Galapagos (GLPG): Big Partnership Filgotinib Before Year End 2015. 0 comments
Dec 3, 2015 9:44 AM | about stocks: GLPG
Galapagos' (listed on Nasdaq) own Filgotinib inflammatory diseases program, 100% proprietary, is part of the negotiations between Galapagos and 5-10 Big Pharma companies since late September 2015.
These Big Pharma companies from both USA and EU which are part of the negotiations realized net medical /pharma revenue of $ 70-20 billion in fiscal year 2014 and fair values of these companies surpasses by far the value of Galapagos.
Well known is the interest of Johnson & Johnson (J&J) and Amgen (mentioned by CEO Galapagos at BNR Nieuwsroom 5 oktober 2015).
The purpose of Galapagos is to engage a partnership before the end of 2015 so the development of the Filgotinib program will evolve, which is expressed by a planned start Phase 3 trial in April 2016, after approval by FDA/EMA's meeting in March.
After successful Phase 3 and registration, first medicine to reach the market is the JAK1 tablet pills for Rheumatoid Arthritis > anticipated in early 2019.
The Filgotinib program (JAK1) technology is now focusing on Rheumatoid Arthritis (read: RA) and Crohn's disease (IBD); current sales represent a worldwide annually revenue of +$30 billion
(Anti-TNF Alpha and Interleukin), an attractive market for Galapagos and the new Partner to gain market share .
Part of Filgotinib program:
-RA Study (DARWIN 1 and 2) : efficacy was excellent in Phase 2b study and safety/tolerance scores were fantastic (no other RA study come close > regarding hemoglobin, anemia, high Cholesterol or high level of infections).
-Crohn Study (FITZROY): 10-week follow up scores are provided within two weeks but is expected in early December 2015 > 'Primary Completion date' at website Clinical Trials is 19 November, so final data collection for now is completed and clinical remission is well known.
The collaboration between Galapagos and a Big Pharma company results in a Win-Win situation (further information: see additional information).
The financial conditions of the Filgotinib partnership, described in draft Term Sheets,
will have a big impact on Galapagos. The management's purpose is to agree on better financial terms than the previous opt-in-license deal with Abbvie (instead of royalties > profit-sharing/Co-development and marketing).
Abbvie earlier in the year 2012 entered into a collaboration with Galapagos, to start Phase 2b studies in RA and Phase 2 Crohn's. Total deal value consisting of $ 1.35 billion milestone payments and
12-22% royalties on future sales.
Abbvie paid $ 150 million in advance and later $ 50 million for an extension of the RA-study.
With the decision of AbbVie 25 September 2015 they saved $ 1.2 billion for RA and also $50 million for Crohn's. (Further motivation of Abbvie: see additional information).
Galapagos CEO, Mr. Onno van de Stolpe recently stated repeatedly that negotiations are proceeding according to schedule, "we are on track to do so". Partnership Deal before the end of 2015 (Link 1).
Term sheets to finalize the deal have been prepared, which includes good Crohn-scores (see transcript Conference Call 13 November, Link: 2), and after completion of safety-scores Crohn study in early December (see Bullish rapport Morgan Stanley, Link: 3, and additional information) the Partnership negotiation will enter the last phase.
Galapagos market value is € 1.82 billion and the Partnership deal alone has a potential value of
+$ 1.25 billion (ditto milestones: AbbVie deal) regarding success in Phase3/4 plus sharing profit*.
*Ratio of profit sharing: development/marketing/sales I assume 30/70 or 40/60 >
Galapagos / Partner.
Future sales of RA and Crohn's Filgotinib program are forecasted at $2-3.75 billion per year
(Bryan Garnier, Jeffries, Morgan Stanley).