32. Related parties
Relationship and transactions with entities with control of, or significant influence over, Galapagos
Gilead
Gilead exercises significant influence over Galapagos as from the equity subscription on 23 August 2019. As a result of the equity subscription we received a transparency notification from Gilead on 28 August 2019 confirming they held 22.04% of the then issued and outstanding shares of Galapagos.
By exercising Warrant A on 6 November 2019, Gilead increased its ownership in Galapagos to 25.10% of the then outstanding shares. Gilead further increased its ownership to 25.84% at 31 December 2019. Gilead’s ownership then diluted to 25.38% at 31 December 2022 and to 25.35% at 31 December 2023, due to four capital increases resulting from the exercise of subscription rights under employee subscription right plans in the course of 2022 (three capital increases) and 2023 (one capital increase).
The presumption of significant influence is also confirmed by Gilead’s right, for as long as it holds more than 20% of Galapagos’ share capital, to appoint two investor Board designees to Galapagos’ Board of Directors, out of a total of nine.
The following table details our relation with Gilead:
|
31 December |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
(thousands of €) |
2023 |
2022 |
||||||||||
Relations with Gilead |
|
|
||||||||||
Trade and other receivables(1) |
5,198 |
7,877 |
||||||||||
Trade and other payables |
585 |
- |
||||||||||
|
|
|
||||||||||
|
Year ended |
|||||||||||
(thousands of €) |
2023 |
2022 |
||||||||||
Revenues recognized related to the performance obligation for the drug discovery platform |
230,242 |
230,423 |
||||||||||
Revenues recognized related to the filgotinib performance obligation(2) |
429,439 |
174,432 |
||||||||||
Royalty income related to the commercialization of filgotinib |
9,466 |
10,726 |
||||||||||
Cost reimbursements related to the development of GLPG1690(3) |
299 |
411 |
||||||||||
Cross charges from and to Gilead relating to filgotinib(4) |
3,643 |
(2,374) |
||||||||||
Costs (-)/deduction of costs relating to our 50/50 profit/(cost) share mechanism(5) |
|
|
||||||||||
included in sales and marketing expenses |
|
31 |
||||||||||
included in research and development expenditure |
|
(31) |
||||||||||
Purchase of raw materials, semi-finished products and finished products of Jyseleca® |
|
13,539 |
||||||||||
|
||||||||||||
As at 31 December 2023 we have two outstanding performance obligations under IFRS 15 towards Gilead, which are the performance obligation related to our drug discovery platform and the termination of our performance obligation relating to filgotinib before its transfer to Alfasigma on the 31 January 2024 following the closing of the transaction for the transfer of the Jyseleca® business. This results in an outstanding deferred income balance of €1.3 billion for the drug discovery platform (including the warrant issuance liability relating to subsequent warrant B) and a remaining €26.3 million deferred income for the performance obligation relating to filgotinib.
A detailed explanation of our transactions with Gilead in 2023 and 2022 can be found in the section titled Agreements with major Galapagos NV shareholders. There are no other shareholders or other entities who, solely or jointly, control Galapagos or exercise significant influence over Galapagos.
Relationship and transactions with subsidiaries
Please see note 33 for an overview of the consolidated companies of the group, which are all wholly-owned subsidiaries of Galapagos NV.
Relationship and transactions with key management personnel
Our key management personnel consists of the members of the Executive Committee and members of the Board of Directors. All amounts mentioned in this section are based on expenses recognized in the financial statements for the relevant financial year.
Remuneration of key management personnel
On 31 December 2023, our Executive Committee had five members: Stoffels IMC BV (permanently represented by Dr. Paul Stoffels), Mr. Thad Huston, Mr. Michele Manto, Ms. Valeria Cnossen and Ms. Annelies Missotten. They provide their services to us on a full-time basis. Mr. Michele Manto's mandate as a member of the Executive Committee ended on 31 December 2023.
On 31 December 2023, our Board of Directors consisted of nine members: Stoffels IMC BV (permanently represented by Dr. Paul Stoffels), Mr. Peter Guenter, Mr. Daniel O’Day, Dr. Linda Higgins, Dr. Elisabeth Svanberg, Mr. Jérôme Contamine, Dr. Dan Baker, Dr. Susanne Schaffert and Mr. Simon Sturge.
During its meeting of 12 June 2023, the Board of Directors appointed Dr. Susanne Schaffert by cooptation as a non-executive independent Director, replacing Dr. Rajesh Parekh who stepped down on 10 June 2023.
During its meeting of 19 September 2023, the Board of Directors appointed Mr. Simon Sturge by cooptation as a non-executive independent Director, replacing Dr. Mary Kerr who stepped down on 18 September 2023.
Dr. Susanne Schaffert’s and Mr. Simon Sturge’s appointments will be submitted to the confirmation of the Company’s Annual Shareholders’ Meeting which will be held on 30 April 2024.
Effective from 1 January 2020, Galapagos no longer grants any subscription rights to members of the Board of Directors, taking into account the stricter rules of the Belgian Companies Code. Prior to 2020, Board members were granted subscription rights.
Effective from 26 April 2022, our CEO, Stoffels IMC BV, permanently represented by Dr. Paul Stoffels, has been appointed as the Chair of the Board of Directors of Galapagos. The CEO will only be remunerated for the performance of its executive functions as CEO and is not entitled to any additional remuneration for its mandates of Chair of the Board of Directors or of any Committee.
Reference is made to the Remuneration Report, which discloses the remuneration awarded to each member of the Board of Directors and Executive Committee during 2023.
The remuneration package of the members of key management personnel comprises:
|
Year ended 31 December |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Thousands of € (except for the number of subscription rights and RSUs) |
2023 |
2022 |
||||||||
Remuneration of key management personnel: |
|
|
||||||||
Short-term benefits to Executive Committee members as a group(1) |
3,902 |
3,444 |
||||||||
Board fees for members of the Board of Directors |
749 |
740 |
||||||||
Post-employment benefits(2) |
209 |
240 |
||||||||
Severance package(3) |
3,150 |
- |
||||||||
|
|
|
||||||||
Subscription rights granted in the year |
|
|
||||||||
Number of subscription rights granted in the year to Executive Committee members as a group |
325,000 |
1,124,000 |
||||||||
Total cost of subscription rights granted in the year under IFRS 2 |
5,163 |
27,010 |
||||||||
|
|
|
||||||||
Number of RSUs granted in the year |
|
|
||||||||
Total number of RSUs granted in the year to Executive Committee members as a group(1)(4) |
331,066 |
200,478 |
||||||||
|
||||||||||
Other
No loans, quasi-loans or other guarantees were given by Galapagos NV or any of its subsidiaries to members of the Board of Directors and of the Executive Committee. We have not entered into transactions with our key management personnel, other than as described above with respect to remuneration arrangements relating to the exercise or termination of their mandates as members of the Executive Committee and the Board of Directors.