• 
  First
  
  
  three
  
  
  months
  
  
  202
  
  
  2
  
  
  financial results
  
  
  :
  
  • 
    Jyseleca
    
    
    ^®
    
    
    net sales
    
    
    reached €
    
    
    14.4
    
    
    million
    
  • 
    Group revenues
    
    
    +
    
    
    20
    
    
    % to
    
    
    €
    
    
    136.3
    
    
    million
    
  • 
    Operating
    
    
    loss
    
    
    -58
    
    
    % to
    
    
    €
    
    
    21.1
    
    
    million
    
  • 
    Cash and c
    
    
    urrent financial investments
    
    
    of €
    
    
    4.
    
    
    6
    
    
    billion
    
    
    on
    
    
    3
    
    
    1
    
    
    March
    
    
    202
    
    
    2
    
• 
  Jyseleca
  
  
  approved in Great Britain and Japan for
  
  
  the
  
  
  treatment of
  
  
  ulcerative colitis (UC)
  
  
  ;
  
  
  commercial roll-out
  
  
  in
  
  
  the EU in
  
  
  rheumatoid arthritis (
  
  
  RA
  
  
  )
  
  
  and UC
  
  
  progressing well with
  
  
  15 countries
  
  
  reimbursed for RA
  
• 
  Dr.
  
  
  Paul Stoffels
  
  
  ⁱ
  
  
  appointed
  
  
  as
  
  
  C
  
  
  hief
  
  
  E
  
  
  xecutive
  
  
  O
  
  
  fficer (CEO)
  
  
  , effective as of
  
  
  1 April 2022
  

Webcast





presentation tomorrow




,




6




May




202




2




,




at




1




4




.00 CET




/




8 AM ET,





www.glpg.com





,




+




32




(0)




2 793 38 47




, code




9523309

Mechelen, Belgium;


5


May


202


2


, 22.0


1


CET; regulated information


– Galapagos NV (Euronext & NASDAQ: GLPG)


today


announced


its first quarter 2022


financial


results


,


a


year-to-date


business update


and


its


outlook for the remainder of 2022.


The


results are further detailed in


the


Q


1


202


2


financial


report


available


on


the


financial reports section of the



website



.

“It is an honor to address you for the first time as CEO of Galapagos. I want to express my respect and appreciation to previous CEO and founder Onno van de Stolpe, who successfully built Galapagos from a start-up to an independent, established publicly listed company. Since I joined a few weeks ago, I have been working closely with the board and the teams across the entire organization to thoroughly review our R&D product portfolio, shape our business strategy and lay the foundations for accelerated growth,” said Dr. Paul Stoffels, CEO of Galapagos. “Our mission is to bring novel medicines to patients around the world and to help them live longer, better lives by adding years of life and improving quality of life. We have the people, the science, the R&D capabilities, the commercial infrastructure, and financial resources to realize that ambition. There are exciting opportunities ahead of us and I look forward to sharing my vision and strategy for the future later this year.”

“In the first quarter of this year, the launch of our Jyseleca franchise continued to gain momentum with robust sales growth,” added Bart Filius, President, COO and CFO of Galapagos. “Following the recent approval of filgotinib in UC in Great Britain and Japan, we are very excited to also bring Jyseleca to patients in this indication, while further progressing our roll-out in RA and UC throughout the European Union. We continue to focus on operational excellence and reiterate our cash burn

ⁱⁱ

guidance of €450-€490 million, including anticipated net sales for Jyseleca of €65-€75 million, compared to the cash burn of €564.8 million over the same period in 2021.”

