Wall Street Trader schreef op 18 oktober 2019 10:37:Bernstein
PT € 155Galapagos: Downgrade to Market-Perform - see you in 2H 2020?
GLPG is up 85% YTD and following the GILD deal, the Rinvoq (Upad) label and the stock close to our PT, we take a step back and wait until we approach stock moving catalysts in 2H20 where at current levels, the risk/reward will still be to the upside. Downgrade to M/P (for now).Filgotinib risk/reward mixed.
Our base assumptions are (i) GILD use a Priority Review Voucher and gain approval in 2Q20. (ii) Filgotinib gets a thrombosis warning on label similar to competition. (iii) Filgotinib to get both 100mg and 200mg doses filed (and approved) – likely to be the case but you cannot say with certainty. Whilst most investors we speak to tend to
agree on all 3 – we are not sure all model filgotinib as conservatively. We agree that the upcoming p2 data in CLE and Sjogren's has a positive risk/reward but it is not stock moving. We think the safety nuances for filgo vs. peers will come out eventually but it will take time to educate physicians and until then you will have debate.Toledo is unlikely to move the stock higher.
We will see first data from the program in 1H20. The debate is if GLPG will move on p1 data - we are unconvinced by the magnitude.
2H20 gets very interesting again.
We will get clarity soon on IPF futility timeline for the p3 and importantly, interim data will see the stock move given our view of "get the drug approved in IPF, it will be a blockbuster". The p2 PINTA data in 2H20 will support excitement in the franchise. Before the end of 2020 we will also get more from (i) MOR106 in AtD and (ii) GLPG1972 in OA – the latter has the potential to drive upside given the good economics.Investment Implications
We admittingly should have downgraded GLPG at €15 higher. We do so now as investor queries have increased - should we buy with fresh money? Our view – No. The risk/reward on catalysts remains positive and if they were sooner, we would have maintained our rating. For holders we suggest maintaining or possibly trimming ahead of filgo approval. M/P PT €155.