Galapagos NV Reports Record Revenues in 2012, Increasing Momentum in Clinical Pipeline
MECHELEN, BELGIUM--(Marketwire - March 08, 2013) - This is a correction of the announcement from 07:30 08.03.2013 CET. Reason for the correction is replacement of language version:
· Group revenues EUR153 M (+36%) versus guidance of EUR150 M
· Group operating loss before exceptional items EUR2.1 M due to EUR10 M pulled-forward investment on '634, while total budget for external spending on this program remains unchanged
· Year-end cash EUR94.7 M, excluding EUR20.7 M in milestone receivables for 2012 revenues and EUR25 M guaranteed and due under the CIR program of the French government
· Service division external revenues +10% to EUR65.8 M, segment profit for running business EUR9.1 M, in line with 2011
· 2012 AbbVie partnering deal for GLPG0634, total value of up to $1.35 B plus double digit royalties
· Three Phase 2 and multiple Phase 1 programs in promising clinical pipeline by end 2013
· 2013 guidance for Group revenues of EUR160 M
Live audio webcast presentation at 10.00 CET, call number +32-2290-1608, www.glpg.com
Galapagos NV (Euronext: GLPG) presents audited financial results, highlights the key events for the full year 2012 and provides an outlook for 2013.
"In 2012, Galapagos claimed leadership in the JAK1 inflammatory space," CEO Onno van de Stolpe commented. "The global collaboration agreement with AbbVie on GLPG0634 and the in-licensing of another JAK1 molecule by GSK provide two opportunities towards success with Galapagos-discovered selective molecules in three inflammation indications with high medical need. The R&D division continues to deliver milestones in its alliances with pharma companies, while achieving progress in our cystic fibrosis and other proprietary programs. The service division realized a solid 2012, with external revenues growth and profitability in line with 2011. By the end of 2013, Galapagos will have three Phase 2 programs in four indications, multiple Phase 1 studies, and pre-clinical candidates in the alliances and our internal programs, highlighting a broad and maturing pipeline."
"Galapagos' business model generates considerable revenues from licensing, alliances, and fee-for-service activities. Group revenues were fuelled by EUR37.2 million in revenue recognition of the $150 million upfront payment received from AbbVie. R&D productivity was reflected further by EUR50.2 million in alliance and other R&D revenues. BioFocus and Argenta both showed good performances in 2012. The service division achieved 10% organic growth of external revenues, making strides toward independence from internal revenues and helping to fund our R&D pipeline. Taken together, these factors resulted in the Group reporting record revenues. Our liquid assets position shows EUR115.4 million, and reflects a EUR10 million pulled-forward investment in 2012 for the Phase 2b studies with GLPG0634, while the total budget for external spending on this program remains unchanged at EUR70 million. Furthermore, Galapagos holds unrestricted and unconditional receivables from the French government (CIR) of EUR25 million, for which the first tranche will be payable in early 2014," said Guillaume Jetten, CFO of Galapagos.
Key figures (consolidated) (EUR millions, except basic result per share)
|Continuing Operations|Continuing Operations
| 31 Dec 2012 | 31 Dec 2011¹
| |
-------------------------------+---------------------+---------------------
Revenues | 153.0 | 112.9
-------------------------------+---------------------+---------------------
Services cost of sales | -48.2 | -39.1
-------------------------------+---------------------+---------------------
R&D expenditure | -80.3 | -84.5
-------------------------------+---------------------+---------------------
General & administrative | -24.5 | -22.1
-------------------------------+---------------------+---------------------
Sales & marketing | -2.1 | -2.3
-------------------------------+---------------------+---------------------
Operating result before | -2.1 | -35.1
exceptional items | |
-------------------------------+---------------------+---------------------
Restructuring & integration | -2.5 | -
-------------------------------+---------------------+---------------------
Result on divestment | -2.0 | 5.2
-------------------------------+---------------------+---------------------
Operating result | -6.6 | -29.9
-------------------------------+---------------------+---------------------
Net result for the period | -5.7 | -30.1
-------------------------------+---------------------+---------------------
Basic result per share (EUR) | -0.22 | -1.13
-------------------------------+---------------------+---------------------
Cash and cash | |
equivalents²/³ | 94.7 | 32.6
Notes:
1) 2011 figures are for continuing operations, with minimal differences for accounting comparison to 2012
2) Cash on 31 December 2012 did not include EUR20.7 million in receivables for revenues recognized in 2012
3) Liquid assets position includes cash and milestone receivables
Details of the financial results
Revenues
Galapagos' revenues for the full year 2012 amounted to EUR153 million, an increase of 36% compared to 2011. The service division focused efforts on growing their external business in 2012, with external revenues of EUR65.8 million growing +10% over 2011, despite closure of BioFocus' Basel operations and the resulting transfer of the high-throughput screening activities to Chesterford Park. The R&D division reported total revenues of EUR87.2 million, reflecting considerable milestone achievements in the alliances and EUR37.2 million in revenue recognition from the $150 million AbbVie payment.
