Barclays 29 maart
Galapagos
FINCH results – looking like birds of prey in the JAK class
Stock Rating/Industry View: Overweight/Positive
Price Target: EUR 130.00
Price (28-Mar-2019): EUR 85.06
Potential Upside/Downside: 53%
Tickers: GLPG NA / GLPG.AS
The data is finally here…and it’s looking good to us
This evening, Galapagos and partner Gilead (covered by Geoff Meacham) released the results of the eagerly anticipated FINCH 1 & 3 trials of filgotinib in rheumatoid arthritis (RA). This is the 2nd and 3rd phase 3 readouts in RA, following the FINCH 2 data, which was top-lined on 11th September 2018 (FINCH takes flight in rheumatoid arthritis (11/09/18)). FINCH 1 (which was testing filgotinib 100mg & 200mg on top of a methotrexate (MTX) backbone vs. Humira + MTX and vs. placebo + MTX in patients who had prior inadequate responses to MTX) and FINCH 3 (which was testing filgotinib 100mg & 200mg + MTX vs. filgotinib 200mg monotherapy vs. MTX monotherapy in MTX naïve patients) both met their primary endpoints of achieving an American College of Rheumatology 20% response (ACR20) (in FINCH 1 vs. placebo at week 12 and in FINCH 3 at week 24).
We’d note that the metric investors had been most keenly watching for was rates of thromboembolic events (see: Galapagos: One day more...? (28/03/19)). FINCH 1 saw one venous thrombotic event (VTE) across the filgotinib groups and two in the placebo group, whereas FINCH 3 saw no venous thrombotic events in the filgotinib groups and one event in the MTX group. To us this is seemingly as good of a safety scenario as we’d expected for filgotinib; just one event of VTE across a total of 1,788 patients treated with filgotinib in the two trials.
The companies also filed a safety update based on the pooled interim data from the three phase 3 FINCH trials and the updated week 156 safety data from the phase 2b DARWIN 3 long term extension safety study. Of 2,088 patients treated with filgotinib, there’s been only 1 case of deep vein thrombosis/pulmonary embolism, which equates to a rate of <0.1%. GLPG’s CEO commented in an email to analysts: “Importantly, the favorable safety data observed across broad RA populations in FINCH 1,2 &3 and the long term DARWIN 3 trial strongly support the hypothesis that our JAK1 selectivity is advantageous. The data also support the submission of 2 doses of filgotinib for approval. With filgotinib treatment, there are improvements of hemoglobin, reduction of platelets, and improvement of lipid profile observed. In the FINCH safety data there is no dose-dependent difference on safety parameters, or, better said, there are no safety flags.” (emphasis ours).
We’d characterize efficacy as generally looking good as well. In FINCH 1, across the endpoints of ACR20, ACR50, ACR70, % of patients with low disease activity (DAS28(CRP=3.2)) and % patients achieving clinical remission (DAS28(CRP<2.6)), both filgotinib arms had p values <0.001 vs. the placebo arm. The filgotinib 200mg arm was superior to Humira on the clinical remission endpoint and the 100mg arm was non-inferior to Humira.
In FINCH 3, both filgotinib arms on top of MTX met stat. significance for the ACR20, ACR50, ACR70 and clinical remission endpoints vs. MTX monotherapy. We would note that the filgotinib 200mg monotherapy arm did not appear to meet statistical significance vs. MTX on the ACR20 endpoint, but it did on the ACR50, ACR70 and clinical remission endpoints. The only other efficacy endpoint we will look for further clarification on is why the change in the modified total Sharp score (mTSS, which measures the progression of structural damage), met statistical significant for both the filgotinib arms in FINCH 1, as well as for the filgotinib 200mg monotherapy arm in FINCH 3, but not the filgotinib + MTX arms in FINCH 3. All treatment arms across both studies met statistical significance on the Health Assessment Questionnaire Disability Index (HAQ-DI) endpoint.
When comparing tonight’s data vs. the relevant trials of Abbvie’s (covered by Geoff Meacham) upadacitinib, we’d generally say the efficacy/safety of filgotinib looks to be at least on-par with/if not a bit better. In FINCH 1, the 200mg filgotinib arm looks a touch better vs. the 15mg upadacitinib arm across efficacy endpoints. In FINCH 3, both arms of filgotinib on top of MTX look marginally better across efficacy endpoints, with the 200mg monotherapy arm looking more comparable on the endpoints where it did meet statistical significance (we would note the MTX monotherapy arm had 71.4% of patients achieving ACR20 in FINCH 3, vs. 54.1% in SELECT-EARLY). From a safety perspective, we’d highlight lower rates of both serious infections and herpes zoster in the filgotinib treatment arms vs. the upadacitinib treatment arms.
Gilead, who will be leading the regulatory process for filgotinib, has previously indicated that once it had presented the FINCH 1 & 3 data, it intended to meet with the FDA in order to determine next steps towards an NDA filing (particularly in light of what information the company may need from the ongoing MANTA safety study in order to support filing). We look to get an update from Gilead on timing in the coming weeks.
Filgotinib in RA is €43.58/share (30%) of our total €132.94/share NPV for Galapagos. This is based on our current peak sales estimates of €2.8bn, €1.7bn of which is in RA. We also model for filgotinib contribution from ulcerative colitis (€13.45/share; 9%) and from Crohn’s disease (€12.27/share; 9%). In light of tonight’s readout, our estimates are currently under review, but in light of this positive development, we do expect a positive reaction from GLPG shares tomorrow.