Galapagos Aktie

Good day, and thank you for standing by. Welcome to Galapagos's Q1 2026 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sherri Spear. Please go ahead.

Hello again from Belgium. Thank you for joining us today as we report Galapagos's First Quarter 2026 Financial Results and Business Update. Last evening, we issued a press release outlining these results. This release, along with today's presentation, can be found on the Galapagos investor website at www.glpg.com. Before we begin, I would like to remind everyone that we will be making forward-looking statements. These forward-looking statements include remarks concerning future developments of our company and our pipeline and possible changes in the industry and competitive environment.

These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on information currently available to us and on assumptions we have made. Actual results may differ materially from those indicated by these statements and are accurate only as of the date of this recording, May 7, 2026. Galapagos is not under any obligation to update statements regarding the future or to conform to these statements in relation to actual results unless required by law. You are cautioned not to place any undue reliance on these statements. Joining us on today's call from the executive team are Henry Gosebruch, Chief Executive Officer; and Aaron Cox, Chief Financial Officer. Eric Hedrick, Chief Clinical Adviser; Sooin Kwon, Chief Business Officer; and Dan Grossman, Chief Strategy Officer, will be joining us for the Q&A session. With all of that, let me now turn the call over to Henry Gosebruch, CEO. Henry?

Thank you, Sherri, and thank you all for joining us today. It is truly an exciting time to be here. This call marks my 1-year anniversary as CEO, and I couldn't be more proud of what we've accomplished together in the first year of our journey. We have transformed our management team and Board, repositioned our portfolio, added an exciting set of new pipeline programs, and we are changing our name to Lakefront Biotherapeutics. This is not a story of small adjustments. It's a story of real transformation. A transformation like this requires the right people. At Galapagos, we've assembled a management team with world-class business development expertise and a shared mission of leveraging our unique position to develop new medicines for patients and to create significant value for our shareholders.

Our executives bring world-class deal making experience and each has an enviable track record. This is a team built for this new phase of our company. We are focused on disciplined decision-making, careful capital allocation, reshaping our pipeline through business development and focused execution that can create long-term sustainable value. As Galapagos transforms, it's also important that the Board brings the right mix of capabilities and background. We are very pleased with the talented group that has joined us. The Board's expertise and background brings the skills and experience that are needed to provide effective oversight of our strategy and the company. Our previous Board Chair, Jerome Contamine, retired from the Board following the 2026 AGM/EGM. I am extraordinarily grateful for Jerome's service. He has been a great partner and provided valuable insights that have positioned us for this next phase of growth.

I'm excited to work with Gino Santini as our new Board Chair going forward. Gino is a seasoned pharmaceutical professional with a 27-year career at Eli Lilly, where he served as Senior Vice President of Corporate Strategy and Business Development and led major acquisitions and partnerships. He has advised and directed numerous pharmaceutical, biotech and venture-backed organizations and has relevant experience in M&A, commercial partnerships and Board governance. Gino's extensive operational, strategic and business development expertise shaped by decades of global leadership in our sector will be invaluable as we execute on our strategy to deliver meaningful patient impact and sustainable shareholder returns.

Just a few weeks ago, we announced that we had entered into a binding agreement with Gilead regarding the portfolio created by Ouro Medicines. This did not happen overnight. It was the result of a structured process, early relationship building, confidential reviews, negotiations and ultimately, successful agreement on a partnership with Gilead that has the potential to drive significant value for our shareholders. The transaction centers on Ouro's lead program, gamgertamig, a BCMA/CD3 T cell engager for autoimmune diseases with multibillion-dollar revenue potential. Currently in Phase Ib dose-ranging studies and expected to enter registrational studies as early as 2027. Gamgertamig, Ouro's lead molecule is, in our view, a potential first and best-in-class T cell engager that has demonstrated a compelling profile in clinical studies.

The collaboration brings a meaningfully clinically differentiated high potential asset into our portfolio. The proof-of-concept initial indications are orphan indications where the clinical trials are manageable in size and scope with significant potential for expansion into additional indications. So far, we've seen compelling data from over 60 patients treated with gamgertamig across 5 distinct autoimmune indications. This clinical experience has highlighted the differentiated profile of gamgertamig characterized by rapid induction of durable complete responses, minimal cytokine release syndrome with the current schedule of administration and remarkable consistency in these findings across studies and disease indications.

We look forward to sharing data with investors over the coming months in a series of publication and presentations at medical meetings. We believe that gamgertamig has a clear speed-to-market advantage. The initial focus on the treatment of rare autoimmune diseases has provided rapid proof of concept, enabling initiation of registrational trials as early as 2027. The program has also received Fast Track and Orphan drug designation in the U.S. for ITP and AHA, further supporting an accelerated development path. Finally, the spectrum of diseases that may be addressable by gamgertamig encompasses over 20 separate indications, giving us a pipeline and a product opportunity.

In conclusion, we believe gamgertamig could represent a very important new type of treatment approach for immune reset therapy for patients across a large number of conditions. It has shown compelling clinical data so far, and it may have both a first-in-class advantage and best-in-class potential. Our partnership also includes 3 exciting preclinical programs, which we will look to progress with urgency. We look forward to sharing more about these programs in the future. Now I'll turn the call over to Aaron to talk about financials. Aaron?

Thanks, Henry, and hello, everyone. As you heard from Henry, we are really excited about the Ouro transaction. Another major benefit is that it includes a partial waiver and modification of terms of our legacy Option License and Collaboration Agreement or OLCA, with Gilead, marking a meaningful step forward in our strategic and financial flexibility. This slide details the benefits of this transaction relative to our legacy relationship. In short, the participation of Gilead was far above the $150 million expected with the Legacy Agreement. I'm really proud of our team for negotiating far better terms and proving that we are able to work together with Gilead to achieve our common goals.

As noted in our transaction announcement, under the revised terms and subject to the closing of the transaction, $500 million is now unlocked for broader use beyond the Ouro investment, enabling Galapagos to pursue new opportunities and transactions independently of Gilead and expanding the universe of potential strategic targets. Additionally, up to $150 million of this $500 million may be used for return of capital to shareholders, subject to certain limitations, providing us with additional optionality to drive shareholder value. This partial waiver and modification to terms of the OLCA further strengthen our ability to deploy capital strategically and to pursue additional value-accretive opportunities. Along these lines, last week, we also received approval from our shareholders to complete a share repurchase.

We will provide an update regarding a potential share repurchase following the close of the Ouro transaction. Turning now to our Q1 2026 financial results and as outlined in the press release issued last night. Our total net revenues were EUR 6.5 million compared to EUR 75 million in Q1 2025. This decrease is mainly driven by the prior year comparison, which included EUR 57.6 million related to the OLCA revenue recognition. As noted with our full year 2025 results, the remaining deferred income balance related to the OLCA was fully released at year-end 2025. In Q1 2026, revenues were primarily driven by EUR 4.9 million in supply revenues from Jyseleca inventory sales to Alfasigma and EUR 1.6 million in collaboration revenues, reflecting royalties from Gilead.

On the cost side, we continue to see significant reduction in our operating expenses. R&D expenses decreased to EUR 31 million, contributing to an overall improvement in our cost base. This reduction is driven by lower severance expenses as well as the absence of restructuring-related charges that impacted Q1 2025. As a result, operating loss improved to EUR 63.7 million compared to EUR 158.7 million last year, which included EUR 111 million in restructuring costs. Moving below operating income, we reported net financial income of EUR 77.7 million, mainly driven by positive fair value adjustments and favorable unrealized currency exchange gains on our U.S. dollar-denominated cash and investments of EUR 64.3 million. This led to a net profit of EUR 14.5 million for the quarter compared to a net loss of EUR 153.4 million for the first 3 months of 2025.

Financial investments and cash and cash equivalents totaled EUR 2,982.2 million on March 31, 2026, as compared to EUR 3,297 million on March 31, 2025. The quarter end cash balance meaningfully benefited from a decrease in the U.S. dollar to euro exchange rate, which moved from $1.175 at year-end 2025 to approximately $1.15 at the end of the quarter. Turning now to our guidance for 2026. With the closing of the Ouro transaction expected in the second quarter, we expect to spend EUR 60 million to EUR 75 million on Ouro-related cash expenditures, including operating costs and transaction expenses in 2026. Along with the upfront payment of approximately EUR 713 million, this results in total Ouro related cash expenditures of EUR 775 million to EUR 790 million for 2026. We continue to expect onetime cash costs of EUR 125 million to EUR 175 million related to the wind down of cell therapy activities.

Inclusive of the Ouro-related expenditures and continued wind-down of cell therapy, we now expect to end the year with EUR 1.975 billion to EUR 2.05 billion of cash and cash equivalents. Importantly, the company remains robustly funded. Following this transaction and including estimated R&D spend associated with gamgertamig until first approval, the company will continue to have a majority of its current cash remaining for additional strategic transactions and other capital allocation priorities. Now let me turn it back to Henry to wrap up.

Thank you, Aaron. In closing, I'm just thrilled to introduce you to the new Lakefront Biotherapeutics. To us, Lakefront symbolizes the attractive opportunity in front of us and the new beginning we are creating. My most reflective moments often occur when I'm out exercising on Chicago's Lakefront. Our new name captures what we aspire to achieve for patients, enhanced quality of life, meaningful positive impact and more time for what matters most. It represents helping patients move toward a better future with greater hope and possibility. As of tomorrow, May 8, we expect to be listed as LKFT on Euronext and NASDAQ, symbolizing another pivotal step in our transformation. So with that, thank you all for your attention, and we will now open it up for your questions. Operator?

[Operator Instructions] We will now take the first question from the line of Brian Abrahams from RBC Capital Markets.

Congrats on all the transformation over there. I was wondering if you could give us maybe your latest thoughts on what the dose-ranging gamgertamig data will need to show specifically just in terms of B-cell depletion, depth and durability, CRS rate reductions to move forward in registrational, how you're going to be picking which registrational trials to begin first? And just any more thoughts on the potential size and complexity of these trials that could start next year?

