Galapagos NV's 2024 Q4 Earnings Call: Unraveling Contradictions in CAR-T Strategy and R&D Focus

These are the key contradictions discussed in Galapagos NV's latest 2024Q4 earnings call, specifically including: CAR-T Manufacturing Strategy and Timeline, Business Development Approach, Deprioritization of CD19 CAR-T assets, Manufacturing Strategy and Cost Structure, and R&D Focus and Expansion:



Pipeline and Strategic Focus in Cell Therapy:
- Galapagos NV advanced its flagship CD19 CAR-T clinical development program, GLPG5101, with FDA IND clearance and promising results from the ATALANTA study.
- The company is prioritizing GLPG5101 and deprioritizing GLPG5201 to simplify its DMU network, focusing resources on accelerating its most promising assets.
- This focus is driven by confidence in the efficacy of fresh cells and a desire to streamline operations to achieve faster market access.

SpinCo and Strategic Partnerships:
- Galapagos announced plans to separate into two entities, Galapagos and SpinCo, with SpinCo focusing on building a pipeline of innovative medicines.
- SpinCo will have sufficient resources for high-quality asset acquisitions and development, potentially partnering with Gilead.
- The creation of SpinCo aims to maximize opportunities for growth and value creation, leveraging Gilead's expertise and capital resources.

Financial Performance and Cost Optimization:
- Galapagos reported €276 million in total revenue for the full year 2024, including €35 million from Jyseleca supplies and €241 million from collaboration revenues.
- The company's cash burn for 2024 was €374 million, excluding business development, within the guidance range of €280 million to €320 million.
- Cost optimization efforts include a 40% reduction in headcount and a restructuring focused on streamlining cell therapy operations to preserve capital for future milestones.

Manufacturing and DMU Expansion:
- Galapagos is expanding its decentralized manufacturing network in the U.S. and Europe, aiming to enable faster cell therapy delivery with a goal of seven days vein-to-vein time.
- The focus is on establishing regional manufacturing sites to cover dense oncology specialty areas, with plans to broaden to commercial sites post-regulatory approval.
- This strategy aims to enhance patient access, reduce logistical constraints, and maintain cost-effectiveness by utilizing automated closed sterile production systems.