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spk23: Good day and thank you for standing by. Welcome to the Galapagos Q3 2023 financial results conference call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 1 again. Please, the advice at today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sophie Van Heysel. Please go ahead.
spk30: Thank you, Operator, and welcome all to the audio webcast of Galapagos' Q3 2023 results. I'm Sophie Van Heysel, Investor Relations, representing the reporting team at Galapagos. This recorded webcast is accessible via the Galapagos website homepage and will be available for download and replay later on today. I would like to remind everyone that we will be making forward-looking statements during today's webcast. These forward-looking statements include remarks concerning future developments of the pipeline and our company, and possible changes in the industry and competitive environments. Because these forward-looking statements involve risks and uncertainties, Calabco's actual results may differ materially from the results expressed or implied in these statements. Today's speakers will be Dr. Paul Stoffels, CEO and Chairman, SADS Houston, CFO and COO, and Dr. Jeevan Shetty, head clinical development oncology. Paul will give an introduction and provide a strategic overview. Thad will then go over the operational and financial results, and Jeevan will discuss our CAR-T programs. You will see a presentation on screen. We estimate that the prepared remarks will take about 25 minutes. Then we'll open it up to Q&A with Paul, Thad, and Jeevan, joined by Michele Manto, chief commercial officer, and Dr. Daniele D'Ambrosio, head of immunology. And with that, I'll now turn it over to Paul.
spk16: Thank you, Sophie, and thank you all for joining today. I would like to start by taking a moment to remind you of our vision and mission to bring transformational medicines to patients around the world. This drives everything we do at Galapagos. Over the past year, we have taken key strategic steps First, with the implementation of a new operating model and a new approach to research and development to accelerate innovation and strengthen our pipeline. And now, with the intended changes related to our Jaisalica business. We reached a critical moment, and we have chosen what we believe is the best option for patients, our people, and Jaisalica. Now, let me walk through the key terms of the deal announced on Monday. Galapagos intends to transfer the entire Icelica business to Alpha Sigma, including the European and UK marketing authorization, sales, marketing, and all forgotten development activities, as well as approximately 400 employees across our European operations. Alpha Sigma is a profitable, privately owned pharmaceutical company in Italy, ranking among the top five with revenues over 1.2 billion euros in 2022. In the contemplated transaction, Galapagos will receive €50 million upfront and is entitled to sales-based milestones of up to €120 million. In addition, Alpha Sigma will pay royalties in the mid-single to mid-double digits to Galapagos. Galapagos will pay up to €40 million in development costs to Alpha Sigma before June 2025. We also announced that we plan to adjust our remaining workforce and streamline our operations to align with renewed focus on innovation. This is expected to impact approximately 100 positions. This will allow us to focus on innovation and accelerate our pipeline of best-in-class transformational medicines in our core areas of immunology and oncology. The completion of the intended transaction is subject to the execution of a definitive agreement and customary conditions, including regulatory approvals and consultations with work councils. With the signing of the letter of intent to transfer Jaiselica business to Alpha Sigma, we completed our process of exploring strategic options for Jaiselica as announced at the half-year earnings call in August. So, let's have a look at the pipeline focused on immunology and oncology. For our immunology franchise, the isellica is grayed out, given by the plant transfer. We are progressing our TIK2 in dermatomyositis and EZ-LE. And we aim to start a patient study with a CD19 CAR-T candidate, 5101, in severe refractory lupus early next year. Meanwhile, we are working on multiple exciting preclinical targets that we are eager to push forward if we see a best-in-class potential. In oncology, we made good progress with the CD19 CAR-T programs and plan to start the BCMA CAR-T program in multiple myeloma in the coming weeks. Together with our research team, we are working on next-gen CAR-Ts as we are evaluating BD opportunities in this space too. Today's earning calls we will focus on important progress that we are making with our oncology programs. We are very pleased that we'll have the opportunity to present three posters at ASH in December. The data in the abstract, released yesterday, underline that our CAR T programs, manufactured at point of care, are delivering on their promise. In today's presentation, we will discuss the encouraging data in CLL and NHL observed with our product candidates, 5201 and 5101, as well as the clinical study design of 5301, our third CAR-T program manufactured at Point of Care. Importantly, we initiated the tech transfer following the agreement with the Boston-based Landmark Bio. This is a key milestone in the geographical expansion of our unique Point of Care production technology and the start of clinical development of our CAR-T programs in the US. In parallel, we continue discussions with multiple centers in Europe and the U.S. to further build our point-of-care manufacturing network. In addition, we continue to strengthen our capabilities in oncology with key hires amongst others in regulatory, clinical, PD, and strategic marketing. I would like to take a moment to highlight the strong fundamentals that we put in place over the last 18 months. We renewed our discovery portfolio and are working hard on accelerating our early-stage pipeline. We continue to broaden our late-stage pipeline, pushing forward our internal programs and scouting for business development opportunities. We are making important progress with our CAR-T programs and are actively expanding our point-of-care footprint with our Cocoon platform. With the transfer of Kaiselica, we can further streamline our organization. And to support our innovation, we aim to approximately at 100 expert roles over the course of next year. And we commit to stay disciplined in our use of cash to focus our investments and to maximize value. Summarizing, we have been executing on our company transformation and now have a fleet path outlined for value creation. Now I hand it over to Tad, who will provide an operational and financial update.
spk15: Thank you, Paul. Let's first go over the key financial year to date Going to our P&L, we reported a net profit of €54 million in the first nine months of 2023, in part driven by higher revenue recognition for Phil Godman. This is driven by collaboration revenues that increased mainly due to the collaboration agreement with Gilead for the Phil Godman development, amounting to €186 million in the first nine months of 2023, compared to €167 million for the same period last year. and by Jaisalica sales coming in at 82 million euro year-to-date, plus a sales milestone of 1 million euro and 7 million euro in royalties for Jaisalica. We also saw a reduction in total operating costs of 72 million euro. We're down 13% versus the prior year, which can be attributed to lower R&D expenses and a reduction of 20 million euro in SG&A expenses. Additionally, we received higher interest income as return on our capital in the first nine months of 2023. Let's now look at the Jaisalca in-market performance for the quarter. Sales remained flat at 28 million euro versus the previous quarter. Year-to-date, we booked 82 million euro in sales, and we are confirming our reset guidance of 100 to 120 million euro. Now a few words on our cash position and guidance. Our cash and cash equivalents are €3.8 billion at the end of Q3 2023. Our operational cash burn for the first nine months of 2023 reached €344 million. We confirm our full year cash burn range of €380 to €420 million. This is explained by an increase in interest income in grants coming in the fourth quarter. Over the full calendar year, we expect approximately 3% return on our outstanding cash balance. With the intended transfer of Jaisalica announced earlier this week, we will realize significant savings, well over 100 million Euro in 2024, and annualized savings of 150 to 200 million Euro as of 2025. We continue to be disciplined and remain focused on managing our resources effectively. This brings us to our business development efforts. We are actively pursuing multiple deals in oncology and in immunology. Our approach is highly selective, and please be assured that we are laser focused on partnering in M&A to accelerate our pipeline. And with this, I will hand it over to Dr. Jeevan Shetty, our head of clinical development in oncology, to walk us through our Part T programs and results.
