Transcript Towards a Performance Organisation

Galapagos: a new force
in drug discovery
Onno van de Stolpe – CEO
IEX Beleggen in Biotech Dag
May 20, 2006
2005 – The year of ‘bold moves’
May: IPO on Euronext Brussels & Amsterdam
September: Successful bid on BioFocus – listing on AiM
2
2005 – The year of ‘bold moves’
Offer on BioFocus
closed
Offer on BioFocus
unconditional
Raises € 22M
with IPO
Bid on
BioFocus
+ 32%
Up 32% since IPO, market cap ~ € 115M
biotech IPO Europe 14%, US -10%
3
Share capital & history
•
•
•
•
Founded 1999 by Crucell & Tibotec
€ 23 M financing: top tier VC’s 2002
IPO: € 22 M raised
BioFocus acquisition: 29% of Group shares
VC's Abingworth
11%
VC's
- Apax
10%
VC's
-Alpinvest
4%
VC's
-Burrill
7%
Free float
50%
Tibotec
9%
Shares: 13,050,743
4
Crucell
9%
April 2006
Galapagos: from protein to drug
Target
identification
Target
validation
Find human protein
responsible for disease
Assay
development
Screening
Identify chemical
compound that
binds to protein
Lead
optimization
Develop compound
into drug candidate
Too much/little of
target protein
Correct level of
target protein
5
Preclinical
testing
Test drug
candidate
Clinical
trials
I, II, III
Galapagos group – business model
Partnering in:
pre-clinical
phase I
phase II
NL & UK
160 employees
fee for service offering
Proprietary
target & drug
discovery platform
€
bone &
joint
diseases
Belgium
60 employees
therapeutic programs
6
novel drug
candidates
High value deals within reach
BioFocus participates in € 3- 4 B drug discovery service market
BioFocus: gene-to-candidate-drug capabilities
Target
identification
Target
validation
Assay
development
Screening
Lead
optimization
• Market set to grow at > 18 % growth per year
• Pharma key drivers R&D outsourcing:
 focus on core competencies
 access novel technologies
 improve speed to market
7
Preclinical
testing
Clinical
trials
I, II, III
From idea to preclinical candidate
Turnkey deal negotiation: multi year alliance
• target identification
Time per phase
• assay development
To targets
• screening
1.5 year
To Proof of Concept
• medicinal chemistry
1.5 year
• preclinical development
To drug candidate
2 years
8
Galapagos internal programs
Ageing population
Diseases
Bone & joint diseases
Osteoarthritis
Underserved medical need
Rheumatoid arthritis
Osteoporosis
market estimate:
€ 21 billion
9
Road to a new drug
Scenario for Galapagos RA program
Phase
Lead
optimization
Pre-clinical
studies
Year
2006-2007
2007-2008
Phase I Phase II
2009
2010
Phase III
2011
out licensing
to big pharma
10
2013
RA program: from target to drug
Small molecules inhibiting cartilage degradation
screened genes
4,611
Inhibition of cytokine-induced MMP1
323
Inhibition of cytokine-induced collagen degradation
192
LPS/TNF profiling
152
IP/literature/drugability/safety profile
48
Expression profiling/knock-in validation
14
Targets to enter drug discovery, including target GT418
11
Proof of Principle in RA
RA mouse model treated with Galapagos molecule (40mg/kg, oral)
100
60
40
20
TNF-
IL-6
GM-CSF
Significant reduction
in disease-causing cytokines
Treated
Untreated
Treated
Untreated
Treated
Untreated
Treated
0
Untreated
% cytokine
80
IL-4
Minimal impact
on other cytokines
12
From target to Proof of Concept
•
Discovered protein responsible for RA in human primary cells
•
Identified molecule that binds to protein
•
Chemical molecule effective in mouse RA model
 Reduction in cytokines
 Reduction in paw swelling development
Improved chance that molecule will be
effective in human RA patients
13
Acceleration at a glance
R&D EXPENSE
REVENUES
in € millions
in € millions
12
11.2
CASH POSITION
9
in € millions
23.6
25
8
10
6.7
7
7.8
8
6
6.5
5.4
5.4
15
5
6
20
4
13.0
10.3
10
3
4
2
2
5
1
0
0
03
04
05
0
03
04
14
05
03
04
05
Group revenues guidance
in € millions
25 - 30
30
Galapagos 2006
Guidance on 40-70% growth
on pro forma 2005
25
20
17.5
15
10
6.5
7.8
5
03
04
05
15
06
R&D expense drug discovery
in € millions
9.0
Increase in R&D
8
6
6.7
2005: 24%
2006: 34% (guidance)
5.4
5.4
03
04
4
2
05
16
06
Become Europe’s leading biotech
• Bring own products into clinic
• Grow service business through organic growth and acquisitions
• Establish strategic alliances through turn key deals with big pharma
• Use BioFocus as cash generator for internal development
17
2006 outlook
• Drive internal drug discovery programs
 Lead optimization RA
 Proof of Concept in OA and/or OP
• Strengthen pipeline
 In-license candidate drug, or
 Acquire product company
• Sign turn key alliance with big pharma
• Grow service business through organic growth and acquisitions
• Grow revenues with 40-70%
Strong newsflow
18
Analyst recommendations
• Fortis
Buy
• KBC
Outperform € 10.5
Christophe Van Vaeck
• Kempen
Buy
€ 12
Mutlu Gundogan
€ 9.5
Mark van der Geest
• Rabobank Hold
€ 12
19
Geraldine O’Keeffe
www.glpg.com
20