Goldman Sachs 21-12-2016
Galapagos NV (GLPG.AS) €58.40: Positive topline SAPHIRA 1 data supports cystic fibrosis timeline
News
Galapagos and Abbvie have announced the headline results of the SAPHIRA 1 trial, the second efficacy trial for the potentiator GLPG 1837. This tested 26 patients with the G551D mutation (25 of whom were being treated with Kalydeco pre study). ‘1837 was generally well tolerated when dosed up to 500 mg twice daily for 14 days. Statistically significant and dose dependent decreases in sweat chloride were observed. At the 500 mg bid dose, sweat chloride decreased from a mean value of 98 mmol/L at baseline to 66 mmol/L (p <0.0001). Patients also saw their FEV1 levels return to where they were on Kalydeco treatment. One patient dropped out due to an increase in non-cardiac creatine phosphokinase (CK). Galapagos will present more data at a call at 2pm UK today (dial in: +44 330 336 9105, code 6588087).
Analysis
This is in line with our previously flagged expectation that SAPHIRA 1 was most likely to show similar efficacy to Kalydeco at a relatively low GLPG1837 dose. We view this data as a validator of the preclinical work that Galapagos has presented, and believe that today’s data supports Galapagos’ goal to select the triple combination components by early-2017. On the call, we will look for (i) the dose response curves, (ii) updates on Galapagos’ plans for the broader cystic fibrosis portfolio, and (iii) more information on the one patient who dropped out (there are several reasons that CK could be increased, but it is reassuring that it is not cardiac).
We see the next key steps from here as (1) the Phase 1 data for the next generation corrector GLPG2737 early next year and (2) the Phase 1 data for Galapagos’ second potentiator GLPG2451, which will allow Galapagos to decide whether to incorporate ‘1837 in the triple combination (which would lead to twice daily dosing) or ‘2451 (which would allow once daily dosing).
Implications
We rate Galapagos as Buy, with a DCF-based 12-month price target of €75. Key risks are the outcomes of the clinical trials, ability to recruit patients into later-stage cystic fibrosis trials, and potential value-destructive M&A.