Brian, it's Henry. Thanks for the question. I'll start, and then I'll have Eric supplement. So first of all, look, we -- as we said on the prior discussion, we had a chance to really thoroughly diligence not only gamgertamig, but other programs out there with other T cell engagers. And we've seen really compelling data from over 60 patients that showed very rapid onset, very deep depletion and very good durability. And so again, as we've talked about, that will come out here in the next couple of quarters in terms of individual releases at medical meetings and other publications. So just for context. But I'll let Eric go through the specifics on the 3 points you raised. Eric?

Yes. Thanks, Henry. Brian, thanks for the question. Sort of expanding on what Henry just said, I think the team at Ouro has done really good work on exploring dose ranging here. I would say that the profile that would be an optimal profile for going into late-stage development would be one where you get profound B cell depletion, but a dose duration schedule that minimizes CRS risk. And I think at the current dose and schedule, we referred to this previously, it really does seem like alterations in the dose and the duration of therapy can really minimize the CRS risk.

I think the other aspect here that's important will be having a dose that results in a period of B-cell depletion that is deep, but relatively short, right, so that you can minimize the infectious risk, the need for supplemental intravenous immunoglobulin. And again, I think the team at Ouro is well on your way to identifying that dose. And we fully expect that by 2027, we'll be comfortable with the doses that we take forward into Phase III programs.

We will now take the next question from the line of Judah Frommer from Morgan Stanley.

I think we saw another transaction recently for BCMA/CD3. There are several assets in the space. Just curious how you think the space might evolve and how you're thinking about development plans. Do you see room for multiple assets targeting the same mechanism within the same large indications? Or do you think this is going to be an area where various assets are going to kind of carve up sub indications, maybe stick to smaller indications as opposed to necessarily all going after the same large ones?

Yes. Thanks, Judah. It's Henry. So again, just for context, we were able to diligence multiple opportunities in some depth, and we're quite pleased that our top choice, i.e., gamgertamig was the one that we were ultimately able to transact with. So we continue to believe that gamgertamig is the best alternative out there and has the potential to be first-in-class. That being said, look, we're very encouraged by the fact that we're not the only ones excited about the space that there's a lot of investment going into it. I think that is good to see and ultimately good for patients.

The Ouro team has been really, really savvy in terms of picking very interesting indications that we believe are quite sizable, multibillion-dollar potential easily, but where they have a clear timing advantage. And so I think in those places, we're in a really favorable position. That being said, we don't view gamgertamig behind in any other indication as well, and those are being very actively explored. To your question whether ultimately the best drug takes all of it or the market gets split up in some way, I think we'll defer that when we go a little bit further. But again, we're -- based on our diligence of multiple programs, we think we got the first and best-in-class alternative here with us.

We will now take the next question from the line of Phil Nadeau from TD Cowen.

Congrats on the progress. Two from us. So first on gamgertamig, you've mentioned that it's perhaps best-in-class. Can you go into a little bit more detail about how it is differentiated structurally or otherwise from the other BCMA/CD3s? That's first. And then a follow-on to Brian's question. In terms of moving into pivotal development, can you talk about the framework with which you're evaluating the different indications and opportunities and how you prioritize the first one or several to move forward into pivotal development?

Eric, why don't you take the first one and then perhaps Dan can take the second one.

Yes, sure. Phil, thanks for your question. Yes, I think in terms of differentiation amongst these BCMA-directed T-cell engagers, yes, one of the things that was attractive about the Ouro molecule, I guess there was 2 aspects. One is the detuning of the CD3 binding arm, which we think goes a long way in addition to dosing and significantly reducing the CRS risk. So that was important. The BCMA binding arm is very potent, right? And so we're comfortable that, that from the data we've seen so far is sort of resulting in very deep B-cell depletion and the sort of response in disease that you would associate with profound B-cell depletion. So I think those were the main aspects of the molecule that were attractive to us. And again, the Ouro team has really advanced us very well in the clinic. And I think you're seeing the clinical representations for those molecular features. And maybe, Dan, if you want to comment as well.

Yes. Sure. I'm happy to talk about indication selection. And first, I'll echo what Henry said in terms of appreciation for the Ouro team's strategic judgment in choosing initial indications in which you could get a very rapid and very clear signal of the actual clinical potency of the molecule and particularly in the benign hematologic indications. Beyond that, I mean, we kind of see gamgertamig as a vanguard of T cell engager therapy for autoimmune disease broadly, it's going to really be revolutionary over the next 10 years. We anticipate that there's a high likelihood that in 10 years, it will be hard to imagine there was a time when this was not -- this kind of technology was not part of standard of care across these B-cell mediated autoimmune disease.

And so we are really looking for quite a bit of breadth and to get the product out into the clinic and then into the hands of physicians to see what it can do across not just different diseases, but different therapeutic areas. So of course, the first filter is always going to be a mechanistic hypothesis that deep B-cell depletion will result in meaningful clinical benefit to patients. That's sort of effectively a proxy for PTRF. And then within that, we see a range of disease states in which the -- in which the standard of care today and anticipated over the next couple of years is woefully inadequate. So there's the room to the most good for patients where there are material sized patient populations and where the feasibility of running clinical trials and bringing the product to the commercial market is most feasible. So we're going to be balancing those factors, but really looking to show the broad potential of this kind of technology.

