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Galapagos (GLPG) Falls on Inflammatory Study Data Readout

Galapagos NV GLPG announced results from several early- to mid-stage studies evaluating two inflammatory candidates — GLPG3970 and GLPG3667 — with different mechanism of action.

GLPG3970, a salt inducible kinase (SIK) inhibitor, is being developed for treating several inflammatory indications including psoriasis, ulcerative colitis (UC) and rheumatoid arthritis (RA).The company is developing the tyrosine kinase 2 (TYK2) inhibitor candidate, GLPG3667 as potential treatment for psoriasis.

We note that GLPG3970 is the first novel compound from the company’s Toledo product portfolio that uses the novel SIK inhibition mechanism discovered by Galapagos. Data from the phase Ib psoriasis study showed that treatment with the candidate achieved improvement of statistical significance compared to placebo.

However, the candidate failed to show any differentiation from placebo in improvement in patients in the two phase IIa studies evaluating it in UC and RA. However, the UC study data supports further development with Toledo compounds.

Galapagos had launched two additional phase II studies on GLPG3970 earlier this year for treating Sjögren’s and systemic lupus erythematosus.

In a separate press release, Galapagos announced positive data from the early-stage psoriasis study evaluating GLPG3667 that supports the initiation of a phase IIb study. Data from the study demonstrated that the candidate was well tolerated. The candidate also achieved at least a 50% improvement in PASI score, a measure of clear skin, from baseline in 40% of patients compared to 10% for placebo. Based on these safety and efficacy data, the company may initiate an optimal dose-finding mid-stage study soon.

Shares of Galapagos were down 1.6% during after-hours trading on Jul 14, most likely due to no differentiation from placebo in UC and RA studies. The company’s shares have declined 33.5% so far this year compared with the industry’s decrease of 3%.

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Last year, the company added the first drug — Jyseleca (filgotinib 200 mg and 100 mg tablets) — to its commercial portfolio following approval from the European Commission as monotherapy or in combination with methotrexate (MTX) for treating RA patients with inadequate response or who are intolerant to one or more disease modifying anti-rheumatic drugs (DMARDs). The company developed the drug in partnership with Gilead Sciences GILD. However, the drug received a complete response letter from the FDA for a similar indication and treatment settings in 2020.

The agency has requested data from the MANTA and MANTA-RAy studies before completing its review of the NDA.  Both studies are fully recruited and top-line results are expected soon this year.

Meanwhile, Galapagos and Gilead are also developing filgotinib, targeting multiple inflammatory diseases, including ulcerative colitis, Crohn’s disease, psoriatic arthritis, and others.

Zacks Rank

Galapagos currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the healthcare sector include Alexion Pharmaceuticals ALXN and Adaptive Biotechnologies ADPT, both presently sporting a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alexion’s earnings estimates have been revised upward from $13.88 to $13.89 for 2021 and from $14.69 to $14.70 for 2022 over the past 60 days. The stock has surged 19.5% year to date.

Adaptive’s loss estimates have narrowed from $1.58 to $1.55 for 2021 and from $1.25 to $1.39 for 2022 over the past 60 days.

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