid half year results 2012

Marketwired

MECHELEN, BELGIUM--(Marketwire -08/03/12)-

Patients for GLPG0634 Phase 2a study now fully recruited

· Group revenues EUR64.5 M compared to EUR39.7 M in H1 2011(+62%)

· Group net loss EUR11.3 M compared to EUR27.7 M loss lastyear

· Cash position of EUR122.6 M on 30 June 2012

· Service division external revenues EUR32.9 M compared toEUR24 M last year(+37%)

· Services EBITDA EUR5.7 M compared to EUR3.7 M last year(+54%)

· Full year guidance reiterated: EUR150 M in revenues,positive operatingresult and cash flow, and net profitability

Click here to access the live audio webcast presentation at 10.00 CETtoday,call numbers: US +1-480-629-9866, Belgium +32-2290-1608, Netherlands+31-20-794-8504

Mechelen, Belgium; 3 August 2012 - Galapagos NV (GLPGF) announcesitsunaudited half year results and maintains guidance for the full year 2012.

"Galapagos delivered strong results in the first half year, bothoperationallyand financially. The Company is well on track in its global collaborationwithAbbott to develop and commercialize GLPG0634. Patient recruitment for thePhase2a dose-range finding study is complete, and we will announce toplineresultsbefore year end. The Service division continues to deliver excellentgrowth inexternal sales and healthy margins in the first half of 2012.Galapagos ismoving its own R&D programs forward and executing as planned to meetfinancialguidance given earlier this year," said Galapagos CEO, Onno van de Stolpe.

Key figures half year 2012
(EUR millions, except net loss per share)

 
Continuing
Operations
30 June 2012 30 June 2011 Change

Revenues 64.5 39.7 24.8

Services cost of sales -25.0 -18.0 -7.0

Gross profit 39.5 21.7 17.8

R&D expenditure -35.9 -42.4 6.5

General & administrative -11.9 -11.0 -0.9

Sales & marketing -1.1 -1.1 -

Restructuring & integration costs -0.4 - -0.4

Result on liquidation -2.9 - -2.9

Result on divestment - 5.9 -5.9

Operating loss -12.6 -26.8 14.2

Net loss for the period -11.3 -27.7 16.4

Basic loss per share (EUR) -0.43 -1.05 0.62

Cash and cash equivalents 122.6 49.8 72.8

Note: In the column for H1 2011, continuing operations exclude thecompoundmanagement business of BioFocus (Compound Focus Inc., based inSouth SanFrancisco, CA, USA) which was sold on 31 May 2011.


Details of the financial results

Revenues

Galapagos' revenues from continuing operations for the first half of 2012amountto EUR64.5 M compared to EUR39.7 M in the same period of 2011. The R&Ddivisionreported revenues of EUR34.5 M (including EUR2.4 M intersegment revenues),comparedto EUR19.3 M in the same period last year. The R&D division revenuesbenefitedfrom pro rata revenue recognition on the upfront payment from Abbott in theglobal collaboration on GLPG0634 announced on 29 February. The Servicedivisionrevenues showed 37% external revenues growth for the period, increasing toEUR32.9M from EUR24 M. The Service division total revenues amount to EUR34.6 M(includingEUR1.7 M in intersegment revenues), compared to EUR30.0 M (including EUR6.0M inintersegment revenues) for continuing operations in the same period lastyear.

Results

The group net loss from continuing operations for the first half-year of2012was EUR11.3 M, compared to the loss of EUR27.7 M for the same period lastyear. TheEBITDA for the Service division was EUR5.7 M, compared to EUR3.7 M lastyear. Grossmargins of the continuing service operations were 34%, compared to 33% lastyear.

The R&D division reported an EBITDA loss of EUR6.3 M, compared to EUR29.0 Mlastyear. R&D expenses for the Group were EUR35.9 M compared to EUR42.4 M lastyear.

General and administrative (G&A) expenses of the Group's continuingoperationswere EUR11.9 M in the first half of 2012 (18% of revenues), compared toEUR11.0 M(28% of revenues) last year.

The first half 2012 financials show a loss on liquidation of EUR 2.9million.This non-cash line item is a one-off historical currency impact, a directresultof the reduction of the number of dormant corporate legal entities in theUK.

Cash flow and cash position

A net increase of EUR90.1 M in cash and cash equivalents was recordedduring thefirst half of 2012, compared to an increase of EUR9.4 M in the same periodlastyear. This increase is due to the collection of the $150 M (EUR112 M) cashpayment made by Abbott in the collaboration on GLPG0634. Galapagos' cashandcash equivalents amount to EUR122.6 M on 30 June 2012.

