Financial highlights

Employees per site as of 31 March 2022

(total: 1,305 employees)

Q1 2022 financial results

We reported product net sales of Jyseleca in Europe for the first three months of 2022 amounting to €14.4 million (€0.1 million in the first quarter of 2021). Our counterparties for the sales of Jyseleca were mainly hospitals and wholesalers located in Belgium, the Netherlands, France, Italy, Spain, Germany, the United Kingdom, Ireland, Austria, Norway, Sweden and Finland.

Cost of sales related to Jyseleca net sales in the first three months of 2022 amounted to €2.9 million.

Collaboration revenues amounted to €121.9 million for the first three months of 2022, compared to €113.8 million for the first three months of 2021.

Revenues recognized related to the collaboration agreement with Gilead for the filgotinib development were €59.0 million in the first three months of 2022 compared to €55.3 million for the same period last year. This slight increase was mainly due to higher revenue recognition of milestone payments strongly influenced by the milestone achieved related to the regulatory approval in Japan for UC in the first quarter of 2022.

The revenue recognition related to the exclusive access rights for Gilead to our drug discovery platform amounted to €57.3 million for the first three months of 2022 (€57.8 million for the same period last year).

We have recognized royalty income from Gilead for Jyseleca for €4.6 million in the first three months of 2022 (compared to €0.7 million in the same period last year) of which €3.6 million royalties on milestone income for UC approval in Japan.

Additionally, we recorded a milestone of €1.0 million triggered by the first sale of Jyseleca in Czech Republic by our distribution and commercialization partner Sobi, in the first quarter of 2022.

Our deferred income balance on 31 March 2022 includes €1.7 billion allocated to our drug discovery platform that is recognized linearly over the remaining period of our 10 year collaboration, and €0.6 billion allocated to filgotinib development that is recognized over time until the end of the development period.

Our R&D expenditure in the first three months of 2022 amounted to €99.9 million, compared to €130.0 million for the first three months of 2021. This decrease was primarily explained by a decrease in subcontracting costs from €73.0 million in the first quarter of 2021 to €41.7 million in the first quarter of 2022, primarily due to the winding down of the ziritaxestat (IPF) program and reduced spend on our Toledo (SIKi) and other programs. This was partly offset by cost increases for our filgotinib program, on a three months basis compared to the same period in 2021. 

Our S&M expenses were €29.0 million in the first three months of 2022, compared to €14.5 million in the first three months of 2021. This increase was primarily due to an increase in personnel costs (€16.0 million for the first three months of 2022 compared to €10.3 million for the same period last year) explained by an increase in the commercial work force from 170 average FTEs in the first quarter of 2021 to 301 average FTEs in the first quarter of 2022 driven by the commercial launch of filgotinib in Europe. The cost increase was also explained by the termination of our 50/50 filgotinib co-commercialization cost sharing agreement with Gilead which explains €6.6 million of variance as in the first quarter of 2021 €6.6 million of costs were expensed to Gilead compared to nil in the first quarter of 2022.

Our G&A expenses were €33.4 million in the first three months of 2022, compared to €30.4 million in the first three months of 2021. The cost increase was primarily due to an increase in personnel costs (€20.4 million for the first three months of 2022 compared to €16.2 million for the same period last year) primarily explained by higher costs for our RSU plans.

Other operating income (€7.7 million for the first three months of 2022, compared to €10.3 million for the first three months of 2021) decreased by €2.6 million, mainly driven by lower grant and R&D incentive income.

We reported an operating loss amounting to €21.1 million for the first three months of 2022, compared to an operating loss of €50.8 million for the same period last year.

Net other financial income in the first three months of 2022 amounted to €9.7 million (as compared to net other financial income of €36.2 million in the same period last year). Net financial income in the first three months of 2022 was primarily attributable to €13.8 million of unrealized currency exchange gain on our cash and cash equivalents and current financial investments at amortized cost in U.S. dollar (as compared to €45.5 million currency exchange gain on cash and cash equivalents and current financial investments in the first three months of 2021) and €0.2 million negative changes in (fair) value of current financial investments (€3.6 million in the same period last year). The other financial expenses also contained the effect of discounting our long term deferred income of €1.9 million (€2.4 million in the same period last year), as well as interest expenses of €2.1 million (€1.4 million in the same period last year). The fair value loss of financial assets held at fair value through profit or loss amounted to nil in the first three months in 2022 (as compared to €2.9 million in the same period last year),

We realized a net loss from continuing operations of €13.3 million for the first three months of 2022, compared to a net loss of €12.8 million for the first three months of 2021.

The net profit from discontinued operations for the first three months of 2021 consisted of the gain on the sale of Fidelta, our fee-for-services business, for €22.2 million.

We reported a group net loss for the first three months of 2022 of €13.3 million, compared to a net profit of €9.4 million for the same period last year.

Cash, cash equivalents and current financial investments

Cash and cash equivalents and current financial investments totaled €4,643.4 million on 31 March 2022 (€4,703.2 million on 31 December 2021).

A net decrease of €59.8 million in cash and cash equivalents and current financial investments was recorded during the first three months of 2022, compared to a net decrease of €54.6 million during the first three months of 2021. This net decrease was composed of (i) €77.4 million of operational cash burn, (ii) offset by €2.2 million of cash proceeds from capital and share premium increase from exercise of subscription rights in the first three months of 2022, and (iii) €0.2 million of negative changes in (fair) value of current financial investments and €15.6 million of mainly positive exchange rate differences.

The operational cash burn (or operational cash flow if this liquidity measure is positive) is a financial measure that is not calculated in accordance with IFRS. Operational cash burn/cash flow is defined as the increase or decrease in our cash and cash equivalents (excluding the effect of exchange rate differences on cash and cash equivalents), minus:

i. the net proceeds, if any, from share capital and share premium increases included in the net cash flows generated from/used in (–) financing activities

ii. the net proceeds or cash used, if any, in acquisitions or disposals of businesses; the movement in restricted cash and movement in current financial investments, if any, included in the net cash flows generated from/used in (–) investing activities.

This alternative liquidity measure is in our view an important metric for a biotech company in the development stage.

The following table provides a reconciliation of the operational cash burn: