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Galapagos (GLPG)
NASDAQ:GLPG
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Galapagos (GLPG) AI Stock Analysis

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GLPG

Galapagos

(NASDAQ:GLPG)

Rating:56Neutral
Price Target:
$34.00
▲(8.14% Upside)
The overall stock score reflects significant financial challenges, particularly in cash flow and profitability, overshadowed by strong technical indicators suggesting positive market momentum. While the company has strategic plans to expand its pipeline and manufacturing, high restructuring costs and anticipated cash burn remain key concerns.
Positive Factors
Financial strategy
GLPG has a sizable cash balance and is focusing on pursuing business development transactions and evaluating all strategic alternatives for their existing assets.
Management
The new management team appears credible and has the right skillsets for the tasks at hand.
Negative Factors
Clinical and market challenges
There is caution on GLPG's novel CAR-T approach given lack of clear clinical advantages, a tough competitive landscape, and logistical complexity.
Uncertainty in execution
The process of installing a new business development team and executing on a transaction is expected to take several months, leaving the future direction of GLPG shares unclear.

Galapagos (GLPG) vs. SPDR S&P 500 ETF (SPY)

Galapagos Business Overview & Revenue Model

Company DescriptionGalapagos NV (GLPG) is a biopharmaceutical company headquartered in Mechelen, Belgium. It focuses on the discovery and development of innovative medicines, primarily targeting unmet medical needs in the fields of inflammation, fibrosis, and oncology. The company's core products include various drug candidates in clinical development, with a strong emphasis on using its proprietary target discovery platform to identify new therapeutic targets and develop treatments.
How the Company Makes MoneyGalapagos generates revenue primarily through the development and commercialization of its pharmaceuticals. The company earns money from several key revenue streams: milestone payments from partnerships with larger pharmaceutical companies, royalties from sales of partnered products, and potentially revenue from its own marketed products once they are approved. Significant partnerships, such as those with Gilead Sciences, contribute to Galapagos's earnings through upfront payments and success-based milestones as products progress through clinical trials. Additionally, grants and collaborations with academic institutions may also supplement its income.

Galapagos Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q1-2025)
|
% Change Since: -5.56%|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment overall, with significant progress in clinical trials, strategic leadership appointments, and a strong financial position. However, restructuring costs and uncertainties related to the SpinCo separation present challenges.
Q1-2025 Updates
Positive Updates
Progress in Clinical Pipeline
Dosed first U.S. patient in the ATALANTA-1 study of GLPG5101, completed enrollment of the indolent NHL cohort, and added new cohorts. Selected MCL as a lead indication for a pivotal trial.
Innovative Manufacturing Platform
Expanded decentralized manufacturing network in the U.S. and Europe. Collaborated with AdaptImmune on developing uza-cel for solid tumors.
Financial Position
Reported a cash balance of EUR 3.3 billion at the end of Q1 2025, with plans for SpinCo to have approximately EUR 2.45 billion post-separation.
Positive Clinical Data
Achieved high overall response and complete response rates in patients receiving CD19 CAR-T cell therapy for various lymphomas with a promising safety profile.
Leadership and Strategic Developments
Announced the appointment of Henry Gosebruch as the Founding CEO of SpinCo and detailed plans for the strategic separation of SpinCo.
Negative Updates
Restructuring Costs
Incurred EUR 111 million in restructuring costs including severance costs, early termination of collaborations, and impairment on small molecule assets.
Spin-Off Uncertainties
The transition involves significant structural changes and uncertainties in execution and future performance of SpinCo.
Company Guidance
During the Galapagos Q1 2025 financial results call, the company provided comprehensive guidance and updates on its strategic initiatives and financial performance. Galapagos reported Q1 net revenues of EUR 75 million, comprising EUR 14 million from supply revenues related to Jyseleca and EUR 61 million from collaboration revenues. The company's cash balance stood at EUR 3.3 billion, with a planned cash runway extending to 2028. Galapagos detailed its innovative cell therapy pipeline, highlighting the ATALANTA-1 study, which evaluated GLPG5101, a CD19 CAR-T candidate, in eight hematological malignancies. The pivotal development for Mantle Cell Lymphoma (MCL) is slated to start in 2026, with anticipated approval in 2028. The company is focused on expanding its decentralized manufacturing units (DMUs) across the U.S. and Europe, improving the logistics and cost-effectiveness of its cell therapies. Additionally, Galapagos announced the appointment of Henry Gosebruch as the CEO of SpinCo, marking a significant step in its strategic separation plan. After the separation, SpinCo will have EUR 2.45 billion for transformative transactions, while Galapagos will retain EUR 500 million to accelerate its cell therapy pipeline. The company remains committed to advancing its R&D efforts, with a focus on oncology, immunology, and virology, and expects multiple value-driving catalysts throughout 2025.

