Galapagos(GLPG) - 2025 Q2 - Quarterly Report

About This Report Report Details and Company Information This section details Galapagos NV's legal structure, report terminology, and the investigational status of its drug candidates - Galapagos NV is a limited liability company organized under Belgian law[3] - The term "Galapagos NV" refers to the non-consolidated Belgian company, while "we," "our," "the group," or "Galapagos" include Galapagos NV and its subsidiaries[4] - The report is published in Dutch and English, with the Dutch version prevailing in case of inconsistency[4] - All drug candidates mentioned are investigational, except for filgotinib (Jyseleca®), which was approved but transferred to Alfasigma in early 2024[7] Management Report Main Events in the First Six Months of 2025 The first half of 2025 saw strategic shifts, leadership changes, and R&D pipeline advancements in oncology and immunology - The Board re-evaluated the proposed separation of the cell therapy business and is now exploring strategic alternatives, including potential divestiture, to maximize shareholder value[22] - Executive leadership was strengthened with the appointment of Henry Gosebruch as CEO and Aaron Cox as CFO, along with other key leadership roles[22] - GLPG5101 (CD19 CAR-T) demonstrated promising efficacy (97% complete response rate) and a favorable safety profile in relapsed/refractory indolent non-Hodgkin lymphoma (iNHL) from the ATALANTA-1 Phase 1/2 study[27] - GLPG5101 is advancing towards pivotal development in mantle cell lymphoma (MCL), with Biologics License Application (BLA) filing anticipated in 2028 and approval in 2029[27] - The company is actively exploring partnership opportunities for GLPG3667, a TYK2 inhibitor in Phase 3-enabling studies for systemic lupus erythematosus (SLE) and dermatomyositis (DM), with topline results expected in H1 2026[22] - As of June 30, 2025, the company held approximately €3.1 billion in cash and financial investments, with an updated 2025 cash outlook to be provided with Q3 2025 results[27] Financial Highlights H1 2025 reported a significant net loss and increased operating loss, driven by reorganization costs, higher R&D, and negative financial results Consolidated Key Figures (Six months ended June 30) | (thousands of €, if not stated otherwise) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------------- | :----------------------------- | :----------------------------- | | Income statement | | | | Total net revenues | 140,265 | 140,305 | | Operating loss | (215,735) | (71,312) | | Net profit/loss (–) from continuing operations | (259,003) | 28,164 | | Net profit/loss (–) from discontinued operations, net of tax | (148) | 71,041 | | Net profit/loss (–) | (259,151) | 99,205 | | Balance sheet (end of period) | | | | Cash and cash equivalents | 71,669 | 72,328 | | Financial investments | 3,019,835 | 3,358,092 | | Total financial investments and cash and cash equivalents | 3,091,504 | 3,430,420 | | Financial ratios | | | | Basic and diluted earnings/loss (–) per share | (3.93) | 1.51 | | Total group employees | 558 | 683 | - Total operating loss from continuing operations for H1 2025 was €215.7 million, significantly higher than €71.3 million in H1 2024, primarily due to €131.6 million in strategic reorganization costs (severance, early collaboration termination, asset impairment, deal costs)[35] - R&D expenses increased to €278.0 million in H1 2025 from €145.2 million in H1 2024, driven by higher subcontracting costs for CAR-T and small molecule oncology programs, early collaboration termination costs, and increased personnel/severance costs[35] - Net financial results shifted to a loss of €45.0 million in H1 2025 (compared to €98.3 million income in H1 2024), mainly due to decreased interest income and €37.9 million unrealized currency exchange loss on U.S. dollar holdings[34] - Cash and cash equivalents and financial investments totaled €3,091.5 million as of June 30, 2025, representing a net decrease of €226.3 million during the first six months of 2025[40][42] - Operational cash burn improved to €91.5 million in H1 2025, down from €250.0 million in H1 2024[31][47] The Galapagos Share Galapagos NV is publicly listed on Euronext Amsterdam and Brussels, and on the Nasdaq Global Select Market - Galapagos NV (ticker: GLPG) has been listed on Euronext Amsterdam and Brussels since May 6, 2005[48] - The company is also listed on the Nasdaq Global Select Market since May 14, 2015[48] Related Party Transactions This section refers to detailed disclosures on related party transactions within the notes to the unaudited condensed consolidated interim financial statements - Information regarding related party transactions is detailed in the "Notes to the unaudited condensed consolidated interim financial statements for the first six months of 2025" section of this report[52] Risk Factors Principal risks, detailed in the 2024 annual report, cover product development, regulatory, commercial, financial, third-party, IP, competitive, and market aspects - Principal risks and uncertainties include product development and regulatory approval, commercialization, financial position and need for additional capital, reliance on third parties, intellectual property, competitive position, organization, structure and operation, and market risks relating to shares and ADSs[53] - Readers are referred to the 2024 annual report (pp. 141–158) and Form 20-F (pp. 3–61) for a comprehensive description of risk factors[53] - The description of the group's financial risk management in the 2024 annual report (pp. 223–225) remains valid and unaltered[54] Financial Statements Unaudited Condensed Consolidated Interim Financial Statements This section presents the unaudited condensed consolidated interim financial statements for H1 2025, including income, financial position, cash flow, and equity statements, showing a net loss of €259.151 million Consolidated Statement of Income and Comprehensive Income/Loss (Six months ended June 30) | (thousands of €, except per share data) | 2025 | 2024 | | :-------------------------------------- | :----- | :----- | | Total net revenues | 140,265 | 140,305 | | Operating loss | (215,735) | (71,313) | | Net profit/loss (–) from continuing operations | (259,003) | 28,164 | | Net profit/loss (–) from discontinued operations, net of tax | (148) | 71,041 | | Net profit/loss (–) | (259,151) | 99,205 | | Basic and diluted earnings/loss (–) per share | (3.93) | 1.51 | Consolidated Statement of Financial Position (June 30, 2025 vs. December 31, 2024) | (thousands of €) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Total assets | 3,818,224 | 4,135,719 | | Total equity | 2,643,819 | 2,896,939 | | Total liabilities | 1,174,405 | 1,238,780 | | Cash and cash equivalents | 71,669 | 64,239 | | Current financial investments | 3,019,835 | 3,053,334 | Consolidated Cash Flow Statement (Six months ended June 30) | (thousands of €) | 2025 | 2024 | | :--------------- | :----- | :----- | | Net cash flow used in operating activities | (147,388) | (188,867) | | Net cash flow generated from investing activities | 159,452 | 95,678 |