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Annual Report 2024

Strategy to Unlock Value

At Galapagos, we are committed to transforming patient outcomes through life-changing science and innovation. We take pride in advancing our pipeline, driving innovation, pioneering for patients, and creating value for all stakeholders. We have continued to evolve, undaunted by challenges and quickly adapting to the ever-changing biotech landscape, while staying true to our mission. 

On January 8, 2025, we announced a bold vision to strengthen our global leadership in oncology cell therapy through a planned separation into two publicly traded entities: SpinCo (to be named later) and Galapagos. 

This planned strategic reorganization aims to drive long-term value creation for patients, shareholders, employees, and society, building on our strong foundation of pioneering science and transformative technology in cell therapy. It marks a pivotal moment in our history, sharpening our focus on programs and indications with the fastest path to market. It will also provide us with the autonomy to execute our cell therapy growth strategy, while creating sustainable shareholder value, and ensuring that we serve patients as effectively as possible, now and in the future.  

Expected benefits of the planned separation

Galapagos: Executing a Focused Cell Therapy Vision in Oncology 

We will focus on unlocking the broad-reaching potential of our decentralized cell therapy manufacturing platform in oncology and will continue to advance our cell therapy pipeline. To achieve our goal of becoming a global leader in cell therapy in oncology, we are seeking potential partners to take over its small molecule portfolio, including GLPG3667, the TYK2 inhibitor in auto-immune indications currently in phase 3-enabling studies for systemic lupus erythematosus and dermatomyositis.

Following the reorganization, we expect our normalized annual cash burn to be between €175 million and €225 million, excluding restructuring costs. Upon separation, we expect to have approximately €500 million in cash.

SpinCo: Building a Pipeline of Innovative Medicines Through Transactions 

In the proposed separation, SpinCo will be capitalized with approximately €2.45 billion of Galapagos’ current cash. It will be focused on building a pipeline of innovative medicines with robust demonstrated proof-of-concept in oncology, immunology, and/or virology through strategic business development transactions. SpinCo will establish a Board of Directors with the majority of its members being independent and it will be led by a small seasoned executive team with a proven track record in biotechnology company-building and strategic transaction execution. 

As of the separation, the global option, license and collaboration agreement with Gilead (OLCA) will be assumed by SpinCo. For future transactions, Gilead has committed to negotiating in good faith, amendments to the OLCA, on a transaction-by-transaction basis to achieve positive value for SpinCo and all of its shareholders. To date, Gilead has demonstrated flexibility in amending the key financial and structural terms of the OLCA to support Galapagos in its assessment of potential business development opportunities to enable value creation. We expect incentives between SpinCo and Gilead to be aligned such that SpinCo can pursue high-quality assets, fund development and invest in its portfolio, so that potential significant future value creation is retained for SpinCo and all of its shareholders.

Unlocking the Potential of Galapagos
Strong fundamentals in place to advance our innovative biotechnology company

Unlocking the Potential of Galapagos (graphic)

The completion of the spin-off of SpinCo is subject to receipt of approval from Galapagos shareholders and is expected to occur by mid-2025.

Cell therapy
Cell therapy aims to treat diseases by restoring or altering certain sets of cells or by using cells to carry a therapy through the body. With cell therapy, cells are cultivated or modified outside the body before being injected into the patient. The cells may originate from the patient (autologous cells) or a donor (allogeneic cells)
Dermatomyositis (DM)
Dermatomyositis is a rare inflammatory disease. Common symptoms include distinctive skin rash, and inflammatory myopathy, or inflamed muscles, causing muscle weakness
GLPG3667
A TYK2 kinase inhibitor discovered by us. Two Phase 3-enabling studies are currently ongoing in SLE and DM
Immunology
The study of the immune system and is a very important branch of the medical and biological sciences. The immune system protects humans from infection through various lines of defence. If the immune system is not functioning as it should, it can result in disease, such as autoimmunity, allergy, and cancer
Oncology
Field of medicine that deal with the diagnosis, treatment, prevention, and early detection of cancer
Phase 3
Large clinical trials, usually conducted in several hundred to several thousand patients to gain a definitive understanding of the efficacy and tolerability of the candidate treatment; serves as the principal basis for regulatory approval
Systemic lupus erythematosus (SLE)
An autoimmune disease, with systemic manifestations including skin rash, erosion of joints or even kidney failure