grapesharvester schreef op 30 juli 2016 23:00:
The tax ruling eliminates 80% of the turnover from filgotinib from the taxable base, so 35 million taxable profits would imply 5x higher income annually (without any costs so if no further programs are developed and no overhead costs would be recorded).
So for 4 years a filgotinib turnover of EUR 175 million would not lead to taxable profits, even if nothing would be spent on development of all the other current programmes. If Galapagos spends about EUR 125 million annually on the pipeline Galapagos would not need to pay taxes with an annual turnover of 175 + 125 = EUR 300 million.
However these are wild guesses and if applied to 3 years these figures woud be EUR 233 + 125 = EUR 358 million (excluding any turnover related costs).
Obviously the turnover would be primarily the milestones in the coming years.
Normally the sale of products starts from zero at the moment of market introduction and growing over time, so peak license income flows are not to be expected in the year of introduction.
However he may well enormously underestimate the effect of the salesforce of Gilead (as many parties did in the past 10 years) or we underestimate the overhead costs and development costs of the other pipeline items during this time frame.
It is simply too early to tell, so, while the ruling has a very positive effect on future cash flow. Taxable profits may emerge much quicker than he can now foresee if not enough research expenses are made in Beglium.
By the way I read in an earlier posting of today that a developer intends to build more space in Mechelen Belgium, for biotech companies like Galapagos.
Maybe Galapagos is already working on/talking about expansion of the research facilities to defer further the moment that corporate income taxes would be payable in Belgium.
In any case research costs are primarily wage cost, so wage tax and employment would be the significant uptake for the Belgian economy.