Net profit of €56 M for first
half 2014
-
Solid cash balance of €232 M on 30 June 2014,
liquid assets position of €240 M
-
Group revenues €63 M, including €18 M revenues
from discontinued service operations
-
Operating loss of continuing operations €15 M,
reflecting planned increase in pipeline investment
-
Group net profit €56 M, resulting from €68 M net
gain on sale of service operations
-
Mature clinical pipeline with multiple Phase 1
and 2 readouts expected over next 18 months
-
Non-cash revision to full year revenue guidance:
now €100 M, including €18 M from discontinued service operations
-
Guidance for year end 2014 cash position
increased to €175 M (was €170 M)
-
GSK stops development of GSK2586184 in psoriasis
and ulcerative colitis, explores other indications
Mechelen,
Belgium; 8 August 2014 - Galapagos NV (Euronext: GLPG) announces
its non-audited half year results and adjusts guidance for the full
year 2014.
"Galapagos reported the largest
first half cash balance in its history and a substantial profit at
half year 2014, resulting from the sale of the service operations
to Charles River. Moving forward, we invested more in our
pipeline this half, delivering exciting results with our corrector
series in cystic fibrosis, encouraging activity of GLPG1790 in
melanoma, and full activity against MRSA with our novel antibiotic
GLPG1492. We continue to execute on our novel targets,
filling our pipeline with new opportunities," said Galapagos CEO
Onno van de Stolpe. "Galapagos aims to deliver the 12 week
data from DARWIN 1 with GLPG0634 in March 2015, starting a steady
flow of Phase 2 readouts expected for GLPG0634 in rheumatoid
arthritis and Crohn's next year and potentially triggering payments
of $250 million from AbbVie. Galapagos is nearing some key
valuation inflection points as it finishes up recruiting for these
studies, with a healthy balance sheet to support further growth of
our pipeline."
Key figures
half year 2014
(€ millions, except net loss per
share)
NOTE: Galapagos sold its BioFocus and Argenta 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. Group results include both continuing and
discontinued operations.
|
Continuing Operations
30/06/2014 |
Continuing Operations
30/06/2013 |
Group
Total
30/06/2014 |
Group
Total
30/06/2013 |
Revenues |
45.1 |
49.2 |
63.2 |
77.4 |
Cost of
sales |
|
|
-11.3 |
-20.1 |
R&D
expenditure |
-52.8 |
-48.0 |
-52.8 |
-48.0 |
General
& administrative costs |
-6.4 |
-5.9 |
-10.5 |
-12.9 |
Sales
& marketing costs |
-0.7 |
-0.6 |
-0.9 |
-1.1 |
Restructuring & integration costs |
-0.6 |
-0.2 |
-0.6 |
-0.6 |
Operating result |
-15.4 |
-5.4 |
-12.9 |
-5.2 |
Net
financial result |
1.1 |
0.3 |
1.5 |
-0.2 |
Result on
divestment |
|
|
67.5 |
|
Taxes |
|
|
-0.2 |
0.1 |
Net result for the period |
-14.3 |
-5.1 |
55.9 |
-5.4 |
Basic profit/loss per share (€) |
-0.48 |
-0.19 |
1.87 |
-0.19 |
Cash and cash equivalents |
NA |
NA |
231.5 |
136.7 |
Details of the financial
results
(NOTE: Galapagos sold its BioFocus and Argenta 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. Group results include both
continuing and discontinued operations.)
Revenues
Galapagos' Group revenues for the first half of 2014 amounted to
€63.2 million compared to €77.4 million in the same period of
2013. R&D revenues (€35.5 million vs €40.2 million last
year) were lower due to the achievement of fewer milestones and a
non-cash change in estimates of revenue recognition for the '634
program. Other R&D income (€9.6 million) increased in H1
'14, driven mainly by IWT grants from the Flemish government.
Results
The Group realized a net profit for the first half of 2014 of €55.9
million, compared to a loss of €5.4 million in the first six months
of 2013.
R&D expenses for the Group in
the first half-year of 2014 were €52.8 million compared to €48.0 M
in 2013. This planned increase is mainly due to increased
efforts on CF and internal programs.
General and administrative
expenses of the Group were €10.5 million in the first half of 2014,
compared to €12.9 million in the first half of 2013.
