On Thursday, Morgan Stanley adjusted its outlook on Galapagos NV (NASDAQ: NASDAQ:GLPG), reducing the price target to $31.00 from the previous $32.00, while keeping an Equalweight rating on the stock. The revision follows Galapagos' recent regulatory submission and its plans for upcoming clinical trials and drug development.
Galapagos has submitted a Clinical Trial Application (CTA) to the European Medicines Agency (EMA) for a Phase 2 dose expansion study of its drug candidate '5201 for relapsed/refractory (R/R) chronic lymphocytic leukemia (CLL) and Richter's Transformation (RT). The company anticipates starting patient enrollment for this study in 2025.
In addition, the biotechnology firm expects to present data from the Phase 1/2 PAPILIO-1 study of '5301 for R/R multiple myeloma (MM) at a medical conference set for 2025. This study is part of Galapagos' ongoing research efforts in oncology.
Furthermore, Galapagos is preparing for Phase 2 results for its TYK2 inhibitor '3667, which is designed to spare IL-10, a cytokine involved in immune responses. The company projects to obtain these results for dermatomyositis and systemic lupus erythematosus (SLE) in 2025 and 2026, respectively.
The company's preclinical pipeline also includes a bispecific CAR-T candidate for hematological oncology and a small molecule candidate for immunology, both expected to enter clinical development between 2025 and 2026.
Management has expressed its intention to initiate over four Investigational New Drug (IND) or CTA-enabling studies in 2025, spanning various modalities and indications. Additionally, Galapagos aims to introduce at least two new clinical candidates annually starting in 2026, reflecting its commitment to expanding its drug development portfolio.
In other recent news, Galapagos NV has been given a Market Perform rating by Leerink Partners, highlighting potential R&D challenges. Leerink's evaluation of the biotechnology firm points to a high-risk nature of its pipeline and the uncertain market value of its potential products. Recent developments include Galapagos' H1 2024 financial outcomes, which emphasized advancements in its oncology and immunology programs.
The company reported a consistent revenue stream, largely attributed to its collaboration with Gilead (NASDAQ:GILD) and royalties from Jyseleca, despite an increase in R&D costs. Galapagos maintains a strong cash position of EUR 3.4 billion and is advancing its oncology and immunology pipeline with 20 small molecules and cell therapy programs.
The company has updated its cash burn guidance for 2024 to EUR 370 million to EUR 410 million, influenced by the Adaptimmune collaboration. Future plans include initiating several IND or CTA-enabling studies and a first-in-human study in 2025, with submissions and approvals targeted for 2028.
InvestingPro Insights
Galapagos NV's financial landscape presents a mixed picture, as revealed by recent InvestingPro data and tips. The company's market cap stands at $1.77 billion, with a price-to-book ratio of 0.56, suggesting the stock might be undervalued relative to its assets. This could be particularly relevant given Morgan Stanley's recent price target adjustment.
An InvestingPro Tip highlights that Galapagos holds more cash than debt on its balance sheet, which could provide financial flexibility for its ambitious clinical trial plans and drug development pipeline. This strong cash position aligns with the company's strategy to initiate multiple IND or CTA-enabling studies in 2025 and introduce new clinical candidates annually from 2026.
However, another InvestingPro Tip cautions that the company is quickly burning through cash. This is a critical factor to consider given the extensive R&D efforts outlined in the article, including the upcoming Phase 2 studies for '5201 and '3667, as well as the planned expansion of the preclinical pipeline.
For investors seeking a deeper understanding of Galapagos' financial health and growth prospects, InvestingPro offers 8 additional tips that could provide valuable insights into the company's future performance and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.