Take a look at our previous reports:

Details of the unaudited condensed consolidated interim results

Product net sales

We reported net sales of Jyseleca for the first six months of 2022 amounting to €35.4 million (€0.5 million in the first six months of 2021).

Related costs of sales in the first half-year of 2022 amounted to €5.5 million.

Collaboration revenues

The following table summarizes our collaboration revenues for the six months ended 30 June 2022 and 2021:

 

Second quarter of

Six months ended 30 June

(thousands of €)

Over time

Point in time

2022

2021

2022

2021

Recognition of non-refundable upfront payments and license fees

 

 

105,384

127,215

204,301

232,441

Gilead collaboration agreement for filgotinib

 

47,784

69,339

89,385

116,744

Gilead collaboration agreement for drug discovery platform

 

57,601

57,876

114,916

115,697

Milestone payments

 

 

9,564

11,504

27,938

19,369

Gilead collaboration agreement for filgotinib

 

8,564

11,504

25,938

19,369

Sobi distribution agreement for Jyseleca

 

1,000

-

2,000

-

Royalties

 

 

1,716

676

6,361

1,397

Gilead royalties on Jyseleca

 

1,716

672

6,317

1,350

Other royalties

 

-

4

44

47

Total collaboration revenues

 

 

116,665

139,395

238,601

253,207

The rollforward of the outstanding balance of the current and non-current deferred income between 1 January 2022 and 30 June 2022 can be summarized as follows:

(thousands of €)

Total

Gilead collaboration agreement for filgotinib

Gilead collaboration agreement for drug discovery platform (1)

Other deferred income

On 1 January 2022

2,364,701

604,875

1,759,828

-

 

 

 

 

 

Milestones achieved

18,238

18,238

 

 

Significant financing component (2)

3,799

3,799

 

 

 

 

 

 

 

Revenue recognition of upfront

(204,301)

(89,385)

(114,916)

 

Revenue recognition of milestones

(25,938)

(25,938)

 

 

 

 

 

 

 

Other movements

3,053

 

 

3,053

 

 

 

 

 

On 30 June 2022

2,159,553

511,588

1,644,912

3,053

(1)

The upfront received and the outstanding balance at 1 January 2022 and at 30 June 2022 comprise the issuance liabilities for the warrants and the upfront payment allocated to the drug discovery platform.

(2)

With regard to the additional consideration received for the extended cost sharing for filgotinib, we assume the existence of a significant financing component reflecting the time value of money on the estimated recognition period.

Operating costs and other operating income

Operating costs

Research and development expenditure

The following table summarizes our research and development expenditure for the six months ended 30 June 2022 and 2021:

 

Second quarter of

Six months ended 30 June

(thousands of €)

2022

2021

2022

2021

Personnel costs

(45,752)

(53,772)

(85,957)

(94,154)

Subcontracting

(62,332)

(66,213)

(104,060)

(139,193)

Disposables and lab fees and premises costs

(5,103)

(6,370)

(10,310)

(12,287)

Depreciation and impairment

(29,169)

(4,816)

(32,555)

(8,099)

Professional fees

(2,994)

(3,828)

(7,402)

(7,041)

Other operating expenses

(4,249)

(3,867)

(9,234)

(8,052)

Total research and development expenditure

(149,597)

(138,866)

(249,518)

(268,826)

The increase in depreciation and impairment for the first six months of 2022 is primarily due to an impairment of €26.7 million of previously capitalized upfront fees related to our collaboration with Molecure on the dual chitinase inhibitor OATD-01.

The table below summarizes our R&D expenditure for the six months ended 30 June 2022 and 2021, broken down by program.

