Galapagos NV

Good day and thank you for standing by. Welcome to the Galapagos Full Year 2024 Financial Results and Business Update conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star 11 on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw a question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Sri Ramaswati. Please go ahead.

Thank you, operator. Good afternoon to all of you who are on the call from Europe, and good morning to all of you in the United States. Thank you all for joining us for Galapagos' full year 2024 financial results and business update conference call. Last night, we issued a press release outlining these results. The press release, along with today's webcast presentation, can be found on the Galapagos website. Before we begin, I would like to remind everyone that we will be making forward-looking statements on the call. These forward-looking statements include remarks concerning future developments of our company and our pipeline and possible changes in the industry and the competitive environment. Actual results may differ materially from those indicated by these statements and are accurate only as of the date of this recording, February 13th, 2025. Galapagos is not under any obligation to update statements regarding the future or to conform to these statements in relation to actual results unless required by law. Joining us on today's call from Galapagos' senior management team are Dr. Paul Stoffels, chair and chief executive officer, and Thad Houston, Chief Operating and Chief Financial Officer. With that introduction, let me now turn the call over to Dr. Stoffels. Paul?

Thank you, Sri, and thank you all for joining us today. 2024 was a productive and transformative year for Galapagos, in which we made significant progress streamlining our business operations and advancing our leadership in cell therapy in oncology. One of our key accomplishments last year was the progress we made advancing GLPG5101, a flagship CD19 CAR-T clinical development program in multiple hard-to-treat NHL indications. We were particularly pleased to receive FDA's IND clearance to begin clinical studies in the U.S., and with the compelling new results from the Atalanta study we presented at the American Society of Hematology annual meeting in December. I will discuss those results in greater detail later on this call. Throughout 2024, we focused on building our leadership position in cell therapy, where we executed a number of key partnerships and collaborations in support of those goals with companies such as Lonza, on our decentralized platform, Thermo Fisher for the development of an ultra-rapid PCR sterility test together with MyDiagnostics, and Excellos, part of Blood Centers of America, to broaden our DMU network in the US. Separately, in 2024, we also signed an agreement with Adaptimmune for TCRT cell therapy in solid tumors. Finally, we completed the transfer of the iSeleca business to Alpha Sigma, which provided us with savings of approximately 200 million euro, and for which we remain eligible for royalties on European sales. Based on this strong foundation, we are continuing to evolve our strategy for building Galapagos as a global leader in cell therapy. Towards the end, We are excited to start the new year with a focus on accelerating value creation by executing on our plan to separate into two publicly traded entities, Galapagos and SpintCo. SpintCo, a newly created Belgian company, will invest to build a pipeline of innovative medicines through transformational transactions with Gilead as a partner. Galapagos will focus on accelerating global oncology leadership by addressing higher medical needs with a decentralized manufacturing platform and with full ownership of all of our programs. As many of you know, in 2019, Galapagos entered into a 10-year global option license and collaboration agreement, or OLCA, with Gilead. Since that time, Gilead, Galapagos, and the biotech industry as a whole have all evolved. Post-separation, SpinCo will assume the ALCA agreement with Gilead. Galapagos will be able to focus on executing its strategy for accelerated growth and sustainable value creation as a leader in the development and innovative manufacturing of cell therapies in hematological and solid tumors, further supporting our mission to bring transformational medicines to patients across the world. As such, we will seek partners for our small molecule programs, including our TIK2 inhibitor, and we will discontinue future small molecule research. By separating into two entities, each company will have the flexibility to allocate resources, pursue tailored strategies, and maximize opportunities for growth and impact. We are offering a win-win for our shareholders as we can create even more value as independent entities with unique strategies in our respective areas of expertise. Let us now turn to the new and exciting opportunities for Galapagos as we forge ahead with the development and delivery of life-changing cell therapies to address patient needs in oncology. This planned transaction allows Galapagos to focus on leadership in cell therapies based on the