Lakefront Biotherapeutics NV 6-K, filed Aug 8, 2022
Lakefront Biotherapeutics NV (LKFT)
About this 6-K
Lakefront Biotherapeutics NV filed this 6-K on August 8, 2022.
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 August 2022
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 ☒ 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 2022 Results
On August 4, 2022, the Registrant announced its unaudited first half-year results for 2022, which are further described in an H1 2022 report.
| Exhibit |
Description | |
| 99.1 | Press Release dated August 4, 2022 | |
| 99.2 | H1 Report 2022 | |
The information contained in this Report on Form 6-K, including the exhibits, except for the quotes of Dr. Paul Stoffels and Mr. Bart Filius, contained in Exhibit 99.1, is hereby incorporated by reference into the Company’s Registration Statements on Form S-8 (File Nos. 333-204567, 333-208697, 333-211834, 333-215783, 333-218160, 333-225263, 333-231765, 333-249416 and 333-260500).
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.
| GALAPAGOS NV | ||
| (Registrant) | ||
| Date: August 8, 2022 | /s/ Marie-Théodora Vandewiele | |
| Marie-Théodora Vandewiele | ||
| Company Secretary |
Exhibit 99.1
First key steps in pipeline rebuild and strong commercial progress in H1 2022
| • | First half-year 2022 financial results: |
| • | Jyseleca® net sales reached €35.4 million |
| • | Group revenues of €274.0 million |
| • | Operating loss of €97.5 million |
| • | Cash and current financial investments of €4.4 billion on 30 June 2022 |
| • | Increased 2022 guidance for Jyseleca from €65-75 million to €75-85 million |
| • | Combined acquisitions of CellPoint and AboundBio in all-cash transactions positions company in CAR-T therapy space |
Webcast presentation tomorrow, 5 August 2022, at 14.00 CET / 8 AM ET, www.glpg.com,
Mechelen, Belgium; 4 August 2022, 22.01 CET; regulated information – Galapagos NV (Euronext & NASDAQ: GLPG) today announced its first half-year 2022 financial results, a year-to-date business update and its outlook for the remainder of 2022. The results are further detailed in the H1 2022 financial report available on the financial reports section of the website.
“This quarter, we took a first key step in our strategic transformation by entering the field of oncology with the acquisitions of CellPoint and AboundBio. The combined transactions offer the potential for a paradigm shift in CAR-T1 therapy through CellPoint’s breakthrough, decentralized point-of-care supply model, developed in a global strategic collaboration with Lonza, and AboundBio’s cutting-edge fully human antibody-based capabilities to design next-generation CAR-Ts. Patient enrolment in the ongoing Phase 1/2a trials in rrNHL and rrCLL2 is progressing well, and we expect topline results in the first half of next year. Our near-term goal is to bring three additional differentiated, next-generation CAR-T candidates in the clinic over the next three years,” said Dr. Paul Stoffels3, CEO and chairman of the board of directors of Galapagos. “We strongly believe that we are taking the right steps in our transformation to accelerate value creation, and we look forward to presenting an in-depth update on our strategy later this year.”
“Our Jyseleca franchise is performing very well with robust sales momentum, supported by the regulatory approvals in ulcerative colitis (UC) in Great Britain and Japan earlier this year. The adoption of Jyseleca is strong across Europe with reimbursement for rheumatoid arthritis (RA) in 15 and for UC in 6 countries,” added Bart Filius, President, COO and CFO of Galapagos. “Following the acquisitions of CellPoint and AboundBio, we expect that second half operating expenses will increase by approximately €30 million. Therefore, we revised our cash burni guidance of €450-€490 million for the full year 2022 to €480-€520 million. As a result of the strong Jyseleca performance, we increase our full-year net sales guidance of €65-€75 million to €75-€85 million.”
| 1 | Chimeric antigen receptor T-cell |
| 2 | rrNHL: relapsed/refractory non-Hodgkin Lymphoma, rrCLL: relapsed/refractory Chronic Lymphocytic Leukemia |
| 3 | Acting via Stoffels IMC BV |
1
Year-to-date operational overview
Commercial & regulatory progress:
| • | Strong adoption across Europe with reimbursement for RA in 15 countries and for UC in 6 countries |
| • | 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 and Portugal, resulting in €2 million milestone payments to Galapagos in H1 |
| • | Filed a type II variation for the label update for Jyseleca based on data from the MANTA and MANTA-RAy studies |
| • | At the EULAR4 2022 European Congress of Rheumatology, Galapagos hosted several expert sessions and presented 11 abstracts, further establishing us as a key player in RA |
| • | Article 20 pharmacovigilance procedure ongoing by the European Medicines Agency’s (EMA) Pharmacovigilance Risk Assessment Committee (PRAC), investigating the safety data of all JAK inhibitors for the treatment of certain chronic inflammatory disorders |
Pipeline update:
| • | Decided to move forward with GLPG3667 (TYK2 inhibitor) in dermatomyositis with the aim to start a Phase 2 study before year-end |
| • | Discontinued development of 4 early-stage programs as part of ongoing scientific and strategic exercise: GLPG3121, a local release formulation JAK1/TYK2 inhibitor with potential in inflammatory diseases; GLPG0555, a JAK1 inhibitor evaluated in osteoarthritis; GLPG4586, a compound with undisclosed mode of action directed toward fibrosis; and GLPG4716, a chitinase inhibitor directed toward idiopathic pulmonary fibrosis |
Corporate update:
| • | Entered the field of oncology through the combined acquisitions of CellPoint and AboundBio in all-cash transactions |
| • | Received a transparency notification from FMR LLC in Q2 indicating that its shareholding in Galapagos increased and crossed the 5% threshold, to 5.04% of the current outstanding Galapagos shares |
| • | Raised €3.6 million through the exercise of subscription rights |
| • | Created new subscription rights plans, offering all Galapagos employees the opportunity to participate |
| • | All proposed resolutions regarding the extraordinary and annual shareholders’ meetings were adopted by Galapagos’ shareholders on 26 April 2022 |
| 4 | European Alliance of Associations for Rheumatology |
2
First half-year 2022 financial highlights (unaudited)
(€ millions, except basic & diluted income/loss per share)
| 30 June 2022 group total |
30 June 2021 group total |
Variance | ||||||||||
| Product net sales |
35.4 | 0.5 | 34.9 | |||||||||
| Collaboration revenues |
238.6 | 253.2 | (14.6 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total net revenues |
274.0 | 253.7 | 20.3 | |||||||||
|
|
|
|
|
|
|
|||||||
| Cost of sales |
(5.5 | ) | (0.1 | ) | (5.4 | ) | ||||||
| R&D expenditure |
(249.5 | ) | (268.8 | ) | 19.3 | |||||||
| G&Aii and S&Miii expenses |
(134.0 | ) | (105.8 | ) | (28.2 | ) | ||||||
| Other operating income |
17.6 | 23.6 | (5.9 | ) | ||||||||
| Operating loss |
(97.5 | ) | (97.6 | ) | 0.1 | |||||||
| Net financial result |
67.7 | 19.9 | 47.8 | |||||||||
| Income taxes |
(2.5 | ) | 0.5 | (3.0 | ) | |||||||
| Net loss from continuing operations |
(32.3 | ) | (77.2 | ) | 44.9 | |||||||
| Net profit from discontinued operations |
— | 22.2 | (22.2 | ) | ||||||||
| Net loss of the period |
(32.3 | ) | (55.0 | ) | 22.7 | |||||||
| Basic and diluted loss per share (€) |
(0.49 | ) | (0.84 | ) | ||||||||
| Basic and diluted loss per share from continuing operations (€) |
(0.49 | ) | (1.18 | ) | ||||||||
| Current financial investments and cash and cash equivalents |
4,429.0 | 5,006.6 | ||||||||||
H1 2022 financial results
We reported product net sales of Jyseleca in Europe for the first six months of 2022 amounting to €35.4 million (€0.5 million in the first six months of 2021). Our counterparties for the sales of Jyseleca were mainly hospitals and wholesalers located in Belgium, the Netherlands, France, Italy, Spain, Germany, Great Britain, Ireland, Austria, Norway, Sweden and Finland.
Cost of sales related to Jyseleca net sales in the first six months of 2022 amounted to €5.5 million.
Collaboration revenues amounted to €238.6 million for the first six months of 2022, compared to €253.2 million for the first six months of 2021.
Revenues recognized related to the collaboration agreement with Gilead for the filgotinib development were €115.3 million in the first six months of 2022 compared to €136.1 million for the same period last year. This decrease was due to a lower increase in the percentage of completion, partly offset by a higher revenue recognition of milestone payments, strongly influenced by the milestone achieved related to the regulatory approval in Japan for UC in the first half-year of 2022. The revenue recognition related to the exclusive access rights for Gilead to our drug discovery platform amounted to €114.9 million for the first six months of 2022 (€115.7 million for the same period last year).
3
We have recognized royalty income from Gilead for Jyseleca for €6.3 million in the first six months of 2022 (compared to €1.4 million in the same period last year) of which €3.6 million royalties on milestone income for UC approval in Japan.
Additionally, we recorded milestones of €2.0 million triggered by the first sale of Jyseleca in the Czech Republic and Portugal by our distribution and commercialization partner Sobi, in the first half-year of 2022.
Our deferred income balance on 30 June 2022 includes €1.6 billion allocated to our drug discovery platform that is recognized linearly over the remaining period of our 10-year collaboration, and €0.5 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 six months of 2022 amounted to €249.5 million, compared to €268.8 million for the first six months of 2021. This decrease was primarily explained by a decrease in subcontracting costs from €139.2 million in the first six months of 2021 to €104.1 million in the first six months of 2022, primarily due to the winding down of the ziritaxestat (IPF) program and reduced spend on our Toledo (SIKi) and TYK2 programs. This was partly offset by cost increases for our filgotinib program, on a six month basis compared to the same period in 2021. Personnel costs decreased from €94.2 million in the first half of 2021 to €86.0 million for the same period this year mainly due to a lower number of FTEs as well as lower costs for our subscription right plans. Depreciation and impairment amounted to €32.6 million for the first six months of 2022 (€8.1 million for the same period last year). This increase was primarily due to an impairment of €26.7 million of previously capitalized upfront fees related to our collaboration with Molecure on the dual chitinase inhibitor OATD-01 (GLPG4716). As part of an ongoing strategic exercise to renew and accelerate our portfolio, we decided to return all rights to OATD-01 to Molecure.
Our G&A and S&M expenses amounted to €134.0 million in the first six months of 2022, compared to €105.8 million in the first six months of 2021. This increase was primarily due to the termination of our 50/50 filgotinib co-commercialization cost sharing agreement with Gilead for filgotinib in 2022. The cost increase was also explained by an increase in personnel costs for the first six months of 2022 compared to the same period last year explained by an increase in the commercial work force driven by the commercial launch of filgotinib in Europe.
Other operating income (€17.6 million vs €23.6 million for the same period last year) decreased, mainly driven by lower grant and R&D incentives income.
Net financial income in the first six months of 2022 amounted to €67.7 million, compared to net financial income of €19.9 million for the first six months of 2021. Net financial income in the first six months of 2022 was primarily attributable to €57.4 million of unrealized currency exchange gains on our cash and cash equivalents and current financial investments at amortized cost in U.S. dollars, and to €11.8 million of positive changes in (fair) value of current financial investments. The financial expenses also contained the effect of discounting our long term deferred income of €3.8 million.
We realized a net loss from continuing operations of €32.3 million for the first six months of 2022, compared to a net loss of €77.2 million for the first six months of 2021.
The net profit from discontinued operations for the six months ended 30 June 2021 consisted of the gain on the sale of Fidelta, our fee-for-services business, for €22.2 million.
4
We reported a group net loss for the first six months of 2022 of €32.3 million, compared to a group net loss of €55.0 million for the first six months of 2021.
Cash position
Current financial investments and cash and cash equivalents totaled €4,429.0 million on 30 June 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 €274.2 million during the first six months of 2022, compared to a net decrease of €162.7 million during the first six months of 2021. This net decrease was composed of (i) €217.1 million of operational cash burn, (ii) offset by €3.6 million of cash proceeds from capital and share premium increase from exercise of subscription rights in the first six months of 2022, (iii) €11.8 million positive changes in (fair) value of current financial investments and €60.4 million of mainly positive exchange rate differences, and (iv) the cash out from the acquisitions of CellPoint and AboundBio, net of cash acquired, of €132.9 million.
Acquisitions of CellPoint and AboundBio
The preliminary accounting of the acquisitions of CellPoint and AboundBio are included in our H1 2022 condensed consolidated financial statements. To date, we have performed a preliminary fair value analysis of the business combinations. We expect the provisional amount of goodwill to change significantly upon the completion of the purchase price allocation, resulting from the valuation of the different assets and liabilities acquired.
Outlook 2022
Financial guidance:
Following the acquisitions of CellPoint and AboundBio, we revised our cash burn guidance for full year 2022 from €450-€490 million to €480-€520 million. Additionally, we increased our anticipated net sales guidance for Jyseleca from €65-€75 million to between €75 and €85 million.
Expected regulatory events:
We anticipate a Committee for Medicinal Products for Human Use (CHMP) opinion on the type II variation for the Jyseleca label, based on the data from the MANTA and MANTA-RAy studies around year-end. We also expect reimbursement decisions in most key European markets in UC and anticipate that Sobi will further progress with reimbursement discussions in RA and UC in Eastern and Central Europe, Greece, and the Baltic countries. As part of the ongoing article 20 pharmacovigilance procedure on all JAK inhibitors approved in Europe, we expect a CHMP opinion by the end of the year, followed by an adoption by the European Commission shortly afterwards.
Anticipated R&D milestones:
Patient enrolment in the Phase 1/2a trials in rrNHL and rrCLL is progressing well and we anticipate that additional clinical sites will be active by year-end. We are on track to report topline results of both trials in the first half of next year.
We plan to progress TYK2 inhibitor GLPG3667 into a Phase 2 program in dermatomyositis with first patients potentially recruited around year-end.