Result
The Group incurred a net loss for the full year 2012 of EUR5.7 million, or EUR0.22 loss per share, compared to a loss of EUR30.1 million, or EUR1.13 loss per share in 2011.
The R&D division incurred a segment loss of EUR3.5 million in 2012, compared to EUR40.5 million last year. R&D expenses were EUR80.3 million, compared to EUR84.5 million last year.
The BioFocus and Argenta Service division reported a gross margin of 33.7% ('11: 31.7%) on external revenues and a segment result of EUR8.2 million, compared to EUR9.0 million last year. Included in the reported segment result for 2012 were one-off investments to build up the high-throughput screening business in the UK, following the transfer from Basel. Corrected for these factors, the profitability of the running business in 2012 was in line with 2011.
General and administrative costs from continuing operations increased to EUR24.5 million, reflecting expenses related to the now-completed implementation of a company-wide ERP system to achieve better cost control and purchasing efficiencies of scale and one-off payroll expenses related to closing the AbbVie deal. General and administrative expenses as a share of group revenues decreased to 16.0% compared to 19.6% in 2011
Restructuring and integration expenses of EUR2.5 million relate to the closure of Basel and reorganization costs. Result on divestment of EUR2 million is the net of the liquidation costs of dormant legal entities and an earnout payment received from Evotec connected with the sale of Compound Focus in 2011.
Liquid assets position
Cash on balance was EUR94.7 million on 31 December 2012. The Company's liquid asset position of EUR115.4 million at year end 2012 (EUR48.5 million at year end 2011) included EUR20.7 million in alliance related receivables for which revenues were recorded in 2012 and payment is expected in Q1 2013. The liquid asset position was negatively impacted by pulled-forward preparations for the Phase 2b study with GLPG0634, amounting to EUR10 million spending earlier than planned in 2012, while total external spend expected for the Phase 2 studies in rheumatoid arthritis remains unchanged. In addition, Galapagos' balance sheet holds an unconditional and unrestricted receivable from the French government (Crédit d'Impôt Recherche)[1] amounting to EUR25 million, payable in three yearly tranches starting in early 2014. A significant portion of this receivable could be transferred into cash if needed.
Operational highlights
On 29 February 2012, Galapagos and Abbott (now AbbVie) announced a global collaboration to develop and commercialize GLPG0634 to treat autoimmune diseases. Under the terms of the agreement, AbbVie made an upfront payment of $150 million for rights related to the global collaboration. This upfront payment will be recognized over 30 months and will contribute to Galapagos' revenues over the coming three years. Upon successful completion of the rheumatoid arthritis Phase 2 studies by Galapagos, AbbVie will license the program for a one-time fee of $200 million. AbbVie will assume sole responsibility for Phase 3 clinical development and will have global manufacturing rights. Pending achievement of certain developmental, regulatory, commercial and sales-based milestones, Galapagos will be eligible to receive additional milestone payments from AbbVie, potentially amounting to $1 billion, in addition to tiered double-digit royalties on net sales upon commercialization. Furthermore, Galapagos retains co-promotion rights in the Benelux.
R&D operations
Galapagos increased the momentum of its R&D pipeline by the end of 2012, ending the year with 4 clinical, 6 pre-clinical, and more than 30 discovery programs. Galapagos is on track to have a mature pipeline of three programs in Phase 2 studies and multiple Phase 1 programs by end 2013.
