Goldman Sachs vandaag
Galapagos NV (GLPG.AS): Announces new cystic fibrosis study: A minor positive
02 Feb 2017
Galapagos has announced a new Phase 2 trial for the C1 cystic fibrosis corrector GLPG2222. The ALBATROSS trial will enrol up to 35 patients who are currently on Kalydeco, and test the effect of GLPG2222 as an add-on therapy. Readout is expected in 4Q 2017. This triggers a US$10 mn milestone payment for Galapagos.
Having spoken to Galapagos this morning, we understand that this trial is not on the "critical path" for Galapagos to develop its triple combination therapy, which is the major market opportunity for Galapagos in cystic fibrosis. The two key results we are waiting for, before Galapagos can start testing the triple combination, are the Phase 1 read outs for potentiator GLPG 2451 and C2 corrector GLPG 2737. Management reiterated their expectation that the triple combination will enter Phase 2 trials in patients by mid 2017.
Today's announced study is an additional study, to learn more about the the safety, tolerability and pharmacokinetic profile of GLPG2222. It also has the advantage of testing GLPG2222 in a different group of cystic fibrosis patients, the Class III mutations (c. 4% of the cystic fibrosis population, for which Kalydeco is currently the standard of care). The market opportunity for the triple combination therapy that Galapagos are targetting is for Class II mutations (c. 90% of the cystic fibrosis population).
Separately, we hosted Galapagos management (Onno van de Stolpe, CEO, and Paul van der Horst, IR) on the road yesterday. Management discussed their development plans for cystic fibrosis and the significant potential market opportunity. For filgotinib, partnered with Gilead, development continues and management expects c.10 proof of concept studies to start in 2017 for new indications. Management also highlighted the potential market opportunity for the early stage osteoarthritis asset GLPG 1972, due to the significant unmet need in this indication, although few details on this program have so far been disclosed.
Galapagos (Buy; last close €62.03) is our preferred name in European biotech, and our 12-month DCF based price target is €81. We believe that the potential for cystic fibrosis at Galapagos is underappreciated by the market, and that 2017 will see more progress and news flow for its development, which could start to drive a reassessment.