spk14: Thank you, Ben. Good morning to you all. Many thanks for your time. My name is Jeevan Shetty. I'm the head of oncology here at Galapagos. I'm really very excited to be able to share this significant data with you all today in a number of really difficult-to-treat cancers. We are sharing data while respecting the ASH embargo. Please be assured that more data will be available in San Diego. I wish to just remind the audience of the key differentiated features of the Galapagos Point of Care platform. Galapagos uses first principles thinking, focusing on the simplification and streamlining of every aspect of the current centralized production you see on the left. Weaknesses that actually lead to critically ill patients not getting the life-saving treatment that they need in time. Our innovative system consists of end-to-end automation, functionally closed systems, a comprehensive real-time monitoring, both centrally and remotely through our excellent platform, and 24-hour clinical and manufacturing support. The seven-day vein-to-vein time and fresh-to-fresh cells is really at the heart of our platform. Galapagos aims to make CAR-T therapies globally available to patients, not where they serve the current central manufacturing process. On the top half of the slide, one sees the seamless and continuous CAR-T production with an innovative QC review through the integrated Galapagos XLF platform. In the lower half of the slide, one sees the conditioning regimen being given at day minus six to day minus four. This is given in parallel to the manufacturing of our cartridge products. This is unique to our system, a testament really to our confidence in our reliable manufacturing process and critical to deliver a seven-day vane to vane timing. Through our unique platform, Galapagos delivers a life-changing service to patients and a step-change experience for clinicians and providers. I wish to spend a moment on high-risk CLL and rigorous transformation, which is the focus of our first study that I will present. Chronic lymphocytic leukemia is a disease for which there is currently no cure. It is one of the commonest hematological malignancies in the Western world. The disease progresses from asymptomatic disease to symptomatic and then undergoes transformation to a much, much more aggressive histology. Richter's transformation is fatal. As you can see, the disease has a dismal prognosis with a median overall survival of only five to eight months. Time is of the essence. With a galactic decentralized platform being close to the patient and the 7-day vein-to-vein time, we can address this rapidly progressing disease with speed and with effectiveness. From an epidemiological perspective, the underserved high-risk CLL population represents 2,100 new patients in the US and 1,800 patients in the EU5. The risk-risk transformation population represents a similar patient number, with 1,900 patients in the US and 2,000 in the EU5. This is a disease with no effective options, a fatal prognosis. We can finally offer some hope for these patients. I now turn to our important study focusing on high-risk CLL and Richter's transmission, the UPLAGIA study. The design of our UPLAGIA study incorporates all the unique components of the Galapagos platform, i.e., concurrent conditioning, seamless CAR-T production, and innovative IT and QC technology, ensuring release at the day of harvest and infusion. This is truly transformational. As you can see, the study population includes patients with relaxed refractory CLL with more than or equal to two prior lines of therapy. CD19-positive CLL patients. Significantly, the trial allows patients with Richter's transformation and also transplant-ineligible patients. The study was designed to explore three dosages. Looking now at the baseline characteristics of the euclasia study population, we see that they're really consistent with the population risk of unfavorable outcome, shown here by age and by gender. Furthermore, the advanced nature of the disease in our study is evidenced by number one, the prior lines of treatment, prior BTK inhibitors and epithelial and prior allobomar stem cell transplant, and also with disease characteristics, number two, TP53 mutation and the high rate of unmutated IgE H3. Turning now to safety, we see a good safety profile with our product. It is well tolerated. There is no great VCRS. Only six patients experienced low-grade CRS, grade one and grade two. There were no ICANNs reported, no deaths occurred, Most treatment emergent adverse events were grade one and grade two, and most observed grade three and four adverse events were of hematological origin and all well managed with standard support for care. I turn now to the efficacy. We observed excellent efficacy with our drug in patients with relapsed refractory CLL with or without ruptures transformation. Objective response was assessed as per IWCLL, for patients with CLL, and Richter's transformation was observed as per the Lugano classification. 11 out of the 12 patients included patients responding to treatment resulted in an objective response of 92%. 35% of patients reached a complete response as their best response. A further key observation is the 83% complete response at dose level 2. This compelling data has transformed our decision on our recommended phase two dose, RP2D, of 100 million cells. At the time of analysis, nine out of 11 patients, 82% of the responders, had an ongoing response. The duration was up to nine months post-infusion, which is the latest available response assessment at the time of the abstract submission. Further follow-up is clearly ongoing. Focusing on the Richter's transformation subset, seven of 12 enrolled patients in the eplasia study were diagnosed with Richter's transformation. All but one patient with Richter's transformation responded to treatment a rate of 86%, and five out of the six responding patients achieved a complete response, 83%. So to conclude, though a small patient number, the efficacy, together with the safety, as excited experts in the field and confirms our desire to accelerate this program to bring this therapy to patients as soon as possible. The next steps for euphasia are genuinely exciting. As I alluded to earlier, with 83% CRR rate of dose level two, the class leading safety and the ratification by experts both internally and externally, we will proceed with dose level two. cohort for the two populations we have described. Critically, we have initiated the tech transfer to the first U.S. site landmark bio in Boston, as mentioned by Paul. Do remember our posts are attached on the 9th of December. Turning now to the NHL program, with our decentralized manufacturing in short vein-to-vein time, we strongly and serve the sickest NHL patients with the most aggressive disease. This has informed our thinking on the future NHL subjects that we will pursue. Disease is currently underserved by the approved CD19 CAR-T therapies. Additionally, even with approved products available, we identify persistent unmet need in indications where limited CAR-T products are actually available as a result of manufacturing slot shortages through the centralized model as it exists. This is the design of our Atlanta study based on our unique Galapagos platform, a phase 1-2 trial in patients with non-Hodgkin's lymphoma consisting of diffuse large B-cell lymphoma, mantle cell lymphoma, mantle zone lymphoma, and follicular lymphoma. The study population requires patients with relapsed or refractory disease after two or more prior lines of therapy, with the inclusion of transplant in eligible patients in addition to primary or been included. With regard to prior lines of therapy, we allowed the same patient population as would be eligible in the approved CAR T products. However, as a consequence of our seven-day advanced wait time, our study allows for patients with potentially more aggressive disease to be included in our trial. Here, too, we will appraise three dose levels. Baseline characteristics of the Atlanta study is typical of the patient population. We see encouraging safety data for our product in the Atlanta study. With ICANTS, there were six patients experiencing grade one ICANTS and only one case of grade B CRS. All others were grade one to grade two. There were two deaths in the study. One was with a patient experiencing intra-abdominal hemorrhage. This patient had been previously diagnosed with pulmonary thromboembolic disease and was already on low molecular weight heparin. The second was a patient who had urosepsis and succumbed to this six months after infusion. We observed very encouraging efficacy in our therapy in patients with multiple subtypes of relapsed or refractory disease. In our dataset, 13 patients were available for response at the time of analysis and 11 resulting in an objective response of 85%. One can also observe complete response rates of 83% of dose level 2. 69% of our patients reach the complete response as their best response in the all-patient population. This is the data at the time of abstract submission. The study is clearly ongoing. We will continue to collect more data with longer follow-up time. We now have the first patient in the ongoing response for over a year, and we will be presenting more of these patients at ASH. As with euthasia, the next steps for Atlanta are similarly exciting. We will expand in indications that will benefit from the short day-to-day time. We will implement dose level three, and as mentioned previously, by Paul, who will complete the tech transfer to the first U.S. site, Landmark Bio in Boston. Given the encouraging safety and efficacy we have presented in CLL and NHL using our innovative and reliable platform, we're moving ahead with addressing the unmet need in multiple myeloma in the Papilio study. Whilst, of course, there are commercially available BCME therapies, there is limited access to these products, and this population remains severely underserved. Here is the study design and the patient population we are proceeding with. We expect our first patient to enroll any time, certainly this month. The data from the 26 patients that were enrolled in the eplasia and the Atlanta studies that we've shared with you today demonstrate that the point of care CAR T manufacturing with short vein-to-vein time is feasible. Our CAR T therapies are administered as fresh products with a median day-to-day time of seven days. We've shown 100% manufacturing success. All patients that underwent leukoparesis were dosed, and they all received fresh CAR T products. In our trial, the clinical responses were supported by high in vivo expansion of the CAR T cells and durable persistence post-infusion. This was observed across the dose levels that we tested. Furthermore, our novel point-of-care manufacturing model, an early phenotype of the less differentiated CAR T cells is preserved in the CAR T product. This really strengthens our belief that our manufacturing process contributes to fitter CAR T products, and that leads us to believe it is not so much the number of cells that are infused, but more the quality of the cells. We believe we have a very innovative platform for the future of CAR T therapy that will serve patients around the world. Patients with little time and few options. Thank you. I hand back to Paul.
