UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
OR
For the fiscal year ended
OR
For the transition period from __________ to __________
OR
Date of event requiring this shell company report __________
Commission file number
(Exact name of Registrant as specified in its charter and translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
Chief Executive Officer
Galapagos NV
Tel: +32 15 342 900 Fax: +
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
ordinary share, no par value per share | The | |
Ordinary shares, no par value per share* | The Nasdaq Stock Market LLC* |
* Not for trading, but only in connection with the registration of the American Depositary Shares.
Securities registered or to be registered pursuant to Section 12(g) of the Act. None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
Ordinary shares, no par value per share:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Accelerated filer ☐ | Non-accelerated filer ☐ | Emerging growth company | |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ◻
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐ | ☒ | Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Material Modifications to the Rights of Security Holders and Use of Proceeds | 189 | |
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers | 191 | |
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ii
INTRODUCTION
Unless otherwise indicated or unless the context requires otherwise, “GLPG,” “the company,” “our company,” “we,” “us,” and “our” refer to Galapagos NV and its consolidated subsidiaries.
We own various trademark registrations and applications, and unregistered trademarks, including GALAPAGOS, JYSELECA (in the European countries where we commercialize filgotinib), and our corporate logo. All other trade names, trademarks and service marks referred to in this annual report on Form 20-F, or this annual report, are the property of their respective owners. Trade names, trademarks and service marks of other companies appearing in this annual report are the property of their respective holders. Solely for convenience, the trademarks and trade names in this annual report may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Our audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. Our consolidated financial statements are presented in euros. All references in this annual report to “$,” “US$,” “U.S.$,” “U.S. dollars,” “dollars,” and “USD” mean U.S. dollars and all references to “€” and “euros” mean euros, unless otherwise noted. Throughout this annual report, references to “ADSs” mean American Depositary Shares or ordinary shares represented by American Depositary Shares, as the case may be.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than present and historical facts and conditions contained in this annual report, including statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward-looking statements. When used in this annual report, the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “is designed to,” “may,” “might,” “plan,” “potential,” “predict,” “objective,” “should,” or the negative of these and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about: the initiation, timing, progress and results of our preclinical studies and clinical trials, and our research and development programs;
| ● | the initiation, timing, progress and results of our preclinical studies and clinical trials, and our research and development programs; |
| ● | our ability to advance product candidates into, and successfully complete, clinical trials; |
| ● | our reliance on the success of our product candidate filgotinib and certain other product candidates; |
| ● | the timing or likelihood of regulatory filings and approvals; |
| ● | our ability to develop sales and marketing capabilities; |
| ● | the commercialization of our product candidates, if approved; |
| ● | the pricing and reimbursement of our product candidates, if approved; |
| ● | the implementation of our business model, strategic plans for our business, product candidates and technology; |
| ● | the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology; |
| ● | our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property rights and proprietary technology of third parties; |
| ● | cost associated with enforcing or defending intellectual property infringement, misappropriation or violation; product liability; and other claims; |
| ● | regulatory developments in the United States, Europe, and other jurisdictions; |
| ● | estimates of our expenses, future revenues, capital requirements and our needs for additional financing; |
| ● | the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements; |
| ● | our ability to maintain and establish collaborations or obtain additional grant funding; |
| ● | the rate and degree of market acceptance of our product candidates if approved by regulatory authorities; |
| ● | our financial performance; |
| ● | developments relating to our competitors and our industry, including competing therapies; |
| ● | our ability to effectively manage and anticipate growth; |
| ● | our ability to attract and retain qualified employees and key personnel; |
| ● | statements regarding future revenue, hiring plans, expenses, capital expenditures, capital requirements and share performance; and |
| ● | other risks and uncertainties, including those listed in the section of this annual report titled “Item 3.D.—Risk Factors.” |
You should refer to the section of this annual report titled “Item 3.D.—Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this annual report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.
You should read this annual report and the documents that we reference in this annual report and have filed as exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forwardlooking statements by these cautionary statements. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. We discuss many of these risks in greater detail in this annual report. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
This annual report contains market data and industry forecasts that were obtained from third parties and industry publications. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified any thirdparty-information. While we believe the market position, market opportunity and market size information included in this annual report is generally reliable, such information is inherently imprecise.
Please see the Glossary of Terms at the end of Item 4 for definitions of scientific and other terms used in this annual report.