First


quarter 2022


and recent business update


Commercial & regulatory progress with filgotinib in RA and UC:

• Strong progress with the roll-out by our own commercial organization across Europe, with reimbursements in 15 countries and a fast uptake in RA and now in UC since the approval by EMA (European Medicines Agency) in November 2021
• Sobi, our distribution and commercialization partner in Eastern and Central Europe, Portugal, Greece, and the Baltic countries, launched Jyseleca in RA in the Czech Republic, resulting in a €1 million milestone payment to Galapagos
• The MHRA (Medicines and Healthcare products Regulatory Agency) in Great Britain and the MHLW (Ministry of Health, Labour and Welfare) in Japan approved filgotinib 200mg for the treatment of moderate to severe UC
• Nine presentations at ECCO (European Crohn’s and Colitis Organisation), including 4 new analyses from the Phase 3 SELECTION and SELECTION long-term extension studies in UC. Initial results from European real-world survey demonstrated the importance of taking an innovative holistic approach to the management of UC
• Article 20 pharmacovigilance procedure ongoing, investigating the safety data of all JAK inhibitors used to treat certain chronic inflammatory disorders

Pipeline and corporate update:

• Multiple Phase 1 studies are being finalized with data read-outs expected before year-end
• Dr. Paul Stoffels
  
  ⁱ
  
  appointed as Chief Executive Officer, effective as of 1 April 2022
• Third installment of €50 million received from Gilead in Q1 as part of the revised filgotinib agreement as announced in December 2020, following payments of earlier instalments totalling €110 million in 2021
• Raised €2.2 million through the exercise of subscription rights
• Received a transparency notification from EcoR1 Capital indicating that its shareholding in Galapagos increased and crossed the 5% threshold, to 5.2% of the current outstanding Galapagos shares
• Created 2 new subscription rights plans within the framework of the authorized capital, intended for certain new members of the personnel of Galapagos or any of its subsidiaries

Post-period events:

• Our distribution partner Sobi recently launched Jyseleca in RA in Portugal
• AbbVie announced that a Phase 2 Proof-of-Concept study evaluating a triple combination therapy in cystic fibrosis (CF) did not meet the prespecified criteria. The company plans to start a Phase 2 study with a new triple combo, including the existing C1 corrector and potentiator licensed from Galapagos, early next year. In the event AbbVie receives regulatory approval and realizes commercial sales in CF, Galapagos is eligible to receive royalties ranging from single digit to low teens
• All proposed resolutions regarding the extraordinary and annual shareholders’ meetings held on 26 April 2022 have been adopted by the shareholders, including the implementation of a
  
  one-tier
  
  governance structure in accordance with the Belgian Companies and Associations Code, the appointment of Stoffels IMC BV (permanently represented by Dr. Paul Stoffels) as director and the appointments of Jérôme Contamine and Dr. Dan Baker as independent directors of the board. Subsequently, the (new) unitary board has appointed Stoffels IMC BV (permanently represented by Dr. Paul Stoffels) as chair of the board of directors

First


quarter


202


2


financial


highlights


(unaudited)



(€ millions, except basic


& diluted


income


/


loss


per share)

Q1 2022


f


inancial results


We reported product net sales of Jyseleca in Europe for the first three months of 2022 amounting to €14.4 million (€0.1 million in the first quarter of 2021). Our counterparties for the sales of Jyseleca were mainly hospitals and wholesalers located in Belgium, the Netherlands, France, Italy, Spain, Germany, the United Kingdom, Ireland, Austria, Norway, Sweden and Finland.

Cost of sales related to Jyseleca net sales in the first three months of 2022 amounted to €2.9 million.

Collaboration revenues amounted to €121.9 million for the first three months of 2022, compared to €113.8 million for the first three months of 2021.

Revenues recognized related to the collaboration agreement with Gilead for the filgotinib development were €59.0 million in the first three months of 2022 compared to €55.3 million for the same period last year. This slight increase was mainly due to higher revenue recognition of milestone payments, strongly influenced by the milestone achieved related to the regulatory approval in Japan for UC in the first quarter of 2022. The revenue recognition related to the exclusive access rights for Gilead to our drug discovery platform amounted to €57.3 million for the first three months of 2022 (€57.8 million for the same period last year).