We continue to explore additional business development opportunities to further leverage our internal capabilities and renew our portfolio, and we look forward to presenting an in-depth update on our corporate strategy later this year.
First half-year 2022 financial report
Galapagos’ financial report for the first six months ended 30 June 2022, including details of the unaudited consolidated results, is accessible on the financial reports section of our website.
5
Conference call and webcast presentation
Management will host a conference call and webcast presentation followed by Q&A tomorrow 5 August 2022, at 14:00 CET / 8 AM ET. To participate in the conference call, please register in advance using this link. Upon registration, the dial-in numbers will be provided. The conference call can be accessed 10 minutes prior to the start time by using the conference access information provided in the e-mail received at the point of registering, or by selecting the call me feature.
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
| 3 November 2022 23 February 2023 |
Third quarter 2022 results Full year 2022 results |
(webcast 4 November 2022) (webcast 24 February 2023) |
About Galapagos
Galapagos is a fully integrated biotechnology company focused on discovering, developing, and commercializing innovative medicines. We are committed to improving patients’ lives worldwide by targeting diseases with high unmet needs. Our R&D capabilities cover multiple drug modalities, including small molecules and cell therapies. Our portfolio comprises discovery through to Phase 3 programs in inflammation, oncology, fibrosis, and other indications. Our first medicine for rheumatoid arthritis and ulcerative colitis is approved and available in the European Union (including Norway), Great Britain and Japan. For additional information, please visit www.glpg.com or follow us on LinkedIn or Twitter.
Except for filgotinib’s approval as Jyseleca® for the treatment of rheumatoid arthritis and ulcerative colitis by the European Commission, Great Britain’s Medicines and Healthcare 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.
Contact
Investors:
Sofie Van Gijsel
Head of Investor Relations
+1 781 296 1143
Sandra Cauwenberghs
Director Investor Relations
+32 495 58 46 63
ir@glpg.com
Media:
Marieke Vermeersch
Head of Corporate Communication
+32 479 490 603
media@glpg.com
6
Forward-looking statements
This press release includes forward-looking statements. 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,” “would,” “potential,” “forward,” “goal,” “next,” “stand to,” “continue,” “should,” “encouraging,” “aim,” “explore,” “further,” as well as similar expressions. These statements include, but are not limited to, the information provide in the sections “Year-to-date operation overview” and “outlook 2022”, the statements regarding the global R&D collaboration with Gilead and the amendment of our arrangement with Gilead for the commercialization and development of filgotinib, statements regarding the amount and timing of potential future milestones, opt-in and/or royalty payments, our R&D strategy, including progress on our fibrosis, inflammation, CAR-T portfolio, kidney disease and SIK platform, and potential changes of such ambitions, statements regarding our pipeline and complementary technology platforms driving future growth, the guidance from management (including guidance regarding the expected financial results, expected operational use of cash during financial year 2022 and our strategic and capital allocation priorities), statements regarding the acquisition of CellPoint and AboundBio (including statements regarding anticipated benefits of the acquisition and integration of CellPoint and AboundBio into our portfolio and strategic plans), statements regarding the expected timing, design and readouts of ongoing and planned clinical trials (or the discontinuation thereof), including recruitment for trials and topline results for our trials and studies in our portfolio, statements regarding the strategic re-evaluation, statements related to the EMA’s 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 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 for filgotinib in Europe, Great Britain, Japan, and the U.S., such additional regulatory authorities requiring additional studies, 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. We caution the reader that forward-looking statements are based on our management’s current beliefs and expectations 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 of , 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, including, but not limited to, the risk that our expectations regarding our 2022 revenues and financial results and our 2022 operating expenses may be incorrect (including because one or more of its assumptions underlying its expense expectations may not be realized), our expectations regarding its 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 RA, rrNHL, rrCLL, Crohn’s disease, UC, IPF , other inflammatory indications, dermatomyositis, and kidney disease or any other indication or disease, may not support registration or further development of its product candidates due to safety or efficacy concerns or other reasons), risks related to the acquisition of CellPoint and AboundBio, including the risk that we may not achieve the anticipated benefits of the acquisition of CellPoint and AboundBio, the inherent risks and uncertainties associated with target discovery and validation and drug discovery and development activities, our 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 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, including the risk that our plans with respect to CAR-T may not be achieved on the currently anticipated timeline or at all, the risk that our projections and expectations regarding the costs and revenues with the commercialization rights may be inaccurate, 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 disruption in our operations and ongoing studies (including our DIVERSITY 1 study) 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 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 safety review may negatively impact acceptance of filgotinib by patients, the medical community and healthcare payors and the risks and uncertainties related to the impact of the COVID-19 pandemic. A further list and description of these risks, uncertainties and other risks can be found in our Securities and Exchange Commission (SEC) filings and reports, including in our most recent annual report on Form 20-F filed with the SEC and other filings and reports filed by us 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, performance or achievements in future periods. 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.
7
| i | 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, related to the acquisitions or disposals of businesses; the movement in restricted cash and movement in current financial investments, if any, the cash advances and loans given to third parties, if any, included in the net cash flows generated from/used in (-) investing activities |
| • | the cash used for other liabilities related to the acquisition of businesses, if any, included in the net cash flows generated from/used in (-) operating 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 six months ended 30 June 2022 amounted to €217.1 million and can be reconciled to our cash flow statement by considering the decrease in cash and cash equivalents of €1,285.2 million, adjusted by (i) the cash proceeds from capital and share premium increase from the exercise of subscription rights by employees for €3.6 million, (ii) the net purchase of current financial investments amounting to €938.7 million, (iii) the cash out from acquisition of subsidiaries, net of cash acquired, of €132.9 million
| ii | General and administrative |
| iii | Sales and marketing |
8
Exhibit 99.2
Half-year financial report 2022 Foundation & Future
TABLE OF CONTENTS
Table of Contents
The Galapagos group
Letter to our shareholders.4
Potential external impact 8 Financial highlights 11 Risk factors.17 The Galapagos share 7 Related party transactions18 Disclaimer and other information 19
Financial statements
Unaudited condensed consolidated interim financial statements.23 Notes 32
Other information
Glossary.48 Financial calendar...65 Colophon...66
Contact..67
2
Galapagos Half-year financial report 2022
S2
The Galapagos group
An overview of Galapagos, its
strategy and portfolio in H1 2022
Foundation & Future
THE GALAPAGOS GROUP
Letter to our shareholders
Dear shareholders, exercise As we are to writing assess our the current next chapter portfolio for and our combine company, internal we embarked and external on a
innovation thorough strategic with the aim to accelerate transformational medicines to patients. oncology This quarter, withwe thetook acquisitions a first key of CellPoint step in our andstrategic AboundBio. transformation The combined by entering
transactions the provide field of us with end-to-end capabilities in CAR-T1 therapy and offer the potential for a paradigm shift
developed in the space in through a global CellPoint’s strategic collaboration breakthrough,with decentralized Lonza, and point-of-care AboundBio’s supply
cutting-edge model, fully human antibody-based capabilities to design next-generation CAR-Ts.
We teams warmly to Galapagos,
welcome and the we CellPoint look forward andtoAboundBio combining oncology. our unique Despite capabilities continued to push progress the boundaries with current in manufacturing CAR-T cancer therapies, and
complex long lead logistics times, continue costly central to be limiting patient factors access. for Thelarge-scale CellPoint capacity novel point-of-care and broad
allow supply for model, efficient, in 7-day or near delivery the hospital, of CAR-Tis therapies designed with to fresh shorten cells, time thereby to treatment offering
the as potential compared to significantly to industry standards. end xCellitIt workflow combines management CellPoint’s proprietary and monitoring end-to-software
with Lonza’s Cocoon® system, a closed, therapies. The regulatory authorities in Belgium, automated themanufacturing Netherlands and platform Spain have for cell approved and gene the start of clinical studies with this novel supply model.
Two Phase 1/2a studies in rrNHL and rrCLL2 with a clinically validated CD19 CAR-T target are supply ongoing model. and
provide Toplinethe results opportunity are expected for a rapid in the validation first half of of the 2023, CellPoint and if positive, CAR-T
point-of-care they would allow us to start pivotal studies in rrNHL and rrCLL shortly afterwards.
In fully a human next step, multi-specific our aim is and to multi-paratopic leverage CellPoint’s CAR-Ts platform that have withthe
AboundBio’s potential for next-generation deeper, more CAR-T durable treatment. responses Our to treatment near-termas goal well isas toretreatment bring three additional of patientsdifferentiated, who
relapsed next-generation following earlier CAR-T candidates in the clinic over the next three years.
1 Chimeric antigen
receptor T-cell
2 Relapsed/Refractory NHL: non-Hodgkin Lymphoma, CLL: Chronic
Lymphocytic Leukemia
4
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
In to discontinue light of the
ongoing 4 early-stage scientific programs: and strategic GLPG3121, review a local andrelease capital formulation allocation prioritization, JAK1/TYK2 inhibitor we decided with a potential compound in inflammatory with undisclosed diseases; mode
GLPG0555, of actionadirected JAK1 inhibitor toward evaluated fibrosis; in and osteoarthritis; GLPG4716, GLPG4586, a chitinase inhibitor development directed opportunities toward idiopathic to further pulmonary leverage our fibrosis. internal
Wecapabilities continue to and explore renew additional our portfolio, business and plan to provide a detailed update on our corporate strategy and portfolio later this year.
Portfolio
Our regulatory Jyseleca approvals franchise inis ulcerative performing colitis very
(UC) well inwith Great robust Britain sales and momentum, Japan earlier supported this year. Despite by the 30 being June the 2022, 4thJyseleca JAK inhibitor is reimbursed to market, in 15 thecountries adoptionfor ofrheumatoid Jyseleca is strong
arthritis across (RA) and Europe. 6 countries As of for UC, and we realized €35.4 million in net sales in the first half year of 2022.
We balance ended
sheet the first of six €4.4 months billion of in thecash year with and acurrent strong necessary financial investments, means to execute which for provides additional us with external the the innovation acquisitions and accelerate of CellPoint
our and R&D AboundBio, pipeline.we Following expect that approximately second half €30 operating million. Therefore, expenses will we increase revised our by cash burn3 guidance of
€450-€490 million for the strong full year Jyseleca 2022 to performance, €480-€520 million. we increase As a result our full-year of the
net million. sales guidance from €65-€75 million to €75-€85
3 We refer to the financial highlights for an explanation and reconciliation of this alternative liquidity measure
5
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
Year-to-date operational review
Commercial & regulatory progress
Strong 6 countries adoption across Europe with
reimbursement for RA in 15 countries and for UC in Greece, Sobi, ourand distribution the Balticand countries, commercialization launched Jyseleca partner inin RA Eastern in the and Czech Central Republic Europe, and Portugal, Portugal, resulting in
€2 million milestone payments to Galapagos in H1 Filed MANTA-RAy a type studies II variation for label update for Jyseleca based on data from the MANTA and At the EULAR4 2022 European Congress of
Rheumatology, Galapagos hosted several expert sessions and presented 11 abstracts, further establishing us as a key European player in RA Article Pharmacovigilance 20 pharmacovigilance Risk Assessment procedure Committee ongoing (PRAC), by
theinvestigating European Medicines the safety Agency’s data of all (EMA) JAK inhibitors for the treatment of certain chronic inflammatory disorders
Pipeline
update
start Decided a Phase to move 2 study forward before with year-end GLPG3667 (TYK2 inhibitor) in dermatomyositis with
the aim to strategic Discontinued exercise: development GLPG3121, ofa4local early-stage release formulation programs as JAK1/TYK2 part of ongoing inhibitor with scientific potential and a incompound inflammatory with diseases; undisclosed GLPG0555,
modeaof JAK1 action inhibitor directed evaluated toward infibrosis; osteoarthritis; and GLPG4716, GLPG4586, a chitinase inhibitor directed toward idiopathic pulmonary fibrosis
Corporate update
Entered in all-cash the transactions
field of oncology through the combined acquisitions of CellPoint and AboundBio Galapagos Received a increased transparency andnotification crossed the from 5%FMR threshold, LLC in Q2 to 5.04% indicating of the that current its shareholding
outstanding in Galapagos shares Raised €3.6 million through the exercise of subscription rights Created participate new subscription right plans, offering all Galapagos employees the opportunity to were All proposed adopted resolutions by
Galapagos’ regarding shareholders the extraordinary on 26 April 2022 and annual shareholders’ meetings
4 European Alliance of Associations for
Rheumatology
6
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
H1 2022 financial result
Jyseleca net sales amount to €35.4 million Collaboration revenues of €238.6 million R&D expenditures of €249.5 million
S&M and G&A expenses amounting to €134.0 million Net loss of €32.3 million Operational cash burn of €217.1 million Cash
position at end of June 2022 of €4,429.0 million
Outlook 2022
We II
variation anticipate forathe Committee Jyseleca label, for Medicinal based on Products the data for from Human the Use MANTA (CHMP) and opinion MANTA-RAy on the studies type UC around and anticipate year-end. We thatalso Sobiexpect will further reimbursement progress with decisions reimbursement in most key discussions European in RA markets and UC in 20 in Eastern pharmacovigilance and Centralprocedure Europe,
Greece, on all and JAK inhibitors the Balticapproved countries.in AsEurope, part of we theexpect ongoing a CHMP article opinion afterwards. by the end of the year, followed by an adoption by the European Commission shortly anticipate Patient
enrolment that additional in the clinical Phase sites 1/2a will trials be active in rrNHL by year-end. and rrCLL We are is progressing on track to report well and topline we results of both trials in the first
half of next year.