spk16: Thank you, Gideon. Let's look now at the remainder of 2023. As presented today, we are making excellent progress with 5.01 and 5.201 in NHL and CLL. And as Gideon just presented, we reported a encouraging safety and efficacy data. And Ash will be able to share more clinical data, including the expansion cohorts, phase one, two results of our NHL study. Also in oncology, we aim to submit an IND for 501 in NHL, our CD19 CAR T candidates in the first half of 2024. As mentioned, we aim to start the phase one B in multiple myeloma with a BCMA CAR T, candidate 5301, and expect to dose the first patient later in November. We also submitted the clinical trial application in Europe for our CD19 CAR-T candidate 5101 in the factory as a lead and expect the first patient in the first quarter next year. Finally, we are actively pursuing multiple business development opportunities and remain very focused on executing multiple deals. The transformation continues, and we have a clear path forward to value creation for all stakeholders. We are accelerating our early stage pipeline, building on a renewed discovery portfolio based on best-in-class targets for best-in-class medicines. While we push forward internal programs, we are in active BD discussions with the aim to expand the Innova pipeline very soon. And we are streamlining our organization with the aim to implement a focus right-sized organization. While we are very well capitalized, we commit to staying disciplined in our use of cash to focus our investments to maximize value. We deliver on our commitment to take action and firmly believe that we are executing on our strategy, unlocking value for shareholders. Thank you all for your support and interest in Galapagos. Let's now open the line for Q&A.
spk30: Thank you, Paul. That concludes the presentation portion of today's audio conference call. I would now like to ask the operator to open up the line for Q&A.
spk23: Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To answer your question, please press star 1 and 1 again. Please limit yourselves to one question per person. We will now take the first question. It comes from the line of Shan Deng from UBS. Please go ahead.
spk28: Thank you so much for taking my question.
spk29: Just one on BD, please. Apologies if I've missed it. So just wondering if you could elaborate a bit more in terms of the area of interest in terms of BD, because you mentioned oncology And also just wondering, like, are you sort of focusing on CAR T or would you also be interested in other modalities? For example, ADCs, we've seen some major deals recently, et cetera. Second one, if I may, given you are starting the CAR T trial in lupus next year, I mean, on one side, generally, autoimmune, the patients would have a higher bar for safety compared to oncology patients. But at the same time, like CRS, I can seem to be linked to a high tumor burden, which is probably missing in autoimmune patients. So just wondering, in the longer term, what do you think about the safety profile for autoimmune disease? Thank you so much.
spk16: Yeah. First of all, on BD deals, we continue to focus on solving high medical needs, focusing on global deals, late preclinical, early clinical, but also mid-stage. If there are good opportunities, we will go for either M&A or L&A for a mid-stage asset, which could accelerate time to result and time to market and time to value creation. With regard to modalities, we started with small molecules only in Galapagos, and with CAR-T, we brought a second modality in. With that, biologics made the entrance, and our scientists today are using the CAR-T, but also antibodies, and we are looking at bispecifics. So we don't stay on the CAR-T small molecules. We look at the best modality to solve a severe disease. And today, we think, to us and to our partners, we can handle multiple modalities as needed. Your question on CB19 and autoimmune disease, lupus, you're right. It is a different, it's not an aspergent, let's say, type of disease, but still, safety is important. We still are in discussion with the regulators on starting a first study, and that will guide us on what they expect. But what's important for us, we think, is that we have the platform which we'll put in place in the oncology space in now three CAR-Ts, and it's all the hematologists who treat the patients, including who treat the patients with autoimmune disease because it's a CAR-T kind of transplant. And that's where we think we have the gateway to market. We have a platform where we can introduce it on a global basis once we have our oncology infrastructure. And that's where we see it as leveraging our platform, but also going for access worldwide. And we are convinced that the platform, it shows a very good safety in oncology, and we're pretty sure, or hopefully we can confirm, that the same safety will be observed in patients with lupus and autoimmune disease.
spk23: Thank you very much. Thank you. We will now take the next question. From the line of from Raymond James, please go ahead.
spk25: Thank you for taking the questions and congratulations on all the progress. Kind of one larger question for me, if I can. So, you know, the early data that you've shared on your CAR T programs, uh is obviously very encouraging from the response rates and emergent durability and safety profile but i think in the minds of many investors to give galapagos more credit for these programs and and what the value of these programs could be over the longer term the question is really can these results be um reproduced in larger cohorts and at more clinical sites. And not necessarily doubting the clinical outcomes, but more can the manufacturing success rate hold up in a truly decentralized manner. So I guess two parts to this. One, can you clarify a little bit more of what we'll see from the additional patients that were not in the abstract of the two ongoing studies? Is there kind of a size of the patient population that we'll see and or will they be more than one site contributing patients that have manufactured the product and been treated? And then secondly, looking later into 2024, do you think we'll start to see some of those data sets come out of true multicenter outcomes manufacturing outcomes for the cocoon system. Thank you.
spk16: Yeah, first on additional patients, ASH will present data for 15 patients for up to 15 months durability. For Atalanta, 23 patients up to 15 months durability. And I think the most important addition to that data set will be durability and further confirmation in a slightly larger data set of patients. So that's what we will show there. With regard to the feasibility of expanding this, just to remind you, the system we produce, the cocoon system, is a standardized system which is very independent of handling, of local handling. Everything is standardized from A to Z. It's a set-out system from when the cells go in to when the cells come out, not come out, when the cells are pumped into the back, which goes to the patient. And it is a very standardized system with very standardized reagents and processes. And so there's little which we think will interfere with scaling it out in a larger way. What we have been thinking more recently also is can we be in the hospital or close to the hospital to make sure that GMP requirements are respected? But at the same time, we see in Europe already that one of our centers is serving multiple hospitals. And so we think that with a decentralized network with highly controlled quality systems and a good GMP environment with a standardized cocoon in there, will show little variability. The variability ultimately is mainly depending on the in-going cells from the patients. That is the one thing you cannot standardize, and as we deploy the system in areas where very advanced patients go in, that's where some variability could happen on the in-going cells if you have really a late-stage patient with very bad cells and you still want to make it, want to make it CAR T therapy, that is where the variability could be, but not in the operations we think we have that very well under control.
spk25: And would landmark bio be that concept of a center that would service a number of hospitals in the U.S.?
spk16: Yes, that's correct. That is for the Boston area. We think that as long as we are with one, two hours from a, we will be able to do it fresh, vein to vein, without too much issues. Transportation of more than one to two hours will make it work. And that's all possible in Boston. And probably in the major US cities, we would be able to operate like that.
spk00: Excellent. Thank you so much.
spk23: Thank you. We will now take the next question. From the line of Brian Abrahams from RBC Capital Markets, please go ahead.
spk18: Hi, this is John for Brian. Thanks for taking that question and congrats on all the progress. So I guess similar question to what was just asked. So yeah, we saw from the ASH aft strikes, I guess there might have been some low yield issues. So just wondering what led to this issue and if it's something that you were able to resolve. Thank you. Thank you for your question.
spk14: Thank you for your question. What we've observed with regards to low yields is, as Paul just mentioned, this is a very patient-driven component characteristic. Even in the few patients that didn't achieve the dose level as intended by the protocol, What we actually observed was the patients actually continued to have a very good response, and we also saw good expansion and good, very positive phenotype of the cells in actual fact. So, therefore, the, what the might be the disease itself, it doesn't appear to have an impact on the outcome, and it may, and efficacy. And so therefore, this is work we're doing very deep analysis with a very robust translational plan and program that's running in parallel to the program.
spk12: Thanks so much. Thank you, Ron.
spk23: Thank you. We will now take the next question. from the line of Jason Calvary from Bank of America. Please go ahead.
spk26: Hey, guys. Just two for me. You know, as you advance your CAR T programs in 24, I'm just wondering about the scope of RMB and TMC investments and how that sort of fits with kind of the outlay of operating spend this year. I imagine there's some cost shifting post the U.S. update. just maybe it's a shift in the composition of your operating spend more towards R&D. So just maybe if you can just talk about, you know, how the cost with the CAR T program starts to scale directionally the next few years. And then can you just remind us, so Gilead will have standard opt-in rights here on the CAR T program. I assume up through the readout of the pivotal phase two, if you get there. So Gilead obviously has more advanced marketed products and partnerships in these respective spaces. So how do you ensure, you know, with that kind of dynamic best efforts, if Gilead were to opt in, you know, be towards your programs? Thanks.