following strong fundamentals. Firstly, we are well capitalized to advance our portfolio and platform toward value-creating milestones. Importantly, the termination of the ALCA for Galapagos gives us the autonomy to fully invest in and partner our own assets and programs and to realize the rewards of our future achievements. We remain focused on providing broader and faster access to cell therapies with our innovative decentralized manufacturing approach and our goal of seven days vein-to-vein time. Not only does this bring logistical and cost benefits, but by providing patients with fit cells, we believe we are improving efficacy and safety and offering a solution for many more patients, especially those patients with a very short life expectancy. We are advancing our cell therapies currently in clinical development, which we believe have potential to be best in class through the delivery of fresh and fit cells. In addition to our six European clinical sites in the Netherlands and Belgium, we are expanding the Atalanta clinical trial in the U.S., where we are engaging with leading cancer centers in Boston. Our aim is to start pivotal studies in 2026. To support our ongoing clinical trials and to assure pivotal readiness, we are expanding our decentralized manufacturing network in the U.S. and Europe. giving patients direct access to our therapies and limiting logistical constraints. We are also building global partnerships with hospital networks and healthcare organizations to increase access significantly. All of this is being done in a highly cost-effective way that takes advantage of our automated, closed sterile production system with limited manual work and is designed to improve access and reduce the cost of goods significantly. We will also look to partner our platform with cell therapy companies, leveraging our unique manufacturing platform and network for broader access, for example, as we did with Adaptimmune in solid tumors. To support sustainable value creation, we are building a pipeline of next-generation cell therapies that have the potential to address some of the limitations of current therapies. by taking advantage of combination, targeting, and armoring to best treat a range of hematological and solid tumors. Most importantly, our ambition in cell therapy and the plant separation are designed to benefit the patients we serve by both accelerating and expanding our ability to bring new medicines to market. Our decentralized manufacturing was designed to overcome the limitations of current cell therapy manufacturing, which is centralized and bears higher cost burdens with longer production and delivery times and delivering cryopreserved cells. Our seven-day vein-to-vein time is designed to provide fresh, fit cells, which we believe enhance the therapeutic profile by producing highly potent cells that are less exhausted, less toxic, and persist longer. We currently have six operational and approved manufacturing sites in several European countries and are actively expanding in Europe and the US, with Landmark Bio in Boston operational for Atalanta. We believe the advantages of our Cocoon process make it ideal for near-point-of-care manufacturing, given its closed system, lean design, user-friendly interface, data monitoring capabilities, automation, and scalability. We have a long-term strategic collaboration with Lonza for the supply of cocoons and cassettes. We truly are excited by the opportunity ahead for Galapagos to lead in cell therapy drug development, and this decentralized manufacturing platform is core to that strategy. Moving forward, Galapagos will focus on unlocking the broad reaching potential of this decentralized cell therapy manufacturing platform as we advance a robust cell therapy pipeline. In line with our goal to be a more focused and streamlined organization, we are implementing a strategic development approach for our CD19 CAR-T portfolio, by prioritizing resources on GLPG 5101, a most advanced asset, cleaved for clinical development by the FDA and the European regulatory authority, and with the fastest path to market. In order to fully realize that potential, We are accelerating and expanding the Atalanta Phase 1-2 clinical study of GLPG5-101 into additional aggressive lymphomas such as Richter transformation and in chronic lymphocytic leukemia where we believe we can drive the greatest impact for patients. Our plan is to move into pivotal studies in 2026 with an aim to have a first approval in 2028. As part of this focus strategy, we are deprioritizing activities related to GLPG5201, our second CD19 CAR-T candidate, pending the advancement of GLPG5101 in Richter's transformation in chronic lymphocytic leukemia. In tandem, we are advancing the Phase 1-2 study of GLPG5301 in multiple myeloma, while also strengthening our early-stage pipeline of next-generation, multi-targeting, armored cell therapies for hematological and solid tumors. To ensure long-term innovation and value creation, we expect to advance one of these preclinical assets into first-in-human clinical studies in 2025. Further reinforcing our commitment to delivering transformational