We firstplan patients to progress potentially TYK2 recruited inhibitor around GLPG3667 year-end. into a
Phase 2 program in dermatomyositis with full Following year 2022 the acquisitions from €450-of €490 CellPoint million and to AboundBio, €480-€520 we
million. revised Additionally, our cash burn we increased guidanceour for anticipated net sales guidance for Jyseleca between €75 and €85 million. on Wehuman want tolives thank through you forcutting-edge your continued science
support andof exceptional our exciting people. journey We tostrongly make a believe true impact that we to presenting are taking the an in-depth right steps update in our on transformation our strategy later
to accelerate this year. value creation and look forward Respectfully, Dr. Paul Stoffels5 CEO and chairman of the board of directors President, Bart Filius COO & CFO
5 Acting via Stoffels IMC BV
7
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
Potential external impact
COVID-19
spreading The start of of
2022 the highly was infectious globally marked Omicron by-variant steeply . At increasing Galapagos, infection we hence rates maintained mainly due the to strict the measures and protect put the inphysical
place byand local mental governments health of toour help staff prevent during the the spread first months of the COVID of the-19 year virus . In most taken places, could gradually the situation be loosened
improved . We significantly nevertheless during keepthe on second continuously quarter monitoring and the measures COVID-19 infection needed to rates guarantee at global business and at continuity local level,
.. We and report have now the following systems in impacts: place to react quicky where At Staff Galapagos, we maintained the measures put in place by local governments to help of prevent our staff the. spread The majority of theof COVID our research
-19 virus staff and continued protect the tophysical work from and the mental office/labs health.
For launched teleworkable
in 2021, functions in locations we continued where thethe ongoing implementation COVID-19 of situation our hybrid and working corresponding model local office,governmental we maintained measures
stringentpermitted cleaning and us to sanitation do so. For protocols, those employees and we strictly coming respected to the social kept our distancing global and policies site-specific at all business times in continuity order to minimize plans up-to risk -date of exposure and continued . We further to take appropriate recommended precautions. by Wevirtual learned meetings, during the resulting pandemic in improved that most cost ofefficiency, the
international a bettertravel work-life could balance, be replaced and a become reduced carbon part of footprint our corporate . The impact travel of guidance this new . On way the
-of-other working hand, has we been noticed retained during and has the month start meeting of March in person 2022, when againinfection and to attend rates lowered
professional significantly, (international) an increasing events.appetite For those to guidance who needed on how to attend to safely ororganize organizeor events, attendwe anydid such implement professional a global events, policy both providing
internally and externally.
By Research prioritizing portfolio the most advanced projects very early on, and increasing the flexibility of our staff compound in
themanagement labs within projects, facility running we maintained at all times, ourand research continued delivery our early timelines, drug research kept the and the implementation of new modalities for target or drug discovery. to The previous
scorecard years, of the indicating researchthat department we were objectives able to minimize shows a similar the impact productivity of the compared COVID-19 pandemic, at least in the short term.
8
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
We Development have a business
portfoliocontinuity plan for our clinical development programs. We closely pandemic monitor each and program the associated in the context specific of the regulatory, current global institutional, and local government situation ofguidance the COVID-19 and consultation policies related with toour COVID-19. CROs and Within clinical thetrial boundaries sites, weof applied these guidelines various measures and
policies, to minimize and in the primary impact aimof to the ensure COVID-19 the safety pandemic of our trial on participants our clinical development and to preserve programs, the datawith integrity the and
basis, scientific tailoredvalidity to theof specific the trials. study These and measures country needs were at implemented any given time, on a case-by-case with
specific immunosuppressive attention paid to vulnerable properties. populations The measures and the include, use of investigational amongst others, medicines increased, with transparent medicines tocommunication patients. For each to clinical all
stakeholders trial, we actively and the monitor directand supply document of investigational the impact of interpretation COVID-19 to and mitigate reporting its ofeffect results. on the study where necessary
and to facilitate the To Manufacturing date, there and has supply been no chain impact to the commercial supply of filgotinib as the result of sites the COVID-19 that currently pandemic. manufacture All
sitesother involved marketed in theproducts manufacturing and are ofin filgotinib good standing are established with the FDA European and are Economic GMP certified. Area and We Great became Britain marketing at the end authorization of 2021, and
holder are responsible of filgotinibfor in the the supply manufacturing filgotinibof except filgotinib. for secondary The same manufacturing packaging and sites labelling thatfor supplied which Gilead a new continue vendor has to been selected.
The Commercial form of organization outreach of our commercial teams to physicians and hospitals was impacted virtual. by the The
COVID-19 teams invested pandemic inand digital consequent channels as travel part of restrictions, the overalland commercial thus became build strategy, partially note and these no material channels impact
areon being the relative utilized competitiveness during our ongoing of our commercial commercial launch. operations Thus due far we to access travel restrictions, discussions. nor Nevertheless, have the effects healthcare of COVID-19 systems impacted are under our ability pressure to engage across inEurope, market of increasing new therapy the volatility options initiated in reimbursement by healthcare procedures providers. and
potentially reducing the number
9
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
Conflict in Ukraine
operations. The armed We conflict currently between have ongoing Russia and clinical Ukraine studies could for filgotinib cause awith material CROs located
disruption in Ukraine in our Ukraine and Russia. andIfthe oursanctions CROs experience against Russia, disruptions it could to their result business in delays due in our to the clinical military development conflict in activities, interruptions
including in operations delay ofof our regulatory clinical development authorities. The plans impact and on timelines, ongoingor pivotal couldstudies cause taking such as measures DIVERSITY to mitigate 1 has remained the impact limited. on ourWe
ability continue to conduct to monitor clinical development the situation activities. and are Interruptions deadlines or to or comply delays in with our contractual and our CROs’ commitments ability towith meet respect expected to the clinical
same, development could lead to impact delays our in ability our overall to conduct developmental clinical development and commercialization activities and timelines, complete which them would onadversely a timely closely basis. Since monitor 24
each February program 2022, inwe context have of extended the currently the focus ongoing of the Ukraine-Russia business continuity conflict and planthe to associated specific regulatory, institutional, and government guidance and policies.
10
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
Financial highlights
Consolidated key
figures
Six monthsSix months
Second Second endedendedYear ended
quarter quarter 30 June30 June31 Decembe
(thousands of €, if not stated otherwise) of 2022 of 202120222021r 2021
Income statement
Product net sales 20,945
37735,35645614,753
Collaboration revenues 116,665 139,395238,601253,207470,093
Cost of sales (2,633) (93)(5,545)(131)(1,629)
R&D
expenditure (149,597) (138,866)(249,518)(268,826)(491,707)
S&M, G&A expenses (71,670)
(60,861)(134,009)(105,819)(210,855)
Other operating income 9,957 13,29817,63723,56453,749
Operating loss (76,332) (46,750)(97,478)(97,548)(165,596)
Net financial
results 58,115 (18,209)67,67619,91642,598
Taxes (811) 630(2,536)473(2,423)
Net loss from continuing operations (19,028) (64,329)(32,338)(77,159)(125,422)
Net profit from discontinued
operations, net of
tax - --22,19122,191
Net loss (19,028) (64,329)(32,338)(54,968)(103,231)
Balance sheet
Cash and cash equivalents 972,796
2,642,639972,7962,642,6392,233,368
Current financial investments 3,456,184 2,363,9693,456,1842,363,9692,469,809
R&D incentives receivables 155,771 142,745155,771142,745144,013
Assets 5,040,085 5,430,6175,040,0855,430,6175,193,160
Shareholders’ equity 2,646,898 2,663,4732,646,8982,663,4732,643,362
Deferred income 2,159,553 2,565,2922,159,5532,565,2922,364,701
Other
liabilities 233,634 201,852233,634201,852185,097
11
Galapagos Half-year financial report 2022
THE GALAPAGOS
GROUP
Six months Six months
Second Second ended
ended Year ended
quarter quarter 30 June
30 June 31 Decembe
(thousands of €, if not stated otherwise) of 2022 of
2021 2022 2021 r 2021
Cash
flow
Operational cash burn (139,721) (95,527) (217,102) (223,196)
(564,840)
Cash flow used in operating activities (141,772) (81,922) (203,740) (203,131) (503,827)
Cash flow generated from/used in
(-)
investing activities (147,604)
182,194 (1,081,057) 682,053 541,238
Cash flow used in financing
activities (337) (1,952) (361)
(1,474) (3,876)
Increase/decrease (-) in cash
and
cash equivalents (289,712) 98,319
(1,285,158) 477,448 33,535
Effect of currency exchange
rate
fluctuation on cash
and
cash equivalents 8,229
(9,629) 24,586 22,121 56,763
Cash and cash equivalents at the end
of
the
period 972,796 2,642,639 972,796 2,642,639 2,233,368
Current financial investments at the end
of the period 3,456,184 2,363,969 3,456,184 2,363,969
2,469,809
Total current financial investments
and
cash and cash
equivalents at the end of
the period 4,428,980 5,006,608 4,428,980 5,006,608
4,703,177
Financial
ratios
Number of shares issued at the end
of
the
period 65,728,511 65,522,521 65,728,511 65,522,521 65,552,721
Basic and diluted loss per share (€) (0.29) (0.98)
(0.49) (0.84) (1.58)
Share price at the end of the period (in
€) 53.04
58.48 53.04 58.48 49.22
Total group employees at the end of
the
period
(number) 1,344 1,397
1,344 1,397 1,309
12
Galapagos Half-year financial report
2022
THE GALAPAGOS GROUP
Employees per site as of
30 June 2022
(total: 1,344 employees)
H1 2022 financial results
to We€reported 35.4 million product (€0.5 net million sales inof the Jyseleca first half-year in Europe of for 2021) the . Our first counterparties
six months of 2022 for the amounting sales of Jyseleca Spain, Germany, were mainly Great hospitals Britain, and Ireland, wholesalers Austria, Norway, located in Sweden Belgium, and the Finland. Netherlands, France, Italy, Cost of sales related to
Jyseleca net sales in the first six months of 2022 amounted to €5.5 million. Collaboration to €253.2 million revenues for the amounted first six months to €238.6 of 2021. million for the first six months of 2022, compared
development Revenues recognized were €115.3 related million to the in the collaboration first six months agreement of 2022 with compared Gilead to for€136.1 the filgotinib million of forcompletion, the same period partly last offset year.
by This a higher decrease revenue wasrecognition due to a lower of milestone increase payments in the percentage strongly first influenced half-year bythe of 2022. milestone achieved related to the regulatory approval in Japan for UC in the platform
The revenue amounted recognition to €114.9 related million to the forexclusive the first six access months rights of 2022 for Gilead (€115.7 tomillion our drug for discovery the same period last year).
13
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
of We 2022 have(compared
recognizedto royalty €1.4 million income in from the same Gileadperiod for Jyseleca last year) for € of 6.3 which million €3in .6 the million firstroyalties six months on milestone income for UC approval in Japan.
Republic Additionally, and we Portugal recorded bymilestones our distribution of €2.0 and million commercialization triggered by the partner first sale Sobi,
of Jyseleca in the first in Czech half-year of 2022. discovery Our deferred platform income that balance is recognized on 30 June linearly 2022over includes the remaining €1.6 billionperiod allocated of our to our 10 drug year
collaboration, until the end of and the€ development 0.5 billion allocated period. to filgotinib development that is recognized over time to Our €268 R&D .8expenditure million for the in the firstfirst six six months months
of 2021 of 2022 . This amounted decreaseto was €249 primarily .5 million, explained compared by a €104 decrease .1 million ininsubcontracting the first half-year costs of 2022, fromprimarily €139.2 due million to the in
winding the firstdown half-year of theof ziritaxestat 2021 to by (IPF) cost program increases andfor reduced our filgotinib spend on program, our Toledo on a(SIKi) six month and TYK2 basis programs compared . This to the wassame partlyperiod offset
in for2021 the .same Personnel period costs this year decreased mainlyfrom due € to 94 a.2 lower million number in the of first FTEs half as ofwell 2021 asto lower €86.costs 0 million for first our subscription six months of
right 2022 plans (€8.1 . Depreciation million for the and same impairment period last amounted year). This toincrease €32.6 million was primarily for the collaboration due to an impairment with Molecure of €26 on.7 the million
dual chitinase of previously inhibitor capitalized OATD-01 upfront (GLPG4716) fees related . As part to ofour an to ongoing OATD-strategic 01 to Molecure exercise . to renew and accelerate our portfolio, we
decided to return all rights in Our the S&M first expenses six months were of€2021 71.0 .million This increase in the first was sixprimarily months of due 2022, to the compared termination to €29 of.0our million 50/ 50 alsofilgotinib
explained co-by commercialization an increase in cost personnel sharing costs agreement (€35.7 million with Gilead for .the Thefirst costsix increase months was of 2022 commercial compared workto
force €26.from 9 million 215 for average the same FTEs period in the first lasthalf year) -year explained of 2021by toan 305 increase average inFTEs the in the first half-year of 2022 driven by the commercial launch of filgotinib in
Europe. in Our the G&A first expenses six months were € of 632021 .0 million . The incost the first decrease six months was of primarily 2022, compared due to the to €76 exceptional .9 million following impairment our
ofdecision €9.3 million to reassess on otherthe tangible construction assets recorded project of inour the new first six future months headquarter of 2021 compared location in to Mechelen €37.6 million (Belgium) for.the Personnel
same period costs (last €35.year) 6 million decreased for the primarily first six months explained of 2022 by a lower number of FTEs. for Other theoperating first six months income of (€ 2021) 17.6 million decreased for the
byfirst €5.9six million, months mainly of 2022, driven compared by lowerto grant €23.and 6 million R&D incentive income. compared We reported to an an operating operating loss loss ofamounting €97.6 million tofor
€97 the .5 same million period for the last first year six . months of 2022,
14
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
net Netfinancial
financialincome incomeof in€the 19.9 first million six months in the same of 2022 period amounted last year) to . Net €67.7 financial million income (as compared in the first to gain six months on our of cash 2022 andwas cash primarily
equivalents attributable and current to €financial 57.4 million investments of unrealized at amortized currencycost exchange in U.S. dollar current (as financial compared investments to €33.4 in million the first currency six months
exchange of 2021) gain and on cash €11.8 and million cashpositive equivalents changes and in last (fair) year) value . The ofother current financial financial expenses investments also contained (€5.8 million the negative effect of
changes discounting in the our same long period term financial deferredassets income held of € at 3.8 fair million value(€ through 4.8 million profit in or theloss same amounted period last to nil year) in .the The first
fairsix value months loss of in 2022 (as compared to €2.9 million in the same period last year). compared We realized to a a net net loss loss from of €continuing 77.2 million operations for the first of € six 32.3
months million of 2021. for the first six months of 2022, on The the net sale profit of from Fidelta, discontinued our fee-for-services operations business, for the
first for €six 22.2 months million. of 2021 consisted of the gain We lossreported of €55.0 million a groupfor net the loss same for the period first last six months year. of 2022 of €32.3 million, compared to a net
Cash, cash equivalents and current financial investments
30 Cash June and
2022 cash (€4,703.2 equivalents millionand on 31 current December financial 2021)investments . totaled €4,429.0 million on was A net recorded decrease during of €274.2 the first million six months in cash and of 2022, cash
compared equivalents to and a net current decrease financial of €162.7 investments million during operational the first cashsix burn, months (ii) offset of 2021. by €3.6 This million net of decrease cash proceeds was composed from
capital of (i) and €217.1 sharemillion premium of of increases positivefrom changes exercise in (fair) of subscription value of current rightsfinancial in the first investments six months and of € 2022, 60.4 million (iii)
€11.8 of million mainly CellPoint positive exchange and AboundBio, rate differences, net of cashand acquired. (iv) €132.9 million cash out from the acquisitions of The financial operational measurecash that is burn not (or calculated
operational in accordance cash flow with if this IFRS. liquidity Operational measure cashis burn/cash positive) flow is a exchange is defined rate as the differences increase on or decrease cash and in cash our equivalents), cash and cash minus:
equivalents (excluding the effect of cash i. the flows net proceeds, generated if from/used any, from share in (–) financing capital and activities share premium increases included in the net in ii. the restricted net proceeds cash and or
movement cash used, if inany, current in acquisitions financial investments, or disposalsifof any, businesses; the loansthe and movement advances given activities to third parties, if any, included in the net cash flows generated from/used in
(–) investing the iii. the netcash cashused flowsfor generated other liabilities from/used related in (-)to operating the acquisition activities. of businesses, if any, included in
15
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
This
alternative liquidity measure is in our view an important metric for a biotech company in the
development stage.