Yes. And Phil, it's Henry. Just to add to Dan's answer. One thing that, again, really attracted us in our diligence is that given how profound the impact is on patients that we've been able to see, you really need just pretty small numbers of patients in these diseases to really figure out whether you get the right dosing scheme to take it forward into larger studies. So we quite like the fact that this is very capital efficient. Again, in due time, we'll provide a little bit more on sort of our R&D spend, et cetera.

Aaron gave it for this year, of course. But that's another very important feature that there's really relatively modestly sized studies needed and then you can go into pivotal, which are also quite modest given, again, this profound impact on patients we've seen.

We can do a lot with a little at this effect size.

We will now take the next question from the line of Sean McCutcheon from Raymond James.

This is [Yang], on for Sean. I have 2 questions. Maybe the first one is, could you speak to the optionality on continued BD activities and the prioritization, for instance, targets or indications driven that may have a clear strategy to have a synergism with gamgertamig in autoimmune disease? And I have a follow-up.

Yes. Thanks for the question. It's Henry. So a couple of things. Again, we've said that the majority of our capital is available for other strategic initiatives and future BD. Aaron walked through the $500 million bucket we now have that we can do deals independent from Gilead and we can take a portion of that for return of capital as well. So we're very excited about that flexibility and the substantial capital we have left to look for other BD. That being said, we're very excited about Ouro and the potential that we just in the prior question outlined and the 3 preclinical assets we have that could also be meaningful opportunities.

So I would say the hurdle for the next BD deal is very, very high. The hurdle for the first one was also high, but the next one is very, very high because we've got a really, really nice portfolio. We do have increased capability now, and we, of course, have a set of diseases that it could make sense to build on, as you say, to introduce some development or even commercial synergy down the road. But I think the message right now is, look, we're excited about what we have. We're going to be very, very busy executing these programs, and we're in no rush to do a second BD deal here given how much have.

Great. Could you also please comment on the infection risk, hematology events associated with gamgertamig and all the BCMA-TCE class in general and the company's view on the differences it may be associated with CD19 TCE for autoimmune disease.

Eric, why don't you take that one?

Yes. Yes. Thanks for the question. I would say that sort of in relation to the comment I made previously, the infectious risk here really has to do with the duration of B-cell depletion and plasma cell depletion, right? When we're giving -- when team at Ouro was giving this drug in the current dosing schedule, we're comfortable that we're getting to the point where the period of B-cell depletion will be such that the infectious risk should be manageable. So that will be a key point in sort of determining the dose to go forward. But again, I think the key point is that you can dose this drug in such a way that you can have an impact on the period of B-cell depletion and then the infectious risks should really go along with the durability of B-cell depletion. And again, the team at Ouro has done a really nice job at dose ranging and trying to like optimize that period.

We will now take the next question from the line of [indiscernible] from KBCS.

[indiscernible] coming in for Jacob. I had a question on the Galapagos 3667 program. What are the strategic options you're currently considering? And could one of the potential outcomes be that you choose to develop the program in collaboration with Gilead? Or how do you look at that program at the moment?

Yes. Thanks for the question. It's Henry. As we said previously, we're analyzing various alternatives relating to '3667. That process continues, although it's quite well advanced at this point. So we're coming close to the end of that process and making a decision which way to go, and we're assessing kind of a broad range of options. So more to come on that in the not-too-distant future, but it's inappropriate at this point to comment further on it.

I would now like to turn the conference back to Henry Gosebruch for closing remarks.

Very good. Well, thank you for your time today. We look forward to closing the Ouro transaction here in the second quarter and welcoming the team from Ouro to join us here. But more broadly, reflecting on the last year, it's really been a fantastic year, and I'm super proud of what we've accomplished together. But I'm also super excited about the year ahead for Lakefront Bio. So thank you, and we hope you have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Galapagos Year-End 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Glenn Schulman, Head of Investor Relations. Please go ahead.

Good day, everyone. This is Glenn Schulman, Head of Investor Relations, and I'd like to thank you all for joining us today as we report Galapagos' full year 2025 financial results and fourth quarter business update. Last evening, we issued a press release outlining these results. This release, along with today's presentation, can be found on the Galapagos Investor website at www.glpg.com.

Before we begin, I would like to remind everyone that we will be making forward-looking statements. These forward-looking statements include remarks concerning future developments of our company and our pipeline and possible changes in the industry and competitive environment. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Actual results may differ materially from those indicated by these statements and are accurate only as of the date of this recording, February 24, 2026.

Galapagos is not under any obligation to update statements regarding the future or to conform to these statements in relation to actual results unless required by law. You are cautioned not to place any undue reliance on these statements. Joining us on today's call from the executive team are Henry Gosebruch, Chief Executive Officer; Aaron Cox, Chief Financial Officer; Sooin Kwon, Chief Business Officer; and Dan Grossman, Chief Strategy Officer of the company, all of whom will be available during the Q&A session.