therapies, we are progressing Usacel, a TCRT candidate for head and neck cancer, through our partnership with Adaptimmune. We believe that the combination of fresh, fast, and fit has the potential for transformative impact, and we can see from the data recently presented at ASH a promising safety and efficacy profile for GLPG5101, in patients with mantle cell lymphoma, marginal zone lymphoma, follicle lymphoma, and diffuse class B cell lymphoma. As of April 25, 2024 data cutoff, 49 patients received CD19 CAR-T cell therapy infusion, and safety results were available for 45 patients, and efficacy was available for 42 patients. As you can see, we achieved high overall response and complete response rates. Here we show 100% of patients with refractory relapsed mantle cell lymphoma, 95% of patients with refractory relapsed follicular lymphoma and marginal zone lymphoma, and 54% of patients with refractory relapsed and diffuse large B-cell lymphoma achieved a complete response. At dose level 2, the complete response rate was 71% and the overall response rate 86% for diffuse large B-cell lymphoma. of evaluable patients achieving complete response, 80% were minimal residual disease negative and remained in complete response at the time of data cutoff. And we are seeing very reassuring safety data with low levels of ICANNs. This translates to less patients in need of intensive care, less time in hospital, and more time at home with family. Not only are we seeing strong data around the response rates, but we are also seeing that those response rates are durable. Across phase 1, phase 2, 32 of 37 or 86% of responding patients had an ongoing response at the time of last assessment or end of study. Of the 15 minimal residual disease evaluable patients with a complete response, Twelve patients, or 80%, achieved minimal residual disease negativity and remained in complete response at data cutoff. The median study follow-up was 3.3 months for follicular lymphoma and diffusional RSB cell lymphoma with a range of 0.9 to 21.2 months and 4.4 months for mantle cell lymphoma with a range of 1 to 24.4 months. GLPG5101 showed an encouraging safety profile with the majority of higher than or equal to grade 3 events being hematological. 96% of patients, 47 of 49, received an infusion with fresh CD19 CAR-T cell therapy, of which 91.5%, 43 out of 47, achieved a vein-to-vein time of 7 days, eliminating the need for bridging therapy. Of note, strong and consistent in vivo CAR T expansion levels and products consisting of stem-like early memory phenotype T cells were observed in all doses tested. The summary of these data underscore our enthusiasm for going all in on GLPG5101, our flagship CD19 program. Our new strategy positions us to build on the clinical success we have seen thus far. Turning now to our small molecule programs in immunology, where our most advanced candidate is our TIK2 inhibitor, GLPG3667. Preclinical and first in human clinical data showed GLPG3667 to be a selective and potent inhibitor of TIK2, resulting in near-complete inhibition of type 1 interferon signaling for a 24-hour cycle, which is supportive of a once-daily administration. We intentionally selected SLE and DM as our first indications because type 1 interferon plays a key role in both diseases. Our phase 2 program offers an attractive partnership opportunity. I'm pleased to report that we recently completed screening in the SLE phase 3 enabling clinical study ahead of schedule. and anticipate top-line results for GLPG3667 in SLE-NDM in the first half of 2026. Beyond SLE-NDM, TIK2 inhibition offers potential in several other autoimmune indications, further expanding its market opportunity. Our bold new strategy is focused on advancing our cell therapy leadership. As such, we are seeking to partner our promising small molecule portfolio which was built on more than 20 years of research and where we have identified more than five programs in both oncology and immunology. The continued unmet medical need in a number of immune-mediated diseases offers a significant market opportunity and should make our programs an attractive opportunity for companies already operating in immunology. As you can see on this slide, we have an exciting year ahead with the potential to achieve a number of value-driving catalysts. Moving ahead with our focus in cell therapy, patient recruitment is ongoing in Europe with leading cancer centers in Boston to be activating following US FDA IND application clearance of 5101. We continue to build out our DMU network and are focused on building the infrastructure and attracting talent to support the start of registrational studies with GLPG 5101 in 2026, as well as our planned global expansion. Our aim is to complete the phase 3 enabling studies with our TIK2 inhibitor in SLE and DM while seeking partnerships. We progress our early-stage next-generation cell therapy pipeline in hematological and solid tumors, including UsaCell. With that overview, let me turn the call over to my colleague, Ted Houston, for an overview of the exciting transaction we recently announced and for a review of our full-year 2024 financials.