The following table provides a reconciliation of the operational cash burn:
Six months ended 30 June
(thousands of €) 2022 2021
Increase/decrease (-) in cash and cash equivalents
(excluding effect of exchange differences) (1,285,158) 477,448
Less:
Net proceeds from capital and share premium
increases (3,619) (2,583)
Net purchase/sale (-) of current financial investments 938,732 (669,365)
Cash out from acquisition of subsidiaries, net of cash acquired 115,178 -
Cash advances and loans to third parties 10,000 -
Cash
used for other liabilities related to the acquisition of
subsidiaries 7,765 -
Cash in from disposals of subsidiaries, net of cash disposed of - (28,696)
Total operational cash burn (217,102) (223,196)
16
Galapagos Half-year financial report
2022
THE GALAPAGOS GROUP
Risk factors
supplemented We refer to the by description the description of of risk riskfactors factors in in our ourannual 2021 annual report on report, Form
20-F pp. 57-69, filed with as principal the U.S. Securities risks and and uncertainties Exchangefaced Commission, by us relate pp.
6-50. to and In include, summary but of are the not foregoing, limited the to: need commercialization, for additional capital; product our development reliance on third and regulatory parties; ourapproval;
competitive our position; financial our position intellectual and as property; COVID-19); our organization, and market risks structure relating and tooperation our shares (including and ADSs. the emergence of
pandemics such annual We also report, refer to pp. the 250-254, description which of remains the group’s validfinancial and unaltered. risk management given in the 2021
The Galapagos share
Performance of the Galapagos share on Euronext and Nasdaq
17
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
Related party transactions
to Wethe refer unaudited to the statements condensed included consolidated under the interim heading Related financial party statements transactions for in the the
first “Notes six months of 2022” part of this report.
18
Galapagos
Half-year financial report 2022
THE GALAPAGOS GROUP
Disclaimer and other
information
registered Galapagos office NV is at a limited Generaal liability De Wittelaan company L11 organized A3, 2800 under Mechelen, the laws Belgium of
Belgium, . Throughout havingthis its report, references the to term “we,” “Galapagos “our,” “the NV” group” refers orsolely “Galapagos” to the non include -consolidated GalapagosBelgian NV together
company withand its subsidiaries. and Withulcerative the exception colitis of by filgotinib’s the European approval Commission, as Jyseleca® Great for the Britain’s treatment Medicines of rheumatoid and Healthcare arthritis products
candidates Regulatory mentioned Agency in this and report Japanese are investigational; Ministry of Health, their efficacy Labour and and safety Welfare, have not our been drug fully evaluated by any regulatory authority. the ThisEnglish report is
version, published the in Dutch Dutch version and inshall English prevail . In case . Galapagos of inconsistency is responsible between for the the translation Dutch and and conformity between the Dutch and English version.
This report is available free of charge and upon request addressed to: Investor Galapagos Relations NV
Generaal 2800 Mechelen, De Wittelaan Belgium L11 A3 Tel: Email: +32 ir@glpg 15 34 .29 com 00
A
digital version of this report is available on our website, www.glpg.com. responsibility We will use reasonable if inaccuracies effortsor toinconsistencies ensure the accuracy with of the the printed digital document version, but arise we do asnot a
result assume of legally any electronic valid. Other transmission information . Therefore, on our website we consider or ononly other the websites printeddoes version notof form thisa report part of tothis be report.
Jyseleca® is a trademark of Galapagos NV and Gilead Sciences, Inc. or its related companies.
Listings
Nasdaq: Euronext GLPG Amsterdam and Brussels: GLPG
19
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
Forward-looking statements
uncertainties. This report contains These statements forward-looking are often, statements, but are not all always, of which madeinvolve throughcertain the
userisks of words and “could,” or phrases “would,” such“potential,” as “believe,” “forward,” “anticipate,” “goal,” “expect,” “next,”“intend,”
“stand to,” “plan,” “continue,” “seek,”“should,” “estimate,” “encouraging,” “may,” “will,” this “aim,” report “explore,” include,
“further” but are asnot welllimited as similar to, statements expressions. made Forward-looking in the “Letter statements to our shareholders” contained in guidance section offrom thismanagement report, the information regarding
the provided expected in operational the sectionuse captioned of cash during “Outlook financial 2022”,year the 2022, the acquisitions statements ofregarding CellPoint and our AboundBio, strategic and including capital allocation statements
priorities, regarding statements anticipated regarding benefits plans, of the acquisitions statements and regarding the integration our regulatory of CellPoint and R&D and AboundBio outlook, statements into our portfolio regarding andexpected
strategic financial in and/or results, royaltystatements payments,regarding our R&D strategy, the amount including and timing progress of potential on ourfuture fibrosis milestones, portfolio opt- and
complementary our SIK platform,technology and potential platforms changes driving in such future strategy, growth, statements statements regarding regarding our the pipeline strategic and statements
re-evaluation, regarding statements the global regarding R&D our collaboration expectations with on Gilead commercial and the amendment sales of filgotinib, of our regarding arrangement the with expected
Gilead timing, for the design commercialization and readouts of and ongoing development and planned of filgotinib, clinical trials statements (or the osteoarthritis, discontinuation (iii) thereof) with GLPG3121 (i) with filgotinib in IBD,
(iv) inwith RA, GLPG3667 UC and Crohn’s in psoriasis disease, and (ii) dermatomyositis, with GLPG0555 (v) in with in IPF, GLPG4399 (viii) with GLPG4586 in inflammation, and GLPG4605 (vi) with compounds in fibrosis, (ix) from with
our GLPG2737 SIKi portfolio, in ADPKD, (vii) with (x)GLPG4716 with CD19 bispecific CAR-T in 2antibodies, Phase 1/2aincluding studies in recruitment rrNHL and rrCLL, for trials and and (xi) topline
with theresults next-generation for trials and CAR-Ts studies and in inflammatory CAR-T, statements disorders, related including to the filgotinib, EMA’s initiated
safety review at theof request JAK inhibitors of the European used to treat Commission certain (EC) regulatory under authorities, article 20 of the Regulation timing or(EC) likelihood No 726/2004, of additional statements regulatory relating
authorities’ to interactions approval with of marketing Great Britain, authorization Japan, and for the filgotinib U.S., such for RA, additional UC or any regulatory other indication authorities for requiring filgotinib in additional Europe,
studies, statements therelating timing to or the likelihood build-up of of pricing our commercial and reimbursement organization, interactions commercial for sales filgotinib, for and filgotinib Ukraine and on
rollout our in operations Europe, statements and ongoing regarding studies the (including effect of the the impact conflict onbetween our DIVERSITY Russia our 1 study), strategy, statements businessregarding plans andthe focus. expected We caution
impact theof reader COVID-19, that forward-looking and statementsstatements regarding of arefuture basedperformance. on our management’s Forward-looking current statements expectations may and involve
beliefs, known and and are not unknown guarantees risks, uncertainties liquidity, performance and other orfactors achievements, which might or the cause industry our in actual which results, we operate, financial tocondition be materially and
different expressed from or implied any historic by such or forward-looking future results, financial statements. conditions, Such risks performance include, but orare achievements not limited to, financial the risk results that our or our beliefs,
2022 assumptions operating expenses and expectations may be regarding incorrect our (including 2022 revenues because one and
20
Galapagos Half-year financial report 2022
THE GALAPAGOS GROUP
or realized), more the of our
inherent assumptions risks andunderlying uncertainties our associated revenue or with expense competitive expectations developments, may not clinical be trial not limited and product to, thedevelopment risk that data activities from our and ongoing
regulatory and planned approvalclinical requirements research (including, programs but in RA, kidney rrNHL, disease rrCLL, orCrohn’s any other disease, indication UC, IPF, or osteoarthritis, disease, may not other support inflammatory
registration indications or further and risks development related to ofthe ouracquisitions product candidates of CellPoint due and to safety, AboundBio, or efficacy including concerns, the risk orthat other wereasons), may not risks achieve and the
uncertainties anticipatedassociated benefits ofwith the target acquisitions discovery of CellPoint and validation and AboundBio, and drug discovery the inherent and our development collaboration activities, partner risks Gilead), relatedrisks to our
related reliance to on thecollaborations implementation with of third the parties transition (including of the transition European will commercialization not be completed responsibility on the currently of filgotinib contemplated from Gilead
timeline to us,or the at risk all, including that the expected the transition results of the for our supply business chain, and andresults the risk ofthat operations, the transition the risk will that notestimates have theregarding currently our our
filgotinib expectations development regarding program the costs and and therevenues commercial associated potentialwith of our the product transfer candidates of European and commercialization continue to executerights on our tocurrently filgotinib
contemplated may be incorrect, business the plan riskand/or that we willwill revise not our bebusiness able to plan, currently including anticipated the risk timeline that or ouratplans all, the with riskrespect that ourto projections CAR-T may and not expectations be achieved regarding on the the revenues commercial associated potential withof the our commercialization product candidates rights or expectations may be inaccurate, regarding thethe
risk costs thatand we will plan, be the unable risk that to successfully we will encounter achievechallenges the anticipated retaining benefits or attracting from our talent, leadership risks related transition to continued disruption regulatory in
our operations review of due filgotinib to the conflict following between approval Russia by relevant and Ukraine, regulatory the authorities risks related and to the the EMA’s risk that safety the EMA review and/or of JAKother inhibitors
regulatory used to authorities treat certain determine inflammatory that additional disorders, non-clinical including or that clinical the market studies authorization are required for with filgotinib respect
in to thefilgotinib, EU be amended, the risk that the risk the that EMAthe may EMA require may impose acceptance JAK of class-based filgotinib by warnings, patients,the therisk medical that community the EMA’s safety and healthcare review may
payors negatively and the impact risks and of these uncertainties risks, uncertainties related to the and impact otherof risks the can COVID-19 be found pandemic. in our A filings further and listreports and
description with the 20-F Securities filed with and Exchange the SEC and Commission our subsequent (SEC), including filings and inreports our most filed recent with annual the SEC. report We also on Form refer
advised to the “Risk not to Factors” place any section undue ofreliance this report. on such Given forward-looking these risks and statements. uncertainties, In addition, the reader evenis if are the result consistent of ourwith
operations, such forward-looking financial condition statements, and liquidity, theyor may the not industry be predictive in which we ofoperate, results, as performance of the dateor ofachievements publication ofin this future document. periods. We
These expressly forward-looking disclaim any statements obligationspeak to update only any withsuch regard forward-looking thereto or any statements change in inevents, this document conditions to reflect or circumstances any change on in our which
expectations any such forth statement in theis forward-looking based or that may statements, affect the unless likelihood specifically that actual required results by law will or differ regulation. from those set
21
Galapagos Half-year financial report 2022
Financial statements
Unaudited condensed
consolidated interim financial statements for the first half-year of 2022
Foundation & Future
FINANCIAL STATEMENTS
Unaudited condensed consolidated
interim financial
statements for the first
six months of 2022
Consolidated statements of income and
comprehensive
income/loss (-)
(unaudited)
Consolidated income statement
Six months ended
Second quarter of 30 June
(thousands of €,
except per share data) 2022 202120222021
Product net sales 20,945 37735,356456
Collaboration revenues 116,665 139,395238,601253,207
Total net
revenues 137,610 139,772273,957253,664
Cost of sales (2,633) (93)(5,545)(131)
Research and development expenditure (149,597) (138,866)(249,518)(268,826)
Sales and marketing expenses (42,024) (14,425)(71,008)(28,961)
General
and administrative expenses (29,646) (46,436)(63,001)(76,858)
Other operating income 9,957 13,29817,63723,564
Operating loss (76,332) (46,750)(97,478)(97,548)
Fair
value adjustments and net currency
exchange differences 58,858 (13,500)71,92927,695
Other financial income 3,320 7304,0151,568
Other financial
expenses (4,062) (5,439)(8,268)(9,347)
Loss before tax (18,217) (64,959)(29,802)(77,632)
Income taxes (811) 630(2,536)473
Net loss from continuing
operations (19,028) (64,329)(32,338)(77,159)
23
Galapagos Half-year financial report 2022
| FINANCIAL STATEMENTS | ||||||||
| Six months ended | ||||||||
| Second quarter of | 30 June | |||||||
| (thousands of €, except per share data) | 2022 | 2021 | 2022 | 2021 | ||||
| Net profit from discontinued operations, net of tax | — | — | — | 22,191 | ||||
| Net loss | (19,028) | (64,329) | (32,338) | (54,968) | ||||
| Net loss attributable to: | ||||||||
| Owners of the parent | (19,028) | (64,329) | (32,338) | (54,968) | ||||
| Basic and diluted loss per share | (0.29) | (0.98) | (0.49) | (0.84) | ||||
| Basic and diluted loss per share from continuing operations | (0.29) | (0.98) | (0.49) | (1.18) | ||||
| The accompanying notes form an integral part of these condensed consolidated financial statements. 24 | ||||||||
| Galapagos Half-year financial report 2022 | ||||||||
FINANCIAL STATEMENTS
Consolidated statement of comprehensive income/loss (-)
Six months ended
Second quarter of 30 June
(thousands of €) 2022 202120222021
Net
loss (19,028) (64,329)(32,338)(54,968)
Items that may be reclassified subsequently to
profit or loss:
Translation differences, arisen from
translating
foreign activities 112 (95)93203
Realization of translation differences upon sale of
foreign
operations - --731
Other comprehensive income/loss (-), net of
income tax 112 (95)93934
Total comprehensive loss attributable
to:
Owners of the parent (18,916) (64,424)(32,245)(54,034)
Total comprehensive loss attributable to owners of
the parent arises
from:
Continuing operations (18,916) (64,424)(32,245)(76,956)
Discontinued operations - --22,922
Total comprehensive
loss (18,916) (64,424)(32,245)(54,034)
The accompanying notes form an integral part of these condensed consolidated financial
statements.
