Revenues doubled in 2018
Key 2018 clinical results:
- FINCH 2 Phase 3 trial with filgotinib in rheumatoid arthritis (RA) met all primary and secondary endpoints, with consistent tolerability
- TORTUGA and EQUATOR Phase 2 trials with filgotinib in ankylosing spondylitis (AS) and psoriatic arthritis (PsA) met primary endpoints with consistent tolerability
- Initiated ISABELA, a global Phase 3 program with GLPG1690 in idiopathic pulmonary fibrosis (IPF)
- Initiated PINTA, a Phase 2 trial with GLPG1205 in IPF
- Initiated ROCCELLA, a global Phase 2b trial with GLPG1972 in osteoarthritis (OA) with collaboration partner Servier
- Initiated IGUANA Phase 2 and Phase 1b bridging trials with MOR106 in atopic dermatitis (AtD) with collaboration partners MorphoSys and Novartis
- Global collaboration signed with Novartis and MorphoSys on MOR106 in AtD
- Licensed out cystic fibrosis portfolio to AbbVie
- Group revenues doubled from €156 million to €318 million
- Operating loss decreased (-50%) by €45 million to €45 million
- Net loss of €29 million, compared to a net loss of €116 million in 2017
- Operational cash burn of €158 million
- Net proceeds from capital increase of €288 million
- Cash balance increased to €1,291 million at year-end
Webcast presentation tomorrow, 22 February 2019 at 14.00 CET/8 AM ET, +32 (0)2 404 0659, www.glpg.com
Mechelen, Belgium; 21 February 2019, 22.01 CET, regulated information - Galapagos NV (Euronext & NASDAQ: GLPG) presents financial results and highlights the key events for the full year 2018.
"The year 2018 was truly pivotal in the history of our company, with the publication of our first ever Phase 3 results, from the FINCH 2 trial in rheumatoid arthritis patients. We also saw promising Phase 2 results with filgotinib in TORTUGA and EQUATOR. Once again, we are encouraged by the results observed, and we are looking forward to the FINCH 1 & 3 Phase 3 results expected in Q1 2019. We significantly expanded our fully proprietary fibrosis portfolio, most notably with the start of the ISABELA and PINTA trials in IPF, while our programs in OA and AtD are also advancing in late stage development," CEO Onno van de Stolpe commented. "The coming year will be data-rich for filgotinib. Following the outcome of the FINCH trials, we expect our collaboration partner Gilead to submit an application for approval for filgotinib in RA - another true milestone for our company. Filgotinib will also advance in the other inflammatory indications, with the readout of the Phase 2 trials in Sjögren's and cutaneous lupus anticipated this year. For MOR106 in AtD, together with our collaboration partners MorphoSys and Novartis, we expect top-line results of the Phase 2 IGUANA study and the subcutaneous Phase 1 bridging study. Meanwhile, recruitment for our other clinical trials is ongoing, and we hope to complete recruitment of the ROCCELLA and PINTA trials, in OA and IPF respectively, before year-end. We are also excited by the progress in our preclinical pipeline, and more particularly with our Toledo family: in H2 2019, the first compound, GLPG3312, should read out Phase 1 results, with a second compound expected to enter the clinic before year-end. 'Thinking big' has brought us where we are today, and this remains our motto as we build towards becoming a fully-integrated biopharma company."
Bart Filius, COO and CFO of Galapagos, added: "Thanks to a successful capital transaction for gross proceeds of €296.2 million, as well as the important business development deals signed with Novartis and AbbVie, we ended 2018 with an extraordinarily strong balance sheet, while still delivering substantial research & development (R&D) spend and progress. We remain focused on investing in our maturing clinical pipeline of novel mechanism of action candidates, and expect to run over 40 clinical trials this year. We will also expand our commercial organization further as we gear up for a potential market launch of filgotinib in 2020. All this will contribute to our financial guidance for operational cash burn between €320 and €340 million for full year 2019."
Key figures (consolidated)
(€ millions, except basic income/loss per share)
|31 Dec 2018 Group total||31 Dec 2017 Group total|
|Revenues and other income||317.8||155.9|
|G&A and S&M expenses||-39.8||-27.2|
|Net result for the period||-29.3||-115.7|
|Basic loss per share (€)||-0.56||-2.34|
|Cash and cash equivalents at year-end||1,290.8||1,151.2|
Details of the financial results
Revenues and other income
Galapagos' revenues and other income for 2018 amounted to €317.8 million, compared to €155.9 million in 2017. Increased revenues and other income were mainly driven by higher revenue recognition and higher milestone and upfront payments from our collaboration partners Novartis and AbbVie.
The Group realized a net operating loss in 2018 of €44.8 million, compared to a net operating loss of €89.8 million in 2017.
R&D expenses for the Group in 2018 were €322.8 million compared to €218.5 million in 2017. This planned increase was due mainly to increased efforts on our clinical and preclinical programs, primarily filgotinib, our IPF program and the proprietary preclinical programs in inflammation and fibrosis.
G&A and S&M expenses of the Group were €39.8 million in 2018, compared to €27.2 million in 2017. This increase was due primarily to a planned headcount increase and higher costs for warrant plans (non-cash), mainly as a result of the increase of the Galapagos share price.
The Group realized a net loss in 2018 of €29.3 million, compared to a net loss of €115.7 million in 2017.