 

Second quarter of

Six months ended 30 June

(thousands of €)

2022

2021

2022

2021

Filgotinib program

(71,280)

(50,908)

(116,147)

(87,840)

Toledo program

(12,744)

(24,412)

(26,098)

(52,235)

TYK2 program on GLPG3667

(5,611)

(7,984)

(9,078)

(13,974)

Ziritaxestat program

(106)

(8,905)

(638)

(19,418)

Other programs

(59,856)

(46,657)

(97,557)

(95,359)

Total research and development expenditure

(149,597)

(138,866)

(249,518)

(268,826)

Sales and marketing expenses

The following table summarizes our sales and marketing expenses for the six months ended 30 June 2022 and 2021:

 

Second quarter of

Six months ended 30 June

(thousands of €)

2022

2021

2022

2021

Personnel costs

(19,690)

(16,569)

(35,723)

(26,871)

Depreciation

(907)

(117)

(1,122)

(168)

External outsourcing costs

(15,293)

(14,844)

(25,671)

(24,959)

Sales and marketing expenses recharged to Gilead

-

18,885

31

25,527

Professional fees

(1,165)

(162)

(1,534)

(180)

Other operating expenses

(4,970)

(1,618)

(6,989)

(2,310)

Total sales and marketing expenses

(42,024)

(14,425)

(71,008)

(28,961)

The termination of our 50/50 filgotinib co-commercialization cost sharing agreement with Gilead explains a significant part of the increase in sales & marketing expenses.

General and administrative expenses

The following table summarizes our general and administrative expenses for the six months ended 30 June 2022 and 2021:

 

Second quarter of

Six months ended 30 June

(thousands of €)

2022

2021

2022

2021

Personnel costs

(15,211)

(21,361)

(35,629)

(37,568)

Depreciation and impairment

(2,383)

(11,060)

(4,297)

(12,730)

Legal and professional fees

(6,309)

(7,610)

(10,817)

(13,469)

Other operating expenses

(5,744)

(6,406)

(12,259)

(13,092)

Total general and administrative expenses

(29,646)

(46,436)

(63,001)

(76,858)

Other operating income

The following table summarizes our other operating income for the six months ended 30 June 2022 and 2021:

 

Second quarter of

Six months ended 30 June

(thousands of €)

2022

2021

2022

2021

Grant income

572

2,515

1,009

3,787

R&D incentives

8,818

10,656

15,903

19,502

Other

567

128

725

276

Total other operating income

9,957

13,298

17,637

23,564

Financial income/expenses

The following table summarizes our financial income/expenses (-) for the six months ended 30 June 2022 and 2021:

 

Second quarter of

Six months ended 30 June

(thousands of €)

2022

2021

2022

2021

Fair value adjustments and net currency exchange differences

 

 

 

 

Net currency exchange gain/loss (-)

46,718

(12,096)

60,168

33,613

Fair value re-measurement of warrants

136

858

(49)

2,828

Fair value loss on financial assets held at fair value through profit or loss

-

-

-

(2,913)

Fair value gain/loss (-) on current financial investments

12,004

(2,262)

11,810

(5,833)

Total fair value adjustments and net currency exchange differences

58,858

(13,500)

71,929

27,695

 

 

 

 

 

Other financial income:

 

 

 

 

Interest income

2,956

696

3,618

1,442

Effect of discounting long term R&D incentives receivables

23

23

46

46

Other finance income

341

11

351

80

Total other financial income

3,320

730

4,015

1,568

 

 

 

 

 

Other financial expenses:

 

 

 

 

Interest expenses

(2,142)

(3,050)

(4,206)

(4,425)

Effect of discounting long term deferred income

(1,860)

(2,323)

(3,799)

(4,770)

Other finance charges

(60)

(66)

(264)

(152)

Total other financial expenses

(4,062)

(5,439)

(8,268)

(9,347)

 

 

 

 

 

Total net financial result

58,115

(18,209)

67,676

19,916

Cash position

Cash and cash equivalents and current financial investments totaled €4,429.0 million on 30 June 2022 (€4,703.2 million on 31 December 2021).

Cash and cash equivalents and current financial investments comprised cash at banks, term deposits, treasury bills and money market funds. Our cash management strategy monitors and optimizes our liquidity position. Our cash management strategy allows short-term deposits with an original maturity exceeding three months while monitoring all liquidity aspects.

