| Galapagos
announces half year 2005 results
· Financials on target
for 2005 increased annual revenues and cash burn of around
€ 7 million
Total revenue for the first six months of 2005 amounted to € 2.2 million, compared to € 2.3 million in the first six months of 2004, due to a decrease in government grants recognized in this period. The net loss for the first half of 2005 increased to € 3.4 million from € 3.0 million in the same period last year. Cash and cash equivalents amount to € 27.5 million on June 30, 2005. “Galapagos is on track to make projected revenue and cash burn targets for 2005, while moving forward in executing our strategic goals. We experienced a 5% growth in service and product revenue during the first half of 2005. New agreements in this period with Novartis, the Cystic Fibrosis Foundation, Celera Genomics and, as announced today, with the High Q Foundation, underscore the industry confidence in Galapagos’ technology,” said Onno van de Stolpe, Galapagos’ CEO. “With the strength of our Euronext listing, we anticipate expanding our product offering and enhancing our competitiveness.” Key
figures half year 2005 Details of half year 2005 financial results Revenue Galadeno service division revenues amounted to € 1.2 million for the half year compared to € 1.1 million for the same period in 2004. Government grants in the first half year of 2005 were € 1.0 million compared to € 1.1 million in the same period last year. Due to the nature of the contracts Galapagos has secured, the Company expects to see fluctuations in revenues on a short-term basis, but is on track to see an increase in revenues as compared to 2004.
Total research and development expenses in the first half year 2005 were € 2.8 million, compared to € 2.6 million in the same period 2004. Selling, general and administrative expenses remained stable at € 2.1 million in the first half of 2005 when compared to those in the first half of 2004.
Galapagos’ cash and cash equivalents amounted to € 27.5 million on June 30, 2005.
Galapagos’ target discovery platform is based on adenoviruses that efficiently introduce human gene sequences into a wide variety of human cells to knock-in or knock-down specific proteins. High-throughput assays that represent a selected human disease are used to select for those proteins that have an effect in those human disease models. After rigorous validation of these protein targets, they form the basis for the development of drugs. The Company’s adenoviral collections and screening technology are made available to pharmaceutical and biotech companies through Galadeno, Galapagos’ partnering unit. Revenue is generated by sales of adenoviruses, as sets from the collection or individually, and from advanced contract research services in target discovery and validation, including design and validation of cell-based screening assays. Galadeno’s ongoing target discovery collaborations with Bayer Healthcare and Celgene are progressing according to plan and several new projects, such as the alliance with GlaxoSmithKline, the virus production agreement with Celera Genomics and the research agreement with Novartis Pharmaceuticals are now underway. In addition to these collaborations with pharmaceutical and biotech companies, Galadeno initiated a funded target discovery program with the Cystic Fibrosis Foundation, in a quest for drug targets against this currently untreatable disease. We announced today that we have reached an agreement in principle for a substantial target discovery program in Huntington Disease with the High Q Foundation, amounting to €2.4 million revenues for Galapagos in a two year program.
Galapagos has used its unique technology to discover and validate novel small molecule drugable targets in rheumatoid arthritis, osteoarthritis, osteoporosis, Alzheimer’s disease and asthma. For Galapagos’ internal drug discovery efforts, the Company has chosen to focus on the bone and joint diseases – rheumatoid arthritis, osteoarthritis, and osteoporosis - to build a pipeline of new chemical entities to treat these diseases. During the first half of 2005, Galapagos has taken three additional targets into drug discovery, on top of the three targets that entered that phase in 2004. Several key collaborations within these programs have enabled the Company to make rapid progress. In its rheumatoid arthritis program, excellent progress has been recorded in the hit-to-lead phase of identifying novel therapeutics in the collaboration with BioFocus in the UK. In a collaboration with Asinex in Russia, Galapagos advanced two projects into drug discovery. In addition, the collaboration that was announced this week with ZoBio, Pyxis Discovery and Leiden University, has enabled Galapagos to take advantage of cutting-edge drug discovery technology in the progression of one of its proprietary targets in arthritis. As part of the € 1.2 million government grant for the collaboration, Galapagos will receive € 550k in support of this program. The
asthma program, which was licensed late 2004 to GlaxoSmithKline
under a target licensing and multi-year target identification
agreement, is progressing according to plan. As a result of Galapagos’ listing on Euronext, Galapagos’ Board of Directors has changed in composition: Ferdinand Verdonck and Harrold van Barlingen have joined as Directors. Concurrently, Ronald Brus (CEO of Crucell and Director since June 1999), Stephen Bunting (Managing Director of Abingworth and Director since March 2002), Steven Burrill (Managing Director of Burrill and Director since March 2003) and Dirk Pollet (VP Business Development of Galapagos and Director since November 2000) stepped down as Directors of Galapagos. Andre Hoekema joined the Executive Council of Galapagos as Managing Director Galadeno. Johan Van den Eynde joined the Galapagos management team as Director Legal and Human Resources.
More information about Galapagos and Galadeno can be found at www.glpg.com. Contact: For
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