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Galapagos (GLPG)
NASDAQ:GLPG
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Galapagos
(NASDAQ:GLPG)
59Neutral
Positive Factors
Business Development
SpinCo will focus on building out a pipeline of oncology, immunology, and/or virology assets via BD with ~€2.45bn in cash post-spin.
Financial Stability
The company expects a cash runway extending to 2028, suggesting financial stability for ongoing projects.
Operational Efficiency
Galapagos NV is prioritizing the development of GLPG5101 due to logistical advantages, which could streamline the manufacturing process.
Negative Factors
Competitive Challenges
There is caution on GLPG's novel CAR-T approach given lack of clear clinical advantages, a tough competitive landscape, and logistical complexity.
Execution Risks
Some fundamental issues with legacy GLPG, such as low probability-of-success on the CAR-T platform and lack of execution on business development, still apply in separate entities.
Strategic Uncertainty
The absence of updates on the proposed spinoff indicates uncertainty about the company's strategic direction.
Galapagos (GLPG) vs. S&P 500 (SPY)
Market Cap
$1.78B
Dividend YieldN/A
Average Volume (3M)358.10K
Price to Earnings (P/E)21.2
Beta (1Y)0.80
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees704
SectorHealthcare
Sector Strength74
IndustryBiotechnology
Share Statistics
EPS (TTM)-2.73
Shares Outstanding65,897,070
10 Day Avg. Volume396,605
30 Day Avg. Volume358,104
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$24.50Price Target Upside-8.51% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering5
Galapagos Business Overview & Revenue Model
Company DescriptionGalapagos NV, an integrated biopharmaceutical company, engages in the discovery, development, and commercialization of various medicines for high unmet medical need. Its pipeline products include filgotinib, a JAK1 inhibitor that is in various phases of clinical trials for the treatment of rheumatoid arthritis, Crohn's disease, ulcerative colitis, small bowel CD, fistulizing CD, ankylosing spondylitis, psoriatic arthritis, and uveitis. The company's pipeline products also comprise GLPG1972 that has completed Phase 2b trial for treating osteoarthritis; Toledo molecules, including GLPG3970, GLPG4399, and GLPG4876 for inflammation; and GLPG4716 and Ziritaxestat to treat idiopathic pulmonary fibrosis. In addition, its other pipeline products include GLPG2737, a cystic fibrosis transmembrane conductance regulator that is in Phase 2 clinical trials to treat patients with autosomal dominant polycystic kidney disease; and GLPG0555, a JAK1 inhibitor, which is in Phase 1b for treatment of patients with osteoarthritis. The company has collaboration agreements with Gilead Sciences, Inc.; AbbVie S.à r.l.; and Novartis Pharma AG. Galapagos NV was incorporated in 1999 and is headquartered in Mechelen, Belgium.
How the Company Makes MoneyGalapagos generates revenue primarily through collaboration agreements with larger pharmaceutical companies, which often involve upfront payments, milestone payments, and royalties on potential future sales of licensed products. Key partnerships, such as those with Gilead Sciences, provide significant financial support and resources for the company's research and development activities. Additionally, Galapagos may earn revenue from government grants and research subsidies, as well as commercialization of its own products, should they receive market approval.
Galapagos Financial Statement Overview
Summary
Galapagos shows financial stability through a strong balance sheet with low leverage, but significant profitability and cash flow challenges remain. The company's inability to generate positive net income and cash flows presents risks, although substantial cash reserves offer some financial flexibility.Income Statement
Galapagos has experienced volatility in its revenue with a recent decline and negative net income, indicating challenges in profitability. The gross profit margin for TTM stands at 50.3%, but the net profit margin is negative at -58.8%, highlighting significant operational inefficiencies. Revenue growth has been inconsistent, with recent contractions. The company also has negative EBIT and EBITDA margins, suggesting ongoing struggles to cover operating expenses.45
Neutral
Balance Sheet
The balance sheet shows a solid equity base with a debt-to-equity ratio of 0.004 in TTM, demonstrating minimal leverage. The equity ratio is 68.3%, indicating strong financial stability. However, the company's return on equity is negative due to net losses, signaling inefficiencies in generating shareholder returns.60
Neutral
Cash Flow
Galapagos faces challenges with negative operating and free cash flows, as seen in the TTM data. Free cash flow growth is negative, reflecting pressure on liquidity. The operating cash flow to net income ratio is also negative, suggesting issues with converting income into cash. Despite these challenges, the company maintains significant cash reserves, providing a buffer against short-term liquidity concerns.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 275.65M | 239.72M | 505.28M | 484.85M | 478.05M | Gross Profit |
| -94.67M | 203.74M | 493.20M | 483.22M | -45.61M | EBIT |