25
Galapagos Half-year financial report 2022
Consolidated statements of financial position
(unaudited)
30 June 31 December
(thousands of €) 2022 2021
Assets
Goodwill 174,288 -
Intangible assets other than goodwill 32,346 60,103
Property, plant and equipment 148,866 137,512
Deferred
tax assets 4,060 4,032
Non-current R&D incentives receivables 138,945
127,186
Other non-current assets 8,390 2,473
Non-current assets 506,893 331,306
Inventories 27,008 20,569
Trade and other
receivables 47,231 111,337
Current R&D incentives receivables 16,826 16,827
Current financial investments 3,456,184 2,469,809
Cash and cash
equivalents 972,796 2,233,368
Other current assets 13,147 9,945
Current assets 4,533,192 4,861,854
Total
assets 5,040,085 5,193,160
26
Galapagos Half-year financial report 2022
FINANCIAL STATEMENTS
30 June 31 December
(thousands of
€) 2022 2021
Equity and liabilities
Share capital 293,026 292,075
Share premium
account 2,733,059 2,730,391
Other reserves (10,493) (10,177)
Translation differences (1,313) (1,722)
Accumulated
losses (367,381) (367,205)
Total equity 2,646,898 2,643,362
Retirement benefit liabilities 12,162 11,699
Non-current lease liabilities 16,875 19,655
Other non-current
liabilities 35,948 7,135
Non-current deferred income 1,777,477 1,944,836
Non-current liabilities 1,842,462 1,983,325
Current lease liabilities 7,179 7,204
Trade and other
liabilities 160,746 137,622
Current tax payable 723 1,782
Current deferred income 382,076 419,866
Current
liabilities 550,725 566,474
Total liabilities 2,393,187 2,549,798
Total equity and liabilities 5,040,085 5,193,160
The accompanying notes
form an integral part of these condensed consolidated financial
statements.
27
Galapagos Half-year financial report 2022
FINANCIAL STATEMENTS
Consolidated cash flow statements
(unaudited)
Six months ended 30 June
(thousands of €) 2022 2021
Net loss of the
period (32,338) (54,968)
Adjustment for non-cash transactions 6,567 50,310
Adjustment for items to disclose separately under operating
cash flow 3,529 2,518
Adjustment for items to disclose under investing
and financing
cash flows (416) (28,843)
Change in working capital other than deferred income 46,034 81,359
Cash
used for other liabilities related to the acquisition of
subsidiaries (7,765) -
Decrease in deferred income (209,428) (248,610)
Cash used in
operations (193,818) (198,234)
Interest paid (7,417) (5,862)
Interest received 757 1,237
Corporate taxes
paid (3,262) (272)
Net cash flows used in operating activities (203,740) (203,131)
28
Galapagos Half-year financial report 2022
FINANCIAL STATEMENTS
Six
months ended 30 June
(thousands of €) 2022 2021
Purchase of property, plant and equipment (15,574) (19,414)
Purchase of
and expenditure in intangible fixed assets (1,783) (647)
Purchase of current financial investments (1,842,495)
(703,841)
Interest received related to current financial investments 210 8
Sale of current financial investments 903,763 1,373,206
Cash in from
disposals of subsidiaries, net of cash disposed of - 28,696
Cash out from acquisition of subsidiaries, net of cash
acquired (115,178) -
Cash advances and loans to third parties (10,000) -
Proceeds from sale of financial assets held at fair value through
profit or loss - 4,045
Net cash flows generated
from/used in (-) investing activities (1,081,057) 682,053
Payment of lease liabilities (3,980) (4,057)
Proceeds from capital and share premium increases from exercise
of
subscription rights 3,619 2,583
Net cash flows used in financing activities (361) (1,474)
Increase/decrease (-) in cash and cash equivalents (1,285,158) 477,448
Cash and cash equivalents at beginning of year 2,233,368 2,143,071
Increase/decrease (-) in cash and cash equivalents (1,285,158) 477,448
Effect of exchange rate differences on cash and cash equivalents 24,586 22,121
Cash and cash equivalents at end of the period 972,796 2,642,639
The
accompanying notes form an integral part of these condensed consolidated financial
statements.
29
Galapagos Half-year financial report 2022
S29
30 June
(thousands of €)
2022
2021
Current financial investments
3,456,184
2,363,969
Cash and cash equivalents
972,796
2,642,639
Current financial investments and cash and cash equivalents
4,428,980
5,006,608
The accompanying notes form an integral part of these condensed consolidated
financial
statements.
30
Galapagos Half-year financial report 2022
S30
FINANCIAL STATEMENTS
Consolidated statements of changes in equity
(unaudited)
Share
Share premium Translation OtherAccumul.
(thousands of
€) capital account differencesreserveslossesTotal
On 1 January 2021 291,312
2,727,840(3,189)(10,907)(334,701)2,670,355
Net loss (54,968)(54,968)
Other comprehensive
income 795139934
Total comprehensive
income/loss
(-) 795139(54,968)(54,034)
Share-based compensation 44,56844,568
Exercise of subscription
rights 599 1,9842,583
On 30 June 2021 291,912 2,729,824(2,394)(10,768)(345,101)2,663,473
On 1 January 2022 292,075 2,730,391(1,722)(10,177)(367,205)2,643,362
Net loss (32,338)(32,338)
Other
comprehensive
income/loss (-) 409(316)93
Total comprehensive
income/loss (-)
409(316)(32,338)(32,245)
Share-based compensation 32,16332,163
Exercise of subscription
rights 951 2,6683,619
On 30 June 2022 293,026 2,733,059(1,313)(10,493)(367,381)2,646,898
The accompanying notes form an integral part of these condensed consolidated financial
statements.
31
Galapagos Half-year financial report 2022
S31
FINANCIAL STATEMENTS
Notes to the unaudited
condensed consolidated interim financial statements for the first six months of 2022
Basis of preparation
These IAS 34 condensed ‘Interim Financial consolidated Reporting’ interim as adopted financial bystatements the European have Union been and prepared as issued in
accordance by the IASB.with The annual condensed report consolidated and should interim therefore financial be read statements in conjunction do not withcontain our Annual all information Report 2021 required . for an
Impact of COVID-19 on the financial statements
cash To
date, flows we and have significant experienced judgements limited impact and estimates, on our financial althoughperformance, we continue to financial face additional position, risks and challenges associated with the impact of the outbreak.
Significant accounting policies
There consolidated were no interim
significant financial changes statements in accounting compared policies to those applied used by in the us in most these recent condensed annual consolidated financial statements of 31 December 2021.
New did not standards have any and material interpretations impact onapplicable our condensed for the consolidated annual period interim beginning financial on 1 January
statements 2022 . We issued have but not is not early yetadopted effectiveany . other standard, interpretation, or amendment that has been
New accounting policies
as a result of recent transactions
Business combinations
position, Business
the combinations acquiree’s are identifiable accounted assets, for using liabilities the acquisition and contingent method liabilities . In theare statement initially recognized of financial consolidated at their fair value income at the
statement acquisition from date the . The date results on which of acquired control operations is obtained are . included Any contingent in our consideration Subsequent changes to be transferred to the fair by value us of will the becontingent
recognizedconsideration, at fair value which at theis acquisition deemed to date be. purchase an asset or consideration liability, willtransferred be recognized overin the profit fair value or loss of.the The acquired excess assets of the and fair
assumed value of the liabilities total is information recognized available as goodwill at the . acquisition The valuations date.in Acquisition support of related fair value costs are determinations expensed as are incurred based . on
32
Galapagos Half-year financial report 2022
S32
FINANCIAL STATEMENTS
Key sources of estimation
uncertainty
Acquisition of CellPoint
We assets determine acquiredand and
allocate liabilities the assumed purchase asprice of the relating acquisition to thedate, acquisition being 21 of CellPoint June 2022. to The the that purchase determine price the determination present fairprocess value ofrequires the contingent us
to use consideration significant estimates included in and theassumptions transaction. adjusted These estimates by our best depend estimate on of development, their probability regulatory of success andand sales-based discounted. milestones We also
anticipate that are to process. use significant estimates and assumptions in the finalization of the purchase price accounting
33
Galapagos Half-year financial report 2022
S33
FINANCIAL STATEMENTS
Details of the unaudited condensed consolidated
interim results
Product net
sales
We reported net sales of Jyseleca for the first six months of 2022 amounting to €35.4 million
(€0.5 million in the first six months of 2021).
Related
costs of sales in the first half-year of 2022 amounted to €5.5 million.
Collaboration revenues
The following table summarizes our collaboration revenues for the six months ended
30 June 2022 and 2021:
Six months ended 30
Second quarter of June
Over Point in
(thousands of €) time time2022202120222021
Recognition of non-refundable
upfront payments and license
fees 105,384127,215204,301232,441
Gilead collaboration
agreement
for filgotinib 47,78469,33989,385116,744
Gilead collaboration agreement
for drug discovery
platform 57,60157,876114,916115,697
Milestone payments 9,56411,50427,93819,369
Gilead collaboration agreement
for filgotinib
8,56411,50425,93819,369
Sobi distribution agreement for
Jyseleca 1,000-2,000-
Royalties 1,7166766,3611,397
Gilead royalties on
Jyseleca 1,7166726,3171,350
Other royalties -44447
Total collaboration revenues 116,665139,395238,601253,207
34
Galapagos Half-year financial report 2022
S34
FINANCIAL STATEMENTS
The rollforward of the
outstanding balance of the current and non-current deferred income
between 1 January 2022 and 30 June 2022 can be
summarized as follows:
Gilead
Gileadcollaboration
collaborationagreement for
agreementdrug discoveryOther deferred
(thousands of €) Total for filgotinibplatform (1)income
On
1 January 2022 2,364,701 604,8751,759,828-
Milestones achieved 18,238 18,238
Significant financing component (2) 3,799 3,799
Revenue recognition of
upfront (204,301) (89,385)(114,916)
Revenue recognition of milestones (25,938) (25,938)
Other movements 3,053 3,053
On 30 June
2022 2,159,553 511,5881,644,9123,053
(1) The upfront received and the outstanding balance at 1 January 2022 and
at 30 June 2022 comprise the issuance
liabilities for the warrants and the upfront payment allocated to the drug discovery platform.
(2) With regard to the additional consideration received for the extended cost sharing for filgotinib, we assume the
existence of a significant financingcomponent reflecting the time value of money on the estimated recognition
period.
35
Galapagos Half-year financial report 2022
S35
FINANCIAL STATEMENTS
Operating costs and other operating income
Operating
costs
Research and development expenditure
The following table summarizes our research and development expenditure for the six months
ended 30 June 2022 and 2021:
Six months ended 30
Second quarter of June
(thousands of
€) 2022 202120222021
Personnel costs (45,752) (53,772)(85,957)(94,154)
Subcontracting (62,332) (66,213)(104,060)(139,193)
Disposables and lab
fees and premises costs (5,103) (6,370)(10,310)(12,287)
Depreciation and impairment (29,169) (4,816)(32,555)(8,099)
Professional fees (2,994) (3,828)(7,402)(7,041)
Other
operating expenses (4,249) (3,867)(9,234)(8,052)
Total research and development expenditure (149,597)
(138,866)(249,518)(268,826)
The increase in depreciation and impairment for the first six months of 2022 is primarily due to
an impairment of €26.7 million of previously capitalized upfront fees related to our collaboration
with Molecure on the dual chitinase inhibitor OATD-01.
The table below summarizes our R&D expenditure for the six months ended 30 June 2022 and
2021, broken down by program.
