Amid Positive Phase III RA News, Galapagos Announces $300 Million Score from U.S. IPO

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Belgium-based Galapagos NV snagged $300 million following its U.S. public offering of new ordinary shares in the form of American Depositary Shares.

The stock is being offered on the Nasdaq Global Select Market under the symbol "GLPG." The initial offering was at $116.50 per ADS. Galapagos said this morning that it granted the underwriters an option to purchase up to an additional 386,266 ADSs, which represents 15 percent of the ADSs placed in the offering. The closing of the offering is expected to occur on Sept. 17. Morgan Stanley and Citigroup are acting as joint book-running managers for the proposed offering. Kempen & Co., Nomura, and Stifel are acting as co-managers for the proposed offering.

Galapagos' ordinary shares are currently listed on Euronext Amsterdam and Euronext Brussels.

This morning’s announcement came one day after Galapagos and its developmental partner Gilead Sciences announced positive results from the FINCH 2 Phase III clinical trial of filgotinib, a JAK1 inhibitor, in adults with moderately-to-severely active rheumatoid arthritis. The companies said filgotinib hit its primary endpoint in a proportion of patients reaching an American College of Rheumatology 20 percent response (ACR20) at Week 12. Detailed results from the FINCH 2 study are expected to be submitted for presentation at a future scientific conference, the two companies said Wednesday.

Walid Abi-Saab, chief medical officer at Galapagos, said the company was pleased that filgotinib “demonstrated significantly improved clinical responses in this difficult to treat population,”

“The good tolerability in this study is also very encouraging,” Abi-Saab said in a statement.

The data from the trial showed that the 200 mg dose of filgotinib resulted in a significant change for patients. The majority of patients, 69 percent, saw a 20 percent improvement in their rheumatoid arthritis at 24 weeks. But, the news got better. For patients dosed on the 200mg medication, 46 percent saw a 50 percent improvement and 32 percent of patients saw a 70 percent improvement at 24 weeks. 

The results were especially sweet for Galapagos after AbbVie walked away from a $1.4 billion collaboration for filgotinib in 2015.

News of the positive Phase III results caused shares of Galapagos to jump 18 percent on Wednesday. There are two other Phase III trials expected regarding the efficacy of filgotinib. If the other two trials are successful, Galapagos stands to make a big payday from Gilead, about $1.35 billion, according to The Motley Fool. In addition to rheumatoid arthritis, filgotinib is also being studied as a treatment for ulcerative colitis and Crohn's disease.

Galapagos has also seen some bad news in recent months. In June the company announced that AbbVie opted to walk away from its cystic fibrosis collaboration, the second time AbbVie and Galapagos have parted ways. That announcement came at the same time Galapagos announced mixed topline results from its investigational C2 corrector GLPG2737, a treatment for adult cystic fibrosis patients who are homozygous for the Class II F508del mutation. Following that announcement, analysts noted that the mixed results likely indicate that the Galapagos treatment can’t compete with Vertex’s Orkambi.

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