| -188.34M | -88.26M | -267.52M | -165.60M | -178.63M | EBITDA |
| -152.94M | 51.04M | -33.37M | -100.93M | -294.52M | Net Income Common Stockholders |
| 74.08M | 211.70M | -217.99M | -125.42M | -311.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.12B | 3.68B | 4.09B | 4.70B | 5.16B | Total Assets |
| 4.14B | 4.36B | 4.73B | 5.19B | 5.72B | Total Debt |
| 11.72M | 9.60M | 21.90M | 26.86M | 29.44M | Net Debt |
| -52.52M | -157.21M | -486.22M | -2.21B | -2.11B | Total Liabilities |
| 1.24B | 1.56B | 2.21B | 2.55B | 3.05B | Stockholders Equity |
| 2.90B | 2.80B | 2.53B | 2.64B | 2.67B |
| Cash Flow | Free Cash Flow | |||
| -402.14M | -425.24M | -537.49M | -561.71M | -518.65M | Operating Cash Flow |
| -320.03M | -405.97M | -500.54M | -503.83M | -427.34M | Investing Cash Flow |
| 220.60M | 71.19M | -1.25B | 541.24M | 757.29M | Financing Cash Flow |
| -4.92M | -5.00M | -1.49M | -3.88M | 22.04M |
Galapagos Technical Analysis
Positive
26.78
Price Trends
25.55
Positive
25.52
Positive
26.66
Positive
Market Momentum
0.46
Negative
68.15
Neutral
83.61
Negative
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 26.78 is above the 20-day moving average (MA) of 24.88, above the 50-day MA of 25.55, and above the 200-day MA of 26.66, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 68.15 is Neutral, neither overbought nor oversold. The STOCH value of 83.61 is Negative, 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 (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $1.79B | 2.72 | 57.29% | ― | 36.07% | ― | |
64 Neutral | $2.24B | ― | -36.38% | ― | -40.11% | -17.79% | |
59 Neutral | $1.78B | 21.22 | -6.25% | ― | ― | ― | |
52 Neutral | $5.28B | 3.75 | -42.72% | 2.86% | 17.70% | 2.03% | |
45 Neutral | $1.91B | ― | -600.68% | ― | -98.62% | -86.21% | |
45 Neutral | $2.33B | ― | -37.40% | ― | -100.00% | -144.79% | |
45 Neutral | $2.00B | ― | -43.94% | ― | -83.18% | -144.95% |
* Healthcare Sector Average
Performance Comparison
GLPG
Galapagos
26.78
-2.67
-9.07%
ARWR
Arrowhead Pharmaceuticals
14.04
-10.09
-41.82%
AGIO
Agios Pharma
30.94
-3.64
-10.53%
DNLI
Denali Therapeutics
16.06
-0.75
-4.46%
BEAM
Beam Therapeutics
19.83
-2.89
-12.72%
KYMR
Kymera Therapeutics
34.55
-1.75
-4.82%
Galapagos Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 5.02%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a strong commitment to expanding the clinical pipeline and enhancing manufacturing capabilities, supported by a robust financial position. However, significant restructuring costs and expected high cash burn post-separation highlight ongoing financial challenges.Q1-2025 Updates
Positive Updates
First U.S. Patient Dosed in ATALANTA-1 Study
Galapagos dosed its first U.S. patient in the ATALANTA-1 study of GLPG5101, which is a novel CD19 CAR-T candidate. This marks a significant milestone in expanding their clinical pipeline in the U.S. and Europe.
Expansion of Decentralized Manufacturing Units (DMUs)
Galapagos expanded its decentralized manufacturing network in the U.S. and Europe, improving access to therapies and reducing logistical constraints. This is a major step in supporting pivotal studies and commercial readiness.
Strong Financial Position with EUR 3.3 Billion Cash Balance
Galapagos reported a cash balance of EUR 3.3 billion at the end of Q1 2025, providing significant runway to fund operations and accelerate the cell therapy pipeline.
Appointment of Henry Gosebruch as Founding CEO of SpinCo
The appointment of Henry Gosebruch as CEO of the new entity SpinCo is a major step in the planned separation, bringing deep expertise in M&A and business development.
Negative Updates
Restructuring Costs Impacting Financial Results
Operating expenses increased due to restructuring costs amounting to EUR 111 million, which include severance costs, early termination of collaborations, and asset impairment.
High Cash Burn Expected Post-SpinCo Separation
Galapagos expects a normalized annual cash burn between EUR 175 million and EUR 225 million, excluding restructuring costs, which presents a significant financial challenge.
Company Guidance
During the Galapagos First Quarter 2025 Financial Results and Business Update conference call, several metrics were highlighted as part of the company's guidance. Galapagos reported total net revenues of EUR 75 million for the first quarter, with EUR 14 million stemming from supply revenues related to Jyseleca and EUR 61 million from collaboration revenues. The company incurred EUR 111 million in restructuring costs, which included severance, termination of collaborations, and impairment costs. Galapagos ended the first quarter with a cash balance of EUR 3.3 billion. Upon the planned separation of SpinCo, it is expected to have EUR 2.45 billion in cash, whereas Galapagos will retain approximately EUR 500 million. This financial outlook supports Galapagos’s strategy to accelerate its cell therapy pipeline and aims to sustain operations through 2028, with a normalized annual cash burn estimated between EUR 175 million and EUR 225 million, excluding restructuring. The company is also advancing its pipeline with the ATALANTA-1 study of GLPG5101 in hematological malignancies, aiming for pivotal development in 2026 and a potential first approval in 2028.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.