* In the field of inflammation:
* reported confirmation of the efficacy and safety profile of GLPG0634 in a multi-center, dose-range finding clinical study in 90 rheumatoid arthritis patients
* opened an IND for GLPG0634 in the United States
* GSK exercised in February 2012 the exclusive option to license GLPG0555 and GLPG0778 and recently announced the initiation of Phase 2 studies with GLPG0778 in psoriasis and lupus
* reported excellent pharmacokinetics and up to 90% inhibition of a biomarker in the Phase 1 First-In-Human clinical study with GLPG0974
* initiated a second, multiple ascending dose Phase 1 study with GLPG0974
* delivered a drug candidate in the osteoarthritis alliance with Servier, two drug candidates in the alliance with Janssen Pharmaceutica, and a fifth candidate in the alliance with GSK
* In the field of oncology:
* completed a Phase 1b clinical study including cancer patients for metastasis candidate drug GLPG0187
* In the field of anti-infectives:
* nominated a pre-clinical candidate against Methicillin-Resistant Staphylococcus Aureus
* In orphan diseases:
* discovered a potentiator in the cystic fibrosis program
* In other areas:
* terminated GLPG0492 in cachexia
* progressed 30 discovery programs, including antibody programs with MorphoSys
* received from the Flemish government agency IWT a three-year grant to discover new antibiotic treatments and a 2.5-year grant to identify new therapeutic compounds for future treatment of Inflammatory Bowel Disease patients
Service operations
* BioFocus
* Drug discovery collaboration between Argenta, BioFocus and AstraZeneca in respiratory and inflammatory disease
* Target discovery agreement with Ono Pharma in the field of allergic disease
* Drug discovery agreement with Ono Pharma in the field of CNS disorders
* Milestone achievement in its drug discovery collaboration with UCB
* Argenta
* Collaboration with the University of Cambridge to seek novel treatments for pain * Drug discovery agreement with ANTABIO in anti-infectives
Corporate
* Average daily trading volumes and values in 2012 were 79,815 shares/EUR1.4 million
* Galapagos won the European Mediscience Awards for CEO and for Transaction of the Year
Outlook 2013
The Phase 2b clinical study for GLPG0634 will start in the second quarter of 2013, on track to delivering the full Phase 2 package to Abbott in late 2014. The Company expects to make significant progress in both partnered and non-partnered R&D programs as the pipeline continues to mature across a broad range of therapeutic areas, resulting in three Phase 2 and multiple Phase 1 programs by end 2013. Management guides for EUR160 million in Group revenues in 2013.
Annual Financial Report 2012
Galapagos is currently finalizing its financial statements for the year ended 31 December 2012. The auditor has confirmed that his audit procedures, which are substantially completed, have not revealed any material corrections 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 full year 2012 on or around 29 March 2013.
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 +32-2290-1608 ten minutes prior to commencement. A question and answer session will follow the presentation of the results. Go to www.glpg.com to access the live audio webcast. The archived webcast will also be available for replay shortly after the close of the call.
Financial calendar 27 March 2013 R&D Update in New York, USA 30 April 2013 Annual General Meeting of Shareholders in Mechelen 17 May 2013 First Quarter 2013 Business Update 9 Augustus 2013 First Half 2013 Results 15 November 2013 Third Quarter 2013 Business Update 7 March 2014 Full Year 2013 Results
About Galapagos
Galapagos (Euronext: GLPG; OTC: GLPYY) is specialized in novel modes-of-action, with a large pipeline of four clinical, six pre-clinical, and 30 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, about to enter Phase 2b studies. 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 GPR43 to be evaluated clinically for the treatment of IBD; this program will start a Proof of Concept Phase 2 study in Q2 2013. The Galapagos Group, including fee-for-service companies BioFocus, Argenta and Fidelta, has over 800 employees and operates facilities in five countries, with global headquarters in Mechelen, Belgium. Further information at: www.glpg.com
This release may contain forward-looking statements, including, without limitation, statements containing the words "believes," "anticipates," "expects," "intends," "plans," "seeks," "estimates," "may," "will," "could," "stands to," and "continues," as well as similar expressions. Such forward-looking statements may involve known and unknown risks, uncertainties and other factors which might cause the actual results, financial condition, performance or achievements of Galapagos, or industry results, to be materially different from any historic or future results, financial conditions, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this document. Galapagos expressly disclaims any obligation to update any such forward-looking statements in this document to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless required by law or regulation.
[1] Crédit d'Impôt Recherche refers to an innovation incentive system underwritten by the French government
Financial tables 2012: http://hugin.info/133350/R/1683950/551253.pdf
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