Six months ended 30
Second quarter of June
(thousands of
€) 2022 202120222021
Filgotinib program (71,280) (50,908)(116,147)(87,840)
Toledo program (12,744) (24,412)(26,098)(52,235)
TYK2 program on
GLPG3667 (5,611) (7,984)(9,078)(13,974)
Ziritaxestat program (106) (8,905)(638)(19,418)
Other programs (59,856) (46,657)(97,557)(95,359)
Total research and
development expenditure (149,597) (138,866)(249,518)(268,826)
36
Galapagos Half-year financial report 2022
S36
FINANCIAL STATEMENTS
Sales
and marketing expenses
The following table summarizes our sales and marketing expenses for the six months ended
30 June 2022 and 2021:
Six months ended 30
Second quarter of June
(thousands of
€) 2022 202120222021
Personnel costs (19,690) (16,569)(35,723)(26,871)
Depreciation (907) (117)(1,122)(168)
External outsourcing
costs (15,293) (14,844)(25,671)(24,959)
Sales and marketing expenses recharged to Gilead - 18,8853125,527
Professional fees (1,165) (162)(1,534)(180)
Other operating
expenses (4,970) (1,618)(6,989)(2,310)
Total sales and marketing expenses (42,024) (14,425)(71,008)(28,961)
The termination of our 50/50 filgotinib co-commercialization cost sharing agreement with Gilead
explains a significant part of the increase in sales & marketing expenses.
General and administrative expenses
The following table summarizes our
general and administrative expenses for the six months
ended 30 June 2022 and 2021:
Six months ended 30
Second quarter of June
(thousands of €) 2022 202120222021
Personnel
costs (15,211) (21,361)(35,629)(37,568)
Depreciation and impairment (2,383) (11,060)(4,297)(12,730)
Legal and professional fees (6,309) (7,610)(10,817)(13,469)
Other
operating expenses (5,744) (6,406)(12,259)(13,092)
Total general and administrative expenses (29,646)
(46,436)(63,001)(76,858)
37
Galapagos Half-year
financial report 2022
S37
FINANCIAL STATEMENTS
Other
operating income
The following table summarizes our other operating income for the six months ended
30 June 2022 and 2021:
Six months ended 30
Second quarter of June
(thousands of
€) 2022 202120222021
Grant income 572 2,5151,0093,787
R&D incentives 8,818 10,65615,90319,502
Other 567 128725276
Total other operating
income 9,957 13,29817,63723,564
38
Galapagos Half-year financial report 2022
S38
FINANCIAL STATEMENTS
Financial income/expenses
The following table
summarizes our financial income/expenses (-) for the six months ended 30
June 2022 and 2021:
Six months ended 30
Second quarter of June
(thousands of €) 2022 202120222021
Fair value adjustments and net
currency exchange
differences
Net currency exchange gain/loss (-) 46,718 (12,096)60,16833,613
Fair value re-measurement of warrants 136 858(49)2,828
Fair value loss on financial assets held at fair value
through profit
or loss - --(2,913)
Fair value gain/loss (-) on current financial
investments 12,004 (2,262)11,810(5,833)
Total fair value adjustments
and net currency
exchange differences 58,858 (13,500)71,92927,695
Other financial income:
Interest income 2,956
6963,6181,442
Effect of discounting long term R&D incentives
receivables 23 234646
Other finance income 341
1135180
Total other financial income 3,320 7304,0151,568
Other financial expenses:
Interest
expenses (2,142) (3,050)(4,206)(4,425)
Effect of discounting long term deferred income (1,860) (2,323)(3,799)(4,770)
Other finance charges (60) (66)(264)(152)
Total other
financial expenses (4,062) (5,439)(8,268)(9,347)
Total net financial result 58,115 (18,209)67,67619,916
39
Galapagos Half-year financial report 2022
S39
FINANCIAL STATEMENTS
Cash
position
Cash and cash equivalents and current financial investments totaled €4,429.0 million on
30 June 2022 (€4,703.2 million on 31 December 2021).
Cash and cash equivalents and current financial investments comprised cash at banks, term
deposits, treasury bills and money market funds. Our cash management strategy monitors and
optimizes our liquidity position. Our cash management strategy allows short-term deposits with
an original maturity exceeding three months while monitoring all liquidity aspects.
Cash and cash equivalents comprised €487.8 million of term deposits which all had an original
maturity longer than three months. All cash and cash equivalents are available upon maximum
three months notice period and without significant penalty. Cash at banks were mainly composed
of notice accounts and current accounts. Our credit risk is mitigated by selecting a panel of highly
rated financial institutions for our deposits.
Current financial
investments comprised €1,332.9 million of term deposits which all had an
original maturity longer than three months and which are not available on demand
within three
months. Our current financial investments also comprised money market funds and treasury
bills. Our portfolio of treasury bills contains only AAA rated paper, issued by Germany. Our money
market funds portfolio consists of AAA short-term money market funds with a diversified and
highly rated underlying portfolio managed by established fund management companies with a
proven track record.
30 June 31 December
(thousands of
€) 2022 2021
Money market funds 1,295,726 1,317,460
Treasury bills 827,574 877,349
Term
deposits 1,332,884 275,000
Total current financial investments 3,456,184 2,469,809
Cash at banks 485,031 1,225,860
Term
deposits 487,765 1,007,508
Total cash and cash equivalents 972,796 2,233,368
Total current financial investments and cash and
cash
equivalents 4,428,980 4,703,177
40
Galapagos Half-year financial report 2022
S40
FINANCIAL STATEMENTS
On
30 June 2022, our cash and cash equivalents and current financial investments included
$953.8 million held in U.S. dollars ($942.5 million on
31 December 2021) which could generate
foreign exchange gains or losses in our financial results in accordance with the fluctuation of
the EUR/U.S. dollar exchange rate as our functional currency is EUR. The foreign exchange loss
(–)/gain in case of a 10% change in the EUR/U.S. dollar exchange rate amounts to €91.8 million.
Capital increase
On 30 June 2022, Galapagos NV’s share
capital was represented by 65,728,511 shares. All shares
were issued, fully paid up and of the same class. The below table summarizes our capital
increases for the period ended 30 June 2022.
Average
exerciseClosing
price sub-share price
scriptionon date of
Sharerightscapital
capital and(in €/ sub-increase
(thousands of €, except Number
of ShareSharesharescription(in €/
share data) shares capitalpremiumpremiumright)share)
On 1 January 2022 65,552,721 292,0752,730,3913,022,467
18 March 2022: exercise of
subscription
rights 95,500 5171,6432,16022.6157.38
20 June 2022: exercise of
subscription rights 80,290 4341,0251,46018.1853.52
On 30 June
2022 65,728,511 293,0262,733,0593,026,086
41
Galapagos
Half-year financial report 2022
S41
FINANCIAL STATEMENTS
Note
to the cash flow statement
Six months ended 30 June
(thousands of €) 2022 2021
Adjustment for non-cash transactions
Depreciation and impairment 37,974 20,996
Share-based compensation expenses 32,163 44,568
Increase in retirement
benefit obligations and provisions 270 190
Unrealized exchange gains and non-cash other financial
result (59,627) (26,537)
Discounting effect of deferred income 3,799 4,770
Fair value re-measurement of warrants 49 (2,828)
Net change in (fair) value of current financial investments (11,810) 5,833
Fair value adjustment financial assets held at fair value through
profit or loss - 2,913
Other non-cash expenses 3,750 405
Total adjustment for non-cash
transactions 6,567 50,310
Adjustment for items to disclose separately under operating
cash flow
Interest expense 4,206 4,425
Interest income (3,214) (1,434)
Tax
expense 2,536 (473)
Total adjustment for items to disclose separately under
operating cash flow 3,529 2,518
Adjustment for items to disclose under
investing and financing
cash flows
Gain on sale of subsidiaries - (22,191)
Gain (-)/loss on sale of fixed
assets (11) 1
Realized exchange gain on sale of current financial investments - (6,645)
Interest income on current financial assets (405) (8)
Total adjustment
for items to disclose separately under investing
and financing cash flow (416) (28,843)
42
Galapagos Half-year financial report 2022
S42
FINANCIAL STATEMENTS
Six
months ended 30 June
(thousands of €) 2022 2021
Change in working capital other than deferred income
Increase in
inventories (10,195) (1,419)
Decrease in receivables 53,204 107,041
Increase/decrease (-) in liabilities 3,025 (24,263)
Total change in
working capital other than deferred income 46,034 81,359
Business combinations
On 21 June 2022 we acquired, in an all-cash transaction, 100% of the shares and voting interests
of CellPoint for a total agreed payment at completion of €125 million, including consideration for
other liabilities associated with the transaction amounting to €10.3 million. Additional contingent
consideration up to €100.0 million is due when certain development, regulatory and sales-based
milestones would be achieved.
On the same date we acquired all of the
outstanding capital of AboundBio, for a total agreed
price of $14 million, including consideration for other liabilities associated with the transaction.
The main reason for these acquisitions is to position ourselves in next-generation cancer therapy
market and to significantly broaden our portfolio and capabilities. As a result of these
acquisitions, we gain access to an innovative, scalable, decentralized and automated point-
of-care cell therapy supply model as well as a next-generation fully human antibody-based
therapeutics platform. Combined and supported by us as a fully integrated biopharma, they
have
the potential to disrupt the CAR-T treatment paradigm. The goal is to expand the current
market for CAR-T therapies and have an important impact on patients in need of additional and
improved treatment
options.
43
Galapagos
Half-year financial report 2022
S43
FINANCIAL STATEMENTS
Details of the preliminary fair value of identifiable assets and liabilities acquired in both
transactions, the preliminary purchase consideration and provisional goodwill at the acquisition
date are as follows:
21 June
2022
(thousands of €) CellPoint AboundBioTotal
Property, plant and equipment 1,289 965
Other non-current assets 81 4
Trade and other receivables 162 -
Cash and cash equivalents 3,179 4,279
Other current
assets 1,254 536
Trade and other liabilities (32,789) (587)
Current deferred income - (474)
Net assets
acquired (26,824) 4,723
Consideration paid in cash 107,750 14,886
Fair value re-measurement of previously held equity
investment - 342
Deferred consideration 6,088 90
Fair value of contingent consideration 22,865 -
Fair
value of total consideration 136,703 15,318
Goodwill 163,526 10,595
Exchange differences on goodwill - 166
Goodwill in the balance
sheet 163,526 10,761174,288
44
Galapagos Half-year financial report 2022
S44
FINANCIAL STATEMENTS
Net
cash outflow arising on acquisition
21 June 2022
(thousands of €) CellPoint AboundBioTotal
Consideration paid in cash 107,750 14,886
Less: cash
and cash equivalents balances acquired (3,179) (4,279)
Cash out from acquisition of subsidiaries, net of cash
acquired 104,57110,607115,178
Cash used in operating
activities for other liabilities
related to the acquisition of subsidiaries 7,765-7,765
The preliminary fair value of the identifiable assets and liabilities are included in our condensed
consolidated interim financial statements as per 30 June 2022. To date we have performed a
preliminary fair value analysis of the business combinations, with corresponding adjustments
to the trade and other liabilities. We expect the provisional amount of goodwill to change
significantly upon the completion of the purchase price allocation, resulting from the valuation of
the different assets and liabilities acquired, including the valuation of in-process R&D.
Contingencies and commitments
Contractual obligations and
commitments
We have certain purchase commitments principally with CRO subcontractors and certain
collaboration partners.
On 30 June 2022, we had outstanding
obligations for purchase commitments, which become due
as follows:
Less than More than
(thousands of €) Total 1 year1—3
years3—5 years5 years
Purchase commitments 442,874 231,179141,70746,56423,425
In addition to the table above, we have a contractual cost sharing obligation related to our
collaboration agreement with Gilead for filgotinib. The contractual cost sharing commitment
amounted to €304.2 million at 30 June 2022 for which we have direct purchase commitments of
€227.4 million at 30 June 2022 reflected in the table above.
Contingent liabilities and assets
We refer to our Annual Report 2021
for a description of our contingent liabilities and assets.
45
Galapagos Half-year financial report 2022
S45
FINANCIAL STATEMENTS
Related party transactions
Subscription On 26 January Right 2022, Plan 2022 our current (B), which CEO have was been offered accepted 1,000,000 on 24 March subscription 2022. The
rights number under of on accepted 25 March subscription 2022. Therights subscription under Subscription rights have an Right exercise Plan 2022 term(B) of was eight enacted years as by of notary the date deed of the for one offer new and
Galapagos have an exercise share. The price subscription of €50. Each rights subscription can in principle right gives not be the exercised right to subscribe prior to 1 January 2026.
(‘RSUs’), On 3 May subject 2022,to members acceptance. of the The executive RSUs arecommittee offered forwere no consideration. offered new Four restricted members
stockof units the executive at Galapagos’ committee discretion, accepted one Galapagos all RSUs offered shareto or them. a payment Each RSU in cash represents of an amount the rightequivalent to receive,
30-calendar to the volume-weighted day period preceding average price the relevant of the Galapagos vesting date. share The on first Euronext RSU grant Brussels will vest over in the full three vesting years
each after yearthe and offer a first date. vesting The second date on RSU 1 May grant 2023. has aFor four-year the members vesting period, of the executive with 25% payment committee, in cash any vesting rather than prior ato delivery the third
of shares. anniversary of the offer date will always give rise to a under On 6 May Subscription 2022, members Right Plan of the 2022 executive BE, subject committee to acceptance. were offered A firstnew portion subscription of the number
rights deed of accepted on 7 July subscription 2022. For three rights members under Subscription of the executive Right Plan committee, 2022 BE the was suspensive enacted by condition notary of of acceptance the date of the is still offer.
outstanding. The exercise Theprice subscription of the subscription rights have an rights exercise is €57.46 term(the of eight closing years price as the of the offer) Galapagos . Each subscription share on Euronext right gives Amsterdam the
right to and subscribe Brusselsfor onone the new day preceding Galapagosthe share. date For of all fully the onbeneficiaries the first day of under the fourth Subscription calendar Right year Plan following 2022 the BE the calendar subscription year
in which rights the vestgrant only was and 1 made. January The 2026. subscription rights are not transferable and can in principle not be exercised prior to
46
Galapagos Half-year financial report 2022
S46
The table below sets forth the number of subscription rights offered under Subscription Right
Plan 2022 (B) and Subscription Right Plan 2022 BE and the total number of RSUs accepted by
each member of the executive committee during the first six months of 2022:
Number of 2022
subscription rightsNumber of 2022
Name Title offeredRSUs accepted
Stoffels IMC BV
(1) CEO 1,000,000 (2)74,408
Bart Filius President, CFO & COO 68,000 (3)61,442
Walid Abi-Saab CMO 32,00037,274
Michele Manto CCO 24,00027,354
(1) Stoffels IMC BV (permanently presented by Dr. Paul Stoffels).