spk15: Thanks for the question. It's clear that, you know, with the transfer of Jaxelica to Alpha Sigma, it does significantly improve our cash burn and allows us more flexibility to invest in broadening our portfolio. Part of the guidance that we gave about saving roughly $150 to $200 million is assuming that we're also increasing our investments in oncology, particularly in the CAR T expansion. we're adding resources to the 100 positions that Paul mentioned largely in those areas to help us build out regulatory CMC clinical capabilities to help us, you know, broaden our CAR T network in the U.S. and in Europe. So we've been actively doing that and continuing to add and roughly that 100 heads will be over the next year, year and a half roughly, increasing our spend. But on the Gilead side, I mean, it's clear that Gilead has been a great partner. We see they have opt-in rights to any of our programs after Pivotal. And so, yeah, they ultimately could choose to partner with us on that. We need to establish the clinical network and get to that point, and then we'll ultimately see whether Gilead opts in at that time.
spk26: Yes, sir. that would ensure that, you know, your program gets prioritized versus sort of maybe minimizing the competitive threat to the existing businesses that they're in?
spk16: Let me answer this one. The first one, visual transformation and CLL, double refractory CLL, doesn't have the indication at this moment in their portfolio. So that's complementary. At the same time, setting up a decentralized network for CAR T provides more access, not just in the U.S., but it could also bring it much, much wider in the world. And again, there could be a significant complementarity with what Gilead is doing. And for us being able to build on the Gilead expertise in both in marketing and sales, but also especially in reimbursement and dealing with this type of products in the U.S. could accelerate for us the rollout. And as long as we can make sure that we can produce all CAR-Ts locally in the network locally and close to the hospital, we absolutely would welcome how we can work together with Gilead to accelerate access to patients and accelerate the reimbursement that people get access to.
spk23: Thank you. We will now take the next question from Sebastian van der Schoot from Van Lanchester campaign. Please go ahead.
spk09: Hi, guys. Congrats on the progress and thank you for taking my questions. The first one is on The dose level, you are now moving to the dose level three. I am assuming that you use the same production process for each of the different dose cohorts and then insert the predefined dose. Can you maybe elaborate in what percentage of patients you get to that dose level three in non-Hodgkin's coma? And I was wondering also with the data that you have generated so far in CLL, whether you can answer expand on how many different clinical sites have patients been treated at?
spk16: On dose level three, we are still preparing to interview that based on the outcome of the first two dose levels, and that's a discussion with the investigators. So the commitment is there to do that. I can't give yet a percentage on how much we can, in how many patients we can achieve that, those level three, and I don't have the detailed production data on the others to derive it from that. On the CLL, at the moment, it's done in one big center where a lot of patients are flowing in from different other centers.
spk09: Okay, thank you. And then on the non-Hodgkin's lymphoma data set, is that Generated in different hospitals? Yeah, there's five different hospitals in five different sites in Europe. And then those three patients that did not have a high enough dose, were those at different centers or was that one single center?
spk16: I can't answer that on the spot.
spk14: Those patients were from different centers. i did just want to point out with patients to the point that we made earlier on uh work we're able to actually deliver good efficacy as well because of the individual expansion and cell viability still being good at the dose that wasn't achieved so um we are interrogating that data in more detail and it will be available in coming conferences let me ask you as i
spk16: What we see in our clinical trials is that because of the short life expectancy of the very aggressive late-stage NHL patients, the patients are highly pre-treated, but at the same time in very bad condition. And so that makes the incoming material very variable. And that's probably why it's across the centers, but that's probably why it's difficult to reach the high of those levels.
spk36: Okay, got it. Thank you so much.
spk23: Thank you. We will now take the next question from the line of Phil Nadeau from Cohen. Please go ahead.
spk20: Hi, this is Alex on Patel. Thanks for taking my questions.
spk24: Congrats on all the progress thus far. Just wondering if you can comment on those key patients in the abstract with vein-to-vein time greater than seven days. You know, any factors that may have led to a longer time here? Any ongoing efforts to kind of optimize this process and further reduce the average vein-to-vein time? Thanks.
spk14: So, if I... The question about the... beyond some days later in time... across the board, and again, I actually see that that 70 to 80% time is achieved quite consistently in the patients. In the abstract, there were, I think you're referring to CLL, and in CLL, it was related to the yield from the patients, but I reiterate the point I made previously, which is that we continue to have good efficacy in vivo expansion and increased the cell viability of those patients as well. So it was related to what we were able to get from the patient rather than anything specific to the actual process itself.
spk16: And to be in detail there, two patients had a slight delay from eight and nine day. One patient, in one case, we had to do a restart because of an issue in the metapractic. And so that is why there's variability in delay.
spk14: And the important point would be that all patients were treated within 14 days. And that is incredibly competitive orders already out there. But most of the patients were seven days.
spk35: Thanks so much.
spk23: Thank you. We will now take the next question. from the line of Jacob Michael from KVC Securities. Please go ahead.
spk34: Hi there, and thanks for taking my question. I have two, if I may. My first one is, how do you look at the expansion of CD19 CAR T into other autoimmune diseases beyond lupus? Would you consider a basket trial set up, for example, to capture a number of indications in one go? And my second question is, can you perhaps share some feedback on the process of setting up new sites in the U.S. And how many do you expect to have up and running by the end of 2024, let's say?
spk16: Well, we are considering additional activities beyond SLE and looking actively at all the indications. We are not very much favoring a bucket study because all of these diseases have their own evaluation criteria, both on the inclusion side, but also on the progress and success side. And with a perfect study in that area, most likely we will not advance very quickly to good conclusions on moving late on into phase two, three. So we will consider other indications, but do it in a very, let's say, organized way that the indication, the early data leads to conclusions on what we can do further. So that is the way we approach this. And we're starting with as a lead, but we're considering several other indications going forward.
spk15: If we haven't disclosed the number of U.S. sites that we're going to set up for 24 at this time, we are actively working with a number of different additional sites beyond Landmark Bio, and we'll provide updates in the future.
spk17: Okay. Thank you. Thank you.
spk23: As a reminder, if you wish to ask a question, please press star 1 and 1 on your telephone. That's star 1 and 1. We will now take the next question from the line of Brian from Jefferies. Please go ahead.
spk21: Hey, thanks. Can you just help us with the latest timings on when you expect to have an asset on the market? Is it still 26, 27? I think that's what you last said on the First half call, likely CD19 Cartier, I think it was, despite the delayed timeline. That's what we assumed before, yeah. Got it. Review, yeah. Yeah, that's on a BDD, right? Sorry, Ali? On a breakthrough...
spk16: Breakthrough designation, yes. We think with the encouraging data we have, we hope to be able to recoup in an accelerated way more patients into the pivotal, and it still lands us with 26, 27, but that is the current timeline which we're still looking for.
spk21: Got it, thanks. And just a second one, just on T-Charge manufacturing from Novartis PHE885, I think that is 10 days door-to-door, showed good data. Okay, yours is seven days, but just curious to know how you're thinking about that as a competitor to your GLPG-2301.
spk16: Yeah, T-CHARGE is a different process where you produce fast, then freeze and do the quality control and the quality release in the next so many days. And that results in a 10-day, I don't know exactly how many days, but approximately 10 days. What we do is we keep the cells in keep them in the incubator fresh to do the quality release and the quality work. And then you can release at day seven, which also fits the seven-day prep time a patient needs in order to receive the cells. So that's why the process is tailored to keeping it fresh, making sure we can do the quality while the cells are in fresh situation, but then also fit exactly the prep time for patients, the depletion time. What we also do is we make sure that it's very well organized for the physicians and the staff in the hospital, because the seven-day vein-to-vein is always organized, that there is no work in the weekends, nor for the staff on the machines, nor for the physicians. Anybody has to do anything in the weekend. It's all organized in a way that it's facilitating the work in the hospital and the labs, and best possible way to bring fresh cells to patients. Decharge is a short process, but it's not the best thing to do.
spk22: Got it. Thank you very much.
spk23: Thank you. There are no further questions at this time. I would now like to turn the conference back to Sophie van Heysel for closing remarks. Thank you, operator.
spk30: That's all for today's call. Please feel free to reach out to the IR team if you still have questions. Our next financial results call will be our full year 2023 results on February 23rd, 2024. Thank you all for participating and have a great rest of your day.
spk16: Thank you all for joining. Thank you. Bye now.
