• Total revenues
of €106 M (+34%)
• Group net profit of €3 M
• R&D revenues of €63.8 M (+76%), driven
by alliances
• BioFocus recurrent segment profit of €7.9 M
(+174%)
• Cash position of €47.4 M at year-end
• Four programs moved into clinical development
• 2010 guidance: profitability and positive cash-flow,
revenues more than €135 million
Click here
to access the live audio webcast presentation
at 10.00 CET,
call number +32 2290 1791
Mechelen, Belgium;
5 March 2010 – Galapagos NV (Euronext: GLPG) presents
financial results for the full year 2009 and highlights
the successful execution of its business and R&D strategy.
Galapagos surpassed its
financial goals in 2009. Group revenues for the full year
2009 were €106.0 million, or a 34% growth compared
to 2008 on a pro forma
restated basis(1).
The R&D division delivered record revenues of €63.8
million, an increase of 76% over 2008. The service division
reported external sales of €43.1 million, or an organic
growth of 13% compared to 2008 on a pro forma restated basis,1
and a segment result of €7.9 million, more than double
the 2008 segment result of €2.9 million. Substantially
increased alliance payments, combined with service division
profits, led the Group to achieve an operating profit of
€1.7 million, a positive swing of €10 million
when compared to 2008. This operating profit, together with
recognition of deferred tax assets from the UK operations,
resulted in a net profit of €3.0 million for the Group,
€15.2 million above the 2008 results. Galapagos concluded
2009 with €47.4 million in cash, €9.4 million
higher than guidance.
For 2010, management reiterates
guidance for Group revenues of at least €135 million,
with profitability and a positive operating result and cash
flow.
Galapagos made significant
advances in its R&D and service operations during the
course of 2009. The Company successfully completed Phase
I trials for its lead program, GLPG0259, with plans to initiate
Phase II trials in rheumatoid arthritis patients in the
second half of 2010. In total, Galapagos advanced 4 programs
into clinical development, delivered 2 pre-clinical candidates
and progressed more than 40 discovery programs in 2009.
Galapagos signed new strategic alliances with Merck and
Roche in 2009, allowing the Company to capitalize further
on its risk/reward sharing alliance strategy. Galapagos
also expanded her arthritis alliance with GSK, the third
expansion since its initiation in 2006. The seven alliances
with major pharmaceutical companies have delivered more
than €110 million in payments since 2006. Service division
BioFocus benefited from its premium positioning through
the extension of ongoing partnerships and the establishment
of new collaborations to achieve an increase in operating
margins.
“2009 was a fantastic
year for Galapagos. Following the continued profitability
of our BioFocus service operations, we have now reached
the point in the Company’s development where we believe
we have achieved sustainable net profitability for the entire
Group,” said Guillaume Jetten, Galapagos’ Chief
Financial Officer. “Galapagos will continue to generate
cash, with a continuing growth of revenues from milestones
in our pharma alliances plus sales from our services.”
“In 2009, we achieved
what we set out to do ten years ago when we started to build
this company – create a self-reliant biotech with
a pipeline of novel mode-of-action drugs,” said Onno
van de Stolpe, CEO and founder of Galapagos. “Through
this financial self-reliance, we are now able to focus on
the next level of the Company’s development - building
a portfolio of novel orphan disease drugs. In 2010, we aim
to advance our innovative pipeline, and build further on
the foundations of one of the most successful biotech companies
in Europe.”
Key figures (consolidated)
(€ millions, except basic result per share)
*Figures exclude BioFocus’ San Diego operations and
reclassify French tax rebates on research activities and
other income as revenues
Download
Financial tables
Financial information
Revenues
Galapagos' revenues for the full year 2009 grew 34% to €106.0
million (pro forma restated 2008: €78.9 million). BioFocus
generated €56.5 million in revenues (+6%), including
€13.4 million intra-company revenues eliminated in
the consolidation. The service operations achieved organic
sales growth of 13%, indicating the resiliency of BioFocus’
premium positioning. The R&D division increased its
revenues by 76% to €63.8 million, driven by success-based
payments in all alliances.
