32. Related Parties
Relationship and transactions with entities with control of, or significant influence over, Galapagos
Gilead
Gilead exercises significant influence over us as from the equity subscription on August 23, 2019. As a result of the equity subscription we received a transparency notification from Gilead on August 28, 2019 confirming they held 22.04% of the then issued and outstanding shares of Galapagos.
By exercising Warrant A on November 6, 2019, Gilead increased its ownership in Galapagos to 25.10% of the then outstanding shares. Gilead further increased its ownership to 25.84% at December 31, 2019. Gilead’s ownership then diluted to 25.35% at December 31, 2023 and at December 31, 2024, due to one capital increase resulting from the exercise of subscription rights under employee subscription right plans in the course of 2023.
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:
|
December 31 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
(thousands of €) |
2024 |
2023 |
||||||||
Trade and other receivables(1) |
2,268 |
5,198 |
||||||||
Trade and other payables |
- |
585 |
||||||||
|
|
|
||||||||
|
Year ended |
|||||||||
(thousands of €) |
2024 |
2023 |
||||||||
Revenues recognized related to the performance obligation for the drug discovery platform |
230,182 |
230,242 |
||||||||
Revenues recognized related to the filgotinib performance obligation(2) |
26,041 |
429,439 |
||||||||
Royalty income related to the commercialization of filgotinib |
10,604 |
9,466 |
||||||||
Cost reimbursements related to the development of GLPG1690(3) |
128 |
299 |
||||||||
Cross charges from and to Gilead relating to filgotinib(4) |
- |
3,643 |
||||||||
|
||||||||||
As at December 31, 2023, we had two outstanding performance obligations under IFRS 15 towards Gilead, which were 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 January 31, 2024 following the closing of the transaction for the transfer of the Jyseleca® business. The remaining deferred income for the performance obligation relating to filgotinib, amounting to €26.3 million at December 31, 2023, was recognized in revenue in 2024. The outstanding deferred income balance at December 31, 2024 for the drug discovery platform amounted to €1.1 billion.
A detailed explanation of our transactions with Gilead in 2024 and 2023 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 us or exercise significant influence over us.
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 December 31, 2024, our Executive Committee had four members: Stoffels IMC BV (permanently represented by Dr. Paul Stoffels), Mr. Thad Huston, Ms. Valeria Cnossen and Ms. Annelies Missotten. They provide their services to us on a full-time basis.
On December 31, 2024, our Board of Directors consisted of nine members: Stoffels IMC BV (permanently represented by Dr. Paul Stoffels), Mr. Peter Guenter, Mr. Andrew Dickinson, Dr. Linda Higgins, Dr. Elisabeth Svanberg, Mr. Jérôme Contamine, Dr. Susanne Schaffert, Mr. Simon Sturge and Mr. Nodelman.
During its meeting of March 26, 2024, the Board of Directors appointed Mr. Andrew Dickinson by cooptation as a Non-Executive Independent Director effective March 27, 2024, replacing Mr. Daniel O’Day who stepped down on March 26, 2024. Mr. Andrew Dickinson’s appointment has been confirmed by the shareholders at the Company’s Annual Shareholders’ Meeting of April 30, 2024.
During its meeting of October 6, 2024, the Board of Directors appointed Mr. Oleg Nodelman by cooptation as a Non-Executive Independent Director effective October 7, 2024, replacing Dr. Dan Baker who stepped down on October 6, 2024.
Mr. Oleg Nodelman’s appointment will be submitted to the confirmation of the Company’s Annual Shareholders’ Meeting which will be held on April 29, 2025.
Effective from January 1, 2020, we no longer grant any subscription rights to members of the Board of Directors, taking into account the stricter rules of the Belgian Companies Code and 2020 Corporate Governance Code. Prior to 2020, Board members were granted subscription rights.
Effective from April 26, 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 pursuant to the Belgian Companies Code the remuneration awarded to each member of the Board of Directors and Executive Committee during 2024.
The remuneration package of the members of key management personnel comprises:
|
Year ended December 31 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Thousands of € (except for the number of subscription rights and RSUs) |
2024 |
2023 |
||||||||
Remuneration of key management personnel: |
|
|
||||||||
Short-term benefits to Executive Committee members as a group(1) |
3,279 |
3,902 |
||||||||
Board fees for members of the Board of Directors |
859 |
749 |
||||||||
Post-employment benefits(2) |
186 |
209 |
||||||||
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 |
185,000 |
325,000 |
||||||||
Total cost of subscription rights granted in the year under IFRS 2 |
1,765 |
5,163 |
||||||||
|
|
|
||||||||
Number of RSUs granted in the year |
|
|
||||||||
Total number of RSUs granted in the year to Executive Committee members as a group(1)(4) |
299,516 |
331,066 |
||||||||
|
||||||||||
Other
No loans, quasi-loans or other guarantees were given by us or any of our 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.