Belgian biotechnology company Galapagos plans to eliminate approximately 200 positions as part of a “new strategic direction” that narrows its research activities.
Paul Stoffels, the former chief scientific officer of Johnson & Johnson and the recently minted CEO of Galapagos, said Thursday that the company’s new focus will be on accelerating the development of drugs for cancer and diseases tied to the immune system. Conversely, it will discontinue work aimed at fibrosis and kidney disease.
“This strategy provides a clear path forward,” Stoffels said in a statement.
Galapagos didn’t provide many details about the planned layoffs, though it specified that they would affect its European sites. As of June 30, the company said it had 1,344 employees.
Galapagos announced the reorganization in tandem with its latest earnings report, in which the company said that net revenue between January and September was up almost 30%, to 410 million euros, or roughly $406 million, compared to the same nine-month period last year.
About $60 million of that total came from sales of Galapagos’ only commercial drug, filgotinib, which is approved in Europe and Japan under the brand name Jyseleca as a treatment for rheumatoid arthritis and ulcerative colitis.
In the third quarter specifically, net sales of Jyseleca reached $25 million. Galapagos said it has seen “strong adoption” of the drug across Europe, with reimbursement secured in 15 countries for the rheumatoid arthritis indication and 10 for the ulcerative colitis indication.
Given this performance, Galapagos increased its 2022 net sales guidance from a previous range of $74 million to $84 million, to a new range of $79 million to $89 million. Over the first nine months of this year, the company recorded a net operating loss of $134 million.
Galapagos also noted how, by the end of September, it had $4.4 billion worth of cash, cash equivalents and current financial investments — an amount that, according to chief financial officer Bart Filius, provides the “necessary means to invest in immunology and oncology.”
Stoffels added that the company plans to increase its business development efforts as well as “derisk” its research and development by pursuing multiple kinds of drugs, including a type of cell therapy known as CAR-T. Earlier this year, Galapagos bought two companies focused on CAR-T medicines, AboundBio and CellPoint, in deals that took some Wall Street analysts by surprise.
The acquisitions came shortly after Stoffels stepped into the role of CEO in April. He succeeded Galapagos’ cofounder and longtime CEO Onno van de Stolpe, who oversaw the company’s transformation from a preclinical biotech to a multibillion-dollar drug developer. He also helped forge an instrumental research pact between Galapagos and Gilead Sciences in 2019.
Since then, a few of Galapagos’ experimental drugs have suffered setbacks in key clinical trials. The company’s partnership with Gilead has run into obstacles, too.
Galapagos’ share price was down more than 5% Friday morning, trading at just under $43.