MECHELEN, BELGIUM--(Marketwired - Aug 9, 2013) -
· Group revenues EUR77.4 M compared to EUR64.5 M in H1 2012
· Group net loss reduced to EUR5.4 M, from EUR11.3 M last year
· Cash position of EUR136.7 M on 30 June 2013
· Strong clinical pipeline with five Phase 2 and one Phase 1 program
· Service division external revenues for the running business EUR28.0 M (H1 '12: EUR29.4 M)
· Services EBITDA EUR3.0 M compared to EUR5.7 M last year
· Full year guidance: EUR160 M in Group revenues reiterated, year end cash position EUR100 M
Click here to access the live audio webcast presentation at 10.00 CET today, call numbers: Belgium +32-2290-1608, Toll-free 0800-50747; Netherlands +31-20-794-8504, Toll-free 0800 265 8526
Galapagos NV (EURONEXT BRUSSELS: GLPG) announces its unaudited half year results and retains guidance for the full year 2013.
"Galapagos delivered again in the first half of 2013, with strong progress in our pipeline. Galapagos now has five Phase 2 clinical studies in patients. The Phase 2B program in RA with JAK1-inhibitor GLPG0634 progressed as planned, and we expanded the '634 franchise with AbbVie twice, with the expansion of the Phase 2B program in RA and the initiation of a Phase 2 study in Crohn's disease. GSK announced the start of two Phase 2 studies with GSK2586184 (formerly GLPG0778) in lupus and psoriasis. Galapagos initiated a Phase 2 Proof-Of-Concept study with GLPG0974 in ulcerative colitis. We achieved substantial milestones in our alliances, declared a new pre-clinical candidate in our internal program on triple-negative breast cancer, and reported promising results with a potentiator series in cystic fibrosis. Our service division had a disappointing performance during the first half, but with a strong pipeline we are confident that the result will improve over the second half of the year. Galapagos is well on track to achieve its operational goals for the year and we reiterate our full year guidance of EUR160 million in Group revenues and provide guidance for year end cash of EUR100 million," said Galapagos CEO Onno van de Stolpe.
Key figures half year 2013 (EUR millions, except net loss per share) 30 June 2013 30 June 2012 Change Revenues 77.4 64.5 12.9 Services cost of sales -20.1 -25.0 4.9 Gross profit 57.3 39.5 17.8 R&D expenditure -48.0 -35.9 -12.1 General & administrative -12.9 -11.9 -1.0 Sales & marketing -1.1 -1.1 - Restructuring & integration costs -0.6 -0.4 -0.2 Result on liquidation -2.9 2.9 Operating loss -5.2 -12.6 7.4 Net loss for the period -5.4 -11.3 5.9 Basic loss per share (EUR) -0.19 -0.43 0.24 Cash and cash equivalents 136.7 122.6 14.1
Details of the financial results
Revenues
Galapagos' revenues for the first half of 2013 amount to EUR77.4 million compared to EUR64.5 million in the same period of 2012. The R&D division reported external revenues of EUR49.1 million, compared to EUR31.5 million in the same period last year. The R&D division revenue increase was driven by revenue recognition on the upfront payment from AbbVie in the global collaboration on GLPG0634, the amendment announced in April 2013 for extended scope of the Phase 2B program, and the achievement of significant milestone payments from the other alliances. Services external revenues amounted to EUR28.4 million in the first half of 2013, compared to EUR32.9 million in the same period last year. Normalizing for the closure and relocation of the Basel site activities last year and the Cangenix acquisition this year, external service revenues for the running business were EUR28.0 million, compared to EUR29.4 million in the same period last year.
Results
The group net loss for the first half of 2013 was EUR5.4 million, an improvement of 52% compared to a loss of EUR11.3 million for the first six months of 2012.
The EBITDA before intersegment and IFRS adjustments for the service operations over the first six months of the year was EUR3.0 million, compared to EUR5.7 million last year. Gross margins of the service operations were 31%, compared to 34% in the first half last year. Profitability of the Services unit is traditionally lower in the first half of the year.
The R&D division reported an EBITDA loss before intersegment and IFRS adjustments of EUR1.3 million, compared to a loss of EUR8.3 million in the first six months of 2012. R&D expenses for the Group in the first half-year of 2013 were EUR48.0 million compared to EUR35.9 M in 2012. This increase is mainly due to outsourcing costs related to the GLPG0634 franchise, which was as expected with the larger Ph2B program.
General and administrative (G&A) expenses of the Group were EUR12.9 million in the first half of 2013 (17% of Group revenues), compared to EUR11.9 million (18% of Group revenues) in the first half of 2012.
Liquid assets position
Galapagos' cash and cash equivalents amounted to EUR136.7 million on 30 June 2013. The Company's liquid asset position of EUR150.3 million on 30 June 2013 (EUR115.4 million at year end 2012) included EUR13.6 million in alliance related receivables for which revenues were recorded in H1 2013, and payment was received in Q3 2013. A net increase of EUR42.1 million in cash and cash equivalents was recorded during the first half of 2013, compared to an increase of EUR90.1 million in the same period last year. The increase this year is due to the EUR52.8 million net proceeds from a private placement in April 2013. The increase last year was due to the collection of the $150 million (EUR112 million) cash upfront payment made by AbbVie in the collaboration on GLPG0634. Furthermore, Galapagos' balance sheet holds an unconditional and unrestricted receivable from the French government (Crédit d'Impôt Recherche)[1] now amounting to EUR28 million, payable in four yearly tranches starting in early 2014.
