JAK1 and beyond Investor Presentation February 2013 Copyright 2013 Galapagos NV
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Galapagos: leading European biotech Two selective JAK1 molecules in Phase II in three indications Major risk sharing alliances with pharma Large pipeline: 4 clinical, 6 PCC, 30 discovery programs Leading fee-for-service provider with BioFocus & Argenta 830 staff, research sites in 5 countries, HQ in Belgium Market cap ~$690 M, 30.2 M fully diluted shares, Euronext: GLPG Ticker symbol 3
Growth strategy Execute development of 634 program to Phase IIb results late 2014 Build mature clinical portfolio move programs through to Proof of Concept in the clinic retain certain geographical rights Partner with big pharma to leverage our innovation Grow Service division revenues by 10-15% per year 4
Revenue generating business model New mode-of-action medicine platform Fee-for-service Alliance business Licensing 5
Full range of drug discovery services 2005 target discovery compound libraries 2010 medicinal chemistry 2013 screening preclinical services respiratory models in vivo PK toxicology inflammation models 6
Service division growth story 100 External revenues, $M 20 Segment result, $M 80 60 40 10 20 0 2008 0 2010 2012E 2008 2010 2012E 7
Alliance business Based on novel drug targets, discovered by Galapagos Partner has option to license program at PCC, Ph I or PoC Success-based milestones + royalties Source of promising molecules & targets coming back to GLPG Received ~$290 M cash from alliances since 2006 start Target to PCC Pre-clinical Phase I Phase II Phase III Launch handover to partner partner 8
Broad pipeline Licensing Indications Company Target Stage lead program RA AbbVie JAK1 Phase IIb Lupus & Psoriasis GSK JAK1 Phase II Metastasis IRA Phase Ib patient study IBD GPR43 Phase I MRSA DNA pol IIIα 9 PCC Inflammation JnJ novel 2 PCC s Osteoarthritis Servier novel PCC Inflammation GSK novel 2 PCC s Oncology Servier novel Lead optimization Cystic Fibrosis novel Lead optimization 4 clinical programs, 6 PCC s >30 discovery programs
JAKs in inflammation Company Drug JAK profile Indications Phase Pfizer Xeljanz JAK3>JAK1>JAK2 RA, UC, psoriasis, JIA Approved in RA, Phase III Incyte/Lilly baricitinib JAK1=JAK2 RA Phase III Vertex VX-509 JAK3 RA Phase II GLPG/AbbVie 634 JAK1 RA Phase II GSK GSK2586184 JAK1 SLE, psoriasis Phase II Incyte INCB039110 JAK1/JAK2 RA, MF, psoriasis Phase II Astellas/JnJ ASP015K JAK3/JAK1 RA Phase II GLPG has two licensed JAK1 selective compounds 10
JAK1 selectivity over JAK2 634 compared to Xeljanz and baricitinib Profiling for JAK1 and JAK2 in cellular whole blood assay JAK1: IL-6/pSTAT1 JAK2: GM-CSF/pSTAT5 Selectivity for JAK1 over JAK2 (ratio IC 50 values) 30 20 10 0 baricitinib Xeljanz 634 634 is the most JAK1 selective clinical compound 11
JAK1 profile creates opportunities JAK2 & JAK3 inhibition has shown: dose-limiting anemia increases in LDL & liver enzymes Xeljanz Phase III dosing limited to 5 mg & 10 mg incidence of (severe) anemia at doses of 10 mg bid and higher Xeljanz approval for 5 mg dose only JAK1 inhibition anticipated to have less side effects 12
634 efficacy Ph II POC 36 patients in 4 week trial Changes in serum CRP (mg/l) % patients reaching ACR20 60 100 50 80 mg/l 40 30 20 % of patients 60 40 10 20 0 0 7 14 21 28 0 0 7 14 21 28 Time (days) Time (days) Placebo 100mg BID 200mg QD Highly efficacious with rapid onset of action, no reported side effects 13
634 safety summary no SAEs on 634 treatment few patients reported treatment-emergent side-effects improvement of hemoglobin no increase in LDL-cholesterol no treatment-induced effects on liver function tests (ALT, AST) modest decrease in neutrophils and platelets no effects on cardiovascular safety (incl. blood pressure) 14
634 Phase IIa study Study design 90 RA patients with insufficient response to MTX, naïve to biologics Doses: placebo, 30, 75, 150 and 300 mg QD, on top of ongoing MTX 28-day, once daily oral dosing 19 study centres in Russia, Ukraine, Hungary, Moldova Outcome Safety profile repeated: absence of anemia, changes in LDL or liver enzymes Clinical improvements seen in 75 300 mg doses Statistically significant improvement in CRP, DAS28, HAQ-DI, and ACR at 300 mg dose Unique safety profile and good efficacy repeated 15
