2023-05-06 01:59:04 ET
Summary
- Galapagos' focuses on immunology and oncology, with its flagship Jyseleca being used to treat rheumatoid arthritis and ulcerative colitis in Europe and Japan.
- The company is also developing CAR-T therapies with encouraging initial safety and efficacy data presented from ongoing Phase 1/2 studies.
- Galapagos announced a collaboration with NovAliX, a drug discovery-focused Contract Research Organization, in which Galapagos will transfer its research and discovery capabilities and employees based in Romainville, France, to NovAliX.
Galapagos ( GLPG ) is a biotechnology company that focuses on developing innovative medicines for high-unmet medical needs, primarily in the areas of immunology and oncology. The company's flagship product, Jyseleca, is a selective inhibitor of Janus kinase 1 (JAK1) used to treat rheumatoid arthritis and ulcerative colitis. Galapagos has also initiated multiple clinical trials to evaluate Jyseleca's safety and efficacy for other indications, including Crohn's disease, dermatomyositis, axial spondyloarthritis, and refractory systemic lupus erythematosus. Additionally, the company has extended its presence into the oncology segment through recent acquisitions and is now developing promising CAR-T therapies for cancer treatment.
Galapagos' concerted efforts in targeting high-unmet medical needs and its diversified product portfolio make it an attractive investment opportunity. Its proven track record of delivering successful products coupled with its innovative approach to drug research showcases the company's dedication towards improving patients' lives worldwide. Furthermore, its strategic expansions into the oncology field highlight its determination to increase its product offerings and create more shareholder value.
Despite having unimpressive financials and balance sheet, investors who take a long-term view can benefit from the company's commitment to research and development (R&D) and its diversified pipeline . Strategic partnerships provide ample resources and expertise for accelerating product development. As such, Galapagos holds strong future growth potential, making GLPG stock an enticing investment proposition despite any immediate financial limitations.
Financials
Galapagos' first quarter 2023 financial results reveal a promising and solid financial outlook for the company. The pharmaceutical giant has shown notable growth in total net revenues, which surged from €136.3 million in Q1 2022 to a staggering €178.9 million in Q1 2023. This remarkable increase can be attributed to the boost in product net sales of Jyseleca in Europe, which grew from €14.4 million in Q1 2022 to €26.7 million in Q1 2023. Furthermore, collaboration revenues have increased from €121.9 million in Q1 2022 to an impressive €152.2 million in Q1 2023.
A significant factor contributing to the rise in collaboration revenues is the company's partnership with Gilead (GILD) for the development of filgotinib, which has generated €93.6 million in Q1 2023 compared to €59.0 million in the same period last year. The deferred income balance on 31 March 2023 includes €1.5 billion allocated to Galapagos NV's drug discovery platform and €0.4 billion allocated to filgotinib development.
In addition, the company's total operating profit for Q1 2023 reached €22.0 million, a remarkable turnaround from the operating loss of €21.1 million recorded in Q1 2022. This financial success can be partly attributed to the reduction in sales, marketing, and general administration expenses, which have decreased from €62.3 million in Q1 2022 to €58.1 million in Q1 2023.
Galapagos NV's net financial income in Q1 2023 amounted to €1.5 million, compared to €9.6 million in Q1 2022. The company reported a group net profit of €23.2 million for the first three months of 2023, a significant improvement from the group net loss of €13.3 million during the same period in 2022.
The company's cash position remains strong, with current financial investments and cash and cash equivalents totaling €3.99 billion on 31 March 2023, as compared to €4.09 billion on 31 December 2022. The total net decrease in cash and cash equivalents and current financial investments during the first three months of 2023 amounted to €104.0 million, compared to a net decrease of €59.8 million during the first three months of 2022.
Considering the financial results for Q1 2023, Galapagos NV's future prospects are bright. Although the company is cautious in revisiting its 2023 net sales guidance for Jyseleca until August, it confidently reiterates its full-year 2023 cash burn guidance in the range of €380 million and €420 million. Galapagos NV is well-positioned to continue its growth trajectory, making it an attractive investment opportunity in the pharmaceutical sector.
Pipeline
Galapagos' product portfolio mainly covers immunology and oncology, with its prominent drug being Jyseleca. This medication has approval for treatment of rheumatoid arthritis and ulcerative colitis in Europe and Japan; it is under review for use against rheumatoid arthritis in China. The firm plans to launch a Phase 3 trial examining axial spondyloarthritis in 2023, and recently declined the possibility of presenting an application for marketing authorization in Europe based on the preliminary results obtained from the Phase 3 DIVERSITY trial .
Galapagos also entered the oncology field with the acquisitions of CellPoint and AboundBio in 2022. The company is developing CAR-T therapies for cancer treatment, including two CD19 CAR-T candidates (GLPG5101 and GLPG5201) and a BCMA CAR-T candidate (GLPG5301). The company presented initial safety and efficacy data from its ongoing Phase 1/2 studies in patients with refractory/relapsed non-Hodgkin lymphoma and chronic lymphocytic leukemia which were encouraging. Galapagos plans to expand these studies with additional cohorts and initiate a Phase 1/2 study in multiple myeloma patients with GLPG5301 in 2023. Additionally, the company intends to submit an investigational new drug application for its CD19 CAR-T candidates in the US in 2023.