Cash and cash equivalents comprised €487.8 million of term deposits which all had an original maturity longer than three months. All cash and cash equivalents are available upon maximum three months notice period and without significant penalty. Cash at banks were mainly composed of notice accounts and current accounts. Our credit risk is mitigated by selecting a panel of highly rated financial institutions for our deposits.

Current financial investments comprised €1,332.9 million of term deposits which all had an original maturity longer than three months and which are not available on demand within three months. Our current financial investments also comprised money market funds and treasury bills. Our portfolio of treasury bills contains only AAA rated paper, issued by Germany. Our money market funds portfolio consists of AAA short-term money market funds with a diversified and highly rated underlying portfolio managed by established fund management companies with a proven track record.

 

30 June

31 December

(thousands of €)

2022

2021

Money market funds

1,295,726

1,317,460

Treasury bills

827,574

877,349

Term deposits

1,332,884

275,000

Total current financial investments

3,456,184

2,469,809

 

 

 

Cash at banks

485,031

1,225,860

Term deposits

487,765

1,007,508

Total cash and cash equivalents

972,796

2,233,368

 

 

 

Total current financial investments and cash and cash equivalents

4,428,980

4,703,177

On 30 June 2022, our cash and cash equivalents and current financial investments included $953.8 million held in U.S. dollars ($942.5 million on 31 December 2021) which could generate foreign exchange gains or losses in our financial results in accordance with the fluctuation of the EUR/U.S. dollar exchange rate as our functional currency is EUR. The foreign exchange loss (–)/gain in case of a 10% change in the EUR/U.S. dollar exchange rate amounts to €91.8 million.

Capital increase

On 30 June 2022, Galapagos NV’s share capital was represented by 65,728,511 shares. All shares were issued, fully paid up and of the same class. The below table summarizes our capital increases for the period ended 30 June 2022.

(thousands of €, except share data)

Number of
shares

Share capital

Share premium

Share capital and
share premium

Average exercise price sub­scription rights
(in €/ sub­scription right)

Closing share price on date of capital increase
(in €/ share)

On 1 January 2022

65,552,721

292,075

2,730,391

3,022,467

 

 

 

 

 

 

 

 

 

18 March 2022: exercise of subscription rights

95,500

517

1,643

2,160

22.61

57.38

 

 

 

 

 

 

 

20 June 2022: exercise of subscription rights

80,290

434

1,025

1,460

18.18

53.52

 

 

 

 

 

 

 

On 30 June 2022

65,728,511

293,026

2,733,059

3,026,086

 

 

Note to the cash flow statement

 

Six months ended 30 June

(thousands of €)

2022

2021

Adjustment for non-cash transactions

 

 

Depreciation and impairment

37,974

20,996

Share-based compensation expenses

32,163

44,568

Increase in retirement benefit obligations and provisions

270

190

Unrealized exchange gains and non-cash other financial result

(59,627)

(26,537)

Discounting effect of deferred income

3,799

4,770

Fair value re-measurement of warrants

49

(2,828)

Net change in (fair) value of current financial investments

(11,810)

5,833

Fair value adjustment financial assets held at fair value through profit or loss

-

2,913

Other non-cash expenses

3,750

405

Total adjustment for non-cash transactions

6,567

50,310

 

 

 

Adjustment for items to disclose separately under operating cash flow

 

 

Interest expense

4,206

4,425

Interest income

(3,214)

(1,434)

Tax expense

2,536

(473)

Total adjustment for items to disclose separately under operating cash flow

3,529

2,518

 

 

 

Adjustment for items to disclose under investing and financing cash flows

 

 

Gain on sale of subsidiaries

-

(22,191)

Gain (-)/loss on sale of fixed assets

(11)

1

Realized exchange gain on sale of current financial investments

-

(6,645)

Interest income on current financial assets

(405)

(8)

Total adjustment for items to disclose separately under investing and financing cash flow

(416)

(28,843)

 

 

 

Change in working capital other than deferred income

 

 

Increase in inventories

(10,195)

(1,419)

Decrease in receivables

53,204

107,041

Increase/decrease (-) in liabilities

3,025

(24,263)

Total change in working capital other than deferred income

46,034

81,359

Business combinations

On 21 June 2022 we acquired, in an all-cash transaction, 100% of the shares and voting interests of CellPoint for a total agreed payment at completion of €125 million, including consideration for other liabilities associated with the transaction amounting to €10.3 million. Additional contingent consideration up to €100.0 million is due when certain development, regulatory and sales-based milestones would be achieved.

