2013-03-08 07:57:03 -
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 €153 M (+36%) versus guidance of €150 M
· Group operating loss before exceptional items €2.1 M due to €10 M
pulled-forward investment on '634, while total budget for external spending on
this program remains unchanged
· Year-end cash €94.7 M, excluding €20.7 M in milestone receivables for
2012 revenues and €25 M guaranteed and due under the CIR program of the French
government
· Service division external revenues +10% to €65.8 M, segment profit for
running business €9.1 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 €160 M
Live audio webcast presentation at 10.00 CET, call number +32-2290-1608,
www.glpg.com
Mechelen, Belgium; 8 March 2013 - 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 €37.2
million in revenue recognition of the $150 million upfront payment received from
AbbVie. R&D productivity was reflected further by €50.2 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 €115.4 million, and reflects
a €10 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 €70 million. Furthermore, Galapagos holds unrestricted and
unconditional receivables from the French government (CIR) of €25 million, for
which the first tranche will be payable in early 2014," said Guillaume Jetten,
CFO of Galapagos.
Key figures (consolidated)
(€ 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 (€) | -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 €20.7 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 €153 million, an increase
of 36% compared to 2011. The service division focused efforts on growing their
external business in 2012, with external revenues of €65.8 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 €87.2 million, reflecting considerable
milestone achievements in the alliances and €37.2 million in revenue recognition
from the $150 million AbbVie payment.
Result
The Group incurred a net loss for the full year 2012 of €5.7 million, or €0.22
loss per share, compared to a loss of €30.1 million, or €1.13 loss per share in
2011.
The R&D division incurred a segment loss of €3.5 million in 2012, compared to
€40.5 million last year. R&D expenses were €80.3 million, compared to €84.5
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 €8.2 million, compared to
€9.0 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 €24.5
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 €2.5 million relate to the closure of
Basel and reorganization costs. Result on divestment of €2 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 €94.7 million on 31 December 2012. The Company's liquid
asset position of €115.4 million at year end 2012 (€48.5 million at year end
2011) included €20.7 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 €10 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 €25 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/€1.4
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 €160 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
CONTACT
Galapagos NV
Elizabeth Goodwin, Director Investor Relations
Tel: +31 6 2291 6240
ir@glpg.com
This release may contain forward-looking statements, including, without
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"anticipates,"
"expects," "intends," "plans," "seeks,"
"estimates," "may," "will," "could,"
"stands to," and "continues," as well as similar expressions. Such
forward-
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factors which might cause the actual results, financial condition, performance
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these uncertainties, the reader is advised not to place any undue reliance on
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of the date of publication of this document. Galapagos expressly disclaims any
obligation to update any such forward-looking statements in this document to
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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:
hugin.info/133350/R/1683950/551253.pdf
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