Galapagos NV Q2 FY2024 earnings call

• Strategy: Focus on oncology and immunology, with breakthrough designation potential indications, building a pipeline of cell therapies and small molecules, strong leadership, and a strong cash position of EUR3.4 billion at end-June 2024.
• Regulatory achievements: Submitted IND for FDA for ATALANTA Phase 1/2 study of 5101 in NHL, submitted CTA to European Authorities for EUPLAGIA Phase 1/2 study of 5201 in CLL and Richter transformation.
• Clinical progress: 5101 and 5201 Phase 1/2 studies made progress, presented safety, efficacy, etc. data at scientific conferences; PAPILIO Phase 1/2 BCMA-directed multiple myeloma program had one case of Parkinsonism, temporarily paused enrollment, amended protocol submitted to EMA in June, anticipate resuming recruitment.
• Pipeline: Oncology and immunology pipeline with 20 small molecules and cell therapy programs; collaboration with Adaptimmune for TCR T-cell therapy in solid tumor; expanding cell therapy manufacturing network; collaboration with BridGene Biosciences for SMARCA2 small molecule or PROTAC.
• Future plans: Expect to initiate at least four IND or CTA-enabling studies and at least one first-in-human study in 2025; from 2026 onwards, fuel clinical pipeline with at least two new clinical assets annually across cell therapy and small molecules.

For continued operations, revenue remained fairly stable year-over-year, mainly consisting of linear recognition of the platform for the Gilead collaboration, a small part from remaining Jyseleca royalty income and inventory sale to Alfasigma. In January 2024, the Jyseleca business was transferred to Alfasigma, so Jyseleca results moved to discontinued operations. Net profit was driven by fair value adjustments in Forex, EUR49 million in interest income, and net profit from discontinued operations of EUR71 million mainly due to the one-time gain from the Jyseleca transaction with Alfasigma.

• Excluding business development activities to-date, full year cash burn guidance reconfirmed at EUR280 million to EUR320 million; accounting for deals executed in first half of 2024, updated cash burn guidance for 2024 is EUR370 million to EUR410 million, mainly driven by Adaptimmune collaboration accounting for EUR79 million.
• Cash balance at end of H1 2024 is EUR3.4 billion.
• Aim to initiate at least four IND or CTA-enabling studies and at least one first-in-human study in 2025; from 2026 onwards, fuel clinical pipeline with at least two new clinical assets annually across cell therapy and small molecules.

Forward-looking statements involve risks and uncertainties, Galapagos' actual results may differ materially from those expressed or implied in these statements; risks related to clinical trial outcomes, regulatory approvals, market competition, etc.

Q: Could you talk about key aspects of manufacturing site readiness, QC for FDA to facilitate IND submission for 5101 and what's left to be done for 5202 for IND filing?

A: Thad Huston said they've been actively preparing, completed process for 5101 and just submitted IND; Jeevan Shetty added multiple interactions with FDA pre-IND submission to optimize proposal, and anticipate filing 5201 later this year with 5202 to follow before end of year.

Q: Is the Parkinsonism in 5301 study similar to other BCMA CAR-Ts? Any difference in severity or quality of side effect and details on protocol amendments?

A: Jeevan Shetty said it's a feature of increasing recognition with BCMA-targeted CAR-T therapies, not atypical, undertook steps to pause study, interrogate patient history, submitted protocol to EMA in June, changes are to components of monitoring and anticipate resuming recruitment imminently.

Q: Thoughts on how first-gen afami-cel asset influenced decision to partner on next-gen asset and specifics on business development efforts going forward?

A: Paul Stoffels said impressed with Adaptimmune team and their work on afami-cel, led to evaluating TCR-T production on their platform, resulting in collaboration on uza-cel starting with head and neck; Thad Huston added business development key to broadening portfolio, looking at acquisitions and partnerships.

Q: Follow-up on protocol amendment for 5301, is it more on monitoring side rather than mitigation and details on number of patients dosed with 5303 and onset of action?

A: Jeevan Shetty said changes are to monitoring, study about to be reinitiated, will share data regarding safety, efficacy, patient numbers in 2025.

Q: Speak to BridGene SMARCA2 project, compare to other assets in the space and view on SMARCA4 loss-of-function mutation?

A: Jeevan Shetty said SMARCA2 is a dependency in SMARCA4 deficient non-small cell lung cancer population, our approach uses PROTAC and small molecule oral ATPase, leveraging own capabilities and BridGene's expertise, intention is to build best-in-class oral selective PROTAC.

Q: Adverse event in multiple myeloma trial, what happened to patient and if reversed, and priority of 5301 compared to other programs?

A: Paul Stoffels said can't share private patient data, evaluating benefit-risk for 5301, 5101 and 5201 are key priorities, focus on starting studies in US and Europe, aiming for submission and approval in 2028.