Interview With Galapagos CEO Onno Van De Stolpe: Partnerships, Pipeline And Potential
Dec. 2, 2019 1:19 PM ET | About: Galapagos NV (GLPG), Includes: GILD
Ashok Dutta of Avisol Capital Partners recently interviewed Onno van de Stolpe, CEO of Galapagos. This interview discusses Galapagos and its robust future and touches on the company's partnerships, pipeline and potential.
The complete interview is available to our subscribers - what follows here is a detailed excerpt.
We have a fantastic pipeline with a number of potentially blockbuster molecules moving towards the market.
~ Mr Onno van de Stolpe, CEO of Galapagos
I recently interviewed Onno van de Stolpe, CEO of Galapagos (GLPG). Mr. van de Stolpe founded Galapagos in 1999 and has been its CEO from the beginning. Before that, he had years of hands-on experience in the healthcare market across both sides of the Atlantic. Mr. van de Stolpe has sat on the board of a handful of healthcare concerns.
I have been following Galapagos for a number of years, and I have witnessed their dramatic rise from being just another European biopharma to a global R&D powerhouse. The company's principal drug asset is filgotinib, a selective JAK inhibitor that's in late stage development for a number of diseases. Galapagos has what amounts to biopharma's defining partnership of 2019 with Gilead (GILD), a multi-billion dollar synergy that has made Galapagos a $12bn behemoth with more than $6bn in cash reserves. The company has a long-tailed pipeline, and clearly we are seeing a global R&D behemoth in the making.
There also are certain potential fault lines here. The Gilead partnership itself, the risks inherent in immunomodulation, and in doing only R&D as a business model, the competition, and so on. Any good investor needs to look at a potential investment from all angles before jumping in.
So we emailed Mr. van de Stolpe a set of 10 questions, and he responded to them in detail. We began by asking what he thinks is the market's reason for this tremendous enthusiasm for what is still a clinical stage company. Here's what was said:
Dr. Ashok Dutta: Galapagos has a vast pipeline, but it's still a clinical stage company. On the other hand, with a $12bn-plus market cap, Galapagos is larger than many market stage companies. What do you think accounts for this tremendous market enthusiasm for Galapagos?
Mr. Onno van de Stolpe: Clearly filgotinib, our drug for inflammatory diseases and currently in registration for rheumatoid arthritis, is a driver for the enthusiasm. The drug is expected to be introduced on the market second half next year, and with the attractive efficacy and safety profile, the expectations for a successful launch are high. But clearly the rest of the pipeline is of great interest as well, especially our drug for IPF (idiopathic pulmonary fibrosis) that's in Ph 3 clinical testing. Add to this our discovery platform that's at the basis of all our programs, and the hallmark deal with Gilead, and it becomes clear that Galapagos has come a long way over the past couple of years.
We then discussed the terms of the partnership with Gilead. Here's what we asked:
Dr. Ashok Dutta: Your lead drug candidate is filgotinib, which many analysts consider a potential blockbuster drug. However, in 2016, you sold the rights to Filgotinib to Gilead for a 15% (22% now in 2019), $425mn stake in Galapagos, $1.35bn in milestone payments and between 20% and 30% in royalties, in all geographies and for all indications. Is my understanding of the terms of the 2016 Gilead partnership correct? What's the latest partnership terms from 2019 with Gilead? What led you to license Filgotinib to Gilead and partner with them?
The CEO discussed this at some length and clarified certain points - the details are available to our subscribers. Essentially, though, this increasingly comprehensive partnership has allowed Galapagos to leave the hassle of commercialisation to a more expert biopharma major while making very generous revenues in milestones and potential royalties. However, in my next question, I still asked him if the partnership was beneficial to Galapagos all the way. I said
Dr. Ashok Dutta: In hindsight, would you have done this differently from 2016? Would you have liked to retain the rights to filgotinib for yourself, or have made other changes to the terms? I guess what I am trying to ask is, what are some of the positives and negatives of the Gilead partnership as far as Galapagos is concerned? How are those going to affect your plans for future partnerships for the rest of your pipeline?
Mr. Onno van de Stolpe: At the time, this was the right deal with the right partner. Gilead has done an excellent job of executing phase 3 trials in rheumatoid arthritis and are exploring filgotinib in a whole range of other inflammatory diseases. In the new alliance we were able to increase our commercial footprint for Galapagos, which was something we wanted but were not able to negotiate in 2016. One learns along the way, and the many partnerships that we had over the past 15 years provides us with an excellent framework on what we want and especially what we do not want in an alliance. I believe this has all come very good together in the all-encompassing alliance with Gilead, where we struck the right balance between independence in R&D and dependence on bringing innovative products to the market.
We then moved on to filgotinib, the lead drug candidate.
Dr. Ashok Dutta: Let's discuss filgotinib. Please tell us about the molecule's nature and mechanism of action. How does its JAK1 selectivity influence filgotinib's safety and efficacy profile? In terms of biochemistry and MoA, how would you differentiate filgotinib from other selective JAK inhibitors and other pan-JAK inhibitors? How would you differentiate it from biologics in terms of MoA, efficacy, safety, convenience, and potential pricing?
Mr. Onno van de Stolpe: Filgotinib is a very selective JAK 1 inhibitor. This means that the molecule does not bind to the other JAK family members JAK 2 and 3. For the effective treatment of inflammatory diseases, only JAK 1 inhibition is necessary, and inhibiting other JAK proteins seems to be causing undesirable side effects. So what we have seen so far in clinical trials is that filgotinib has potentially an unsurpassed safety profile, which is very important for the patients, especially as this is a chronic disease.
The JAK inhibitors are a new class of drugs, with the different mode of action than the biologics (TNFa and IL6 inhibitors). The advantage of the class is the ease of use (oral versus injections), rapid onset of action and high efficacy. It will be interesting to see how fast this class will take over the biologics in treatment of inflammatory diseases.
I moved on to discuss a potential risk aspect of filgotinib and Mr. van de Stolpe clarified it for our readers.
Dr. Ashok Dutta: Recently, we have seen the FDA raising concerns about the thrombotic effects of certain JAK inhibitors like tofacitinib, baricitinib, and even AbbVie's recently-approved upadacitinib. Do you think this concern is relevant to filgotinib? Have the various trials of Filgotinib identified any thrombotic safety concerns that could potentially impact the harm-benefit analysis of the drug candidate?