• Revenues increased to €37.7 M (from €31.6
M on pro forma basis, +19%)
• Net loss reduced to €7.3 M (from €7.9
M, -7 %)
• Cash burn reduced to €8.6 M (from €21.9
M, -61%)
• BioFocus DPI external revenues growth of 11%
• BioFocus DPI operating profit of €3.4 M (from
loss of €1.2 M)
• Cash position of €18.7 M on 30 June 2009
• Confirmation guidance of €100 M full year revenues
and €20 M year end cash position
• Positive results of clinical Phase I study with
GLPG0259 in rheumatoid arthritis
• Ongoing clinical Phase I study with GLPG0187 in
bone metastasis
• Announced two alliances with Merck & Co. for
a potential value of €490 M plus royalties
• Achieved milestones in all three bone & joint
alliances
Click
here to access the live audio
webcast presentation at 11.00 CET,
call number +32.2290.1791
Mechelen, Belgium; 7 August 2009 – Galapagos
NV (Euronext: GLPG) announces its half year results and
reiterates guidance for the full year.
“Galapagos has met all its objectives in the first
six months of 2009,” said Galapagos CEO, Onno van
de Stolpe. “Galapagos now has three candidate drugs
in clinical development, three pre-clinical programs, which
will enter human trials in 2010, and a broad portfolio of
discovery programs moving toward the clinic. The rheumatoid
arthritis compound GLPG0259, our first program based on
a proprietary Galapagos target, has demonstrated a good
safety and pharmacokinetic profile in a Phase I study, supporting
once-daily oral dosing. We have an ongoing Phase I study
with bone metastasis compound GLPG0187, for which we will
report the outcome within the next couple of months. We
continue to achieve successes across our alliances, allowing
us to advance one of the largest R&D portfolios in European
biotech.”
“The Company continues to grow its business and meet
its operational objectives from a well-controlled cost base.
The improved contribution of BioFocus DPI, combined with
achievement of milestones in the alliance programs, have
helped to reduce substantially the Company’s cash
burn and net loss in the first half of 2009,” noted
Guillaume Jetten, Chief Financial Officer. “With both
divisions set to continue their performance in the second
half, Galapagos retains full year guidance for revenues
of €100 M and a year end cash position of €20
M.”
Key figures half year 2009
Note: In November 2008 Galapagos sold BioFocus DPI’s
San Diego operations. For better comparison, pro forma figures
for June 30, 2008 have been presented based on continuing
business streams.
(€
millions, except net loss per share)
[1] Excludes BioFocus DPI’s
San Diego operations
Operational
overview
R&D division
In March 2009, Galapagos initiated Phase I clinical development
of its novel mechanism of action, first-in-class candidate
drug GLPG0259 for rheumatoid arthritis (RA), the first small
molecule from Galapagos’ target discovery platform
to enter the clinic. In the single ascending and multiple
dose studies completed thus far, GLPG0259 demonstrated good
safety and an excellent pharmacokinetic profile, supporting
once-daily oral dosing. A multiple ascending dose trial
will be initiated in the third quarter. GLPG0259 is a compound
in Galapagos’ internal RA program, which falls under
the option agreement with Janssen Pharmaceutica. Upon successful
completion of a dose finding Phase II clinical trial for
GLPG0259, Janssen has the exclusive option to license the
program for €60 M, with further potential milestones
to Galapagos of €776 M and up to double-digit royalties
on global sales. In its other alliance programs with Janssen
Pharmaceutica, Galapagos achieved milestones worth €3.4
M in the first half of the year.
In
June 2009, Galapagos initiated a first–in-human trial
for its integrin receptor antagonist (IRA), GLPG0187. Pre-clinical
studies demonstrated that GLPG0187 affects several steps
in cancer disease progression and could therefore offer
a promising new therapeutic approach for treating bone metastasis.
Based on these studies, Galapagos was granted permission
to evaluate this compound's safety, tolerability and pharmacokinetic
properties in healthy volunteers. Galapagos’ GLPG0187
program is funded by the Company.