With all that, let me now turn the call over to Henry Gosebruch, CEO of Galapagos. Henry?

Thank you, Glenn, and thank you all for joining us today. Galapagos had a transformative 2025, focused on turning the page from cell therapy, implementing a new strategic direction and laying a strong foundation for long-term value creation. We are entering this new chapter with approximately EUR 3 billion in cash at year-end 2025 in a strong position to pursue transformative business development opportunities with significant strategic flexibility. The new team is in place to execute on the strategic vision. We have been very deliberate in assembling the right leadership team to execute the strategy, and I could not be more pleased with the level of talent we've been able to attract to Galapagos.

We've assembled a management team with world-class business development expertise and a shared mission of leveraging our unique position to create significant shareholder value. Collectively, our team has executed hundreds of transactions in the life sciences sector and is working well together with the goal of creating value for our shareholders. We have also evolved our Board composition, welcoming 5 new directors who bring the deep transaction, capital allocation and operating experiences needed for this next phase of growth. Our objective is not incremental rebuilding, but a fundamental reshaping of the company around programs we believe are capable of delivering meaningful patient impact and sustainable shareholder returns.

We are aggressively evaluating opportunities across our focus areas and maintaining a broad dialogue with companies and innovators globally. We are encouraged by the level of potential transactions we have in our deal pipeline and our opportunity to become a unique player in the biotech deal ecosystem and carve out niches where we can be competitively differentiated. At the same time, we are disciplined and selective. We will allocate our capital carefully and thoughtfully with clear financial metrics in mind. Our focus remains on clinically derisked opportunities in areas where we are able to bring unique insights that represent competitive advantage.

Lastly, our collaboration with Gilead remains a key strategic advantage and potential competitive differentiation. We are working very closely with Gilead and continue to have active and constructive dialogue as we evaluate opportunities. Their global development and commercialization expertise, combined with our capital base, agility and deal-making skills creates a powerful platform as we shape this next phase of growth for Galapagos. Let me briefly provide an update on our legacy R&D asset, TYK2 or GLPG3667. In December, we announced top line Phase II results for GLPG3667 in patients with dermatomyositis and systemic lupus erythematosus or SLE.

GLPG3667 met the primary endpoint in the dermatomyositis study, demonstrating a statistically significant clinical benefit and meaningful improvement on secondary measures of disease activity compared to placebo. We are currently evaluating all strategic options for this program, including pursuing potential partnerships with other i&i players to accelerate the development of GLPG3667.

In conclusion, Galapagos is well positioned for the future. Our year-end cash position of approximately EUR 3 billion, our strong business development and capital allocation experience provides the strategic flexibility to pursue business development opportunities while maintaining a disciplined focus on value creation. With that overview, I would like to now turn the call over to Aaron Cox, our CFO, to review our full year 2025 financial results and 2026 guidance. Aaron?

Thanks, Henry, and hello, everyone. In the press release issued last night, we detailed our full year 2025 results, provided an update on fourth quarter performance and shared our 2026 guidance. Total operating profit from continuing operations amounted to EUR 295.1 million in 2025 compared to an operating loss of EUR 188.3 million in 2024. This operating profit was primarily due to the release in revenue of the remaining deferred income balance of EUR 1,069 million associated with the exclusive access rights granted to Gilead under the OLCA.

As a reminder, in conjunction with this transaction in 2019, Galapagos recognized a contract liability of approximately EUR 2.3 billion, which was to be recognized as revenue on a straight-line basis over the 10-year term of the agreement. Following the 2025 OLCA amendments, the intention to wind down and related events in 2025, as of December 31, it was assessed that there were no remaining obligations that would justify this specific contract liability to be maintained in our IFRS financial statements. We do not expect any cash tax impact in 2025 related to this recognition of revenue. Importantly, while the OLCA still remains in force, we expect that any future business development transaction will be completed under terms that would be different than the existing terms of the OLCA.

Now turning to expenses. Operating expenses were negatively impacted for a total of EUR 399.8 million by the decision to wind down the cell therapy activities with an impact of EUR 275 million, consisting of an impairment of the cell therapy activities of EUR 228.1 million, severance costs of EUR 33.3 million, costs for early termination of collaborations of EUR 16.3 million, deal cost of EUR 10.1 million, EUR 1.5 million for additional accelerated noncash cost recognition for subscription right plans, and EUR 7.5 million of other costs, partly offset by a positive fair value adjustment of the contingent consideration payable of EUR 21.8 million.

Additionally, the executed strategic reorganization related to the small molecules business announced in 2025 for EUR 124.8 million. Financial investments and cash and cash equivalents totaled EUR 2,998 million on December 31, 2025, as compared to EUR 3,317.8 million on December 31, 2024. Our cash and cash equivalents and current financial investments included EUR 2,159 million held in U.S. dollars versus EUR 726.9 million on December 31, 2024. These U.S. dollars were translated to euros at an exchange rate of 1.175. Since year-end, we have converted more euros to U.S. dollars and now hold approximately 72% of our cash in U.S. dollars and 28% in euros. We expect to continue increasing the portion of cash in U.S. dollars as the year progresses.

