Galapagos Plunges 8.83% Amid Earnings Shock—What’s Next for the Biotech Giant?

Summary
• Galapagos (GLPG) slumps 14.27% pre-market on earnings miss and strategic uncertainty
• Q2 2025 EPS of €(1.60) far below Raymond James’ estimate of €(0.22), citing severance, impairments
• Leadership reshuffle and cash deployment plans spark investor skepticism
• Intraday range of $28.78–$30.35 highlights volatile session amid mixed sector dynamics

Galapagos NV (NASDAQ: GLPG) is grappling with a sharp selloff as earnings miss and leadership changes collide with strategic uncertainty. The stock’s 8.83% intraday drop underscores investor anxiety over capital deployment and pipeline direction, while new appointments to the C-suite add complexity to its transformation. With a 52-week range of $22.36–$33.86, the biotech giant faces a critical juncture.

Earnings Miss and Leadership Shifts Trigger Sharp Selloff
Galapagos’ Q2 2025 earnings report sent shockwaves through the market, with a loss of €1.60 per share far exceeding Raymond James’ estimate of €0.22. The shortfall was attributed to severance costs, asset impairments, and early termination of collaboration agreements, eroding confidence in management’s cost control. Compounding the issue, the company’s strategic pivot—abandoning a spin-off and focusing on M&A—has left investors uncertain about value creation. New CEO Henry Gosebruch and CFO Aaron Cox face an uphill battle to deploy the €3.1 billion cash hoard effectively, while recent leadership additions like CBO Sooin Kwon and CStO Dan Grossman signal a high-stakes transformation phase.

Biotech Sector Mixed as AMGN Holds Steady
Options and Technicals: Navigating GLPG’s Volatile Playbook
• 52W High/Low: $33.86 / $22.36 (current price $30.35)
• 200D MA: $26.95 (below current price)
• RSI: 87.5 (overbought)
• MACD: 1.14 (bullish), Signal Line: 0.78, Histogram: 0.36 (declining momentum)
• Bollinger Bands: Upper $33.16, Middle $29.80, Lower $26.44 (price near lower band)
• Support/Resistance: 30D $28.79–$28.92, 200D $26.72–$26.93

Galapagos’ technicals paint a mixed picture: short-term overbought conditions (RSI 87.5) clash with a long-term bearish trend (price below 200D MA). The Bollinger Bands suggest oversold territory, but the MACD’s declining histogram hints at waning bullish momentum. Traders should monitor the $28.78 intraday low and the 200D MA at $26.95 as critical levels. With Amgen (AMGN) flat (-0.0057%), sector-specific catalysts remain key.

Top Option 1: GLPG20250815P30
• Contract Code: GLPG20250815P30
• Type: Put
• Strike Price: $30
• Expiration: 2025-08-15
• IV: 48.00% (high volatility)
• Lverage Ratio: 24.26% (moderate)
• Delta: -0.4309 (moderate sensitivity)
• Theta: -0.003825 (slow decay)
• Gamma: 0.1075 (high sensitivity to price swings)
• Turnover: 785 (liquid)

Top Option 2: GLPG20250919P30
• Contract Code: GLPG20250919P30
• Type: Put
• Strike Price: $30
• Expiration: 2025-09-19
• IV: 46.28% (high volatility)
• Lverage Ratio: 15.55% (moderate)
• Delta: -0.4249 (moderate sensitivity)
• Theta: -0.007645 (faster decay)
• Gamma: 0.0700 (moderate sensitivity to price swings)
• Turnover: 195 (reasonable liquidity)

Payoff Analysis (5% downside to $28.83):
• GLPG20250815P30: $1.17/share payoff (strike $30 vs. $28.83)
• GLPG20250919P30: $1.17/share payoff (strike $30 vs. $28.83)

Why These Contracts Stand Out:
Both options balance high IV (46–48%) with moderate delta (-0.43 to -0.42) for directional bets on further declines. The GLPG20250815P30’s higher gamma (0.1075) amplifies sensitivity to price swings, ideal for a volatile near-term outlook. Aggressive short-sellers may prioritize the August contract for its shorter time to expiration and robust liquidity.

Backtest Galapagos Stock Performance
The backtest of GLPG's performance after a -9% intraday plunge shows mixed results. While the 3-day win rate is 45.19%, the 10-day win rate is 42.60%, and the 30-day win rate is 37.71%, indicating a higher probability of positive returns in the short term, the actual returns over these periods are negative, with a maximum return of -0.02% over 30 days. This suggests that while GLPG has a decent chance of recovery in the short term, the overall performance after the plunge is lackluster.

Bullish Long-Term Outlook, But Near-Term Volatility Remains
Galapagos’ long-term trajectory hinges on its ability to deploy $3.1 billion in cash and execute strategic M&A, but near-term volatility is inevitable. Investors should watch for a rebound above the $28.92 support level or a breakdown below the 200D MA at $26.95. The sector’s mixed performance, with Amgen (AMGN) unchanged, suggests GLPG’s fate will remain tied to its own operational execution. For now, options like GLPG20250815P30 offer leveraged exposure to a bearish scenario, but patience is key as the company’s new leadership team navigates its transformation. Watch for $28.78 breakdown or Q3 cash outlook clarity.