In
its Nanocort® program, Galapagos is preparing for Phase
II studies to evaluate the effectiveness of this therapeutic
in treating inflammatory diseases. This includes production
of clinical batches of the product, trial design, and preparation
of the regulatory filings. The Phase I/II trial for Nanocort
demonstrated safety as well as faster and more pronounced
decrease in rheumatoid arthritis symptoms as compared to
a standard steroid treatment. Based on these findings, a
Phase II trial will be initiated in the fourth quarter to
evaluate Nanocort’s efficacy in multiple sclerosis,
an autoimmune disease affecting the central nervous system.
In addition a Phase II study designed to evaluate Nanocort’s
effectiveness in targeting inflamed joints is being scheduled.
The Nanocort program is funded by the Company.
Galapagos
has also moved three programs into pre-clinical development
in the first half of 2009. Two of these are part of the
osteoarthritis alliance with GlaxoSmithKline. The first
pre-clinical candidate of this alliance is on track to start
Phase I testing by the end of 2009. The second candidate
nomination was achieved in the first half of 2009. The third
pre-clinical program is the SARM (selective androgen receptor
modulator) candidate drug which is being developed for the
treatment of cachexia (loss of weight and muscle mass).
At the start of 2009, Galapagos announced the remarkable
success of this program to produce a novel compound that
overcame the limited bioavailability reported at the beginning
of 2008. The SARM program is funded by the Company.
In
addition to its clinical and pre-clinical programs, Galapagos
is advancing more than 40 discovery programs across its
arthritis, osteoporosis, and infectious diseases alliances.
On top of the milestones received in the arthritis alliances,
Galapagos received a €2.5 M payment from Eli Lilly
for advancing one of the programs in the osteoporosis alliance
to the next stage of drug discovery. Furthermore, Galapagos
has initiated an Alzheimer’s drug discovery program
based on the novel Alzheimer’s target described earlier
this year in the journal Science , with the aim to deliver
a candidate drug to treat Alzheimer’s disease.
In
the first half of the year, Galapagos announced alliances
with Merck & Co. in diabetes and obesity and in inflammatory
diseases. The Company also expanded its anti-infectives
alliance with GSK. Through its six risk/reward sharing alliances
with big pharma, Galapagos is eligible to receive in excess
of €2.2 billion in success-dependent milestone payments
plus up to double-digit royalties on the worldwide sales
of medicines that result from these programs. In the first
half of 2009, Galapagos achieved €11.1 M in milestone
payments in its alliances, for a total since 2006 of more
than €77 M in payments to date.
BioFocus
DPI service division
BioFocus DPI had a solid first half year, with external
sales growth of 11% and the best financial performance in
its history. The unit showed resiliency in a tough economic
climate; while the chemistry division again reported a strong
performance, much of the growth was driven by the biology
division. BioFocus DPI signed deals with partners such as
Lilly, Medicines for Malaria Venture and Opsona Therapeutics.
Corporate
developments
In June 2009, Geoff McMillan and Laurent Ganem stepped down
as Board Members and Werner Cautreels, CEO of Solvay Pharmaceuticals,
joined the Board as an independent member. In June the Company
also announced the resignation of CFO Leo Steenbergen, and
the appointment of Guillaume Jetten as his replacement as
per 1 July 2009. Galapagos received the Innovative Enterprise
qualification in France, opening up the Galapagos investment
opportunity to a new category of French investors.
Details
of the financial results
Note: All comparisons are relative to pro forma
figures for June 30, 2008 which exclude BioFocus DPI’s
San Diego operations.
Revenues
Galapagos’ revenues for the first half of 2009 amounted
to €37.7 M compared to €31.6 M on a pro forma
basis in the same period of 2008. The R&D division is
on track with revenues of €18.0 M compared to €14.2
M in the same period last year (+27%). BioFocus DPI reported
total revenues of €26.1 M, including €6.4 M in
inter-company revenues. BioFocus DPI external revenues grew
by 11% as compared to the same period last year.