Result
The Group net profit for the full year 2009 was €3.0
million, or €0.14 earnings per share, a positive turnaround
of €15.2 million when compared to a loss of €12.2
million, or €0.58 per share, on a pro forma restated
basis for 2008. Research and development costs increased
from €38.7 million to €60.0 million, making Galapagos’
R&D budget one of the largest in European biotech in
2009. BioFocus reported a positive segment result of €7.9
million, compared to €2.9 million in 2008. The service
division’s substantially improved recurring result
was mainly attributable to better gross margins, particularly
in the biology division, and to higher capacity utilization.
General and administrative costs decreased to €16.9
million (16% of revenues), as compared to €19.1 million
(24% of revenues). The group net result was also impacted
by recognition of €1.3 million in deferred tax assets
from the UK operation, as per early adoption of IFRS 3R
and IAS 27R.
Cash position
Galapagos’ cash and cash equivalents amounted to €47.4
million on 31 December 2009, compared to €27.3 million
at the end of 2008. The positive cash flow from both the
R&D and service operations, in combination with the
successful €18.2 million private placement in October
2009, resulted in a year-end 2009 cash position of €47.4
million. This is €9.4 million better (25%) than the
updated guidance of €38.0 million given in November
following the successful private placement.
Operational highlights
R&D division
• Achieved milestones in all pharma alliances
• Signed strategic alliance with Roche in COPD (chronic
lung disease)
• Signed new strategic alliance with Merck in inflammatory
diseases
• Expanded metabolic disease alliance with Merck to
include cardiovascular diseases
• Broadened arthritis alliance with GlaxoSmithKline
• Completed Phase I studies for RA candidate drug
GLPG0259, showing good safety and pharmacokinetic profile
• Completed Phase I studies for candidate metastasis
drug GLPG0187, showing good safety and biomarker response
in healthy volunteers
• Initiated Phase II studies for Nanocort® for
multiple sclerosis flares
• Initiated Phase I studies for GLPG0555, lead program
in arthritis alliance with GSK
• Delivered two development candidates in arthritis
alliance with GSK
• Pre-clinical development of cachexia candidate drug
GLPG0492
• Progressed antibody alliance with MorphoSys
Service operations
• Increased margins and profitability of BioFocus
operations
• Extended service agreements with Amgen, Schering-Plough
and Eli Lilly
• Signed new agreements with, among others, Procter
& Gamble, Opsona Therapeutics, Medicines for Malaria
Venture and TB Alliance
• Achieved €1.6 million in target acceptance
payments in oncology target discovery collaboration with
Ortho Biotech Oncology Research & Development/Janssen
Pharmaceutica
• Strengthened network of cutting-edge capabilities
through partnerships with Oncodesign and DiscoveRx
Corporate
• Appointment of Guillaume Jetten as Chief Financial
Officer
• Appointment of Werner Cautreels to Galapagos Board
• €18.2 million raised through private placement
of 2,125,925 new shares
• Average daily trading volumes up 65% (from 32,000
in 2008 to 53,000 in 2009)
Outlook 2010
Galapagos’ acquisition of Argenta Discovery 2009 Ltd
in February 2010 created one of the world’s largest
drug discovery contract research operations. Forecasted
revenue from Galapagos’ seven alliances with pharmaceutical
companies and visibility into the BioFocus and Argenta order
books encourage management to give guidance for 2010 Group
revenues above €135 million, with profitability and
a positive operating income and cash flow for full year
2010. The Company anticipates having six programs in clinical
trials in 2010, including a Phase II study with GLPG0259,
its first-in-class candidate medicine in rheumatoid arthritis.
Annual Financial
Report 2009
Galapagos is currently finalizing its financial statements
for the year ended 31 December 2009. The auditor has confirmed
that his audit procedures, which are substantially completed,
have not revealed any material corrections that are required
to be made to the financial information included in this
press release. Should any material changes arise during
the audit finalization, an additional press release will
be issued. Galapagos expects to be able to publish its fully
audited Annual Financial Report for the year 2009 on or
before 1 April 2010.
Conference call
and webcast presentation
Galapagos will conduct a conference call open to the public
today at 10.00 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
