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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
▲(3.94%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 Stability
GLPG has a cash balance of approximately €3.1B, which could be leveraged for value-creating business development transactions.
Management
The new management team appears credible and has the right skillsets for the tasks at hand.
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.
Strategic Direction
The absence of updates on the proposed spinoff indicates uncertainty about the company's strategic direction.

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

Galapagos Business Overview & Revenue Model

Company DescriptionGalapagos NV is a biotechnology company focused on the discovery and development of small molecule medicines with novel modes of action, addressing diseases with significant unmet medical need. The company operates in the pharmaceutical sector, engaging in drug development activities primarily in the areas of inflammation, fibrosis, and other diseases. Galapagos conducts research and development through its proprietary target and drug discovery platform.
How the Company Makes MoneyGalapagos generates revenue through a combination of collaborative agreements, milestone payments, and royalties. The company forms strategic partnerships with larger pharmaceutical companies to co-develop and commercialize its drug candidates. These partnerships often include upfront payments, research funding, and milestone payments contingent upon the achievement of specific development, regulatory, and commercial goals. Additionally, once a partnered drug is successfully commercialized, Galapagos earns royalties on sales. The company also invests in advancing its proprietary drug pipeline, which could lead to future revenue from direct product sales if these drugs receive regulatory approval.

Galapagos Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q1-2025)
|
% Change Since: -1.74%|
Next Earnings Date:Nov 05, 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.

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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue275.65M239.72M505.28M484.85M478.05M
Gross Profit-94.67M203.74M493.20M483.22M-45.61M
EBITDA-152.94M51.04M-33.37M-100.93M-294.52M
Net Income74.08M211.70M-217.99M-125.42M-311.00M
Balance Sheet
Total Assets4.14B4.36B4.73B5.19B5.72B
Cash, Cash Equivalents and Short-Term Investments3.12B3.68B4.09B4.70B5.16B
Total Debt11.72M9.60M21.90M26.86M29.44M
Total Liabilities1.24B1.56B2.21B2.55B3.05B
Stockholders Equity2.90B2.80B2.53B2.64B2.67B
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 Flow220.60M71.19M-1.25B541.24M757.29M
Financing Cash Flow-4.92M-5.00M-1.49M-3.88M22.04M

Galapagos Technical Analysis

Technical Analysis Sentiment
Positive
Last Price32.71
Price Trends
50DMA
29.56
Positive
100DMA
27.61
Positive
200DMA
27.06
Positive
Market Momentum
MACD
1.13
Negative
RSI
62.55
Neutral
STOCH
81.82
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 32.71 is above the 20-day moving average (MA) of 31.34, above the 50-day MA of 29.56, and above the 200-day MA of 27.06, indicating a bullish trend. The MACD of 1.13 indicates Negative momentum. The RSI at 62.55 is Neutral, neither overbought nor oversold. The STOCH value of 81.82 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 (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
60
Neutral
$3.07B-32.17%-25.85%-23.89%
59
Neutral
$2.16B3.3764.05%30.57%
56
Neutral
$2.17B21.22-10.10%
51
Neutral
$7.35B0.50-65.61%2.47%15.28%1.44%
50
Neutral
$1.98B-38.04%-82.38%-164.76%
47
Neutral
$2.18B-24.67%1436.97%68.03%
45
Neutral
$2.01B-35.21%-100.00%-144.79%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GLPG
Galapagos
32.71
7.86
31.63%
ARWR
Arrowhead Pharmaceuticals
15.93
-9.15
-36.48%
AGIO
Agios Pharma
35.00
-7.59
-17.82%
DNLI
Denali Therapeutics
13.44
-8.20
-37.89%
BEAM
Beam Therapeutics
18.83
-6.78
-26.47%
KYMR
Kymera Therapeutics
42.96
3.51
8.90%
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