Turning now to our guidance for 2026. As part of the transformation to the new Galapagos, we announced our intention to wind down our cell therapy activities last fall, and we are now executing on this process following the works council processes that were completed last month. Given the progress we've made on this execution, I can now share that we expect the cell therapy wind down to be substantially completed by the end of the third quarter of 2026. In connection with the wind down of the cell therapy activities, we expect an operating cash outflow of up to EUR 50 million in Q1 2026 as well as one-time restructuring cash impact of EUR 125 million to EUR 175 million in 2026. This reflects a EUR 25 million reduction compared to the prior guidance range of EUR 150 million to EUR 200 million.

In addition, we anticipate cash costs of approximately EUR 35 million to EUR 40 million for the final implementation of the restructuring announced in January 2025. Costs related to the ongoing TYK2 program, including completion of the Phase II clinical trials in DM and SLE, as well as ongoing support to advance the program towards Phase III development are expected to be up to EUR 40 million in 2026. Away from the spend items, we continue to expect meaningful cash flow to come from interest income, royalties and tax credits. As a result, we expect to be cash flow neutral to positive by the end of 2026. We also anticipate we will have approximately EUR 2.775 billion to EUR [ 2.850 ] billion in cash, cash equivalents and financial investments at December 31, 2026, excluding any business development activities or currency fluctuations.

Now let me turn it back to Henry to wrap up.

Thanks, Aaron. In closing, 2026 will be a pivotal year for Galapagos as we focus on building long-term value through transformative business development, leveraging our strong balance sheet, our deal-making expertise and our unique collaboration with Gilead. Our shares remain at a significant discount to the cash figures, Aaron just reviewed. We will be focused on closing the gap through execution on our business development plan, thoughtful capital allocation and engagement with shareholders to rebuild trust and confidence. We are encouraged by the momentum we've built so far as we reshape Galapagos with a clear strategy in place.

With a disciplined approach to capital allocation, we remain focused on pursuing the right opportunities to build a pipeline of novel therapeutics designed to deliver meaningful benefits for patients and a sustainable value for shareholders. We are still early in this new chapter of our company, but we are off to a strong start, and we are excited about the future ahead.

So with that, thank you all for your attention, and we will now open it up for your questions. Operator?

[Operator Instructions] And our first question comes from the line of Brian Abrahams from RBC Capital Markets.

Just as you continue to progress on business development, just kind of curious if anything has evolved in terms of what you might be looking for? And then is there any deadline or any sort of change that we might expect based on the Gilead agreement if you're not able to identify assets to bring in by a certain time point?

Yes. Brian, it's Henry. I'll take those questions. So no, our strategy is really consistent with what we've been talking about since last fall in terms of focusing on derisked late-stage clinical assets, not exclusively, but primarily in the i&i and oncology space. And I'd say we continue to see a lot of good opportunity there. And as we said in the prepared remarks, we're focusing on opportunities where we think we can bring unique insight, unique competitive advantage. But I think there's, again, a lot of opportunity, and we're working through our deal funnel and remain confident that there's a lot of attractive opportunity for us.

With respect to your second question, as we said previously, we're not going to set a deadline for a specific deal. Again, we'll remain patient, disciplined. Again, we do have some good activity going on, but it's more important to do the right deal than to do a deal by a certain period of time. The OLCA does expire. Now it doesn't expire for about 3 years and change. So ultimately, that is a deadline. But certainly, we're focused on getting an important transaction, transformative transaction done ahead of that ultimate expiration of OLCA.

Got it. And if something does not happen before then?

Well, if something does not happen by then, despite working really hard on, trying to make it happen, then OLCA would expire, and we would go on without the OLCA in place.

Our next question comes from the line of Phil Nadeau from TD Cowen.

Our question is on GLPG3667. In the past, you've suggested that the bar to moving that forward internally and investing in it further would be rather high. We're curious to get an update on your thoughts there. I know you said you're pursuing all possible avenues of moving that forward. But how does management weigh developing that internally and investing in it versus out-licensing?

Yes, Phil, I would say those comments also stands. We have a high bar. Frankly, we have a high bar, not just for 3667, but for any asset, be it internal or external, we really look at it with the same unbiased lens. Now with respect to where we are, again, it's still early. We, as you know, get the topline data just before the holiday. Data is still coming in. So we don't have the full package in place. We are in the process of talking to partners.

Again, given that we don't have the full infrastructure required to really take this into Phase III, it makes sense to see where some of the players are that, that have that. And maybe in working with a partner, we can do more, do it faster, do it more capital efficient and ultimately create more value. So we're focused on looking at that. We're focused on getting our arms around the data that's still trickling in. But again, the bar is exactly the same bar that we've always set for ourselves.

[Operator Instructions] Our next question comes from the line of Sean McCutcheon from Raymond James.

Can you speak to your current view on capital allocation, specifically as it relates to the pool of capital you aim to put forth for acquisitions for BD? And how much you need to reserve for operating expenses going forward and how the Gilead partnership informs deal sizing and optionality on that front?