We have recognized royalty income from Gilead for Jyseleca for €4.6 million in the first three months of 2022 (compared to €0.7 million in the same period last year) of which €3.6 million royalties on milestone income for UC approval in Japan.

Additionally, we recorded a milestone of €1.0 million triggered by the first sale of Jyseleca in the Czech Republic by our distribution and commercialization partner Sobi, in the first quarter of 2022.

Our deferred income balance on 31 March 2022 includes €1.7 billion allocated to our drug discovery platform that is recognized linearly over the remaining period of our 10 year collaboration, and €0.6 billion allocated to the filgotinib development that is recognized over time until the end of the development period.

Our R&D expenditure in the first three months of 2022 amounted to €99.9 million, compared to €130.0 million for the first three months of 2021. This decrease was primarily explained by a decrease in subcontracting costs from €73.0 million in the first quarter of 2021 to €41.7 million in the first quarter of 2022, primarily due to the winding down of the ziritaxestat (IPF) program and reduced spend on our Toledo (SIKi) and other programs. This was partly offset by cost increases for our filgotinib program, on a three months basis compared to the same period in 2021.

Our S&M and G&A expenses were respectively €29.0 million and €33.4 million in the first three months of 2022, compared to respectively €14.5 million and €30.4 million in the first three months of 2021. This increase was primarily due to an increase in personnel costs mainly driven by higher average FTEs on a three months comparison basis following the commercial launch of filgotinib in Europe, as well as higher costs for RSU plans. The increase was also explained by the termination of our 50/50 co-commercialization cost sharing agreement with Gilead for filgotinib in 2022, while in the first quarter of 2021 such costs were still shared with Gilead.

Other operating income (€7.7 million vs €10.3 million for the same period last year) decreased, mainly driven by lower grant and R&D incentives income.

Net other financial income in the first three months of 2022 amounted to €9.7 million, compared to net other financial income of €36.2 million for the first three months of 2021. Net other financial income in the first three months of 2022 was primarily attributable to €13.8 million of unrealized currency exchange gains on our cash and cash equivalents and current financial investments at amortized cost in U.S. dollars, to €0.2 million of negative changes in (fair) value of current financial investments and to €2.1 million of interest expenses. The other financial expenses also contained the effect of discounting our long term deferred income of €1.9 million.

We realized a net loss from continuing operations of €13.3 million for the first three months of 2022, compared to a net loss of €12.8 million for the first three months of 2021.

The net profit from discontinued operations for the three months ended 31 March 2021 consisted of the gain on the sale of Fidelta, our fee-for-services business, for €22.2 million.

We reported a group net loss for the first three months of 2022 of €13.3 million, compared to a group net profit of €9.4 million for the first three months of 2021.

Cash


position


Current financial investments and cash and cash equivalents totaled €4,643.4 million on 31 March 2022, as compared to €4,703.2 million on 31 December 2021.

Total net decrease in cash and cash equivalents and current financial investments amounted to €59.8 million during the first three months of 2022, compared to a net decrease of €54.6 million during the first three months of 2021. This net decrease was composed of (i) €77.4 million of operational cash burn, (ii) offset by €2.2 million of cash proceeds from capital and share premium increase from exercise of subscription rights in the first three months of 2022, and (iii) €0.2 million negative changes in (fair) value of current financial investments and €15.6 million of mainly positive exchange rate differences.

Outlook


202


2


Financial guidance:

For 2022, we anticipate a significantly lower cash burn compared to 2021 of €450-€490 million, including anticipated net sales for Jyseleca between €65 and €75 million.

Expected regulatory events:

We expect reimbursement decisions in most key European markets for Jyseleca in UC this year and anticipate that Sobi will further progress with reimbursement discussions in RA and UC in Eastern and Central Europe, Greece, and the Baltic countries. Following the ongoing article 20 pharmacovigilance procedure on all JAK inhibitors, we expect that the EMA will give its opinion by end of September 2022.