2
Summary of risk factors
We are heavily dependent upon our global R&D collaboration with Gilead and the amendment of our arrangement with Gilead for the commercialization and development of filgotinib. There can be no assurance that these arrangements will deliver the benefits we expect, including but not limited to the payment of potential future milestones, opt-in and/or royalty payments by Gilead.
We have no historical product revenues, which makes it difficult to assess our future prospects and financial results.
We have limited sales and distribution experience and are currently building a marketing and sales organization. We expect to continue to invest significant financial and management resources to continue to build these capabilities and to establish a European commercial infrastructure. To the extent any of our product candidates for which we maintain commercial rights is approved for marketing, if we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to market and sell any product candidates effectively, or generate product revenues.
The marketing and sale of filgotinib or future approved products may be unsuccessful or less successful than anticipated. We are heavily dependent on the success of filgotinib, which is approved for the treatment of rheumatoid arthritis in the European Union, Great Britain, and Japan and marketed under the brand name Jyseleca, and approved for the treatment of ulcerative colitis in European Union and Great Britain, and under regulatory review in Japan for the treatment of ulcerative colitis.
We are also dependent on the success of our other clinical-stage product candidates, such as our inflammation candidates/trials (such as GLPG3667, GLPG0555, GLPG3121, and GLPG4399, and the MANTA/MANTA RAy trials with filgotinib), and our lung fibrosis candidate (GLPG4716). We cannot give any assurance that any product candidate will successfully complete clinical trials or receive regulatory approval, which is necessary before it can be commercialized.
Clinical development is a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials as well as data from any interim analysis of ongoing clinical trials may not be predictive of future trial results or approved label for clinical use. Clinical failure can occur at any stage of clinical development.
Due to our limited resources and access to capital in the past, we have decided to prioritize development of certain product candidates and may have forgone the opportunity to capitalize on product candidates or indications that may ultimately have been more profitable or for which there was a greater likelihood of success.
We may not be successful in our efforts to use and expand our novel target discovery platform to build a pipeline of product candidates.
The regulatory approval processes of the FDA, the EMA, the MHLW, and other comparable regulatory authorities are lengthy, time consuming and inherently unpredictable which may affect the commercial viability of our products in development. If we are unable to ultimately obtain regulatory approval for our product candidates, our business will be substantially harmed.
In connection with our global clinical trials, local regulatory authorities may have differing perspectives on clinical protocols and safety parameters, which impacts the manner in which we conduct these global clinical trials and could negatively impact our chances for obtaining regulatory approvals or marketing authorization in these jurisdictions, or for obtaining the requested label or dosage for our product candidates, if regulatory approvals or marketing authorizations are obtained.
Even if we receive regulatory approval for any of our product candidates, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense. Additionally, our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.
3
Our future clinical trials or those of any of our collaborators may reveal significant adverse events not seen in our preclinical studies or earlier clinical trials and result in a safety profile that could inhibit regulatory approval or market acceptance of any of our product candidates.
Coverage and reimbursement decisions by third-party payers may have an adverse effect on pricing and market acceptance.
Legislative and regulatory activity may exert downward pressure on potential pricing and reimbursement for any of our product candidates, if approved, that could materially affect the opportunity to commercialize.
We face significant competition for our drug discovery and development efforts, and if we do not compete effectively, our commercial opportunities will be reduced or eliminated.
Our ability to compete may decline if we do not adequately protect our proprietary rights.
Our business, results of operations and future growth prospects could be materially and adversely affected by the COVID-19 pandemic.
The market price of the ADSs could be subject to wide fluctuations.
We may be at an increased risk of securities class action litigation.
PART I
Item 1 Identity of directors, senior management and advisers
Not applicable.
Item 2 Offer statistics and expected timetable
Not applicable.
Item 3 Key information
A. Selected financial data
Our audited consolidated financial statements have been prepared in accordance with IFRS, as issued by the IASB. We derived the selected statements of consolidated operations data, selected statements of consolidated financial position and selected statements of consolidated cash flows, each as of December 31, 2021, 2020 and 2019 from the audited consolidated financial statements, which are included herein. We derived the selected statements of consolidated operations data, selected statements of consolidated financial position and selected statements of consolidated cash flows, each as of 2018 and 2017 from our audited consolidated financial statements, which are not included herein.
This data should be read together with, and is qualified in its entirety by reference to, “Item 5—Operating and financial review and prospects” as well as our financial statements and notes thereto appearing elsewhere in this annual report. Our historical results are not necessarily indicative of the results to be expected in the future.