Yes, it's Henry. Thanks for the question. So look, at a high level, I mean, some of what I'm going to say is it's pretty obvious, but we have EUR 3 billion in capital. And as you point out, that capital needs to account both for any consideration to a partner or acquisition target and of course, our development expenses we would have in any transaction. Now when you say sort of how does the relationship with Gilead inform our capital allocation, as we said on calls previously, the dialogue with Gilead is quite strong. It's very, very constructive. They continue to indicate openness to contribute in both deal terms, meaning paying some of the upfront consideration as well as taking on some of the development spend operation.

So ultimately, in working with Gilead, we can go beyond the EUR 3 billion we have. And I think that's one of the features we think is very attractive in working with Gilead. So as we think through it, we don't just think about our pool of capital. We also think about what in working with Gilead can we add to the pie and therefore, kind of go beyond what we could do on our own. I don't know if that's where you were going with your question or if you want to clarify maybe what I didn't answer.

No, I think that covers it.

There are no further questions at this time. So I'll hand the call back to Glenn for closing remarks.

Thanks, [ Mel ]. I think in the Q&A queue, we do have one more or a couple more coming in, if possible, it would be great to take. I think there's a question from KBC.

Please go ahead Mathijs Geerts Danau from KBCS.

Mathijs coming for Jacob. I had a question on the lower cell therapy wind-down costs. Do you maybe expect that to lower further in the future? Or do you see any possibility in that?

Yes, Mathijs, thanks. It's Henry. Thanks for getting the question, and I'll let Aaron answer that.

Yes, thanks. We're not providing future guidance here, but we'll obviously update folks on how that cost envelope is progressing on future calls. But yes, we did lower the range from a previous range of EUR 150 million to EUR 200 million in terms of one-time restructuring costs. We lowered that range by EUR 25 million with this release. And as we continue to progress through the wind down, we'll provide updated costs on future calls.

[Operator Instructions] Our next question comes from the line of Delphine Le Louet from Bernstein.

I was wondering and coming back to the capital allocation and the decision you've been taking especially regarding the cash and the cash allocation, the move from euro to dollar, considering the fact that you didn't gain as much as financial income as last year. And so I was questioning about what was the rationale on the back of that? What was the exact timing for us to be clear? And shall we consider the breakup of, let's say, 2/3 U.S., 1/3 euro as being a picture for your next investment portfolio or for the picture we should have from your investment income in the near future?

Yes. Thanks, Delphine. So mid last year, we started transitioning more euros to dollars, and that was primarily based on where we expected our BD activity to be driven and also where our cost base is starting to move towards, which is more U.S.-based. We provided a range on this call of EUR 2.775 billion to EUR [ 2.850 ] billion for the year. And as I mentioned before, we'll update that as we go through the year. In terms of continued transition to U.S. dollars, we did -- as you heard from my remarks, we do expect to transition more to U.S. dollars as the year progresses, but still keeping a portion in euros as we still have meaningful operating expenses in euro denomination over the year as we move through this wind down.

We do see higher earnings rates in terms of what we're receiving on our U.S. dollars. As you look at rates across the environment, you could estimate euros earning around 2% and U.S. dollars earning around 4%. So while the exchange rate does move, we are seeing significant uptake in terms of the interest earned on the U.S. dollars versus euros.

Can I ask another one? Or do you have to go back in the queue?

Go ahead, Delphine. Go ahead.

I was wondering if you have or if you can communicate any expectation regarding your -- the breakeven in terms of operating income.

You cut out a little bit. You're asking about what regarding operating income?

Yes. When do you expect to breakeven for the operating income?

Yes. We've indicated we expect to be cash flow neutral to positive by year-end. Obviously, as we work through the wind down and associated costs, those costs are going to be chunky kind of throughout the year. So it's hard to predict exactly which quarter some of those costs are going to fall in, but we do expect to be cash flow neutral and positive by year-end.

[Operator Instructions] Our next question comes from the line of Nora Lazar from [indiscernible]. There are no further questions at this time. So please go ahead, Glenn, for closing remarks.

Thanks, [ Mel ] and thanks, everyone, for taking the time to join us this morning on the call. Just a couple of upcoming activities on the Investor Relations front, the Galapagos team is going to be at the TD Cowen Conference next week up in Boston, attending the Jefferies by the Beach Conference in a couple of weeks, Kempen Conference coming up in April 15 and the Bank of America Conference in May. Those interested in meeting with the team, please feel free to reach out to your sales contact at those respective institutions to schedule a meeting.

Lastly, I just want to mention that our annual report will be filed near the end of March, March 26. So there'll be additional information coming out then. And if you need anything in the meantime, don't hesitate to reach out to me. Thank you all for your attention today, and have a great week.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Galapagos Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to hand the conference over to your host today, Dr. Glenn Schulman, Head of Investor Relations. Please go ahead.

Thank you all for joining us today as we report Galapagos' 9-month 2025 financial results. Last evening, we issued a press release outlining these results. This release, along with today's webcast presentation, can be found on the Galapagos investor website.