Operational overview
R&D division
* Inflammation
* Presented the expanded scope of the Phase 2B program with GLPG0634 in rheumatoid arthritis, received $20 million from AbbVie for expansion
* Initiated recruitment for Phase 2B program with GLPG0634 in rheumatoid Arthritis
* Expanded the GLPG0634 franchise with AbbVie to include a Phase 2 study in Crohn's disease, to be performed by Galapagos for a $50 M success fee
* Presented at EULAR Phase 2A dose-range finding results, which confirmed the efficacy and safety of GLPG0634 shown in an earlier RA study
* Started a Phase 2 Proof of Concept study in ulcerative colitis patients with GLPG0974
* Initiated a Phase 1 First-In-Human study with GLPG1205, a compound from the alliance with Janssen Pharmaceutica NV
* GSK initiated two Phase 2 studies with GSK2586184, formerly GLPG0778, one in psoriasis and one in lupus
* Achieved milestones in the osteoarthritis alliance with Servier
* Oncology
* Discovered a novel candidate drug GLPG1790 to treat triple negative breast cancer
· Other
o Announced the termination of the Roche and Lilly alliances
o Announced three grant awards from IWT: EUR2.7 million to discover new antibiotic treatments, EUR2.5 million for inflammatory bowel disease research and development, and EUR2.4 million for psoriasis research
Service division
· Extended the collaboration between BioFocus and The Michael J. Fox Foundation for optimization of agents for disease specific biomarkers
· Signed a new collaboration between Argenta and Antabio for the identification of novel anti-bacterial agents and discovery of a development candidate
· Signed an integrated drug discovery collaboration between Argenta en Boehringer Ingelheim in which Argenta will apply its extensive respiratory drug discovery services
· Acquired Cangenix, a structure-based drug discovery company, to augment Argenta's ability to design new drugs and fill a growing client need
Corporate
· The AGM appointed Katrine Bosley to the Board of Directors to replace Ferdinand Verdonck
· Raised EUR1,181,926 in equity through warrant exercises, resulting in the issuance of 197,581 new shares
· Completed a private placement of 2,696,831 new ordinary shares, raising EUR54 million (EUR52.8 million net proceeds) with primarily US institutional investors, bringing the total number of shares outstanding as of 30 June 2013 to 29,665,159
· NYSE Liffe, the Europe-based derivatives business of NYSE Euronext (NYX), added options on the shares of Galapagos (GLS)
Outlook 2013
The Phase 2B clinical study in RA with GLPG0634 started in the second quarter of 2013, on track to delivering the 12-week data to AbbVie in late 2014 and 24-week data in early 2015. The Company expects to make significant progress in both partnered and non-partnered R&D programs as the clinical pipeline continues to mature across a broad range of therapeutic areas, resulting in five Phase 2 and multiple Phase 1 programs by end 2013.
Galapagos management reiterates full-year 2013 financial guidance for Group revenues of EUR160 million and provides guidance of EUR100 million in cash at year end.
Interim Report 2013
The electronic version of Galapagos' Interim Report for half year 2013 is now available online at www.glpg.com/index.php/companyoverview/financialskey-financials/financial-reports/. Printed versions of the report can be requested by e-mailing ir@glpg.com.
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 Belgium +32-2290-1608, Toll-free 0800-50747; Netherlands +31-20-794-8504, Toll-free 0800 265 8526, ten minutes prior to commencement of the call. A question and answer session will follow the presentation of the results. Click here to access the live audio webcast. The archived webcast will also be available for replay shortly after the close of the call.
Financial calendar 2013 3Q13 interim update 15 November 2013 Full year results 2013 7 March 2014 Annual shareholders meeting 29 April 2014
About Galapagos
Galapagos (EURONEXT BRUSSELS: GLPG) (PINKSHEETS: GLPYY) is specialized in novel modes-of-action, with a large pipeline of five clinical, six pre-clinical, and more than 20 discovery small-molecule and antibody programs in cystic fibrosis, inflammation, antibiotics, metabolic disease, and other indications.
GLPG0634 is an orally-available, selective inhibitor of JAK1 for the treatment of rheumatoid arthritis and potentially other inflammatory diseases, currently in Phase 2B studies in RA and about to enter Phase 2 studies in Crohn's disease. AbbVie and Galapagos signed a worldwide license agreement whereby AbbVie will be responsible for further development and commercialization after Phase 2B. Galapagos has another selective JAK1 inhibitor in Phase 2 in lupus and psoriasis, GSK2586184 (formerly GLPG0778, in-licensed by GlaxoSmithKline in 2012). GLPG0187 is a novel integrin receptor antagonist currently in a Phase 1B patient study in metastasis. GLPG0974 is the first inhibitor of FFA2 to be evaluated clinically for the treatment of IBD; this program is currently in a Proof of Concept Phase 2 study. GLPG1205 is a first-in-class molecule that targets inflammatory disorders and is currently in a First-in-Human Phase 1 study.
The Galapagos Group, including fee-for-service companies BioFocus, Argenta and Fidelta, has 800 employees and operates facilities in five countries, with global headquarters in Mechelen, Belgium. Further information at: www.glpg.com
Galapagos forward-looking statements
This release may contain forward-looking statements, including, without limitation, statements containing the words "believes," "anticipates," "expects," "intends," "plans," "seeks," "estimates," "may," "will," "could," "stands to," and "continues," as well as similar expressions. Such forward-looking statements may involve known and unknown risks, uncertainties and other factors which might cause the actual results, financial condition, performance or achievements of Galapagos, or industry results, to be materially different from any historic or future results, financial conditions, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this document. Galapagos expressly disclaims any obligation to update any such forward-looking statements in this document to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless required by law or regulation.
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[1] Crédit d'Impôt Recherche refers to an innovation incentive system underwritten by the French government
Interim Report 2013: http://hugin.info/133350/R/1722139/573689.pdf
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Source: Galapagos NV via Thomson Reuters ONE
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