Operational overview

R&D division

* Signed a global collaboration with Abbott to develop and commercialize GLPG0634

* Initiated Phase 2a trial in RA for GLPG0634, a selective JAK1 inhibitor

* 100% of patients recruited, results to be communicated this year

* Dose-range finding study includes 90 patients in four countries for 4 weeks of treatment, with ACR20 response rate as primary endpoint

* Delivered a pre-clinical candidate compound in the alliance withServier

* Confirmed excellent PK and PD profile for GLPG0974 in a First-in-HumanPhase 1 study

* Validated a novel, proprietary antibody target in COPD and RA in the alliance with MorphoSys

* Highlighted promising anti-bacterial programs showing activity againstMRSA strains

* Announced termination of GLPG0492 in cachexia and end of theGSK anti-infectives alliance

* UK and US patents for GLPG0634 granted, while still pending in afurther 40 countries covering all major commercial territories

Service division

· Signed a target discovery agreement between BioFocus and OnoPharma inthe field of allergic disease

· Signed a multi-year agreement between BioFocus, Argenta, andAstraZeneca tofind new compounds in the fields of respiratory and inflammatory disease

· Signed an agreement between BioFocus and Almirall to deliver drugdevelopmentcandidates in the field of respiratory disease

· Initiated closure of the Basel site in order to increaseefficiency andcapture more synergies with high-throughput screening activities in the UK

Corporate

* Raised EUR1.3 M in equity through warrant exercises, resulting in theissuance of 156,113 new shares

* Received shareholder notifications from Abingworth Ltd (now 4.9%),Capital Research and Management (5.1%), and Baker Brothers Life Sciences L.P.(6.5%)

* Appointed Dr Piet Wigerinck as Chief Scientific Officer

* Won 'Transaction of the Year' and 'CEO of the Year' awards at theEuropean Mediscience Awards

Outlook 2012

In the past, Galapagos delivered the majority of its full-year revenues inthesecond half of the year. After good results in the first half of 2012, andexpecting significant R&D revenues and a continued strong performance oftheservice operations in the second half of the year, management reiteratesfull-year 2012 financial guidance: Group revenues of EUR150 M, a positiveoperationaland net result, and a year-end cash position of at least EUR130 million bythe endof 2012.

The Company advances toward achievement of its strategic objectives for2012:

· Deliver topline Phase 2a results for GLPG0634

· Increase cash and profit contribution of Service division

· Meet financial guidance for the full year

Interim Report 2012

The electronic version of Galapagos' Interim Report for half year 2012 isnowavailable online at www.glpg.com/investor/financial_reports.htm. Printedversions of the report can be requested by e-mailing ir@glpg.com.

Conference call and webcast presentation

Galapagos will conduct a conference call open to the public today at 10.00Central European Time (CET), which will also be webcast. To participate intheconference call, please call US +1-480-629-9866, Belgium +32-2290-1608,Netherlands +31-20-794-8504, ten minutes prior to commencement of the call.Aquestion and answer session will follow the presentation of the results.Clickhere to access the live audio webcast. The archived webcast also will beavailable for replay shortly after the close of the call.


Financial calendar 2012:

3Q12 interim update: 16 November 2012

Full year results 2012: 8 March 2013

Annual shareholders meeting: 30 April 2013


About Galapagos

Galapagos (GLPGF) (GLPYY) is a mid-sizeclinical stagebiotechnology company specialized in the discovery and development ofsmallmolecule and antibody therapies with novel modes-of-action. TheCompany isprogressing its JAK1 inhibitor GLPG0634, as well as one of the largestpipelinesin biotech, with four programs in development and over 30 discoveryprograms.The Galapagos Group has over 800 employees and operates facilitiesin sixcountries, with global headquarters in Mechelen, Belgium. Moreinfo at:www.glpg.com


This release may contain forward-looking statements, including,withoutlimitation, statements containing the words "believes,""anticipates,""expects," "intends," "plans," "seeks," "estimates," "may," "will,""could,""stands to," and "continues," as well as similar expressions.Such forward-looking statements may involve known and unknown risks,uncertainties and otherfactors which might cause the actual results,financial condition, performanceor achievements of Galapagos, or industry results, to be materiallydifferentfrom any historic or future results, financial conditions,performance orachievements expressed or implied by such forward-looking statements.Giventhese uncertainties, the reader is advised not to place any unduereliance onsuch forward-looking statements. These forward-looking statements speakonly asof the date of publication of this document. Galapagos expresslydisclaims anyobligation to update any such forward-looking statements in thisdocument toreflect any change in its expectations with regard thereto or anychange inevents, conditions or circumstances on which any such statement is based,unlessrequired by law or regulation.

Interim Report 2012:http://hugin.info/133350/R/1631605/523099.pdf


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Source: Galapagos NV via Thomson Reuters ONE

[HUG#1631605]

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