Galapagos(GLPG)2021-11-05 18:30Financial Data and Key Metrics Changes - The company reported a cash burn of €377 million for the first nine months leading up to the end of September, with a total cash balance of €4.9 billion at the end of the quarter [34] - The cash burn guidance has been reduced by €50 million, now expected to be in the range of €530 million to €570 million, down from a previous range of €580 million to €620 million [29][30] - Revenue recognition for the quarter was slightly lower due to amendments in the DIVERSITY trial, which affected the accounting under IFRS [35] Business Line Data and Key Metrics Changes - The launch of Jyseleca in Europe is progressing well, with total sales year-to-date reaching €60 million, of which €6 million is booked by Galapagos [23] - The company has taken over the commercialization of filgotinib in Europe, with a reduced royalty rate negotiated with Gilead [14] - The DIVERSITY trial for Crohn's disease is fully recruited, and the company expects to report sales from the launch of Jyseleca soon [11][12] Market Data and Key Metrics Changes - In the EU5 market, the JAK class has a growing market share of 17%, with Jyseleca gaining a 4% share in Germany [24][25] - The company is actively working on reimbursement processes in 14 different countries, with key markets like Germany and Denmark still undergoing procedures [27] Company Strategy and Development Direction - The company is focusing on R&D to discover and develop novel targets while addressing the gap in its pipeline through business development and M&A opportunities [40][42] - The strategic review emphasizes the importance of maintaining a strong R&D focus while also building a commercial infrastructure around filgotinib [41][82] - The company aims to achieve breakeven for the Jyseleca franchise by 2024, with significant cash inflows expected in 2027 and 2028 [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the TYK2 program despite recent failures in the market, emphasizing the importance of dosing in ulcerative colitis [48][50] - The company is not considering breaking up its operations, believing that keeping the commercial and R&D aspects together is more beneficial [56] - The outlook remains positive with anticipated approval for ulcerative colitis by the European Commission and ongoing recruitment for the MANGROVE trial [39] Other Important Information - The company is in the process of searching for a new CEO and CSO, with a focus on candidates who have strong R&D backgrounds [13][81] - A contract has been signed with a third-party distributor for Eastern Europe, Portugal, and Greece to promote Jyseleca [28] Q&A Session Summary Question: Thoughts on Bristol's deucra failure in UC and its impact on TYK2 program - Management noted that the failure was surprising and may relate to dosing, emphasizing confidence in their selective TYK2 inhibitor [48][50] Question: Consideration of breaking up the company - Management discussed that keeping the two segments together makes more sense for the company, focusing on bridging the pipeline gap through external acquisitions [56] Question: Evaluation of business development opportunities during CEO search - Management indicated that they are looking for bolt-on transactions in inflammation and fibrosis areas, rather than large transformational deals until a new CEO is appointed [62] Question: Feedback on Jyseleca from physicians - Positive feedback was received regarding Jyseleca's efficacy and safety profile, particularly in Germany, where it is seen as having a differentiating profile compared to peers [100]