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JPM 2022: Galapagos execs troll for deals at J.P. Morgan but will hold off on signing for CEO-in-waiting

January 15, 2022
Life sciences

After dropping a late-stage asset and hitting an FDA roadblock in the JAK inhibitor class last year, Galapagos is in need of a 2022 rebound. With active discussions underway at the J.P. Morgan Healthcare Conference to find an acquisition target and a new CEO expected within weeks, the biopharma is trying to spark a revival.

Outgoing CEO Onno van de Stolpe, a 23-year Galapagos veteran, said the new CEO has a “fantastic legacy,” not clarifying whether a specific individual has been selected or if that’s the caliber of candidate that is needed to turn the biopharma around. He spoke to investors during the company’s presentation at the conference Thursday morning.

Any new leader of the Belgian company is going to have his or her hands full. Van de Stolpe said that the yet-to-be-named leader will be responsible for boosting Galapagos’ late-stage pipeline, which saw a phase 3 asset, ziritaxestat, canned and the JAK inhibitor filgotinib snared up as the FDA tightened its stance on the drug class.

But the new executive will also have plenty of cash to work with. To shore up the gaps in R&D, Galapagos is on the M&A hunt, with $5.6 billion in cash to deploy and a board approval to find acquisitions or in-licensing deals, van de Stolpe said. The likely target will be a late-stage inflammation therapy, but Galapagos will wait to pen a deal until a new CEO is installed to help “jointly make that decision,” van de Stolpe said. Investors have been in a “holding pattern” since he made his departure plans public last August.

Galapagos is meeting with a “large number of companies” at JPM this week about potential acquisitions and licensing deals, said Andre Hoekema, Ph.D., chief business officer.

Potentially trying to save face after a 23-year career at Galapagos, van de Stolpe said he doesn’t think much needs to be fixed at the company, but the biopharma does “need to start to dream again.”

Those dreams were scuttled in August 2020 when the FDA rejected filgotinib in rheumatoid arthritis through Galapagos’ partner Gilead. The drug has found some success with an approval in Europe for rheumatoid arthritis and ulcerative colitis. Marketed as Jyseleca across the pond, Galapagos projects the program will reach breakeven in 2024, the CEO said.

After all the woes in 2021, Galapagos’ current CEO sees 2022 as a rebound year. With a new leader, and also a new chief scientific officer expected, the company will have a renewed strategic focus. Piet Wigerinck, Ph.D., left the CSO post last year after 13 years at Galapagos.

This year, the company will “hopefully” put its TYK2 inhibitor through a phase 2b test, van de Stolpe said. The drug, GLPG3667, passed a phase 1b trial in psoriasis last July. However, the CEO cautioned there’s potential for the FDA to label TYK inhibitors with the same cautions as JAKs, meaning it could come with black box warnings that serve as a hindrance to market uptake.

With that in mind, Galapagos will keep watch on how the FDA treats Bristol Myers Squibb’s deucravacitinib. The drug beat Amgen’s Otezla in pivotal studies in psoriasis last year, and the Big Pharma is slated to ask the FDA for approval this year. The FDA’s stance on BMS’ drug will help inform Galapagos’ strategy with its own TYK2 inhibitor, van de Stolpe said.

Galapagos sold its cystic fibrosis (CF) pipeline in 2018, but the company is still keeping close watch as AbbVie prepares to release phase 2 data on a key asset from the transaction this year. The $45 million upfront deal could mean $175 million in milestone payments for Galapagos if all goes well.

Galapagos has its fingers crossed as AbbVie tries to enter a field “completely dominated by Vertex,” van de Stolpe said. Vertex aims to be the CF leader well into the next decade, the drugmaker’s CEO said Monday at the conference.

by Kyle LaHucik


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