On Friday, Morgan Stanley adjusted its outlook on Galapagos NV (NASDAQ:GLPG), reducing the price target to $32.00 from the previous $35.00. The firm maintained an Equalweight rating on the stock. The revision follows Galapagos' second-quarter financial report, which showed an operational cash burn of approximately €125 million, concluding the quarter with €3.4 billion in cash and equivalents.
Management at Galapagos reaffirmed its guidance for the 2024 cash burn to be between €280 million and €320 million, which includes year-to-date business development costs, bringing the total to €370 million to €410 million. The company is on schedule with its Investigational New Drug (IND) application for the Phase 1/2 EUPLAGIA-1 study of '5201 in relapsed/refractory chronic lymphocytic leukemia, with or without rituximab, expecting to file in the fourth quarter of 2024.
Further updates from Galapagos include the anticipation of providing additional data for '5101 and '5201 by the end of 2024. An amendment to the protocol for the '5301 PAPILIO-1 study in multiple myeloma was submitted in June, with the company expecting to resume enrollment soon and planning to present study data at a medical conference in 2025.
Looking ahead, Galapagos is preparing for Phase 2 readouts for '3667 in dermatomyositis and systemic lupus erythematosus in 2025 and 2026, respectively. The preclinical pipeline is also active, with plans to initiate more than four Investigational New Drug or Clinical Trial Application-enabling studies and a first-in-human study in 2025. Additionally, the company aims to introduce at least two new clinical candidates each year starting in 2026.
The adjustment in the price target to $32 by Morgan Stanley reflects the actuals from the second quarter, aligning with the latest financial and developmental progress reported by Galapagos.
In other recent news, Galapagos NV has been making significant strides in its operations. The company recently reported a net profit in Q1 2024, driven by fair value adjustments and interest income. This development aligns with their full-year cash burn guidance, emphasizing a strategic focus on immunology and oncology.
In a noteworthy collaboration, Galapagos NV and Adaptimmune Therapeutics (NASDAQ:ADAP) have partnered for a clinical proof-of-concept trial for uza-cel, a TCR T-cell therapy for head & neck cancer. The partnership leverages Galapagos' decentralized manufacturing platform, potentially enhancing the delivery speed and efficacy of the therapy. The agreement includes an upfront payment of $70 million to Adaptimmune, with additional R&D funding totaling $30 million, and potential milestone payments of up to $465 million.
TD Cowen maintained a Buy rating on Galapagos NV, highlighting the potential of its pipeline program. The firm's perspective is based on the latest data from the GLPG5101 trial, which could influence the company's market valuation. This reaffirmed Buy rating reflects confidence in Galapagos NV's prospects, particularly given the promising trial data presented.
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