Galapagos Launches Phase 3 OLINGUITO Trial
Galapagos has revealed the launch of its crucial Phase 3 trial, dubbed OLINGUITO , focusing on Jyseleca for treating axial spondyloarthritis (AxSpA). The trial seeks to explore the effectiveness and safety of Jyseleca in active radiographic AxSpA and non-radiographic AxSpA patients who have not adequately responded to traditional or biological therapies. AxSpA is a long-lasting inflammatory disorder marked by pain, stiffness, and fatigue, and there is a significant unaddressed demand for potent oral treatments for this ailment. Jyseleca is taken orally once a day, and has shown consistent efficacy and safety in various patient groups and inflammatory conditions.
The Phase 2 TORTUGA trial demonstrated the effectiveness and tolerability of Jyseleca 200mg in active radiographic AxSpA patients who did not respond to standard therapy. Approximately 476 patients will be enrolled in the OLINGUITO trial by Galapagos, with top-line results anticipated in the second half of 2025. The global OLINGUITO Phase 3 trial comprises two randomized, placebo-controlled, double-blind, multi-center, parallel-group studies, with each study enrolling around 238 patients. The primary goal for both studies is the percentage of patients who attain an ASAS40 response by Week 16, in line with the guidelines set forth by the European Medicines Agency .
The launch of Galapagos' Phase 3 trial for Jyseleca in AxSpA signifies a positive step for the biotech company. The trial addresses the substantial need for effective oral therapies for AxSpA patients, and Jyseleca has consistently shown efficacy and safety across various inflammatory conditions. This progress highlights Galapagos' dedication to meeting unserved medical requirements and advancing its product portfolio. If the Phase 3 trial proves successful, it may result in the broadening of Jyseleca's approved uses and potentially generate significant revenue for the company.
Galapagos Partners with NovAliX
Galapagos and NovAliX have established a strategic partnership, wherein NovAliX, a Strasbourg-based Contract Research Organization specializing in drug discovery, will take over Galapagos' research and discovery operations in Romainville, France. Meanwhile, Galapagos will retain the option to access essential expertise and resources through a five-year collaborative agreement. This arrangement enables Galapagos to concentrate on its primary therapeutic fields of cancer and immunology while safeguarding the ongoing employment of its Romainville-based research staff. The partnership is anticipated to expedite innovation, diminish risks, and truncate drug development durations. The financial implications are incorporated in Galapagos' previously declared 2023 cash burn guidance, ranging from €380 to 420 million. The transaction is slated to be finalized in July 2023, subject to standard closing prerequisites.
The collaboration is projected to bolster Galapagos' future success, supplementing NovAliX's pre-existing proficiency in cancer and infectious diseases, and providing comprehensive drug discovery capabilities and cutting-edge technologies in renal diseases, fibrosis, and immunology.
Risks and Adverse Events
Galapagos products target key pathways involved in inflammation and cancer, but they also pose potential dangers that could limit their efficacy and safety. Some drugs like JAK1 inhibitors can help alleviate inflammation in diseases like RA, UC, and rSLE. However, they may also increase the risk of infections, thrombosis, malignancies, anemia, thrombocytopenia, hyperlipidemia, and peripheral neuropathy. Meanwhile, CAR-T therapies, which are genetically modified immune cells intended to target specific antigens on cancer cells, can trigger severe side effects such as cytokine release syndrome, neurotoxicity, infection, anemia, thrombocytopenia, and brain swelling. It's essential to note that CAR-T therapies have limited specificity, persistence, and availability, which can restrict their accessibility and scalability. Although Galapagos products offer hope for treating inflammatory and cancerous conditions, healthcare professionals and patients must carefully weigh their potential benefits and challenges.
Advantages Over Competitors
Galapagos' Jyseleca has demonstrated superiority over its competitors, including Humira, in clinical trials . Additionally, Galapagos' ongoing clinical trials for Jyseleca in Crohn's disease, dermatomyositis, axial spondyloarthritis, and refractory systemic lupus erythematosus demonstrate the company's commitment to addressing unmet medical needs.
Galapagos' entry into the oncology field with the acquisition of CellPoint and AboundBio in 2022 demonstrates its strategic expansion beyond its core therapeutic areas. The company's CAR-T therapies for cancer treatment, including CD19 CAR-T candidates (GLPG5101 and GLPG5201) and a BCMA CAR-T candidate (GLPG5301), have shown initial safety and efficacy data in ongoing Phase 1/2 studies. The company's plans to expand these studies with additional cohorts and initiate a Phase 1/2 study in multiple myeloma patients with GLPG5301 in 2023 demonstrate its commitment to oncology which will further strengthen its position in the oncology market.
Conclusion
Galapagos' recent strategic moves and pipeline advancements position the company for future growth and success. With a renewed focus on its key therapeutic areas of oncology and immunology, the company has made significant strides in advancing its product portfolio, including its flagship JAK1 inhibitor Jyseleca, and its CAR-T therapies for cancer treatment. The company's recent acquisition of CellPoint and AboundBio has also expanded its presence in the oncology field, which is a key area of focus for the industry as a whole. While there may be some potential risks associated with the company's product categories, Galapagos has a track record of successful clinical trials and a strong balance sheet that can withstand any potential setbacks. Overall, Galapagos has a promising financial outlook and is well-positioned to capitalize on the growing demand for innovative medicines in the immunology and oncology fields. Investors should consider adding Galapagos to their portfolios as a long-term growth opportunity.
For further details see:
Galapagos Stands Strong On Jyseleca Positive Clinical Data