Risks related to Galapagos’ financial position and need for additional capital

Galapagos is a clinical-stage biotechnology company and has not yet generated significant income. Galapagos’ operations to date have been limited to developing its technology and undertaking pre-clinical studies and clinical trials of its product candidates.

Galapagos has incurred significant operating losses since its inception. Galapagos expects to continue incurring significant research, development and other expenses related to its ongoing operations, and to continue incurring losses for the foreseeable future. Galapagos does not anticipate generating revenues from sales of products for the foreseeable future, if ever. Because of the numerous risks and uncertainties associated with pharmaceutical product development, Galapagos is unable to predict the timing or amount of expenses and when it will be able to achieve or maintain profitability, if ever.

Galapagos will require substantial additional future capital which may not be available to it on acceptable terms, or at all, in order to complete clinical development and, if Galapagos is successful, to commercialize any of its current product candidates. In addition, raising additional capital may cause dilution to Galapagos’ existing shareholders, restrict Galapagos’ operations or require Galapagos to relinquish rights to its product candidates or technologies. The incurrence of additional indebtedness could result in increased fixed payment obligations and could also result in certain additional restrictive covenants that could adversely impact Galapagos’ ability to conduct its business. In the event that Galapagos enters into collaborations and/or licensing arrangements in order to raise capital, it may be required to accept unfavorable terms, including relinquishing or licensing to a third party on unfavorable terms its rights to technologies or product candidates.

For further reference on financial risks in particular, see note 38 of the notes to the consolidated financial statements.