Anticipated R&D milestones:

We expect the read out from a Phase 1b trial with JAK1 inhibitor GLPG0555 and a Phase 1 trial with JAK1/TYK2i GLPG3121 in healthy volunteers. In addition, we aim to progress TYK2 inhibitor GLPG3667 into a Phase 2 program, considering the current regulatory and competitive landscape for TYK2 as a class, and to advance selected compounds with optimized pharmacology and selectivity from our SIKi portfolio into the clinic. Furthermore, we are evaluating the start of a Phase 2 trial with chitinase inhibitor GLPG4716 in lung fibrosis.

While we push forward our internal programs and further roll-out Jyseleca in RA and UC, we continue to diligently scout for external opportunities. We are confident that in 2022 we will make significant progress to accelerate our innovative pipeline with the aim to address unmet medical needs, and we look forward to presenting an in-depth update on our future plans later this year.

First


quarter


2022


financial


report

Galapagos’ financial report for the first three months ended 31 March 2022, including details of the unaudited consolidated results, is accessible on the financial reports section of our

website

.

Conference


call and webcast presentation

Management will host a conference call and webcast presentation with Q&A tomorrow 6 May 2022, at 14:00 CET / 8 AM ET. To participate in the conference call, please dial one of the following numbers ten minutes prior to the start:

CODE:


9523309

The live webcast can be accessed on the investors section of the Galapagos

website

, and a replay will be made available shortly after the close of the call.

Financial


calendar


2022

About Galapagos

Galapagos NV discovers, develops, and commercializes small molecule medicines with novel modes of action. Our pipeline comprises discovery through Phase 3 programs in inflammation, fibrosis 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

.

Except for


filgotinib’s


approval for the treatment of rheumatoid arthritis


and


ulcerative colitis


by the European Commission


, Great Britain’s


Medic


ines and Health


care products Regulatory Agency


and Japanese Ministry of Health,


Labour


and Welfare,


our


drug candidates are investigational; their efficacy and safety have not been fully evaluated by any regulatory authority.

Jyseleca

^®

is a trademark of Galapagos NV and Gilead Sciences, Inc. or its related companies.

C


ontact

Investors:


Sofie Van Gijsel

Head of Investor Relations

+1 781 296 1143

Sandra Cauwenberghs

Director Investor Relations

+32 495 58 46 63


[email protected]

Media:


Marieke Vermeersch

Head of Corporate Communication

+32 479 490 603


[email protected]

Forward-looking statements

This release may contain forward-looking statements, including, among other things, statements


regarding the global R&D collaboration with Gilead


,


the amount and timing of potential future milestone


s


, opt-in and/or royalty payments by Gilead, Galapagos’ strategic R&D ambitions


,


including progress on our fibrosis portfolio


and


SIK


platform


,


and potential changes of such ambitions


,


the


guidance from management (including guidance


regarding the expected operational use of cash


during financial year 20


2


2


), financial results


,


statements regarding the expected timing, design and readouts of ongoing and planned clinical trials


,


including recruitment for trials and topline results for our trials and studies in our inflammation portfolio,


statements regarding the strategic re-evaluation


,


statements


related to the EMA’s planned safety review of JAK inhibitors used to treat certain inflammatory disorders, including


filgotinib


, initiated at the request of the European Commission (EC) under article 20 of Regulation (EC) No 726/2004,


statements relating to


interaction


s


with


regulatory authorities


,


the


timing


or likelihood of additional regulatory authorities’ approval of marketing authorization for


filgotinib


for RA, UC or any other indication, including UC and IBD indication


s


for


filgotinib


in Europe,


Great-Britain


, Japan, and the U.S.


, such additional regulatory authorities requiring additional studies


,


statements regarding changes in our


board of directors,


and key personnel, our ability to effectively transfer knowledge during this period of transition, the search and recruitment


of


a CSO


, the risk that Galapagos will be unable to successfully achieve the anticipated benefits from its leadership transition plan,


the possibility that Galapagos will encounter challenges retaining or attracting talent,


the timing or likelihood of pricing and reimbursement interactions for


filgotinib


,


statements relating to the


build-up of


our


commercial


organization


,


statements


and


expectations regarding


commercial sales


for


filgotinib


, the


expected


impact of COVID-19, and our strategy, business plans and focus


.