Following the sale of the service
operations, the Group reported a net profit from discontinued
operations of €70.2 million in the first half of 2014. The
service operations reported revenues of €18.2 million and a net
profit of €2.5 million for the first three months of 2014.
Galapagos recorded a result on divestment of €67.5
million.
Liquid assets
position
Galapagos' cash and cash equivalents amounted to €231.5 million on
30 June 2014. The Company's liquid asset position of €240.1
million on 30 June 2014 (€147.5 million at year end 2013) included
€8.5 million in alliance related receivables for which revenues
were recorded in H1 2014, and payment was or is to be received in
Q3 2014. A net increase of €90.1 million in cash and cash
equivalents was recorded during the first half of 2014, compared to
an increase of €42.1 million in the same period last year.
The increase this year is due to the €130.8 million net cash
proceeds from the sale of the service operations to Charles River
Laboratories Inc. in April 2014. Furthermore, Galapagos'
balance sheet holds an unconditional and unrestricted receivable
from the French government (Crédit d'Impôt Recherche)[1] now
amounting to €28 million, payable in three yearly
tranches.
Operational
overview
R&D
division
o Inflammation
o With GLPG0634, we expect topline 12 week
results for DARWIN 1 (595 patients, methotrexate add-on) in March
2015 and DARWIN 2 (280 patients, monotherapy) topline 12 week
results in Q2 2015, with complete 24 week data package in Q3
2015
o We initiated a 20 week, 180 patient Phase 2
study with GLPG0634 in Crohn's disease, the topline results of
which we expect to disclose in Q2 2015
o We presented results for GLPG0634 at EULAR,
DDW, and ECCO (abstracts, posters and presentations available on
our website)
o
Regarding GSK2586184, Galapagos' Jak1 inhibitor licensed to GSK,
GSK informed Galapagos that [quote]"GSK have
assessed the overall risk:benefit profile of GSK2586184 and have
elected to terminate all current indications where GSK2586184 is
administered orally for chronic immunoinflammatory diseases (SLE,
UC, psoriasis). As disclosed in February 2014, futility was
demonstrated in SLE at an early interim analysis of an adaptive
phase 2a/b study. For ulcerative colitis and psoriasis, GSK
has elected to terminate development principally as a result of the
statin drug-drug interaction (DDI) study. Development options
for GSK2586184 in other potential indications are presently being
explored by GSK."[end quote] Galapagos' other Jak1
inhibitor, GLPG0634, presents a low risk of interference with
statin and other drugs concomitantly administered to patients, as
Galapagos disclosed at EULAR 2014 (abstract available on our
website)
o
With GLPG0974, the first selective antagonist of FFA2 in clinical
development, we completed a Phase 2 proof-of-concept study in 45
ulcerative colitis (UC) patients. Patients on treatment
tolerated it well and showed decreases in two established
biomarkers of disease severity. This did not translate to
improvement in signs and symptoms during this four week
study. Galapagos is performing subgroup analyses, exploring
additional indications, and discussing further development of
GLPG0974 with potential partners
o We achieved a partial milestone by the
nomination of a pre-clinical candidate GLPG1792 in the
osteoarthritis alliance with Servier
o In the alliance with MorphoSys, partiese
selected MOR106 as the first pre-clinical candidate
antibody
o Cystic fibrosis
o We reported new in vitro
cellular data showing multiple series of corrector compounds which,
in combination with our novel potentiator GLPG1837, restore up to
65% of wild-type CFTR function in f508del mutation, the largest
patient group in CF. GLPG1837 is expected to enter the
clinic, and a pre-clinical candidate corrector is expected to be
nominated, both by end 2014
o Anti-infectives
o Galapagos' fully proprietary narrow spectrum
antibiotic with a novel mode-of-action against
Methicillin-resistant Staphylococcus aureus,
GLPG1492, is expected to be dosed in first volunteers (Phase 1) in
early 2015. Pre-clinical data with GLPG1492 showing
in vitro cidality and in
vivo efficacy were disclosed, with broad coverage of all known
MRSA strains. Galapagos has discovered that the mode of
action for GLPG1492 can be utilized as a platform for addressing
gram positive and gram negative bacteria posing major public health
threats, including the ESKAPE pathogens
o Oncology
o We disclosed new data showing high sensitivity
to GLPG1790 in metastatic melanoma, including wild-type BRAF.