Deal structure with AbbVie Upfront payment $150 million Galapagos performs & funds Phase II in RA License fee $200 million after achievement Phase IIb criteria AbbVie performs & funds Phase III, registration & commercialization GLPG to receive up to $1 billion in milestones + double digit royalties Fiscal benefits from Belgian Patent Income Deduction law Phase II Phase III Marketing and sales handover after Phase IIb Benelux 16
Summary of 634 clinical plan for RA 2013 2014 2015 2016 2017 Phase IIb Phase III Topline results Registration Press release 17
GSK2586184 (previously 778) GSK and Galapagos alliance very productive: 5 PCC s since 2006 GSK2586184 is an investigational selective JAK1 inhibitor inlicensed by GSK from GLPG in Feb 2012 $45 M in downstream milestones + up to double-digit royalties on sales Phase II indications: systemic lupus erythematosus and psoriasis 18
Phase II studies with GSK2586184 Systemic lupus erythematosus Dose range 50 to 400 mg, oral BID vs placebo for up to 12 weeks Approx 150-250 patients in 66 centers in Europe, South America, Asia Primary Outcome Measures include: SELENA SEDAI score, interferon biomarkers Estimated study completion June 2014 Chronic plaque psoriasis Oral BID for up to 12 weeks in UK and Germany Cohort A: dose range 100, 200, 400 mg vs placebo, estimated 56 patients Cohort B: open-label skin biopsy gene expression study, estimated 8 patients Estimated study completion December 2013 Source: ClinicalTrials.gov Galapagos milestone payment upon successful POC 19
974 in inflammatory diseases Target GPR43 is upregulated in gut tissue of UC and IBD patients 974 first GPR43 inhibitor to be evaluated clinically Excellent Phase I data PK PD: CD11b(AE) expression GLPG0974 (ng/ml) 10000 1000 100 10 B - 30 mg C - 90 mg D - 250 mg % Inhibition 100 80 60 40 20 0 Placebo 30 mg 90 mg 250 mg 1 0 6 12 18 24 30 36 42 48-20 0 1 2 3 4 5 6 7 8 Time after dosing (h) Time after dosing (h) 20
Cystic fibrosis Novel targets identified in lung cells from ΔF508 patients Programs proprietary to GLPG Learning from Vertex: Ussing chamber predicts clinical outcome 3 programs in hit-to-lead, new potentiator in lead optimization CF programs on track to deliver PCC in 2013 21
Galapagos CF potentiators Ussing chamber: Cl - flow in 2 types of CF patient lung cells 12 Cl - currents (μa/cm 2 ) 70 10 60 FSK + DR potentiator 8 6 50 4 2 FSK (activator) potentiator Specific blocker 40 30 Specific blocker 0 1 1,000 1001 2,000 2001 3,000 3001 time (sec) 20 time 1 (min) 51 100 101 151 150 201 200 250 251 300 301 350 351 401 400 451 450 F508 CF patient cells (treated with 3 µm VX-809 corrector) GLPG Kalydeco DMSO control G551D CF patient cells (with increasing dosage of potentiator) GLPG potentiators open CFTR channels in patient cells 22
Novel class of antibiotics DNA PolIIIa based antibacterial approach no cross resistance with existing antibiotics bactericidal activity Advanced S.aureus compounds active against all S.aureus including MRSA & multiresistant strains excellent in vivo activity active as oral & IV Early compounds against: Staph, Strep, E.coli, H.influenzae Lead program entered pre-clinical development in Nov 2012 23
Active in vivo In vivo efficacy in lung infection (oral administration) 1.00E+08 1.00E+07 Level of bacterial infection CFU/lung 1.00E+06 1.00E+05 1.00E+04 Increasing efficacy 1.00E+03 1.00E+02 T2hrs T24hrs Levo 50mg/kg PO Linezolid 50 50mg/kg PO PO Compound GLPG 1 50mg/kg mg/kg PO Active in MRSA in vivo models 24
Guidance 2012 Revenues ($ M) Group revenues > $199 M ( 150 M) 200 199 Year end cash > $170 M ( 130 M) 150 Positive operational result & net income Increased cash and profit contribution service operations 100 50 99 01 03 05 07 09 11 12E 25
News flow 2013 Start Phase IIb studies with 634 JAK1 Phase I readouts with 187 IRA and 974 GPR43 Complete Phase II PoC with 974 Start 3 Phase I FiH with new MoA s Servier osteoarthritis alliance GSK inflammation alliance JnJ inflammation alliance Delivery of PCC with potentiator in cystic fibrosis Delivery of more PCCs in the alliances Continued strong performance of service division Three Phase II, multiple Phase I programs by end 2013 26
Bright outlook for Galapagos Leadership in JAK1 space: 2 compounds in Phase II in 3 indications AbbVie deal and inlicensing by GSK highlight success of our approach Broad pipeline provides further opportunities for clinical success Strong cash flow and profits from service division contribute to financial predictability support funding of our proprietary programs Galapagos in excellent position to build on its R&D strengths 27