Cash and cash equivalents totaled €1,290.8 million on 31 December 2018.
A net increase of €139.6 million in cash and cash equivalents was recorded in 2018. Net cash flows from financing activities generated €280.2 million through a public offering in the United States, as well as €7.7 million from warrant exercises. Total operational cash burn in 2018 amounted to €158.4 million, within the guided range, and consisted of a net cash outflow from operating activities of €142.5 million and an investing cash outflow of €15.9 million. Finally €10.1 million unrealized positive exchange rate differences were generated on cash and cash equivalents.
Furthermore, Galapagos' balance sheet holds a receivable from the French government (Crédit d'Impôt Recherche), payable in four yearly tranches and a receivable from the Belgian Government for R&D incentives, for a total of both receivables of €84.6 million.
Together with collaboration partner Gilead, we aim to report topline results for the FINCH 1 and FINCH 3 trials in RA in Q1. Pending the results and discussions with the regulatory agencies, Gilead and Galapagos plan to submit an application for approval in RA in 2019. Also for filgotinib, in the second half of the year, we expect Gilead to report topline results for the proof-of-concept studies in Sjögrens and cutaneaous lupus, and to launch a Phase 3 trial in PsA.
We also plan to fully recruit our Phase 2 PINTA study for our fully proprietary IPF compound GLPG1205 as well as our ROCCELLA study in OA, together with collaboration partner Servier. For GLPG1690, we plan to continue our ISABELA trials as well as the NOVESA Phase 2 trial in systemic sclerosis (SSc), for which a first patient was dosed in early 2019.
For MOR106, together with our collaboration partners MorphoSys and Novartis, we plan to start a Phase 2 trial in AtD with MOR106 in combination with topical corticosteroids (the GECKO Phase 2 trial) as well as a Japanese ethno-bridging study. In the second half of the year, we expect the primary analysis of the IGUANA Phase 2 trial in AtD and topline results of the subcutaneous Phase 1 bridging study. Pending positive results, these four studies combined should offer a solid data package for our collaboration partner Novartis to move into Phase 3.
With regard to our earlier and fully proprietary programs, we expect Phase 1 readouts of a number of earlier stage studies, including for GLPG3312, the first Toledo compound that entered the clinic in early 2019. This molecule is scheduled to be dosed in patients in a first proof-of-concept study before the end of the year. We also plan to initiate a Phase 1 trial with our second generation Toledo compound, GLPG3970, in the second half of the year.
Given the large number of maturing proprietary clinical programs and the expansion of our R&D and commercial team, we expect an operational cash burn between €320 and €340 million in 2019.
Annual report 2018
Galapagos is currently finalizing its financial statements for the year ended 31 December 2018. The auditor has confirmed that his audit procedures, which are substantially completed, have not revealed any material corrections required to be made to the financial information included in this press release. Should any material changes arise during the audit finalization, an additional press release will be issued. Galapagos expects to be able to publish its fully audited annual report for the full year 2018 on or around 29 March 2019.
Conference call and webcast presentation
Galapagos will conduct a conference call open to the public tomorrow, 22 February 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:
Confirmation Code: 5739601
Belgium: +32 2 404 0659
France: +33 1 76 77 22 74
Netherlands: +31 20 721 9251
United Kingdom: +44 330 336 9105
USA: +1 323-701-0225
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.
29 March 2019 Publication Annual Report and 20-F 2018, AGM convocation
25 April 2019 First quarter 2019 results (webcast 26 April)
30 April 2019 Annual shareholders' meeting in Mechelen, Belgium
25 July 2019 Half year 2019 results (webcast 26 July 2019)
24 October 2019 Third quarter 2019 results (webcast 25 October 2019)
20 February 2020 Full year 2019 results (webcast 21 February 2020)
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.
All of the drug candidates mentioned in this press release are investigational; their efficacy and safety are yet to be established.
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Sofie Van Gijsel
+32 485 19 14 15
Senior Director Communications & Public Affairs
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This release may contain forward-looking statements, including, among other things, statements regarding the guidance from management (including guidance regarding the expected operational cash burn during financial year 2019), financial results, the timing of audited financial results, mechanism of action and profile of, timing and/or results of clinical trials with, and potential commercialization of compounds coming out of our programs, investment in commercial capabilities, and interaction with regulators, including the potential approval of our current or future drug candidates. Galapagos cautions the reader that forward-looking statements are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which might cause the actual results, financial condition and liquidity, performance or achievements of Galapagos, or industry results, to be materially different from any historic or future results, financial conditions and liquidity, performance or achievements expressed or implied by such forward-looking statements. In addition, even if Galapagos' results, performance, financial condition and liquidity, and the development of the industry in which it operates are consistent with such forward-looking statements, they may not be predictive of results or developments in future periods. Among the factors that may result in differences are that Galapagos' expectations regarding its 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, 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.
 The operational cash burn (or operational cash flow if this performance measure is positive) is equal to the sum of the net cash flows generated / used (-) in operating activities and the net cash flows generated / used (-) in investing activities minus (i) the proceeds or cash used, if any, in acquisitions or disposals of businesses; and (ii) the movement in restricted cash, if any. This alternative performance measure is in our view an important metric for a biotech company in the development stage. For the full year of 2017, the operational cash burn represented €154.1 million.
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 Crédit d'Impôt Recherche refers to an innovation incentive system underwritten by the French government.