GLPG1790 is fully proprietary to Galapagos
o We disclosed novel target EPHA2 of GLPG1790 at
AACR (poster available on our website)
o Other
o We initiated a Phase 1 First-In-Human study
with GLPG1690, a compound with a novel mode of action from the
alliance with Janssen Pharmaceutica NV. GLPG1690 has a novel
mode of action discovered by Galapagos, with potential application
in pulmonary diseases. This achievement triggered a €6.6
million milestone payment to Galapagos
o We announced two grant awards from Flemish IWT:
€2.9 million for cystic fibrosis research and €2.3 million for
fibrosis research
Service
division
-
Galapagos sold its service operations to Charles
River Laboratories on 1 April 2014 for cash consideration of €129
million, excluding an earnout of €5 million upon achievement of
certain commercial targets within one year, and excluding working
capital and net cash/debt adjustments
Corporate
-
Van Herk Investments disclosed 5.3% shareholding
in Galapagos
-
Raised €2.4 million cash through warrant
exercises
-
Guillaume Jetten resigned as CFO
Outlook
2014
The Phase 2B clinical program in RA for GLPG0634 is expected to
deliver 12 week topline efficacy and safety data for DARWIN 1 in
March 2015. The Company expects to make significant progress
in partnered and non-partnered R&D programs as the pipeline
continues to mature across a broad range of therapeutic areas,
resulting in multiple additional clinical and pre-clinical stage
programs by end 2014. With a solid cash balance, Galapagos is
very well positioned to support this pipeline development.
Based on the forecast for the
remainder of the year, the year-end cash guidance is increased from
€170 million to €175 million.
Revenue recognition for AbbVie's
payments in 2012 and 2013 for '634 was adjusted in accordance with
updated project timelines, and revenue recognition for AbbVie's
2013 CF upfront non-refundable payment was now deferred over a
longer period as a result of a change in estimate relative to the
period of continuous involvement by Galapagos (in the
remaining R&D process). These changes lead management to
give new guidance for Group revenues of €100 million, including €18
million revenues from the discontinued service operations. This
adjusted revenue guidance has no cash impact.
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.
Interim Report
2014
The electronic version of Galapagos' Interim Report for half year
2014 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.
Financial calendar
2014
Full year results
2014
6 March 2015
Annual shareholders meeting 28 April
2015
About
Galapagos
Galapagos (Euronext: GLPG; OTC: GLPYY) is specialized in novel
modes-of-action, with a large pipeline comprising three Phase 2
studies, two Phase 1 studies, five pre-clinical, and 20 discovery
small-molecule and antibody programs in cystic fibrosis,
inflammation, antibiotics, metabolic disease, and other
indications. In the field of inflammation, AbbVie and
Galapagos signed an agreement for the development and
commercialization of GLPG0634. GLPG0634 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 has another selective JAK1 inhibitor,
GSK2586184 (formerly GLPG0778, in-licensed by GlaxoSmithKline in
2012). GLPG0974 is the first inhibitor of FFA2 to be
evaluated clinically for the treatment of IBD; this program has
completed a Proof-of-Concept Phase 2 study. GLPG1205 is a
first-in-class molecule that targets inflammatory disorders and has
completed Phase 1. GLPG1690 is a first-in-class compound that
targets pulmonary diseases and is currently in a Phase 1
study. AbbVie and Galapagos signed an agreement in cystic
fibrosis to develop and commercialize molecules that address
mutations in the CFTR gene. Potentiator GLPG1837 is at the
pre-clinical candidate stage. The Galapagos Group, including
fee-for-service subsidiary Fidelta, has around 400 employees,
operating from its Mechelen, Belgium headquarters and facilities in
The Netherlands, France, and Croatia. Further information 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 may contain forward-looking
statements, including, without limitation, 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 other factors which might cause the actual
results, financial condition, performance or achievements of
Galapagos, or industry results, to be materially different from any
historic or future results, financial conditions, performance or
achievements expressed or implied by such forward-looking
statements. 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,
unless required by law or regulation.
[1] Crédit
d'Impôt Recherche refers to an innovation incentive system
underwritten by the French government
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Galapagos NV via Globenewswire
HUG#1847341
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