7. Operating costs
Operating result has been calculated after charging (–)/crediting:
Research and development expenditure
The following table summarizes research and development expenditure for the years ended 31 December 2020 and 2019.
|
Year ended 31 December |
|
(thousands of €) |
2020 |
2019 |
Personnel costs |
(161,509) |
(118,875) |
Subcontracting |
(301,841) |
(255,725) |
Disposables and lab fees and premises costs |
(22,349) |
(19,573) |
Depreciation |
(11,707) |
(9,330) |
Professional fees |
(12,692) |
(1,834) |
Other operating expenses |
(13,570) |
(14,753) |
Total research and development expenditure |
(523,667) |
(420,090) |
The R&D expenditure increase reflects the increase of our investments to advance our R&D programs. This increase was principally due to:
- Increased R&D personnel costs were explained by an enlarged workforce following the growth in our R&D activities as well as increased costs of the subscription right plans.
- The increase in subcontracting costs is mainly due to increased expenditure for filgotinib development due to the increased cost share. Moreover expenditures have further increased as we advance our Toledo program and our other programs.
- Professional fees increased due to additional consulting expenses related to the implementation of new software applications.
The table below summarizes our research and development expenditure for the years ended 31 December 2020 and 2019, broken down by program:
|
Year ended 31 December |
|
(thousands of €) |
2020 |
2019 |
Filgotinib program |
(126,879) |
(100,032) |
Ziritaxestat program |
(55,902) |
(75,951) |
OA program on GLPG1972 |
(22,966) |
(19,958) |
Toledo program |
(87,107) |
(47,204) |
CF program |
(69) |
(3,897) |
AtD program on MOR106 |
(7,618) |
(24,051) |
Other programs |
(223,126) |
(148,997) |
Total research and development expenditure |
(523,667) |
(420,090) |
Sales and marketing expenses
The following table summarizes the sales and marketing expenses for the years ended 31 December 2020 and 2019.
|
Year ended 31 December |
|
(thousands of €) |
2020 |
2019 |
Personnel costs |
(31,727) |
(7,558) |
Depreciation |
(140) |
(61) |
External outsourcing costs |
(27,174) |
(15,721) |
Professional fees |
(3,420) |
(459) |
Other operating expenses |
(4,007) |
(777) |
Total sales and marketing expenses |
(66,468) |
(24,577) |
The increase in our sales and marketing expenses in 2020 is mainly due to the preparation of the commercial launch for filgotinib and is primarily explained by an increase in personnel costs due to recruitments and increased costs of subscription right plans, as well as related increase in outsourcing costs. The latter was mainly due to additional costs incurred relating to our co-promotion activities with Gilead for filgotinib, for which we have recharged €4.7 million to Gilead, which was recorded as a deduction of sales and marketing expenses (compared to €8.2 million recharges by Gilead to us for the year ended 31 December 2019).
General and administrative expenses
The following table summarizes the general and administrative expenses for the years ended 31 December 2020 and 2019.
|
Year ended 31 December |
|
(thousands of €) |
2020 |
2019 |
Personnel costs |
(70,110) |
(51,204) |
Depreciation |
(5,147) |
(1,421) |
Legal and professional fees |
(25,592) |
(11,568) |
Other operating expenses |
(17,908) |
(8,190) |
Total general and administrative expenses |
(118,757) |
(72,382) |
The increase in our general and administrative expenses in 2020 was mainly due to a planned increase in the staff supporting the growth of the company, higher costs related to the subscription right plans and additional legal and professional fees.