Galapagos Financial Statement Overview

Summary
Galapagos faces significant financial challenges, including negative profitability and cash flow issues. Despite a strong balance sheet with low leverage, the company struggles with operating losses and cash burn, posing a substantial risk to its financial stability.
Income Statement
35
Negative
The income statement reveals significant challenges for Galapagos, with declining revenues and negative profitability metrics. The TTM gross profit margin is approximately 52.34%, indicating some level of cost control. However, the net profit margin is deeply negative at -103.14% for TTM, highlighting the company's struggle to generate profit. Revenue has seen a slight decline from the previous annual period, and the company has operated at a loss with negative EBIT and EBITDA margins. These figures suggest financial distress and a need for strategic shifts to achieve profitability.
Balance Sheet
65
Positive
Galapagos maintains a strong equity position, with a debt-to-equity ratio of 0.0032, reflecting minimal reliance on debt. The equity ratio stands at 69.23%, indicating that a significant portion of the company’s assets is financed by equity. The return on equity is negative due to the net losses. The low leverage is a positive aspect, providing financial stability and reducing risk, but the company needs to improve profitability to enhance shareholder value.
Cash Flow
30
Negative
Cash flow analysis shows negative free cash flow of -297.68 million in TTM, highlighting cash burn issues. Although investing cash flow is positive, largely due to divestments, operating cash flow remains negative. The operating cash flow to net income ratio is negative due to losses, suggesting inefficiencies in core operations. The cash flow situation is concerning and requires attention to ensure long-term liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue275.61M275.65M239.72M505.28M484.85M478.05M
Gross Profit144.23M-94.67M203.74M493.20M483.22M-45.61M
EBITDA-362.14M-152.94M51.04M-33.37M-100.93M-294.52M
Net Income-284.27M74.08M211.70M-217.99M-125.42M-311.00M
Balance Sheet
Total Assets3.82B4.14B4.36B4.73B5.19B5.72B
Cash, Cash Equivalents and Short-Term Investments3.09B3.12B3.68B4.09B4.70B5.16B
Total Debt8.44M11.72M9.60M21.90M26.86M29.44M
Total Liabilities1.17B1.24B1.56B2.21B2.55B3.05B
Stockholders Equity2.64B2.90B2.80B2.53B2.64B2.67B
Cash Flow
Free Cash Flow-297.68M-402.14M-425.24M-537.49M-561.71M-518.65M
Operating Cash Flow-278.55M-320.03M-405.97M-500.54M-503.83M-427.34M
Investing Cash Flow284.37M220.60M71.19M-1.25B541.24M757.29M
Financing Cash Flow-4.30M-4.92M-5.00M-1.49M-3.88M22.04M

Galapagos Technical Analysis

Technical Analysis Sentiment
Positive
Last Price31.44
Price Trends
50DMA
30.72
Positive
100DMA
28.66
Positive
200DMA
27.32
Positive
Market Momentum
MACD
0.21
Positive
RSI
47.00
Neutral
STOCH
25.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GLPG, the sentiment is Positive. The current price of 31.44 is below the 20-day moving average (MA) of 32.41, above the 50-day MA of 30.72, and above the 200-day MA of 27.32, indicating a neutral trend. The MACD of 0.21 indicates Positive momentum. The RSI at 47.00 is Neutral, neither overbought nor oversold. The STOCH value of 25.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GLPG.

Galapagos Risk Analysis

Galapagos disclosed 79 risk factors in its most recent earnings report. Galapagos reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Galapagos Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
$2.16B3.3764.05%30.57%
56
Neutral
$2.10B21.22-10.10%
55
Neutral
$3.15B-33.26%-49.51%-44.09%
54
Neutral
$2.95B-34.80%2816.21%73.33%
51
Neutral
$7.78B-0.06-40.08%2.29%21.32%-1.82%
45
Neutral
$2.28B-39.69%-100.00%1.62%
41
Neutral
$1.68B-41.94%-82.90%-155.64%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GLPG
Galapagos
31.44
1.80
6.07%
ARWR
Arrowhead Pharmaceuticals
20.71
-3.23
-13.49%
AGIO
Agios Pharma
37.26
-9.83
-20.87%
DNLI
Denali Therapeutics
15.57
-9.40
-37.65%
BEAM
Beam Therapeutics
16.44
-9.85
-37.47%
KYMR
Kymera Therapeutics
41.82
-7.12
-14.55%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 30, 2025