(2) These subscription rights have already been accepted.
(3) 100 subscription rights have already been accepted, the remainder is outstanding for acceptance.
On 26 April 2022, Galapagos held an extraordinary shareholders’ meeting, followed by its annual
shareholders’ meeting. All agenda items were approved, including the approval of (a) the
appointment of Stoffels IMC BV (permanently represented by Dr. Paul Stoffels) as director, and
(b) the appointments of Jérôme Contamine and Dr. Dan Baker as independent directors within
the meaning of article 7:87 of the Belgian Companies and Associations Code and article 3.5 of the
Belgian Corporate Governance Code 2020. Subsequently, the (new) unitary board has appointed
Stoffels IMC BV (permanently represented by Dr. Paul Stoffels) as chair of the board of directors.
The mandates of Howard Rowe and Katrine Bosley as members of the board of directors came
to an
end on 26 April 2022.
During the first six months of 2022, other than as disclosed in the paragraph above, there were
no changes to related party transactions disclosed in the 2021 annual report that potentially had
a material impact on the financials of Galapagos of the first six months of 2022.
Events after the end of the reporting period
There were no adjusting
events nor material non-adjusting events to be reported.
47
Galapagos Half-year financial report 2022
S47
OTHER INFORMATION
Glossary
100 points clinical response
Percentage patients of patients achieving a 100-point decrease in CDAI score during a clinical trial in CD
ACR
American College of Rheumatology
ACR20 (ACR 20/50/70)
in American the number College of of swollen Rheumatology and tender 20% joints response as wellrate as a signifies 20% oragreater 20% orimprovement greater improvement in three
out response of five rates, other respectively disease-activity measures. ACR50 and ACR70 reflect the same, for 50% and 70%
ADPKD
enlarged Autosomal with dominant fluid-filled polycystic cysts, leading kidney to disease, kidney failure. a disease Other where organs typically may be both affected kidneys
asbecome well
ADS
American GLPG andDepositary CUSIP number Share; 36315X101.
Galapagos One has ADS a Level is equivalent 3 ADS listed to one onordinary Nasdaqshare with ticker in Galapagos symbol NV
AFM
Dutch Authority for the Financial Markets
Anemia
the Condition body’s in tissues which the patient has an inadequate number of red blood cells to carry oxygen to
Anti-TNF
Tumor necrosis factor. An anti-TNF drug acts by modulation of TNF
Antibody
A combine blood chemically protein produced with substances in response whichto theand body counteracting recognizes asa alien, specific suchantigen. as bacteria, Antibodies
viruses, and foreign substances
48
Galapagos Half-year financial report 2022
S48
OTHER INFORMATION
Assays
Laboratory tests to determine characteristics
Attrition rate
development The historical paths. success Statistically rate for drug seen,discovery investment andindevelopment, at least 12 target-based based on publicly programs known is
programs required to are ensure discontinued that at least before one reaching of these Phase will reach 3 because a Phase they3 are study. not successful Most new enough drug R&D to be approved
BID dosing
Twice-daily dosing (bis in die)
Bioavailability
(oral) Assessment administration of the amount of product candidate that
reaches a body’s systemic circulation after
Biomarker
Substance product
candidate used as has an aindicator biologicalof effect a biological process, particularly to determine whether a
Bispecific antibody
An antibody that binds to two different antigens
Black & Scholes model
A widely mathematical used in the description pricing of European of financial options markets and and subscription derivative rights investment instruments that is
Bridging trial
extrapolate Clinical trial performed data from one to “bridge”
population or extrapolate to anotherone for the dataset same todrug thatcandidate, for another or situation, to movei.from e. to IV to subcutaneous dosing
CAR-T
Chimeric engineered antigen to produce receptor an T artificial cells (also T cell known receptor as CAR for T use cells)
in immunotherapy are T cells that have been genetically
CD19
CD19 hallmark is
a ofprotein B-cells,found the protein on the has surface been of used B-cells, to diagnose a type of cancers white blood that arise cell.from Since this CD19 type isof a
cell—notably B-cell lymphomas
49
Galapagos Half-year financial report 2022
S49
OTHER INFORMATION
CDAI
pre-defined Crohn’s Disease weight Activity as a way Index, to evaluating quantify the patients impacton of CD eight different factors,
each of which has a
CDAI remission
In <150 the FITZROY trial, the
percentage of patients with CD who showed a reduction of CDAI score to
CFTR
Cystic channel fibrosis in vertebrates transmembrane that is encoded conductance by the regulator CFTR gene. (CFTR) It isishypothesized a membrane that protein
inhibition and chloride of the a CFTR CFTR channel inhibitor might reduce cyst growth and enlargement for patients with ADPKD. GLPG2737 is
CHIT1/AMCase
chitinase. Chitotriosidase CHIT1(CHIT1) is predominantly is a proteininvolved coding gene, in macrophage and AMCase activation. is an inactive Inhibition acidic ofmamalian
chitinase preclinical activity translates models.into GLPG4716 a potential is a therapeutic CHIT1/AMCase benefit inhibitor in lung targeting diseases a key like pathway IPF, as shown in tissue in remodeling
CHMP
committee Committee responsible for Medicinalfor Products humanfor medicines Human Use
and is plays the European a vital role Medicines in the authorization Agency’s (EMA) of medicines in the European Union (EU)
CIR
Crédit up to 30% d’Impôt of the Recherche, annual investment or research incredit. French Under R&D operations, the CIR, theover French a period government of
three refunds years. Galapagos benefits from the CIR through its operations in Romainville, just outside Paris
CRP
C-reactive inflammation protein is a protein found in the blood, the levels of which rise in response to
Cash position
Current financial investments and cash and cash equivalents
Chitinase
chitinase Chitinaseactivity is an enzyme translates thatinto degrades a potential
chitin, therapeutic involved inbenefit the human in lung innate diseases immunity. like IPF, Inhibition as shown of in preclinical models
50
Galapagos Half-year financial report 2022
S50
OTHER INFORMATION
Chronic Lymphocytic Leukemia
(CLL)
starts Chronic in lymphocytic cells that become leukemia certain is the white most blood common cells (called leukemia lymphocytes) in adults. It inis the a
type bone of marrow. cancer that The cancer (leukemia) cells originate in the bone marrow and migrate to the bloodstream
Clinical Proof of Concept (PoC)
Point therapeutic in the setting drug development process where the product candidate first shows efficacy in a
Complete Response Letter (CRL)
A application letter send is by notthe ready FDA for to
approval indicate that in itsthe present review form cycle for an application is complete and the
Compound
A chemical substance, often a small molecule with drug-like properties
Contract research
organization (CRO)
Organization biotechnologywhich and medical provides devices drug discovery industry on and a contract development basis services to the
pharmaceutical,
Corticosteroids
have Any of various a group metabolic of
steroid functions hormones andproduced some arein used the to adrenal treat inflammation cortex or made synthetically. They
Crohn’s disease (CD)
ultimately An IBD involving in some inflammation cases surgical of removal the small of and partslarge of the intestines, bowel leading to pain, bleeding, and
Cytokine
A category of small proteins which play important roles in signaling in processes in
the body
DARWIN
Phase daily administration, 2 program forfor filgotinib up to
24 inweeks RA. DARWIN in RA patients 1 explored with insufficient three doses, response in twice-daily to methotrexate and once-(MTX) three and once-daily who remained doses for on their up to stable 24 weeks background in RAtreatment patients with
with MTX. insufficient DARWIN response 2 explored to double-blind, methotrexate placebo-controlled (MTX) and who washed trials out which of recruited their treatment approximately with MTX. 900 DARWIN patients 1 globally and 2 were and for patients
which are results on 200 were mg filgotinib, reported except in 2015. for DARWIN U.S. males 3 is who a long are on term 100 extension mg. The week trial in 156 which results all from DARWIN 3 were reported in 2019
51
Galapagos Half-year financial report 2022
S51
OTHER INFORMATION
DAS28 (CRP)
counts DAS28 is ofan 28RA defined Disease joints, Activity theScore physician’s basedglobal on a calculation health assessment that usesand tender a serum and swollen marker
joint for calculation: inflammation, scores such range as C- from reactive 2.0 to protein. 10.0, with DAS28 scores (CRP) below includes 2.6 being the considered
C-reactive remission protein score
DDI study
effects Drug-drug of interaction a drug caused study. by concomitant This type of administration study will assess with if there another is a change drug in the action or side
DIVERGENCE
Phase small bowel 2 programs CD and with DIVERGENCE filgotinib in
2 Crohn’s in fistulizing disease. CD DIVERGENCE 1 was an exploratory study in
DIVERSITY
Phase 3 program evaluating filgotinib in CD
DMARDs
Disease the symptoms modifying anti rheumatic drugs; these drugs address the disease itself rather than just
Deep venous thrombosis (DVT)
The lower formation limbs. The of blood one or clots more can
blood travel clots to the in one lung of and the cause body’s a large pulmonary veins, most embolism commonly in the
Degradation
The molecules process by which proteins are lost through the use of drugs such as PROTACs or small
Dermatomyositis
rash, Dermatomyositis and inflammatory is a rare myopathy, inflammatory or
inflamed disease. muscles, Common causing symptoms muscle weakness include distinctive skin
Development
All development activities required research, to chemical bring a new anddrug pharmaceutical to the market. development This includes and preclinical regulatory and filings
clinical of product candidates
Discovery
Process department by which that
oversees new medicines target are anddiscovered drug discovery and/orresearch designed. through At Galapagos, to nomination this is the of preclinical candidates
52
Galapagos Half-year financial report 2022
S52
OTHER INFORMATION
Disease-modifying
Addresses disease the disease itself, modifying the disease progression, not just the symptoms of the
Dose-range finding study
Phase treatment 2 clinical in patients. study exploring Results are
the used balance to determine between doses efficacy for and later safety studies among various doses of
Double-blind
patient Term to ischaracterize taking placebo a clinical or the trial treatment in which being neither evaluated the physician nor the patient knows if the
EC
European Commission
EMA
European Medicines Agency, in charge of European market authorization of new medications
Efficacy
Effectiveness for intended use
End-to-end
functional A process solution, that takes usually a system without or strong service reliance from on beginning third parties to end and delivers a complete
Endoscopy
A non-surgical procedure
involving use of an endoscope to examine a person’s digestive tract
FDA
The public U. S. health Food and and inDrug charge Administration of American market is an agency approval responsible of new medications for protecting and
promoting
FIH
First-in-human safety, tolerability clinical and pharmacokinetics trial, usually
conducted of the product in healthy candidate volunteers with the aim to assess the
FILOSOPHY
Phase 4 program evaluating filgotinib in RA
FINCH
Phase 3 program evaluating filgotinib in RA
53
Galapagos Half-year financial report 2022
S53
OTHER INFORMATION
FITZROY
A weeks. double-blind, Full results placebo were published controlled inPhase The Lancet 2 trial in with 2016 filgotinib in 177 CD patients for up to 20
FORM 20-F
Form
20-F is an SEC filing submitted to the US Securities and Exchange Commission
FSMA
The Financiële Belgian Diensten market en authority: Markten Financial Services and Markets Authority, or Autoriteit voor
FTE
FTE Full-time of 1.0equivalent; means that a the way equivalent to measure work an of
employee’s one full-time involvement worker was in a used project. on the For project example, an
Fast Track
of A designation drugs which by treat the a FDA serious of an or investigational life-threatening drug condition for expedited and fill review an unmet to facilitate medical
development need
Fee-for-service
service Payment performed system where the service provider is paid a specific amount for each procedure or
Filgotinib
Formerly inhibitor, approved known as in GLPG0634, RA in European commercial Union,
name Great is Britain, Jyseleca. and Small Japan, molecule and inpreferential UC in European JAK1 is Union partnered and Great with Britain. Gilead. Application Filgotinib currently for approval is in Phase for ulcerative 3 trials in colitis CD, was
and filed in a Phase in Japan. 4 trial Filgotinib in RA
Fistulizing CD
Fistulae region. Fistulae are inflammatory are one of tracts thethat most most severe often sequelae occur between of luminal the distal CD and colon theand
lifetime the perianal risk of occurrence is close to 50% of those with active CD
Futility analysis
Analysis information of the to be likelihood gathered. of The a trial term to ‘futility’ meet its isprimary used to refer endpoint, to the based low likelihood on a
subset of aof clinical the total trial to that achieve it is unlikely its objectives. to achieve Instatistical particular, significance stopping a can clinical save trial resources when that the interim could be results used on suggest more
promising research
54
Galapagos Half-year financial report 2022
S54
OTHER INFORMATION
G&A expenses
General & administrative expenses
GLIDER
Phase 2 Proof of Concept trial with SIK2/3 inhibitor GLPG3970 in Sjögren’s syndrome
GLPG0555
A JAK1 inhibitor in Phase 1b. Development was stopped in July 2022
GLPG0634
Molecule number currently known as filgotinib and Jyseleca
GLPG2737
A AbbVie compound but Galapagos currently retained in Phase rights 2
in ADPKD. outsideThis of CF compound is part of the CF collaboration with
GLPG3121
was A compound stopped in in July Phase 2022 1 targeting JAK1/TYK2 directed toward inflammation (IBD). Development
GLPG3667
A in TYK2 July 2021 kinase inhibitor discovered by us, topline results from the Phase
1b in psoriasis reported
GLPG3970
in A SIK2/3 UC, psoriasis inhibitor and in
multiple RA werePhase reported 2 Proof in July of 2021. Concept The studies. compound Topline was results discontinued from the instudies March 2022
GLPG4399
A SIK3 inhibitor currently in Phase 1 directed toward inflammation
GLPG4586
inlicensed A compound from with Fibrocor. undisclosed The development mode of action was in stopped preclinical in July phase 2022 directed toward fibrosis and
GLPG4605
A SIK2/3 inhibitor in the preclinical phase, currently directed
toward fibrosis
55
Galapagos Half-year financial report 2022
S55
OTHER INFORMATION
GLPG4716
molecule A chitinase have inhibitor been returned inlicensed to Molecure from Molecure in July 2022 (previously OncoArendi). The rights to the
Genome
grow An organism’s and develop complete set of genetic information needed to build
that organism and allow it to
HDL
High-density contributes tolipoprotein.