On the same date we acquired all of the outstanding capital of AboundBio, for a total agreed price of $14 million, including consideration for other liabilities associated with the transaction. 

The main reason for these acquisitions is to position ourselves in next-generation cancer therapy market and to significantly broaden our portfolio and capabilities. As a result of these acquisitions, we gain access to an innovative, scalable, decentralized and automated point-of-care cell therapy supply model as well as a next-generation fully human antibody-based therapeutics platform. Combined and supported by us as a fully integrated biopharma, they have the potential to disrupt the CAR-T treatment paradigm. The goal is to expand the current market for CAR-T therapies and have an important impact on patients in need of additional and improved treatment options.

Details of the preliminary fair value of identifiable assets and liabilities acquired in both transactions, the preliminary purchase consideration and provisional goodwill at the acquisition date are as follows:

 

21 June 2022

 

(thousands of €)

CellPoint

AboundBio

Total

Property, plant and equipment

1,289

965

 

Other non-current assets

81

4

 

Trade and other receivables

162

-

 

Cash and cash equivalents

3,179

4,279

 

Other current assets

1,254

536

 

Trade and other liabilities

(32,789)

(587)

 

Current deferred income

-

(474)

 

Net assets acquired

(26,824)

4,723

 

 

 

 

 

Consideration paid in cash

107,750

14,886

 

Fair value re-measurement of previously held equity investment

-

342

 

Deferred consideration

6,088

90

 

Fair value of contingent consideration

22,865

-

 

Fair value of total consideration

136,703

15,318

 

 

 

 

 

Goodwill

163,526

10,595

 

Exchange differences on goodwill

-

166

 

Goodwill in the balance sheet

163,526

10,761

174,288

Net cash outflow arising on acquisition

 

21 June 2022

 

(thousands of €)

CellPoint

AboundBio

Total

Consideration paid in cash

107,750

14,886

 

Less: cash and cash equivalents balances acquired

(3,179)

(4,279)

 

Cash out from acquisition of subsidiaries, net of cash acquired

104,571

10,607

115,178

 

 

 

 

Cash used in operating activities for other liabilities related to the acquisition of subsidiaries

7,765

-

7,765

The preliminary fair value of the identifiable assets and liabilities are included in our condensed consolidated interim financial statements as per 30 June 2022. To date we have performed a preliminary fair value analysis of the business combinations, with corresponding adjustments to the trade and other liabilities. We expect the provisional amount of goodwill to change significantly upon the completion of the purchase price allocation, resulting from the valuation of the different assets and liabilities acquired, including the valuation of in-process R&D.

Antibody
A blood protein produced in response to and counteracting a specific antigen. Antibodies combine chemically with substances which the body recognizes as alien, such as bacteria, viruses, and foreign substances
CAR-T
Chimeric antigen receptor T cells (also known as CAR T cells) are T cells that have been genetically engineered to produce an artificial T cell receptor for use in immunotherapy
Filgotinib
Formerly known as GLPG0634, commercial name is Jyseleca. Small molecule preferential JAK1 inhibitor, approved in RA in European Union, Great Britain, and Japan, and in UC in European Union and Great Britain. Application for approval for ulcerative colitis was filed in Japan. Filgotinib is partnered with Gilead. Filgotinib currently is in Phase 3 trials in CD, and in a Phase 4 trial in RA
Point-of-care
Drug treatment is provided close to or near the patient