inspirator schreef op 4 augustus 2018 09:50:
Eenieder waardeert Galapagos inmiddels boven 100 euro
Alleen koers Galapagos moet zich nog aanpassen.
DeGroof Petercam 3 augustus 2018
Galapagos (Buy) - On track to deliver important milestones in the coming months (EUR 92 / TP EUR 110)
Facts – FY18 operational cash burn guidance lowered to EUR 180-200m
Galapagos reported its 1H18 financial results. Revenues and other income came in higher than expected at EUR 101.9m versus our anticipated EUR 91.4m (Css. EUR 84.5m). Revenues increased to EUR 87.6m (from EUR 60.9m 1H17) as a result of increased revenue recognition of upfront payments (related to the Gilead collaboration) and due to the adoption of IFRS15.
Operating expenses increased YoY, landing at EUR 167.6m (DPe EUR 157m; Css EUR 149m), with R&D EUR 151.4m and SG&A EUR 16.2m. This increase in OpEx is mainly attributed to an increase in subcontracting costs primarily relating to the filgotinib and IPF (GLPG1690) programs, as expected. This leads to an operating loss of EUR 65.8m. The company realized a net loss of EUR 59.1m.
Cash & cash equivalents came in at EUR 1,066.8m (DPe EUR 1,059.5m; Css EUR 1,061.7m)
On the development pipeline, the company provides the following outlook for 2018:
-Top line results of the filgotinib trials FINCH 2 (Phase III, rheumatoid arthritis) and TORTUGA (Phase II, ankylosing spondylitis) in 3Q18.
-Interim readout of the FALCON trial in cystic fibrosis in 3Q18.
-Start dosing in the Phase III ISABELA trial with GLPG1690 (idiopathic pulmonary fibrosis), as well as Phase II trials with GLPG1205 (IPF; PINTA) and GLPG1972 (osteoarthritis; ROCCELLA).
On the outlook for FY18, management lowers its guidance for operational cash burn from EUR 220-240m to EUR 180-200m as a result of the recently announced collaboration agreement with Novartis on MOR106.
Our view – Key upcoming results of lead product
Galapagos continues with a strong cash position to further fuel its discovery platform while starting the foundations of a commercial organization. A positive is that the cash burn will be slightly lower than previously guided thanks to the licensing of MOR106 to Novartis. Cash burn is now guided to be in the EUR 180-200m range (vs. EUR 220-240m previously).
The coming quarters will be news flow rich, with the most important item being results of the filgotinib trials. The Phase III results in rheumatoid arthritis (FINCH 2) will lead the way of the stream of trial readouts of Galapagos’ JAK inhibitor (we refer to our recent report ‘CrackerJAK’ for detailed information). Subsequent to the strong results in psoriatic arthritis, the second proof-of-concept trial to read out this year will be in ankylosing spondylitis.
Following the setback with GLPG2737 in the cystic fibrosis PELICAN trial, expectations for the ongoing triple combination FALCON trial are very low. Any positive news from the trial could provide further upside, though we attributed only 10% probability of success to the program at this stage.
Investment conclusion
The upcoming news flow will provide multiple value inflection points through which significant upside could materialize in the coming quarters, with the most important milestone being the FINCH-2 readout. Filgotinib represents the main part of our sum-of-the-parts valuation (EUR 70 of our EUR 110 TP). In our view, the market has yet to incorporate the full impact of JAK inhibitors in the autoimmune space as well as the potential of additional indications for filgotinib. We see Galapagos as our key play for year end, as we anticipate a further rerating the closer we move to the Phase III readout of filgotinib. We reiterate our Buy recommendation.