Galapagos(GLPG) - 2020 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a healthy cash balance of €5.3 billion at the end of September 2020, with a cash burn of €433 million for the first nine months of the year [32][33] - The full-year cash burn guidance remains between €490 million and €520 million [35] - Revenues for the quarter were €370 million, largely driven by accounting revenues related to deferred income from filgotinib and access rights to the platform [36][37] - Operating expenses exceeded €500 million, reflecting increased R&D investments and staff costs, particularly in preparation for the launch of filgotinib in Europe [38] Business Line Data and Key Metrics Changes - The approval of Jyseleca (filgotinib) in the EU and Japan was highlighted as a significant operational achievement, despite receiving a complete response letter (CRL) from the FDA for U.S. approval [9][10] - The company announced the filing of Jyseleca for osteoarthritis in the EU, marking a second indication for the drug [10][11] - Positive top-line results were reported for ziritaxestat, while disappointing results were noted for the 1972 molecule in osteoarthritis [12][13] Market Data and Key Metrics Changes - The company is expanding its market presence in Germany and the Netherlands with the first shipments of Jyseleca [11] - The company is focused on building a franchise in fibrosis and idiopathic pulmonary fibrosis (IPF), with multiple compounds in development [52] Company Strategy and Development Direction - The company aims to leverage its strong balance sheet to grow its internal pipeline and acquire external assets to enhance its R&D capabilities [19][22] - The recent collaboration with OncoArendi focuses on a novel class of fibrosis targets, with an upfront payment of €25 million and potential milestones totaling €220 million [26][27] - The company is committed to advancing its Toledo program, with plans for multiple Phase 2 trials and a focus on innovative treatments for various diseases [15][16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential of the Toledo program and the importance of bringing innovations to patients as quickly as possible [17] - The company anticipates a Type A meeting with the FDA regarding filgotinib, which could clarify the path forward for the drug [40][61] - The management acknowledged the challenges posed by the FDA's CRL but remains focused on addressing the agency's concerns [10][61] Other Important Information - The company is preparing for a significant number of readouts and milestones in 2021 and 2022, including the first Phase 3 readout [16][17] - The company is also exploring the potential of its Toledo assets in treating diabetes and obesity [83] Q&A Session All Questions and Answers Question: Can you elaborate on the clinical trial design for the OncoArendi deal? - The plan is to conduct a Phase 2b study with multiple dosing, focusing on patients with IPF without background therapy [48] Question: What triggered the revival of the JAK-1 inhibitor Galapagos 0555? - The compound showed promising data in previous evaluations, leading to its reintroduction into clinical studies [49] Question: How does the company view the integration of its fibrosis and IPF programs? - The company aims to build a franchise in fibrosis, leveraging multiple compounds to address the serious unmet medical needs in IPF [52] Question: What are the expectations for the Type A meeting with the FDA regarding filgotinib? - The meeting is expected to clarify the path forward and address the FDA's concerns regarding the risk-benefit profile of the 200 mg dose [61][62] Question: Can you provide insights into the differences between EMA and FDA regarding JAK inhibitors? - The EMA appears to be more open to JAK inhibitors compared to the FDA, which has raised concerns about the risk-benefit profile [88][90] Question: What is the rationale for the small patient numbers in the Toledo Phase 2 trials? - The company aims to explore a wide array of potential diseases with smaller studies, allowing for adaptive learning and efficient resource allocation [108]