Galapagos cautions the reader that forward-looking statements are not guarantees of future performance.


Forward-looking statements involve known and unknown risks, uncertainties and other factors which might cause the actual results, financial condition and liquidity, performance or achievements of Galapagos, or industry results, to be materially different from any historic or future results, financial conditions and liquidity, performance or achievements expressed or implied by such forward-looking statements.


In addition, even if Galapagos’ results, performance, financial condition and liquidity, and the development of the industry in which it operates are consistent with such forward-looking statements, they may not be predictive of results or developments in future periods.


Among the factors that may result in differences


are that our expectations regarding our 202


2


revenues and financial results and our


202


2


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


the risk


that data from Galapagos’ ongoing


and planned


clinical research programs


in rheumatoid arthritis, Crohn


’


s disease, ulcerative colitis, idiopathic pulmonary fibrosis, osteoarthritis, other inflammatory indications


and kidney disease


may not support registration or further development of its product candidates due to safety


or


efficacy


concerns


or other reasons), Galapagos’ reliance on collaborations with third parties


(including our collaboration partner Gilead


)


,


the timing of and the risks related to the


implementation of the transition of the European commercialization responsibility of


filgotinib


from Gilead to us


,


the risk that the transition will not be completed on the currently contemplated timeline or at all, including the transfer of the supply chain, and the risk that the transition will not have the currently expected results for our business and results of operations,


estimating the commercial potential of


our product candidates


and


Galapagos’ expectations regarding the costs and revenues associated with the transfer of European commercialization rights to


filgotinib


may be incorrec


t


,


the


risk that Galapagos will not be able


to


continue to execute on its currently contemplated business plan and/or will revise its business plan,


the


risk that Galapagos will be unable


to


successfully achieve


the


anticipated benefits from its leadership transition plan, the risk that Galapagos will encounter challenges retaining or attracting talent, risks related to disruption in our operations due to the conflict between Russia and Ukraine, the risks related to continued regulatory review of


filgotinib


following approval by relevant regulatory authorities and the EMA’s planned safety review of JAK inhibitors used to treat certain inflammatory disorders, including the risk that the EMA and/or other regulatory authorities determine that additional non-clinical or clinical studies are required with respect to


filgotinib


, the risk that the EMA may require that the market authorization for


filgotinib


in the EU be amended, the risk that the EMA may impose JAK class-based warnings, the risk that the EMA’s planned safety review may negatively


impact


acceptance of


filgotinib


by patients, the medical community and healthcare payors


and the


risks and


uncertainties


relating


to the impact of the COVID-19 pandemic


.


A further list and description of these risks, uncertainties and other risks can be found in Galapagos’ Securities and Exchange Commission (SEC) filings and reports, including in Galapagos’ most recent annual report on


F


orm 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.



This release may contain 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 “anticipate,” “expect,” “intend,” “plan,” “may,” “will,” “continue,” “aim,” “future


,


”


“guidance,” “outlook,” “progress,” “forward”


as well as similar expressions.


Forward-looking statements contained in this release include, but are not limited to,


statements regarding the global R&D collaboration with Gilead,


statements regarding


the amount and timing of potential future milestones, opt-in and/or royalty payments by Gilead,


statements regarding our


strategic R&D


plans


,


including progress on our fibrosis portfolio and SIK platform,


and potential changes of such


plans


,


statements regarding


the


guidance from management


regarding our financial results


(including guidance


regarding the expected operational use of cash


during financial year 202


2


)


, statements regarding our regulatory and R&D outlook


,


statements regarding the expected timing, design and readouts of ongoing and planned clinical trials