spk23: That concludes our conference for today. Thank you for participating. You may now disconnect. you Thank you. Bye. Thank you. you
spk30: And welcome all to the audio webcast of Galapagos' Q3 2023 results. I'm Sophie van Heesel, Investor Relations, representing the reporting team at Galapagos. This recorded webcast is accessible via the Galapagos website homepage and will be available for download and replay later on today. I would like to remind everyone that we will be making forward-looking statements during today's webcast. These forward-looking statements include remarks concerning future developments of the pipeline and our companies, and possible changes in the industry and competitive environments. Because these forward-looking statements involve risks and uncertainties, Galapagos' actual results may differ materially from the results expressed or implied in these statements. Today's speakers will be Dr. Paul Stoffels, CEO and Chairman, SADS Houston, CFO and COO, and Dr. Jeevan Shetty, Head, Clinical Development Oncology. Paul will give an introduction and provide a strategic overview. Ted will then go over the operational and financial results, and Jeevan will discuss our CAR-T programs. You will see a presentation on screen. We estimate that the prepared remarks will take about 25 minutes. Then we'll open it up to Q&A with Paul, Ted, and Jeevan, joined by Michele Manto, Chief Commercial Officer, and Dr. Daniele D'Ambrosio, Head of Immunology. And with that, I'll now turn it over to Paul.
spk16: Thank you, Sophie, and thank you all for joining today. I would like to start by taking a moment to remind you of our vision and mission to bring transformational medicines to patients around the world. This drives everything we do at Galapagos. Over the past year, we have taken key strategic steps in our transformation into an innovative biotech. First, with the implementation of our new operating model and the new approach to research and development, to accelerate innovation and strengthen our pipeline. And now with the intended changes related to our Eiceleca business. We reached the critical moment and we have chosen what we believe is the best option for patients, our people and Eiceleca. Now let me walk through the key terms of the deal announced on Monday. Galapagos intends to transfer the entire Eiceleca business to Alpha Sigma, including the European and UK marketing authorization sales, marketing, and also government development activities, as well as approximately 400 employees across our European operations. Alpha Sigma is a profitable, privately owned pharmaceutical company in Italy, ranking among the top five with revenues over 1.2 billion euros in 2022. In the contemplated transaction, Galapagos will receive 50 million euro upfront and is entitled to sales-based milestones of up to €120 million. In addition, Alpha Sigma will pay royalties in the mid-single to mid-double digits to Galapagos. Galapagos will pay up to €40 million in development costs to Alpha Sigma before June 2025. We also announced that we plan to adjust our remaining workforce and streamline our operations to align with the renewed focus on innovation. This is expected to impact approximately 100 positions. This will allow us to focus on innovation and accelerate the pipeline of best-in-class transformational medicines in our core areas of immunology and oncology. The completion of the intended transaction is subject to the execution of a definitive agreement and customary conditions, including regulatory approvals and consultations with work councils. With the signing of the letter of intent to transfer the iSeleca business to Alpha Sigma, We completed our process of exploring strategic options for Yaiselica as announced at the half-year earnings call in August. So let's have a look at our pipeline focused on immunology and oncology. For our immunology franchise, Yaiselica is grayed out, given by the plan transfer. We are progressing our TIC-2 in dermatomyositis and EZ-LE. And we aim to start a patient study with a CD19 CAR-T candidate. in severe refractory lupus early next year. Meanwhile, we are working on multiple exciting preclinical targets that we are eager to push forward if we see a best-in-class potential. In oncology, we made good progress with the CD19 CAR-T programs and plan to start the BCMA CAR-T program in multiple myeloma in the coming weeks. Together with our research team, We are working on next-gen CAR-Ts, and we are evaluating BD opportunities in this space, too. Today's earning call will focus on important progress that we are making with our oncology programs. We are very pleased that we'll have the opportunity to present three posters at ASH in December. The data in the abstract released yesterday underline that our CAR-T programs, manufactured at Point of Care, are delivering on their promise. In today's presentation, we will discuss the encouraging data in CLL and NHL observed with our product candidates 5201 and 5101, as well as the clinical study design of 5301, our third CAR-T program manufactured at point of care. Importantly, we initiated the tech transfer following the agreement with the Boston-based Landmark Bio. This is a key milestone in the geographical expansion of our unique point-of-care production technology and the start of clinical development of our CAR-T programs in the U.S. In parallel, we continue discussions with multiple centers in Europe and the U.S. to further build our point-of-care manufacturing network. In addition, we continue to strengthen our capabilities in oncology with key hires, amongst others, in regulatory, clinical, PD, and strategic marketing. I would like to take a moment to highlight the strong fundamentals that we put in place over the last 18 months. We renewed our discovery portfolio and are working hard on accelerating our early-stage pipeline. We continue to broaden our late-stage pipeline, pushing forward our internal programs and scouting for business development opportunities. We are making important progress with our CAR-T programs and are actively expanding our point-of-care footprint with our Cocoon platform. With the transfer of Geiselica, we can further streamline our organization. And to support our innovation, we aim to approximately add 100 expert roles over the course of next year. And we commit to stay disciplined in our use of cash to focus our investments and to maximize value. Summarizing, we have been executing on our company transformation and now have a clear path outlined for value creation. Now I hand it over to Beth, who will provide an operational and financial update.
spk15: Thank you, Paul. Let's first go over the key financial year to date. Going to our P&L, we reported a net profit of 54 million Euro in the first nine months of 2023, in part driven by higher revenue recognition for Phil Godman. This is driven by collaboration revenues that increased mainly due to the collaboration agreement with Gilead for the Phil Godman development. amounting to €186 million in the first nine months of 2023, compared to €167 million for the same period last year. And by Giseleca sales coming in at €82 million year-to-date, plus a sales milestone of €1 million and €7 million in royalties for Giseleca. We also saw a reduction in total operating costs of €72 million, or down 13%, versus the prior year, which can be attributed to lower R&D expenses and a reduction of €20 million in SG&A expenses. Additionally, we received higher interest income as a return on our capital in the first nine months of 2023. Let's now look at the Giseleca in-market performance for the quarter. Sales remained flat at €28 million versus the previous quarter. Year-to-date, we've booked 82 million euros in sales, and we are confirming our reset guidance of 100 to 120 million euros. Now a few words on our cash position and guidance. Our cash and cash equivalents are 3.8 billion euros at the end of Q3 2023. Our operational cash burn for the first nine months of 2023 reached 344 million euros. we confirm our full-year cash burn range of $380 to $420 million. This is explained by an increase in interest income in grants coming in the fourth quarter. Over the full calendar year, we expect approximately 3% return on our outstanding cash balance. With the intended transfer of Jaisalica announced earlier this week, we will realize significant savings well over 100 million Euro in 2024 and annualized savings of 150 to 200 million Euro as of 2025. We continue to be disciplined and remain focused on managing our resources effectively. This brings us to our business development efforts. We are actively pursuing multiple deals in oncology and in immunology. Our approach is highly selective And please be assured that we are laser-focused on partnering in M&A to accelerate our pipeline. And with this, I will hand it over to Dr. Jeevan Shetty, our head of clinical development in oncology, to walk us through our Part T programs and results.
