A conversation with Paul and Thad

We are very pleased to have our company’s visionary leaders, CEO and Chairman, Dr. Paul Stoffels¹ and newly appointed CFO and COO, Thad Huston, share their insights in this interview. Paul and Thad offer their perspective on Galapagos’ half-year 2023 business performance and financial results and the outlook for the remainder of the year.

Thad, you joined Galapagos on July 1^st from Kite (a Gilead Company). What triggered you to leave California and move to Belgium?

Thad: I’ve always been impressed by Galapagos’ dedication to transformational innovation. The opportunity to contribute to pioneering for patients and applying my strategic and operational expertise, especially in the exciting field of cell therapy, have sparked a real sense of excitement. I have known Paul for over 20 years, and we share the same vision to accelerate innovation and make a lasting impact for patients worldwide.

I look forward to returning to Belgium where I lived for a couple of years during my tenure at Janssen Pharmaceutica (a J&J Company), and I am thrilled to have the opportunity to be a part of the Galapagos community and work alongside such an exceptional team. Together, we will work hard to drive the company’s success and shape a brighter future for patients.

What are your top priorities for the next coming months?

Thad: I am looking forward to collaborating with Paul and the team to unlock the full potential of our company. My initial focus will be directed towards ensuring we are allocating our resources on our core strategic areas of growth and value creation, including executing on business development opportunities to bring in external innovation, and optimizing operational efficiency.

Galapagos is at an exciting phase in its development following the roll-out of our new R&D model in immunology and oncology. We are working hard to further build our portfolio and leverage our infrastructure. Together with our strong balance sheet and experienced team, I believe that we are well prepared to realize our mission to transform the lives of patients across the globe, while creating value for all our stakeholders.

Paul, as we reflect on the first half of this year, how would you summarize the past period?

Paul: Our commitment to providing transformational medicines to patients worldwide remains our core focus. We have successfully implemented our renewed R&D strategy to accelerate innovation, aiming to generate short and long-term value for all our stakeholders. We are actively building a differentiated discovery pipeline of best-in-class small molecules, CAR-T cell therapies and biologicals in our focus areas in immunology and oncology.

Additionally, we are making good progress in our clinical programs across our therapeutic areas, and we are optimistic about the global potential of our CAR-T cell therapy portfolio in hematological malignancies. We are encouraged by the initial safety, efficacy and point-of-care feasibility results observed in the Phase 1/2 ATALANTA-1 and EUPLAGIA-1 studies with our CD19 CAR-T candidates, GLPG5101 and GLPG5201, in relapsed/refractory non-Hodgkin’s lymphoma and chronic lymphocytic leukemia respectively, with or without Richter’s transformation. This underscores the global transformational impact that our differentiated approach to CAR-T cell therapy could have on patients.

Furthermore, we continue to expand our clinical pipeline of small molecules in immunology. We dosed the first patients in the Phase 3 OLINGUITO study with filgotinib in axial spondyloarthritis and the Phase 2 GALARISSO study with our TYK2 inhibitor, GLPG3667, in dermatomyositis. We started screening the first patients in the Phase 2 GALACELA study with GLPG3667 in systemic lupus erythematous (SLE). Moreover, we have submitted a clinical trial application in Europe to initiate clinical development of our CAR-T candidate in refractory SLE.

From a corporate perspective, we have further strengthened our leadership team. We appointed Thad Huston as Chief Financial Officer and Chief Operating Officer. I am excited to work with Thad again and I believe that his strategic and operational expertise, particularly in the field of cell therapy, perfectly aligns with our company’s R&D and business development strategy in immunology and oncology. Additionally, I am delighted to welcome Dr. Susanne Schaffert as a non-executive independent Director to our Board. With her extensive experience in R&D, regulatory affairs, and commercialization in the field of oncology, Susanne brings valuable insights, a global network, and a deep understanding of the competitive landscape. Her contributions will be instrumental as we continue our mission to deliver transformative treatments to patients.

From a financial point of view, considering the recent challenges for the JAK inhibitor class of medicines in Europe, how would you describe the first six months of the year? Can you provide guidance on the full-year 2023 cash burn and any financial targets or projections for the company?

Thad: The first six months of the year have been challenging due to the changed market dynamics and competitive landscape for the JAK class in Europe, leading to an adjustment of our 2023 net sales guidance of Jyseleca® in rheumatoid arthritis and ulcerative colitis to €100 – €120 million, compared to €140 – 160 million initially projected in our full year 2022 results in February. In response to that, we are in the process of evaluating various strategic options for Jyseleca®.

We are fortunate to have a strong cash position of €3.9 billion in cash, which provides us with the necessary means to invest in our core strategic areas internally while executing on smart business development opportunities to further expand our portfolio. As a result of project prioritization, strict cost management and resource allocation, we reiterate our full-year 2023 cash burn guidance in the range of €380 – €420 million despite the lower than anticipated net sales for Jyseleca®.

Paul: We remain focused on managing our resources effectively and pursuing opportunities that will drive growth and deliver value. Together, as a united team, we are confident in our ability to overcome challenges, adapt to changing circumstances, and bring Galapagos forward on its path of accelerating life-changing science and innovation.

Looking ahead, how would you formulate Galapagos' outlook for 2023? What can we expect?

Paul: Our R&D pipeline in our core therapeutic areas holds great promise, and we have several upcoming milestones and events that we are excited about. To ensure a comprehensive Phase 1 data package, we are actively enrolling patients in the Phase 1 dose-escalation cohorts of ATALANTA-1 and EUPLAGIA-1, the two ongoing Phase 1/2 studies with our CD19 CAR-T candidates, GLPG5101 and GLPG5201, respectively. While this is an adjustment to our initial timeline around summer, we now anticipate sharing a progress update from the Phase 1 cohorts of these studies later this year. We plan to present in-depth findings and further insights from both studies at a scientific conference before year-end.

Thad: A primary objective is to actively pursue strategic business development opportunities to further expand our immunology and oncology portfolio for long-term value creation. We are also committed to expanding our CAR-T point-of-care network across Europe and plan to roll out our presence in the US to support our clinical trials. We are actively working towards these goals to expand the reach and impact of our innovative therapies.

One final question for both of you: Galapagos recently announced its 2028 Sustainability ambitions. How is that going?

Paul: We are promoting sustainable practices throughout our operations and have established structures and frameworks to support, track, and report on our progress. While there is still work to be done, we are making steady progress and remain committed to being a responsible and sustainable business.

Thad: At Galapagos, our employees are encouraged to embrace the principles behind our Sustainability pillars on a daily basis. We have recently appointed internal ambassadors and workstream owners, who are passionate about aligning our operations to achieve our Sustainability goals by 2028. But it’s not just about meeting targets; it’s also about fostering an environment where every voice is valued and heard. Each one of us has the potential to make a meaningful contribution beyond our organization-wide commitments.