Strategy

Our mission is to develop and commercialize first-in-class medicines based on novel targets. Using human primary cells, we discover which proteins ("targets") play a key role in disease pathways. We then identify and develop small molecules that inhibit these targets, restore the balance, and thereby positively influence the course of the disease. This approach is designed to address the root cause of the disease rather than just treating symptoms.

In 2020 we achieved our longtime ambition to become a fully integrated biotech company, with the approval and commercial launch of the first drug from our research platform, filgotinib for the treatment of RA. Moving forward, we remain focused on the development and commercialization of novel medicines in inflammation & fibrosis, with the ambition to commercialize additional therapies that are the result of our proprietary pipeline. Our aim is to further enrich our internal pipeline with business development opportunities, including the in-licensing of molecules, programs and modalities tailored to strengthen our research platform.

The key elements of our strategy include:

• Strengthen our innovation leadership in inflammation
  We observed strong activity in various inflammatory preclinical models with compounds targeting the SIK class of novel targets we discovered and code-named Toledo. Molecules inhibiting the SIK target family effectuate a dual mode of action on inflammation by stimulating anti-inflammatory cytokines and inhibiting pro-inflammatory cytokines. This brings a novel mode-of-action to the field of inflammation with potential differentiation on both efficacy and safety versus currently available therapies. We are executing on a broad and accelerated program to discover and develop multiple series of compounds acting on SIK targets, aimed at activity across several conditions, including inflammation. We completed Phase 1 with GLPG3970 and initiated multiple Proof of Concept trials in inflammatory diseases in 2020. We expect to report first topline results of three trials with GLPG3970 in the second half of this year. In addition, we initiated a Phase 1b trial in psoriasis patients with TYK2 inhibitor GLPG3667, with topline results also expected in the second half of 2021. Meanwhile, we continue to advance multiple preclinical candidates in inflammation, and to scale-up our target and drug discovery productivity. We also explore additional modalities of drug therapies, and to this aim, we actively collaborate with external research partners to further accelerate our progress.

• Further expand European commercial access to our first marketed product, filgotinib, and gain market approval in additional inflammatory indications
  Following the European regulatory approval of filgotinib in RA and our revised agreement for filgotinib announced in December 2020 (see Notes to the consolidated financial statements), we and Gilead are securing European market access while also transitioning all European commercial operations to us. Gilead remains responsible for sales outside of Europe and obtained approval for filgotinib in RA in Japan in 2020. We and Gilead are developing filgotinib in CD and UC. Gilead submitted the application for approval of filgotinib in UC in Europe and is expected to submit the filing in Japan in the first half of 2021. Gilead is conducting Phase 3 clinical programs in CD (DIVERSITY) for which completion of recruitment is expected in the second half of 2021.

• Tackle IPF/fibrosis with our pioneering approach
  We are building a diverse fibrosis franchise with what we believe are different and complementary modes of action in IPF and other forms of fibrosis. To date, we reported positive topline results for the PINTA Phase 2a trial with GPR84 inhibitor GLPG1205 in IPF patients and nominated a preclinical candidate from our Toledo program. Recently we added GLPG4716, a chitinase inhibitor, to our IPF portfolio. This in-licensed compound from OncoArendi is in preparation for a Phase 2 trial. We also in-licensed two early stage compounds (and have an exclusive option to in-license a total of four additional novel target programs) with novel modes of action in the field of fibrosis, thereby strengthening a growing portfolio of distinct mechanism approaches to tackle IPF and fibrosis.

• Maximize and capture the value of our target discovery platform based on novel modes of action
  Our platform has yielded many novel mode-of-action investigational therapies across multiple therapeutic areas. Our most advanced preclinical programs are GLPG4586 (fibrosis), GLPG4605 (fibrosis), and GLPG4876 (inflammation). We aim to initiate a Phase 3 trial every other year and our ambition is to conduct three Proof of Concept trials, deliver at least three preclinical product candidates and at least six new validated targets every year.

R&D ambition – Maintaining an active portfolio of around 30 projects

• Build long-term value and accelerate our pipeline with our collaboration partner Gilead
  Through our transformative R&D collaboration with Gilead signed in July 2019, we plan to strengthen our discovery, development and commercial efforts to bring innovation to patients suffering from serious diseases. We strongly believe that this is a mutually beneficial collaboration, as we gain access to Gilead’s extensive experience in drug development and commercialization, and Gilead to our pioneering discovery platform, with option rights to our current and future programs outside Europe. Gilead is subject to a 10-year standstill, and made a $3.95 billion upfront payment plus a $1.5 billion equity investment (including the exercise of Warrant A). In addition to retaining full European commercial rights, we are also eligible to receive a $150 million opt-in fee per program, plus tiered royalties ranging from 20-24% on net sales of all our products (ex filgotinib) licensed by Gilead. See the Notes to the consolidated financial statements.