heart disease HDL at high scavenges levels. High and levels reduces of HDL low-density reduce the lipoprotein risk for heart (LDL) disease, which while low levels of HDL increase the risk of heart disease
Hemoglobin
body A protein and carries inside red carbon blood dioxide cells
that backcarries to the oxygen lungs from the lungs to tissues and organs in the
Histology
Study of the microscopic structures of tissues
Histopathology
Microscopic examination of tissues for manifestations of a disease
IBD
bowel, Inflammatory including Bowel CD and Disease. UC. CD This affects is a general the small term andfor large anintestine, autoimmune whiledisease UC affects affecting the large
the intestine. ultimately,Both in some diseases cases, involve surgical inflammation removal of part of the of intestinal the bowel wall, leading to pain, bleeding, and
IPF
progressive Idiopathic pulmonary decline in lung fibrosis. function. A chronic Pulmonary
and fibrosis ultimately involves fatal scarring disease of characterized lung tissue and by is a “idiopathic” the cause of isshortness used because of breath. the cause Fibrosis of pulmonary is usually associated fibrosis is still with
unknown a poor prognosis. The term
In vitro
Studies performed with cells
outside their natural context, for example in a laboratory
In vivo
Studies
performed with animals in a laboratory setting
56
Galapagos Half-year
financial report 2022
S56
OTHER INFORMATION
In-/out-licensing
Receiving/granting patent, or other proprietary permission right, from/to in exchange another forcompany a fee and/or or institution royalty to use a brand name,
Inflammatory diseases
A large, unrelated group of disorders associated with abnormalities in
inflammation
Intellectual property
patents, Creations trademarks of the mind
or that copyrights have commercial value and are protected or protectable, including by
Intersegment
Occurring between the different operations of a company
Investigational New Drug (IND)
Application
United an experimental States Federal druglaw across requires statealines, pharmaceutical usually to company clinical investigators, to obtain an
before exemption a marketing to ship this application exemption, for the allowing drug has them been to perform approved. clinical The IND studies is the means by which the sponsor obtains
JAK
cytokines Janus kinases and growth (JAK) are factors, criticalincluding components thoseof
that signaling are elevated mechanisms in RA. Filgotinib utilized by is a apreferential number of JAK1 inhibitor
Jyseleca®
Jyseleca® is the brand name for filgotinib
LDL
Low-density lipoprotein. LDL contributes to heart disease at high levels
Lipoprotein
bloodstream. Lipoproteins are There substances are two main made types of of
protein cholesterol: and fat High-density that carrylipoprotein cholesterol (HDL), through or “good” your cholesterol and Low-density lipoprotein (LDL), or “bad” cholesterol
Liver enzymes
liver Inflamed enzymes, or injured into the liver bloodstream cells secrete
higher than normal amounts of certain chemicals, including
Lymphocyte
Type of
white blood cell that is part of the immune system
57
Galapagos Half-year
financial report 2022
S57
OTHER INFORMATION
MACE
Major research adverse cardiovascular events; a composite endpoint frequently used in cardiovascular
MANGROVE
Phase 2 program with GLPG2737 in autosomal dominant polycystic kidney disease
MANTA
A Phase 2 semen parameter trial with filgotinib in male patients with
CD or UC
MANTA-RAy
Phase 2 semen
parameter trial with filgotinib in male patients with RA, PsA, or AS
MHLW
Japanese authorization Ministry of new of medications Health, Labor and Welfare (MHLW), in charge of Japanese market
MHRA
Medicines and Healthcare products Regulatory Agency in Great Britain
MTX
Methotrexate; a first-line therapy for inflammatory diseases
Mayo Score
Mayo from Score four categories, is a Diseaseincluding Activity Score stoolfor
frequency, ulcerative rectal colitis. It bleeding, is a composite findingsofof subscores flexible proctosigmoidoscopy ranging from 0–12 or colonoscopy, and physician’s global assessment, with a total score
Milestone
Major payment achievement in a project or program; in our alliances, this is usually
associated with a
Modulation
molecules, The process peptides, by which
antibodies the function or of cell proteins therapyis changed through the use of drugs such as small
Molecule collections
Chemical with specific libraries, target usually classes.consisting These collections of drug-like can be small screened molecules against thataare target designed to generate to
interact initial “hits” in a drug discovery program
58
Galapagos
Half-year financial report 2022
S58
OTHER INFORMATION
NDA
New Drug Application
NICE
national The National guidance Institute andfor advice Health to improve and Care health Excellence; and social an independent care in the UK public body that provides
NK cells
Natural viruses killer cells, type of white blood cell with granules of enzymes which
can attack tumors or
Neutrophil
Type in theof body. immune Neutrophils system
cell arewhich another is one type ofof the white first blood cell types cellto which travel fight to the infection site ofby aningesting infection and killing microorganisms
Non-Hodgkin Lymphoma (NHL)
of Non-Hodgkin the body’s germ-fighting lymphoma is immune a type ofsystem. cancer In that non-Hodgkin begins in the lymphoma, lymphatic white system, blood which cellsis
called part lymphocytes grow abnormally and form tumors throughout the body
Oligonucleotide
protein Short DNA expression or RNA molecule that can be used as research tools or therapeutic drug to change
Oral dosing
Administration of medicine by the mouth, either as a solution or solid (capsule,
pill) form
Osteoarthritis (OA)
The breakdown most common of cartilage form in
the of joints arthritis, leading usually to pain, occurring stiffness, after and middle swelling age, marked by chronic
Outsourcing
Contracting work to a third party
PASI
the Psoriasis severity Area (erythema, and Severity induration Index; an and index desquamation) used to express and percentage the severity of of affected psoriasis. area It
combines
PRAC
for Pharmacovigilance assessing all aspects Risk Assessment of
risk management Committee of human of the European medicinesMedicines Agency, responsible
59
Galapagos Half-year financial report 2022
S59
OTHER INFORMATION
PROTAC
Proteolysis that play a role targeting in disease chimera, processes a special small molecule capable of removing unwanted proteins
Pharmacokinetics (PK)
absorption, Study of what distribution a body does to the to atissues,
drug; the metabolism fate of a substance and excretion. delivered These to processes a body. This determine includes the blood concentration of the drug and its metabolite(s) as a function of time from dosing
Phase 1
tolerability, First stage pharmacokinetics of clinical testingof ofa an drug,
investigational usually performed drug designed in a small number to assess of the healthy safety human and volunteers
Phase 2
Second order tostage determine of clinical efficacy, testing, tolerability usually and performed the dose in to no use more than several hundred patients, in
Phase 3
Large definitive clinical understanding trials, usually ofconducted the efficacyin and
several tolerability hundred of the to several candidate thousand treatment; patients serves to as gain the a principal basis for regulatory approval and access to the market
Phenotypic screening
Phenotypic to alter a cell’s screening diseaseis characteristics. a
strategy used Animal in drug models discovery and cell-based to identifyassays molecules are both with the strategies ability used screening to identify does not these rely on molecules. knowing In thecontrast identity of to the target-based
specific drug drug target discovery, or its hypothetical phenotypic role capture in the complex disease. biological A key benefit mechanisms this approach that are has not over otherwise target-based achievable screening, is its capacity to
Pivotal trials
Registrational clinical trials
Placebo
biologically A substance active having preparation no pharmacological effect but
administered as a control in testing a
Point-of-care
Drug treatment is provided close to or near the patient
60
Galapagos Half-year financial report 2022
S60
OTHER INFORMATION
Preclinical
humans. Stage of Consists drug research of in vitro development, and in vivo undertaken screening, prior pharmacokinetics, to the administration toxicology, ofand thechemical drug
to upscaling
Preclinical candidate (PCC)
A development new molecule process
and potential drug that meets chemical and biological criteria to begin the
Product candidate
for Substance development, that has starting satisfied with the formal requirements preclinical ofsafety early preclinical evaluationtesting followed and byhas clinical been
testing selected for the treatment of a certain disorder in humans
Proof of Concept (POC)
Concept A clinical trial trial is inusually which first with evidence a small number for efficacy of patients of a candidate and for drug shortisduration gathered. to A get Proof a
first of impression of drug activity
Proof of Concept study
Phase mechanism 2
patient of action study in which activity as well as safety in patients is evaluated, usually for a new
Pulmonary embolism
A blockage in one of the pulmonary arteries in the lungs
QD dosing
Once-daily dosing (qd from the Latin quaque die)
R&D operations
product Research candidates and development for internal operations; pipeline orunit as part responsible of risk/reward for discovery sharing alliances and developing with partners
new
Refractory
to, “Refractory” treatment refers to a patient with
cancer that is/has become resistant to, or does not respond
Relapsed
“Relapsed” improvement refers to a patient with cancer that develops cancer again after a period of
61
Galapagos Half-year financial report 2022
S61
OTHER INFORMATION
Replication
The of cell process division by which DNA is copied to produce two identical DNA molecules during the process
Rheumatoid arthritis (RA)
A cartilage chronic, destruction, systemic inflammatory bone
erosiondisease and disability that causes joint inflammation, and usually leads to
S&M expenses
Sales and marketing expenses
SEC
Securities and Exchange Commission in the US
SELECTION
Phase 2021 3 program evaluating filgotinib in UC patients. Full results were published in The Lancet in
SES-CD scores
values Simple from endoscopic 0
(unaffected) score for to 3 CD, (highly involving affected) review of five pre-defined bowel segments, assigning
SIK
Salt-inducible kinase. This is the target family for the portfolio of molecules in the Toledo program
Screening
Method in a biochemical usually applied assay against at the a beginning series of
of small a drug molecules discovery or antibodies campaign, to where obtain a target an initial is tested set of “hits” that show activity against the target. These hits are then further tested or optimized
Short interfering RNA
A research tool that is used to silence the activity of specific genes
Sjögrens syndrome
Sjögren’s often resulting Syndrome in
chronic is a systemic dryness of inflammatory the eyes and disease mouthwhich can be felt throughout the body,
Small bowel CD (SBCD)
CD gastrointestinal causes chronic tract inflammation including theand stomach erosion and ofsmall the intestines. and large intestines. It can affect While different isolated
regions SBCDof is the an uncommon ileum, is common presentation of CD, involvement of some portion of the small bowel, particularly
62
Galapagos Half-year financial report 2022
S62
OTHER INFORMATION
Statin
are Statins at high are arisk class ofof cardiovascular lipid-lowering disease. medications They that arereduce the most illness common and mortality cholesterol-lowering in those
who drugs. atherosclerosis Low-density andlipoprotein coronary heart (LDL) disease carriers via ofthe cholesterol mechanisms play described a key role by in the thedevelopment lipid hypothesis of
Systemic lupus erythematosus
even An autoimmune kidney failure disease, with systemic
manifestations including skin rash, erosion of joints or
TEAE
treatments
Treatment Emergent or any event Adverse already Event, present is any that event worsens not inpresent either intensity prior to orthe frequency initiation following of the exposure to the treatments
TYK
residues Tyrosine of kinase specific is an proteins enzyme inside that a can cell.
transfer It functions a phosphate as an “on” group or “off” from switch ATPin tomany the tyrosine cellular also functions. attach Tyrosine phosphates kinases to belong other amino to a larger acids class such ofas enzymes serine
known and threonine. as protein GLPG3667 kinases which is a reversible and selective TYK2 kinase domain inhibitor
Target
therapeutic Proteïn that intervention has been shown or discovery to play of a role a medicine in a disease process and that forms the basis of a
Target discovery
Identification and validation of proteins that have been shown to play a role
in a disease process
Technology access fee
License collections) payment made
in return for access to specific technology (e.g. compound or virus
Toledo
Toledo is the program name for the target family of SIK inhibitors
Topical
corticosteroids
Corticosteroids which are administered through the skin using an ointment
Transcription
The process of making an RNA copy of a DNA gene sequence
63
Galapagos Half-year financial report 2022
S63
OTHER INFORMATION
Translation
The process by which a protein is synthetized from mRNA
Ulcerative colitis (UC)
UC inflammation is an IBD causing throughout chronic the inflammation gastrointestinal of tract) the lining of the colon and rectum (unlike CD with
Venous thrombotic events
a When venousathromboembolism blood clot breaks (VTE). The loose
abbreviation and travels DVT/PE in refers the to blood, a VTEthis where is a called deep vein thrombosis (DVT) has moved to the lungs (PE or pulmonary embolism)
64
Galapagos Half-year financial report 2022
S64
OTHER INFORMATION
Financial calendar
03 November 2022
Third quarter 2022 results
23 February 2023
Full year 2022 results65
Galapagos Half-year financial report 2022
S65
OTHER INFORMATION
Colophon
Concept, nexxar GmbH, design Vienna and online – Online programming annual reports and online sustainability reports www.nexxar.com
Frank Photography van Delft
Copy deadline: 4 August 2022 report This report or atis www.
also available glpg.com in Dutch and available for download in the Downloads section of this
66
Galapagos Half-year financial report 2022
S66
OTHER INFORMATION
Contact
Sofie Van Gijsel Sandra Cauwenberghs
Head of Investor Relations Director of Investor Relations
Galapagos NV Galapagos NV
Generaal De Wittelaan L11 A3 Generaal De Wittelaan L11 A3 2800 Mechelen, Belgium 2800 Mechelen, Belgium Tel. +1 781 296 1143 Tel. +32 15
34 29 00 Email: ir@glpg.com Email: ir@glpg.com
Marieke Vermeersch
Head of
Corporate Communication Galapagos NV
Generaal De Wittelaan L11 A3 2800 Mechelen, Belgium Tel. +32 479 49 06 03 Email: media@glpg.com
67
Galapagos Half-year financial report 2022
S67