Galapagos N.V. Q3 FY2025 earnings call

• Transformation of the company is ongoing; decision to wind down cell therapy business after unsuccessful sale process.
• Ongoing consultation with works councils in Belgium and the Netherlands regarding cell therapy wind down.
• TYK2 program progress with data from Phase III enabling studies expected early 2026.
• Business development strategy focused on clinically derisked and differentiated opportunities, collaboration with Gilead.
• Assembled world-class team for business development and strategic advisory board.
• New Board members welcomed, and legacy R&D program updates provided.

For the first 9 months of 2025, total operating loss from continuing operations was EUR 462.2 million compared to EUR 125.6 million in the same period of 2024. This was negatively impacted by a EUR 204.8 million impairment on the cell therapy business and a EUR 135.5 million strategic reorganization impact. Cash and cash equivalents and current financial investments totaled EUR 3.05 billion on September 30, 2025, representing EUR 46 per share. Looking ahead, they anticipate ending 2025 with approximately EUR 2.975 billion to EUR 3.05 billion in cash, etc., and expect cash flow neutral to positive by end of 2026 excluding business development and currency fluctuations. The cell therapy wind down would have cash impacts of EUR 100-125 million from Q4 2025 to 2026 and EUR 150-200 million one-time restructuring costs in 2026.

• Anticipate ending 2025 with approximately EUR 2.975 billion to EUR 3.05 billion in cash, cash equivalents and financial investments excluding business development and currency fluctuations.
• If cell therapy wind down is implemented, expect EUR 100 million to EUR 125 million operating cash impact from Q4 2025 through 2026 and EUR 150 million to EUR 200 million one-time restructuring cash costs in 2026.
• Expect to be cash flow neutral to positive by end of 2026 excluding business development and currency fluctuations.

• Cell therapy wind down process subject to works council consultation in Europe, which may take several months.
• Challenges in finding viable proposals for cell therapy business acquisition due to significant ongoing investment requirements.
• Need to align with Gilead for any capital return to shareholders due to their 25% ownership and partnership agreement terms.
• Belgium law imposes limitations on capital returns to shareholders.

Q: When you say you expect to achieve cash flow neutral to positive status by year-end '26, can you talk about the assumptions?

A: Assumptions include interest income based on forward curve and cash balance, no business development activity assumed, income from Jyseleca and tax credits.

Q: What kinds of opportunities are in the deal funnel?

A: Focus on clinically derisked mid- to late-stage opportunities, collaboration with Gilead, therapeutic areas of oncology and immunology/inflammatory disease.

Q: How is the Gilead relationship contemplated in strategy to ensure speed?

A: Collaborative relationship, Gilead represented on Board, team experienced in complex BD transactions, combined team to work through complexity.

Q: Plans for 3667 upon completion of Phase III studies?

A: Will look at data carefully, consider partnering process, evaluate capabilities and who can maximize value.

Q: Timeline for cell therapy wind down process?

A: Intention to wind down subject to works council consultation, expected concluded in Q1 2026, open to viable proposals during process.

Q: How to ensure cost-effective acquisition of derisked programs?

A: Financially disciplined, consider partnering with Gilead for joint value creation, reserve capacity for development spend of acquired assets.

Q: Will potential transactions bring in R&D capabilities?

A: Flexible, could be through acquisition with capable team or funding external capability, depends on opportunity.

Q: Length and KPIs of Gilead partnership?

A: OLCA agreement has ~3.5 years remaining, focused on joint transactions creating value for both companies.