spk14: Thank you, Ben. Good morning to you all, and many thanks for your time. My name is Jeevan Shetty. I'm the head of oncology here at Galapagos. I'm really very excited to be able to share this significant data with you all today in a number of really difficult to treat cancers. We are sharing data while respecting the ASH embargo. Please be assured that more data will be available in San Diego. I wish to just remind the audience of the key differentiated features of the Galapagos Point of Care platform. Galapagos uses first principles thinking focusing on the simplification and streamlining of every aspect of the current centralized production you see on the left. Weaknesses that actually lead to critically ill patients not getting the life-saving treatment that they need in time. Our innovative system consists of end-to-end automation, functionally closed systems, a comprehensive real-time monitoring, both centrally and remotely through our excellent platform. and 24-hour clinical and manufacturing support. The seven-day vein-to-vein time and fresh-to-fresh cells is really at the heart of our platform. Galapagos aims to make CAR T therapies globally available to patients, not only serve the current central manufacturing process. On the top half of the slide, one sees the seamless and continuous CAR T production QC review through the integrated Galapagos XLX platform. In the lower half of the slide, one sees the conditioning regimen being given at day minus six to day minus four. This is given in parallel to the manufacturing of our cartridge products. This is unique to our system, a testament really to our confidence in our reliable manufacturing process and critical to deliver a seven day vane to vane timing. Through our unique platform, Galapagos delivers a life-changing service to patients, and a step-change experience for clinicians and providers. I wish to spend a moment on high-risk CLL and Richter's transformation, which is the focus of our first study that I will present. Chronic lymphocytic leukemia is a disease for which there is currently no cure. It is one of the commonest hematological malignancies in the Western world. The disease progresses from asymptomatic disease to symptomatic and then undergoes transformation to a much, much more aggressive histology. Richter's transformation is fatal. As you can see, the disease has a dismal prognosis with a median overall survival of only five to eight months. Time is of the essence. With a collaborative decentralized platform being close to the patient and the 7-day vein-to-vein time, we can address this rapidly progressing disease with speed and with effectiveness. From an epidemiological perspective, the underserved high-risk CLL population represents 2,100 new patients in the US and 1,800 patients in the EU5. The risk-risk transformation population represents a similar patient number, with 1,900 patients in the US and 2,000 in the EU5. This is a disease with no effective options, a fatal prognosis. We can finally offer some hope for these patients. I now turn to our important study focusing on high-risk CLL and Richter's transmission, the Euclasia study. The design of our Euclasia study incorporates all the unique components of the Galapagos platform, i.e., concurrent conditioning, seamless CAR-T production, and innovative IT and QC technology, ensuring release at the day of harvest and infusion. This is truly transformational. As you can see, the study population includes patients with relaxed refractory CLL with more than or equal to two prior lines of therapy. CD19 positive CLL patients. Significantly, the trial allows patients with Richter's transformation and also transplant in eligible patients. The study was designed to explore three dual subjects. Looking now at the baseline characteristics of the eucalasia study population, we see that they're really consistent with the population risk of unfavorable outcome, shown here by age and by gender. Furthermore, the advanced nature of the disease in our study is evidenced by, number one, the prior lines of treatment, prior BTK inhibitors and etoclax, and prior alaboma or stem cell transplant, and also with disease characteristics, number two, TP53 mutation, and the high rate of unmutated IgEHV that you see. Turning now to safety, we see a good safety profile with our product. It is well tolerated. There is no great VCRS. Only six patients experienced low-grade CRS, grade one and grade two. There were no ICANNs reported, no deaths occurred, Most treatment emergent adverse events were grade one and grade two, and most observed grade three and four adverse events were of hematological origin, and all well managed with standard support for care. I turn now to the efficacy. We observed excellent efficacy with our drug in patients with relapsed refractory CLL with or without ruptures transformation. Objective response was assessed as per IWCLL, for patients with PLL, and Richter's transformation was observed as per the Lugano classification. 11 out of the 12 patients included patients responding to treatment resulted in an objective response of 92%. 35% of patients reached a complete response as their best response. A further key observation is the 83% complete response at dose level 2. This compelling data has transformed our decision on our recommended phase two dose, RP2D, of 100 million cells. At the time of analysis, nine out of 11 patients, 82% of the responders, had an ongoing response. The duration was up to nine months post-infusion, which is the latest available response assessment at the time of the abstract submission. Further follow-up is clearly ongoing. Focusing on the Richter's transformation subset, seven of 12 enrolled patients in the eplasia study were diagnosed with Richter's transformation. All but one patient with Richter's transformation responded to treatment a rate of 86%, and five out of the six responding patients achieved a complete response, 83%. So to conclude, though a small patient number, the efficacy, together with the safety, as excited experts in the field and confirms our desire to accelerate this program to bring this therapy to patients as soon as possible. The next steps for euphasia are genuinely exciting. As I alluded to earlier, with 83% CRR rate of dose level two, the class leading safety and the ratification by experts both internally and externally, we will proceed with dose levels. populations we have described. Critically, we have initiated the tech transfer to the first U.S. site landmark bio in Boston, as mentioned by Paul. Do remember our posts are attached on the 9th of December. Turning now to the NHL program, with our decentralized manufacturing in short vein-to-vein time, we strongly believe accessibility and efficacy of CAR-T thousands can be improved and serve the sickest NHL patients with the most aggressive disease. This has informed our thinking on the future NHL subjects that we will pursue. Disease is currently underserved by the approved CD19 CAR-T therapies. Additionally, even with approved products available, we identify persistent unmet need in indications where limited CAR-T products are actually available as a result of manufacturing slot shortages through the centralized model as it exists. This is the design of our Atlanta study based on our unique Galapagos platform, a phase 1-2 trial in patients with non-Hodgkin's lymphoma consisting of diffuse large B-cell lymphoma, mantle cell lymphoma, mantle zone lymphoma, and follicular lymphoma. The study population requires patients with relapsed or refractory disease after two or more prior lines of therapy, with the inclusion of transplant in eligible patients in addition to patients also being included. With regard to prior lines of therapy, we allowed the same patient population as would be eligible in the approved CAR-T products. However, as a consequence of our seven-day in vain time, our study allows for patients with potentially more aggressive disease to be included in our trial. Here, too, we will appraise three dose levels. Baseline characteristics of the Atlanta study is typical of the patient population. We see encouraging safety data for our product in the Atlanta study. With ICANTS, there were six patients experiencing grade 1 ICANTS and only one case of grade B CRS. All others were grade 1 to grade 2. There were two deaths in the study. One was with a patient experiencing intra-abdominal hemorrhage. This patient had been previously diagnosed with pulmonary thromboembolic disease and was already on low molecular weight heparin. The second was a patient who had urosepsis and succumbed to this six months after infusion. We observed very encouraging efficacy in our therapy in patients with multiple subtypes of relapsed or refractory disease. In our data set, 13 patients were available for response at the time of analysis. and 11 patients' response to treatment, resulting in an objective response of 85%. One can also observe complete response rates of 83% of dose level 2. 69% of our patients reached a complete response as their best response in the all-patient population. This is the data at the time of abstract submission. The study is clearly ongoing, and we're continuing to collect more data with longer follow-up time. We now have the first patient in the ongoing response for over a year, and we will be presenting more of these patients at ASH. As with euthasia, the next steps for Atlanta are similarly exciting. We will expand in indications that will benefit from the short vein to vein time. We will implement dose level three. And as mentioned previously by Paul, we will complete the tech transfer to the first U.S. site, Landmark Bio in Boston. Given the encouraging safety and efficacy we have presented in CLL and NHL using our innovative and reliable platform, we're moving ahead with addressing the unmet need in multiple myeloma in the Papilio study. Whilst, of course, there are commercially available BCMA therapies There is limited access to these products, and this population remains severely underserved. Here is the study design and the patient population we are proceeding with. We expect our first patient to enroll any time, certainly this month. The data from the 26 patients that were enrolled in the eplasia and the Atlanta studies that we have shared with you today demonstrate that the point of care CAR T manufacturing with short vein-to-vein time is feasible. Our CAR T therapies are administered as fresh product with a median vein-to-vein time of seven days. We've shown 100% manufacturing success. All patients that underwent leukoparesis were dosed, and they all received fresh CAR T products. In our trial, the clinical responses were supported by high in vivo expansion of the CAR T cells and durable persistence post-infusion. This was observed across the dose levels that we tested. Furthermore, our novel point-of-care manufacturing model, an early phenotype of the less differentiated CAR T cells is preserved in the CAR T product. This really strengthens our belief that our manufacturing process contributes to fitter CAR T products. And that leads us to believe it is not so much the number of cells that are infused, but more the quality of the cells. We believe we have a very innovative platform for the future of CAR T therapy that will serve patients around the world. Patients with little time and few options. Thank you. I hand back to Paul.
