Financial highlights

Employees per site as of 30 September 2022

(total: 1,357 employees)

Q3 2022 financial results

We reported product net sales of Jyseleca in Europe for the first nine months of 2022 amounting to €60.5 million (€6.1 million in the first nine months of 2021). Our counterparties for the sales of Jyseleca were mainly hospitals and wholesalers located across Europe.

Cost of sales related to Jyseleca net sales in the first nine months of 2022 amounted to €7.9 million.

Collaboration revenues amounted to €349.7 million for the first nine months of 2022, compared to €311.7 million for the first nine months of 2021.

Revenues recognized related to the collaboration agreement with Gilead for the filgotinib development were €166.8 million in the first nine months of 2022 compared to €136.4 million for the same period last year. This increase was due to a higher increase in the percentage of completion, as well as a higher revenue recognition of milestone payments strongly influenced by the milestone achieved related to the regulatory approval in Japan for UC in the first nine months of 2022.

The revenue recognition related to the exclusive access rights for Gilead to our drug discovery platform amounted to €172.6 million for the first nine months of 2022 (€173.3 million for the same period last year).

We have recognized royalty income from Gilead for Jyseleca for €8.2 million in the first nine months of 2022 (compared to €1.9 million in the same period last year) of which €3.6 million royalties on milestone income for UC approval in Japan.

Additionally, we recorded milestones of €2.0 million triggered by the first sales of Jyseleca in Czech Republic and Portugal by our distribution and commercialization partner Sobi, in the first nine months of 2022.

Our deferred income balance on 30 September 2022 includes €1.6 billion allocated to our drug discovery platform that is recognized linearly over the remaining period of our 10 year collaboration, and €0.5 billion allocated to filgotinib development that is recognized over time until the end of the development period.

Our R&D expenditure in the first nine months of 2022 amounted to €364.1 million, compared to €378.0 million for the first nine months of 2021. This decrease was primarily explained by a decrease in subcontracting costs from €189.1 million in the first nine months of 2021 to €158.5 million in the first nine months of 2022, primarily due to the winding down of the ziritaxestat (IPF) program and reduced spend on our SIKi and TYK2 programs. This was partly offset by cost increases for our filgotinib program, on a nine month basis compared to the same period in 2021. Personnel costs decreased from €134.3 million in the first nine months of 2021 to €130.0 million for the same period this year. Depreciation and impairment amounted to €35.6 million for the first nine months of 2022 (€14.1 million for the same period last year). This increase was 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 (GLPG4716), recorded in Q2 2022. 

Our S&M expenses were €105.3 million in the first nine months of 2022, compared to €46.6 million in the first nine months of 2021. This increase was primarily due to the termination of our 50/50 filgotinib co-commercialization cost sharing agreement with Gilead. The cost increase was also explained by an increase in personnel costs (€53.4 million for the first nine months of 2022 compared to €43.3 million for the same period last year) explained by an increase in the commercial work force from 234 average FTEs in the first nine months of 2021 to 304 average FTEs in the first nine months of 2022 driven by the commercial launch of filgotinib in Europe.

Our G&A expenses were €97.4 million in the first nine months of 2022, compared to €104.7 million in the first nine months of 2021. The cost decrease was primarily due to the impairment of €9.3 million on other tangible assets recorded in the first nine months of 2021 following our decision to reassess the construction project of our new future headquarter location in Mechelen (Belgium). Personnel costs amounted to €54.5 million for the first nine months of 2022 compared to €52.4 million for the same period last year.

Other operating income (€29.5 million for the first nine months of 2022, compared to €36.3 million for the first nine months of 2021) decreased by €6.9 million, mainly driven by lower grant and R&D incentive income.

We reported an operating loss amounting to €135.1 million for the first nine months of 2022, compared to an operating loss of €175.7 million for the same period last year.

Net financial income in the first nine months of 2022 amounted to €127.5 million (as compared to net financial income of €33.6 million in the same period last year). Net financial income in the first nine months of 2022 was primarily attributable to €102.1 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 €54.9 million currency exchange gain on cash and cash equivalents and current financial investments in the first nine months of 2021) and €26.0 million positive changes in (fair) value of current financial investments (€7.2 million negative changes in the same period last year). The other financial expenses also contained the discounting effect of our long term deferred income of €5.7 million (€7.2 million in the same period last year). Net interest income amounted to €3.3 million in the first nine months of 2022 (compared to net interest cost of €6.3 million in the same period last year), due to increasing interest rates. The fair value loss of financial assets held at fair value through profit or loss amounted to nil in the first nine months in 2022 (as compared to €2.9 million in the same period last year).

We realized a net loss from continuing operations of €10.8 million for the first nine months of 2022, compared to a net loss of €141.8 million for the first nine months of 2021.

The net profit from discontinued operations for the first nine 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 nine months of 2022 of €10.8 million, compared to a group net loss of €119.6 million for the same period last year.

Cash, cash equivalents and current financial investments

Cash and cash equivalents and current financial investments totaled €4,362.1 million on 30 September 2022 (€4,703.2 million on 31 December 2021).

A net decrease of €341.1 million in cash and cash equivalents and current financial investments was recorded during the first nine months of 2022, compared to a net decrease of €295.2 million during the first nine months of 2021. This net decrease was composed of (i) €343.1 million of operational cash burn, (ii) offset by €6.7 million of cash proceeds from capital and share premium increases from exercise of subscription rights in the first nine months of 2022, (iii) €26.0 million of positive changes in (fair) value of current financial investments and €105.6 million of mainly positive exchange rate differences, and (iv) €136.4 million cash out from the acquisitions of CellPoint and AboundBio, net of cash acquired.

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, the loans and advances given to third parties, if any, included in the net cash flows generated from/used in (–) investing activities

iii. the cash used for other liabilities related to the acquisition of businesses, if any, included in the net cash flows generated from/used in (–) operating 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: