Galapagos NV ((GLPG)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Galapagos NV’s recent earnings call presented a mixed outlook, highlighting both opportunities and challenges. The company is undergoing significant strategic shifts and financial restructuring. While Galapagos boasts a strong cash position and potential for growth through partnerships, particularly with Gilead, the wind down of its cell therapy business and substantial operating losses underscore the hurdles it faces. The company’s leaner organizational focus and strategic partnerships are expected to guide its future developments.
Strong Cash Position
Galapagos reported a robust cash balance of approximately EUR 3 billion, equivalent to EUR 46 per share. This strong financial footing is generating significant interest income, with the company receiving around EUR 77 million in interest income through the first nine months of the year.
Partnership and Strategic Opportunities
The company is leveraging its partnership with Gilead to explore business development opportunities. Gilead’s 25% ownership in Galapagos and the collaboration agreement provide a strategic advantage, allowing Galapagos to opt into U.S. rights of proof-of-concept assets.
Potential Income Streams
Galapagos anticipates continued income from royalties and earn-outs from Gilead and Alfasigma on sales of Jyseleca, expected to last into the mid-2030s. Additionally, the company expects to receive tax receivables ranging from EUR 20 million to EUR 35 million annually over the next three years.
Pipeline Developments
The development team at Galapagos has made progress with the Phase III enabling studies for the TYK2 program, GLPG3667. The company expects to report data from two fully enrolled trials by early 2026, marking a significant milestone in its pipeline.
Failed Cell Therapy Spin-Off
The planned spin-off of the cell therapy business was unsuccessful. After a strategic review, no viable proposals for sale or investment were found, leading the Board to decide on winding down the business. This decision affects approximately 365 employees across various locations.
Significant Operating Loss
Galapagos reported a total operating loss of EUR 462.2 million for the first nine months of 2025, a significant increase from the EUR 125.6 million loss in the same period of 2024. This was largely due to an impairment on the cell therapy business and strategic reorganization costs.
High Restructuring Costs
The wind down of the cell therapy business is expected to result in cash impacts of EUR 100 million to EUR 125 million from Q4 2025 through 2026. Additionally, one-time restructuring cash costs are projected to be between EUR 150 million and EUR 200 million in 2026.
Forward-Looking Guidance
In its third-quarter financial results call for 2025, Galapagos provided several key metrics and strategic updates. The company projects to end the year with a cash balance between EUR 2.975 billion and EUR 3.05 billion, excluding business development activities. Despite facing an operating loss of EUR 462.2 million, Galapagos is actively pursuing business development opportunities, leveraging its partnership with Gilead.
In summary, Galapagos NV’s earnings call reflects a company in transition, balancing its strong cash position and strategic partnerships against the challenges of winding down its cell therapy business and managing significant operating losses. The company’s future developments will likely be guided by its leaner organizational focus and strategic collaborations.