4
Consolidated statement of operations:
Year ended December 31, | |||||||||||||||
| 2021 |
| 2020 |
| 2019 |
| 2018 |
| 2017 | ||||||
(Euro, in thousands, except per share data) | |||||||||||||||
Product net sales | € | 14,753 | € | 2 | € | — | € | — | € | — | |||||
Collaboration revenues | 470,093 | 478,051 | 834,901 | 278,666 | 127,087 | ||||||||||
Total net revenues | 484,846 | 478,053 | 834,901 | 278,666 | 127,087 | ||||||||||
Cost of sales | (1,629) | — | — | — | — | ||||||||||
Research and development expenses | (491,707) | (523,667) | (420,090) | (316,222) | (218,502) | ||||||||||
Sales and marketing expenses | (69,956) | (66,468) | (24,577) | (4,146) | (2,803) | ||||||||||
General and administrative expenses | (140,899) | (118,757) | (72,382) | (34,377) | (24,415) | ||||||||||
Other operating income | 53,749 | 52,207 | 50,896 | 29,000 | 28,830 | ||||||||||
Operating income/loss (-) | (165,596) | (178,632) | 368,748 | (47,080) | (89,802) | ||||||||||
Fair value re-measurement of share subscription agreement and warrants | 2,960 | 3,034 | (181,644) | — | — | ||||||||||
Other financial income | 70,548 | 18,667 | 21,389 | 18,264 | 4,877 | ||||||||||
Other financial expenses | (30,911) | (152,844) | (59,968) | (2,602) | (30,582) | ||||||||||
Income/loss (-) before tax | (122,999) | (309,775) | 148,525 | (31,417) | (115,507) | ||||||||||
Income taxes | (2,423) | (1,226) | 165 | (822) | (198) | ||||||||||
Net income/loss (-) from continuing operations | (125,422) | (311,001) | 148,689 | (32,240) | (115,704) | ||||||||||
Net income from discontinued operations, net of tax | 22,191 | 5,565 | 1,156 | 2,981 | |||||||||||
Net income/loss (-) | € | (103,231) | € | (305,436) | € | 149,845 | € | (29,259) | € | (115,704) | |||||
Net income/loss (-) attributable to: | |||||||||||||||
Owners of the parent | (103,231) | (305,436) | 149,845 | (29,259) | (115,704) | ||||||||||
Basic income/loss (-) per share | € | (1.58) | € | (4.69) | € | 2.60 | € | (0.56) | € | (2.34) | |||||
Diluted income/loss (-) per share | € | (1.58) | € | (4.69) | € | 2.49 | € | (0.56) | € | (2.34) | |||||
Basic income/loss (-) per share from continuing operations | € | (1.91) | € | (4.78) | € | 2.58 | € | (0.62) | € | (2.34) | |||||
Diluted income/loss (-) per share from continuing operations | € | (1.91) | € | (4.78) | € | 2.47 | € | (0.62) | € | (2.34) | |||||
Weighted average number of shares - Basic (in '000 shares) | 65,500 | 65,075 | 57,614 | 52,113 | 49,479 | ||||||||||
Weighted average number of shares - Diluted (in '000 shares) | 65,500 | 65,075 | 60,113 | 52,113 | 49,479 | ||||||||||
Condensed consolidated statement of financial position:
December 31, | |||||||||||||||
| 2021 |
| 2020 |
| 2019 |
| 2018 |
| 2017 | ||||||
(Euro, in thousands) | |||||||||||||||
Current financial investments | € | 2,469,809 | € | 3,026,278 | € | 3,919,216 | € | — | € | — | |||||
Cash and cash equivalents | 2,233,368 | 2,135,187 | 1,861,616 | 1,290,796 | 1,151,211 | ||||||||||
Cash and cash equivalents classified as assets held for sale | — | 7,884 | — | — | — | ||||||||||
Total assets | 5,193,160 | 5,717,731 | 6,068,609 | 1,439,496 | 1,286,274 | ||||||||||
Share capital | 292,075 | 291,312 | 287,282 | 236,540 | 233,414 | ||||||||||
Share premium account | 2,730,391 | 2,727,840 | 2,703,583 | 1,277,780 | 993,025 | ||||||||||
Total equity | 2,643,362 | 2,670,355 | 2,875,658 | 1,214,249 | 1,011,983 | ||||||||||
Total non-current liabilities | 1,983,325 | 2,412,101 | 2,621,158 | 5,342 | 102,592 | ||||||||||
Total current liabilities | 566,474 | 635,274 | 571,793 | 219,905 | 171,699 | ||||||||||
Total liabilities | |||||||||||||||