,


including recruitment for trials and topline results for our trials and studies in our inflammation portfolio, statements regarding the strategic re-evaluation


, statements relating to interactions with


regulatory authorities


, the timing or likelihood of additional regulatory authorities’ approval of marketing authorization for filgotinib


for RA, UC or any other indication, including UC and IBD indication


s


for filgotinib in Europe, Great-Britain, Japan, and the U.S.,


and


such additional regulatory authorities requiring additional studies,


,


statements regarding


the timing or likelihood of pricing and reimbursement interactions for filgotinib, statements relating to the build-up of our commercial organization,


statements and expectations regarding commercial sales


for filgotinib, and


statements regarding


our strategy, business plans and focus.


Any forward-looking statements in this release are based on management’s current expectations and beliefs


and


are


not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which might cause


our


actual results, financial condition and liquidity,


performance


or achievements


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.


Such risks include, but are not limited to, the risk that


our expectations regarding our 202


2


revenues and financial results and our


202


2


operating expenses may be incorrect (including because one or more of


our


assumptions underlying


our


expense expectations may not be realized),


the risk that our


expectations regarding


our


development programs may be incorrect, the inherent


risks and


uncertainties associated with competitive developments, clinical trial and product development activities and regulatory approval requirements (including the risk that data from


our


ongoing and planned clinical research programs


in rheumatoid arthritis, Crohn’s disease, ulcerative colitis, idiopathic pulmonary fibrosis, osteoarthritis, other inflammatory indications and kidney disease


may not support registration or further development of


our


product candidates due to safety or efficacy concerns or other reasons),


risks related to our


reliance on collaborations with third parties


(including


, but not limited to,


our collaboration partner Gilead)


,


risks related


to the implementation of the transition of the European commercialization responsibility of filgotinib from Gilead to us, the risk that the transition will not be completed on the currently contemplated timeline or at all, including the transfer of the supply chain, and the risk that the transition will not have the currently expected results for our business and results of operations,


the risk that our estimates of


the commercial potential of our product candidates and


our


expectations regarding the costs and revenues associated with the transfer of European commercialization rights to filgotinib may be incorrect, the risk that


we


will not be able to continue to execute on


our


currently contemplated business plan and/or will revise


our


business plan,


risks related to


our ability to effectively transfer knowledge during this period of transition


,


the risk that


we


will be unable to successfully achieve the anticipated benefits from


our


leadership transition plan, the risk that


we


will encounter challenges retaining or attracting talent,


risks related to


potential


disruption


s


in our operations due to the conflict between Russia and Ukraine


,


and the


risks and


uncertainties relating to the impact of the COVID-19 pandemic


. A further


discussion


of these risks, uncertainties and other risks can be found in


our


filings and reports


with the


Securities and Exchange Commission (SEC), including in


our


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


risks and


uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. In addition, even if


our


results, performance, 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. These forward-looking statements speak only as of the date of publication of this


release


.


We


expressly disclaim any obligation to update any such forward-looking statements in this


release


unless required by law or regulation.

ⁱ

Acting via Stoffels IMC BV


ⁱⁱ

The operational cash burn (or operational cash flow if this liquidity 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:

• the net proceeds, if any, from share capital and share premium increases included in the net cash flows generated from/used in (-) financing activities
• the net proceeds or cash used, if any, in acquisitions or disposals of businesses; the movement in restricted cash and movement in current financial investments, if any, included in the net cash flows generated from/used in (-) investing activities.

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

The operational cash burn for the three months ended 31 March 2022 amounted to €77.4 million and can be reconciled to our cash flow statement by considering the decrease in cash and cash equivalents of €995.4 million, adjusted by (i) the cash proceeds from capital and share premium increase from the exercise of subscription rights by employees for €2.2 million, and (ii) the net purchase of current financial investments amounting to €920.2 million


ⁱⁱⁱ

General and administrative


^iv

Sales and marketing

Attachment

• 
  Galapagos demonstrates regulatory and commercial progress in Q1 2022