spk16: Thank you, Jeevan. Let's look now at the remainder of 2023. As presented today, we are making excellent progress with 5-101 and 5-201 in NHL and CLL. And as Jeevan just presented, we reported a encouraging safety and efficacy data. And Ash will be able to share more clinical data, including the expansion cohorts, phase one, two results of our NHL study. Also in oncology, we aim to submit an IND for 501 in NHL, our CD19 CAR T candidates in the first half of 2024. As mentioned, we aim to start the phase one B in multiple myeloma with a BCMA CAR T, candidate 5301, and expect to dose the first patient later in November. We also submitted the clinical trial application in Europe for our CD19 CAR-T candidate 5101 in the refractory azalea and expect the first patient in the first quarter next year. Finally, we are actively pursuing multiple business development opportunities and remain very focused on executing multiple deals. The transformation continues, and we have a clear path forward to value creation for all stakeholders. We are accelerating our early stage pipeline, building on our new discovery portfolio based on best-in-class targets for best-in-class medicines. While we push forward internal programs, we are in active BD discussions with the aim to expand the Innova pipeline very soon. And we are streamlining our organization with the aim to implement a focus right-sized organization. While we are very well capitalized, we commit to staying disciplined in our use of cash to focus our investments to maximize value. We deliver on our commitment to take action and firmly believe that we are executing on a strategy unlocking value for shareholders. Thank you all for your support and interest in Galapagos. Let's now open the line for Q&A.
spk30: Thank you, Paul. That concludes the presentation portion of today's audio conference call. I would now like to ask the operator to open up the line for Q&A.
spk23: Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To answer your question, please press star 1 and 1 again. Please limit yourself to one question per person. We will now take the first question. It comes from the line of Shan Deng from UBS. Please go ahead.
spk28: Thank you so much for taking my question.
spk29: Just one on BD, please. Apologies if I've missed it. So just wondering if you could elaborate a bit more in terms of the area of interest in terms of BD, because you mentioned oncology And also just wondering, like, are you sort of focusing on CAR T or would you also be interested in other modalities? For example, ADCs, we've seen some major deals recently, et cetera. Second one, if I may, given you are starting the CAR T trial in lupus next year, I mean, on one side, generally, autoimmune, the patients would have a higher bar for safety compared to oncology patients. But at the same time, like CRS, I can seem to be linked to a high tumor burden, which is probably missing in autoimmune patients. So just wondering, in the longer term, what do you think about the safety profile for autoimmune disease? Thank you so much.
spk16: Yeah. First of all, on BD deals, we continue to focus on solving high medical needs, focusing on global deals, late preclinical, early clinical, but also mid-stage. If there are good opportunities, we will go for either M&A or L&A for a mid-stage asset, which could accelerate time to result and time to market and time to value creation. With regard to modalities, we started with small molecules only in Galapagos, and with CAR-T, we brought a second modality in. With that, biologics made the entrance, and our scientists today are using the CAR-T, but also antibodies, and we are looking at bispecifics. So we don't stay on the CAR-T small molecules. We look at the best modality to solve a severe disease. And today, we think, to us and to our partners, we can handle multiple modalities as needed. Your question on CB19 and autoimmune disease, lupus, you're right. It is a different, it's not an aspergent, let's say, type of disease, but still, safety is important. We still are in discussion with regulators on starting a first study, and that will guide us on what they expect. But what's important for us, we think, is that we have the platform which will put in place in the oncology space in now three CAR-Ts, and it's all the hematologists who treat the patients, including who treat the patients with autoimmune disease because it's a CAR-T kind of transplant. And that's where we think we have the gateway to market. We have a platform where we can introduce it on a global basis once we have our oncology infrastructure. And that's where we see it as leveraging our platform, but also going for access worldwide. And we are convinced that the platform, it shows a very good safety in oncology, and we're pretty sure, or hopefully we can confirm, that the same safety will be observed in patients with lupus and autoimmune disease.
spk23: Thank you very much. Thank you. We will now take the next question from the line of Dane Leone from Raymond James. Please go ahead.
spk25: Thank you for taking the questions and congratulations on all the progress. Kind of one larger question for me if I can. So, you know, the early data that you've shared on your CAR T programs, is obviously very encouraging from the response rates and emergent durability and safety profile. But I think in the minds of many investors to give Galapagos more credit for these programs and what the value of these programs could be over the longer term, the question is really can these results be – reproduced in larger cohorts and at more clinical sites. And not necessarily doubting the clinical outcomes, but more can the manufacturing success rate hold up in a truly decentralized manner. So I guess two parts to this. One, can you clarify a little bit more of what we'll see from the additional patients that were not in the abstract? of the two ongoing studies? Is there kind of a size of the patient population that we'll see and or will they be more than one site contributing patients that have manufactured the product and been treated? And then secondly, looking later into 2024, do you think we'll start to see some of those data sets come out of true multicenter outcomes manufacturing outcomes for the cocoon system. Thank you.
spk16: Yeah, first on all additional patients, ASH will present data for 15 patients for up to 15 months durability. For Atalanta, 23 patients up to 15 months durability. And I think the most important addition to that data set will be durability and further confirmation in a slightly larger data set of patients. So that's what we will show there. With regard to the feasibility of expanding this, just to remind you, the system we produce, the cocoon system, is a standardized system which is very independent of handling, of local handling. Everything is standardized from A to Z. It's a state-of-the-art system from when the cells go in to when the cells come out, not come out, but the cells are pumped into the back, which goes to the patient. And it is a very standardized system with very standardized reagents and processes. And so there's little which we think will interfere with scaling it out in a larger way. What we have been thinking more recently also is can we be in the hospital or close to the hospital to make sure that GMP requirements are respected? But at the same time, we see in Europe already that one of our centers is serving multiple hospitals. And so we think that with a decentralized network, with highly controlled quality systems and a good GMP environment, with a standardized cocoon in there, will show little variability. The variability, ultimately, is mainly depending on the in-going cells from the patients. That is the one thing you cannot standardize, and as we deploy the system in areas where very advanced patients go in, that's where some variability could happen on the in-going cells if you have really a late-stage patient with very bad cells and you still want to make the CAR T therapy, that is where the variability could be, but not in the operations we think we have that very well under control.
spk25: And would landmark bio be that concept of a center that would service a number of hospitals in the U.S.?
spk16: Yes, that's correct. That is for the Boston area. We think that as long as we are with one, two hours from a hospital we will be able to do it fresh, vein to vein, without too much issues. Transportation of more than one to two hours will make it work. And that's all possible in Boston. And probably in the major US cities, we would be able to operate like that.
spk00: Excellent. Thank you so much.
spk23: Thank you. We will now take the next question. From the line of Brian Abrahams from RBC Capital Markets, please go ahead.
spk18: Hi, this is John for Brian. Thanks for taking that question and congrats on all the progress. So I guess similar question to what was just asked. So yeah, we saw from the ASH aft strikes, I guess there might have been some low yield issues. So just wondering what led to this issue and if it's something that you were able to resolve. Thank you. Thank you for your question.
spk14: Thank you for your question. What we've observed with regards to low yields is, as Paul just mentioned, this is a very patient-driven component characteristic. Even in the few patients that didn't achieve the dose level as intended by the protocol, What we actually observed was the patients actually continued to have a very good response, and we also saw good expansion and good, very positive phenotype of the cells in actual fact. So, therefore, the, while the might be the disease itself, it doesn't appear to have an impact on the outcome, and it may, and efficacy. And so therefore, this is work we're doing very deep analysis with a very robust translational plan and program that's running in parallel to the program.
spk12: Thanks so much. Thank you, Rod.
spk23: Thank you. We will now take the next question. from the line of Jason Calvary from Bank of America. Please go ahead.
spk26: Hey, guys. Just two for me. You know, as you advance your CAR T programs in 24, I'm just wondering about the scope of RMB and TMC investments and how that sort of fits with kind of the outlay of operating spend this year. I imagine there's some cost shifting post the Ucelica update. just maybe it's a shift in the composition of your operating spend more towards R&D. So just maybe if you can just talk about how the cost with the CAR-T program starts to scale directionally the next few years. And then can you just remind us, so Gilead will have standard opt-in rights here on the CAR-T program. I assume up through the readout of the pivotal phase two, if you get there. So Gilead obviously has more advanced marketed products and partnerships in these respective spaces. So how do you ensure, you know, with that kind of dynamic best efforts, if Gilead were to opt in, you know, be towards your programs? Thanks.