Results
The net loss for the first half-year of 2009 was €7.3
M, compared to the loss of €7.9 M on a pro forma basis
for the first six months of 2008. The R&D division reported
a segment loss of €9.9 M, compared to €5.8 M the
first six months of 2008. The segment profit for BioFocus
DPI over the first six months of the year was €3.4
M, compared to a €1.2 M segment loss in the same period
last year, on a pro forma basis. This improvement is the
result of higher margins and further payback of earlier
restructuring efforts, and is in line with management expectations.
Visibility in the pipeline and the improved margins give
management confidence that BioFocus DPI remains on track
to deliver improved revenues, profit, and cash generation
for the full year.
R&D
expenses for the group in the first half year of 2009 were
€25.8 M compared to €18.0 M in the same period
of 2008. This planned increase was due to the broader portfolio
of research programs and increased costs of later stage
clinical programs.
General
and administrative expenses for the group were €9.9
M in the first half of 2009, compared to the €9.3 M
in the first six months of 2008. The general and administrative
expenses decreased as a percentage of revenues from 29%
in 2008 to 26% in 2009.
Cash
flow and cash position
A net decrease of €8.6 M in cash and cash equivalents
was recorded during the first half of 2009, compared to
a decrease of €21.9 M in the same period last year.
The net cash flow used in operating activities was €5.4
M, as compared to €17.7 M during the same period in
2008; this decrease is due to a larger tax refund received
from the French government for research investments, an
additional non-cash provision for share-based compensation,
as well as differences in timing between revenue recognition
and cash received in the two periods. Galapagos’ cash
and cash equivalents amounted to €18.7 M on 30 June
2009.
Outlook
2009
The Company reiterates full-year 2009 guidance figures:
revenues of €100 M, a 30% increase in annual consolidated
sales of 2008; R&D revenues of approximately €60
M; an improved cash contribution from BioFocus DPI and,
based on the contracts in the pipeline and anticipated R&D
payments, a maximum cash burn of €7 M, resulting in
a year end cash position of €20 M.
The
Company continues to advance toward achievement of its strategic
objectives for 2009:
• Completion Phase Ia, initiation of Phase Ib for
GLPG0259 first-in-class molecule
• Completion Phase Ia for GLPG0187 bone metastasis
molecule
• Initiation Phase II trial for Nanocort
• Finalization of pre-clinical testing for SARM &
osteoarthritis candidates
• Increased revenues, profit, and cash flow from the
BioFocus DPI service division
• Further capitalize on target discovery platform
Interim
Report 2009
The electronic version of Galapagos’ Interim Report
for half year 2009 is now available online at www.glpg.com/investor/financial_reports.htm.
Printed versions of the report can be requested by e-mailing
ir@glpg.com.
Conference
call and webcast presentation
Galapagos will conduct a conference call open to the public
today at 11.00 Central European Time (CET), which will also
be webcast. To participate in the conference call, please
call +32 2290 1791,
ten minutes prior to commencement. A question and answer
session will follow the presentation of the results. Click
here to access the live audio webcast. The
archived webcast also will be available for replay shortly
after the close of the call.
Financial
calendar 2009
3Q09 interim update 13 November 2009
Annual results 2009 5 March 2010
Annual shareholders meeting 27 April 2010
About
Galapagos
Galapagos (Euronext: GLPG; OTC: GLPYY) is a drug discovery
and development company with small molecule programs in
bone and joint diseases, bone metastasis, cachexia, anti-infectives
and metabolic diseases. It has established risk sharing
alliances with GSK, Janssen Pharmaceutica, Eli Lilly and
Merck and Co. Through an alliance with MorphoSys, Galapagos
is also developing new antibody therapies in bone and joint
diseases. Its division BioFocus DPI offers a full suite
of target-to-drug discovery products and services to pharmaceutical
and biotech companies and to patient foundations, encompassing
target discovery and validation, screening and drug discovery
through to delivery of pre-clinical candidates. Galapagos
currently employs 495 people and operates facilities in
six countries, with global headquarters in Mechelen, Belgium.
More info at: www.glpg.com.
CONTACT
Galapagos
NV
Onno van de Stolpe, CEO
Tel: +31 6 2909 8028
ir@glpg.com