spk15: Thanks for the question. It's clear that, you know, with the transfer of Jaxelica to Alpha Sigma, it does significantly improve our cash burn and allows us more flexibility to invest in broadening our portfolio. Part of the guidance that we gave about saving roughly $150 to $200 million is assuming that we're also increasing our investments in oncology, particularly in the CAR T expansion. We're adding resources to the 100 positions that Paul mentioned, largely in those areas, to help us build out regulatory CMC clinical capabilities to help us broaden our CAR T network in the U.S. and in Europe. So we've been actively doing that and continuing to add. And roughly that 100 heads will be over the next year, year and a half roughly, increasing our spend. But on the Gilead side, I mean, it's clear that Gilead has been a great partner. We see they have opt-in rights to any of our programs after Pivotal. And so, yeah, they ultimately could choose to partner with us on that. We need to establish the clinical network and get to that point, and then we'll ultimately see whether Gilead opts in at that time.
spk26: Yes, sir. that would ensure that, you know, your program gets prioritized versus sort of maybe minimizing the competitive threat to the existing businesses that they're in?
spk16: Let me answer this one. The first one, visual transformation and CLL, double refractory CLL, doesn't have the indication at this moment in their portfolio. So that's complementary. At the same time, setting up a decentralized network for CAR T provides more access, not just in the US, but it could also bring it to much, much wider in the world. And again, there could be a significant complementarity with what Gilead is doing. And for us being able to build on the Gilead expertise in both in marketing and sales, but also especially in reimbursement and dealing with this type of product in the U.S. could accelerate for us the rollout And as long as we can make sure that we can produce all CAR-Ts locally in the different network, in the network locally and close to the hospital, we absolutely would welcome how we can work together with Gilead to accelerate access to patients and accelerate the reimbursement that people get access.
spk23: Thank you. We will now take the next question from Sebastian van der Schoot from Van Lanchester Campaign. Please go ahead.
spk09: Hi, guys. Congrats on the progress, and thank you for taking my questions. The first one is on the dose level. You are now moving to the dose level three. I am assuming that you use the same production process for each of the different dose cohorts, and then insert the predefined dose. Can you maybe elaborate in what percentage of patients you get to that dose level three in a non-hostile coma? And I was wondering also with the data that you have generated so far in CLL, whether you can expand on how many different clinical sites have patients been treated at?
spk16: On dose level three, we are still preparing to introduce that based on the outcome of the first two dose levels, and that's a discussion with the investigators. So the commitment is there to do that. I can't give yet a percentage on how much we can, in how many patients we can achieve that. those level three, and I don't have the production, the detailed collection data on the others to derive it from that. On the CLL, at the moment, it's done in one big center where a lot of patients are flowing in from different other centers.
spk09: Okay, thank you. And then on the non-Hodgkin's lymphoma data set, is that Generated in different hospitals? Yeah, there's five different hospitals in five different sites in Europe. And then those three patients that did not have a high enough dose, were those at different centers or was that one single center?
spk16: I can't answer that on the spot.
spk14: Those patients were from different centers. to the point that we made earlier on were able to actually deliver good efficacy as well because of the individual expansion and cell viability still being good at the dose that wasn't achieved so we are interrogating that data in more detail and it will be available in
spk07: Let me add to it.
spk16: As I discussed in previous meetings, what we see in our clinical trials is that because of the short life expectancy of the very aggressive late stage NHL patients, the patients are in very high, highly pre-treated, but at the same time in very bad condition. And so that makes the incoming material very variable. And that's probably why it's across the centers, but that's probably why it's difficult to reach the high of those levels.
spk36: Okay, got it. Thank you so much.
spk23: Thank you. We will now take the next question from the line of Phil Nadal from Cohen. Please go ahead.
spk20: Hi, this is Alex on Patel. Thanks for taking my questions.
spk24: Congrats on all the progress thus far. Just wondering if you can comment on those key patients in the abstract with vein-to-vein time greater than seven days. Any factors that may have led to a longer time here? Any ongoing efforts to kind of optimize this process and further reduce the average vein-to-vein time? Thanks.
spk14: So the question about beyond seven days, across the board, and again, I actually see that that 70% of the time is achieved quite consistently in the patients in the abstract. There were, I think you're referring to CLL, and in CLL, it was related to the yield from the patients, but I reiterate the point I made previously, which is that we continue to have good efficacy in vivo expansion and increase the cell viability of those patients as well. So it was related to what we were able to get from the patient rather than anything specific to the actual process itself.
spk16: And to be in detail there, two patients had a slight delay from eight and nine day. One patient, in one case, we had to do a restart because of an issue in the manufacturer. And so that is why there's variability in delay.
spk14: And the important point would be that all patients were treated within 14 days, and that is incredibly competitive orders already out there, but most of the patients were seven days.
spk35: Thanks so much.
spk23: Thank you. We will now take the next question. From the line of Jacob Michael from KVC Securities, please go ahead.
spk34: Hi there, and thanks for taking my question. I have two, if I may. My first one is, how do you look at the expansion of CB19 CAR T into other autoimmune diseases beyond lupus? Would you consider a basket trial set up, for example, to capture a number of indications in one go? And my second question is, can you perhaps share some feedback on the process of setting up new sites in the U.S. And how many do you expect to have up and running by the end of 2024, let's say?
spk16: Well, we are considering additional activities beyond SLE and looking actively at all the indications. We are not very much favoring a bucket study because all of these diseases have their own evaluation criteria, both on the inclusion side, but also on the progress and success side. And with a perfect study in that area, most likely we will not advance very quickly to good conclusions on moving later on into phase two, three. So we will consider other indications, but do it in a very, let's say, organized way that the indication, the early data leads to conclusions on what we can do further. So that is the way we approach this. And we're starting with as a lead, but we're considering several other indications going forward.
spk15: We haven't disclosed the number of U.S. sites that we're going to set up for 24 at this time. We are actively working with a number of different additional sites beyond landmark bio, and we'll provide updates in the future.
spk17: Okay. Thank you. Thank you.
spk23: As a reminder, if you wish to ask a question, please press star 1 and 1 on your telephone. That's star 1 and 1. We will now take the next question from the line of Brian from Jefferies. Please go ahead.
spk21: Hey, thanks. Can you tell us with the latest timings on when you expect to have an asset on the market? Is it still 26, 27? I think that's what you last said on the first half call um likely cd19 carty i think it was despite the delayed timelines assuming that's it right well we assumed before yeah got it yeah yep review yeah yeah that's that's on on a btd right sorry only on a breakthrough
spk16: Breakthrough designation, yes. We think with the encouraging data we have, we hope to be able to recoup in an accelerated way more patients into the pivotal, and it still lands us with 26, 27, but that is the current timeline which we're still looking for.
spk21: Got it, thanks. And just a second one, just on T-Charge manufacturing from Novartis PHE885, I think that is 10 days door-to-door, showed good data, ask, okay, yours is seven days, but just curious to know how you're thinking about that as a competitor to your GLP-G5301.
spk16: Yeah, T-charge is a different process where you produce fast, then freeze and do the quality control and the quality release in the next so many days. And that results in a 10-day, I don't know exactly how many days, but approximately 10 days. What we do is we keep the cells in incubator fresh to do the quality release and the quality work, and then you can release at day seven, which also fits the seven-day prep time a patient needs in order to receive the cell. So that's why the process is tailored to keeping it fresh, making sure we can do the quality while the cells are in fresh situation, but then also fit exactly the prep time for patients, the depletion time. What we also do is we make sure that it's very well organized for the physicians and the staff in the hospital, because the seven-day vein-to-vein is always organized, that there is no work in the weekends, nor for the staff on the machines, nor for the physicians. Anybody has to do anything in the weekend. It's all organized in a way that it's work, facilitating the work in the hospital and the labs, and best possible way to bring fresh cells to patients. Decharge is a short process, but it's not the best thing to do.
spk22: Got it. Thank you very much.
spk23: Thank you. There are no further questions at this time. I would now like to turn the conference back to Sophie van Heysel for closing remarks.
spk30: Thank you, operator. That's all for today's call. Please feel free to reach out to the IR team if you still have questions. Our next financial results call will be our full year 2023 results on February 23rd, 2024. Thank you all for participating and have a great rest of your day.
spk16: Thank you all for joining. Thank you. Bye now.
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