Before we begin, I would like to remind everyone that we will be making forward-looking statements. These forward-looking statements include remarks concerning future developments of our company and our pipeline and possible changes in the industry and competitive environment. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made.

Actual results may differ materially from those indicated by these statements and are accurate only as of the date of this recording, November 6, 2025. Galapagos is not under any obligation to update statements regarding the future or to conform to these statements in relation to actual results unless required by law. You are cautioned not to place any undue reliance on these statements.

Joining us on today's call from the executive team are Henry Gosebruch, Chief Executive Officer; Aaron Cox, Chief Financial Officer; Sooin Kwon, Chief Business Officer; and Dan Grossman, Chief Strategy Officer of the company, all of whom will be available during the Q&A session.

With all of that, let me now turn the call over to Henry Gosebruch, CEO of Galapagos.

Thank you, Glenn, and thank you all for joining us today. It has been a very active time here at Galapagos as we have worked tirelessly toward advancing the transformation of our company. This transformation has been ongoing for several years, and I firmly believe we have a bright future ahead of us.

Earlier this year, we announced our decision to separate the company into two entities with Galapagos advancing its cell therapy programs and the planned launch of a SpinCo that would focus on business development and be funded with approximately EUR 2.45 billion in existing cash. However, in May, it became apparent that the spin-off could not be executed as planned, and the Board took swift and decisive action towards a different path to realize value, and I was honored to be named CEO.

The Board gave me a clear mandate to analyze strategic alternatives for our existing businesses, including cell therapy. In addition, I was asked to further refine the strategy for deploying our cash resources into transformative business development and rebuilding our pipeline.

We moved quickly, brought on advisers and commenced a thorough strategic review and sale process to identify potential buyers or investors with the expertise and resources to take the cell therapy business forward. We were highly motivated to identify a buyer or investor who could not only support the ongoing investment requirements in the business but also honor the efforts of our employees, who have put their blood, sweat and tears into the cell therapy business over the past several years.

However, after a 5-month process, there were no viable proposals presented that would reasonably support the business going forward. We offered to divest the business for minimal upfront consideration and, where appropriate, we even offered to provide capital support to potential buyers. But no party was able to provide committed financing to enable a viable acquisition of the business.

One key reason is that several hundreds of millions of euros would be required for any such deal given the significant ongoing investment requirements not only in the business but also to stand behind the obligations to our employees.

After this comprehensive review of strategic alternatives and given these ongoing investment requirements, coupled with evolving market dynamics and taking into account the interest of all relevant stakeholders, the Board unanimously agreed to form an intention to wind down the cell therapy business. Given the impact on our employees and ongoing operations, this was a difficult decision. But I firmly believe it was the right decision given our circumstances.

Now that the strategic review process has concluded, we are actively consulting with the works councils in Belgium and the Netherlands to seek their advice in order to implement this wind down. During this ongoing consultation process regarding the intended wind down, we would consider any viable proposals to acquire all or a part of the cell therapy activities if such a proposal emerges during the wind-down process.

In parallel to all this activity, we have assembled what I believe to be a world-class team focused on executing our business development strategy. Our deal funnel has been building steadily, and I'm confident that we can identify and execute on opportunities that can bring exciting new opportunities to Galapagos in our pipeline. I will share more detail on our strategy in today's presentation.

As part of our ongoing transformation, we have also welcomed four new Board members over the past 6 months. I am delighted to be working with Jane, Dawn, Neil and Devang on the Board going forward. And I would like to again thank Peter, Simon, Elisabeth, Susanne and Andy for all their valuable contributions during their time on our Board.

As I mentioned, our intention to wind down the cell therapy business is subject to the conclusion of consultations with work councils in Belgium and the Netherlands, which is standard practice in Europe. During this period, Galapagos will continue to operate the business. If the wind down is ultimately implemented, we anticipate that up to approximately 365 employees would be impacted across our offices in Europe, the U.S. and China. Also, we would plan to close Galapagos sites in Leiden, Basel, Princeton, Pittsburgh and Shanghai.

In this scenario, we would effectively proceed with a full exit of our cell therapy activities and we would expect to incur the costs detailed on the slide, which will be discussed in more detail during Aaron's review of financials later on this call. We are deeply grateful to our dedicated employees, investigators, patients, shareholders and partners for their continued commitment and support. We will stand behind our obligations as an employer to treat our employees fairly throughout all of this.

The remaining Galapagos organization will be repositioned for long-term growth through transformational business development and would maintain a dedicated presence at our headquarters in Mechelen, Belgium. We hope to complete the works council process quickly as we aim to provide more clarity to our employees and stakeholders as soon as possible. Although it is difficult to predict the exact duration of this process, we currently expect it to be concluded in the first quarter of 2026.

I wanted to spend a few minutes on the last remaining legacy R&D program, our TYK2 program. Our development team has done an excellent job progressing the Phase III enabling studies, and we expect to see data from two studies by early '26, ahead of our original expectations. The studies are now fully enrolled and the remaining spend related to this program is moderating.

GLPG3667 is a differentiated oral TYK2 inhibitor currently in two Phase III enabling studies for SLE and dermatomyositis. At the recent ACR conference, we presented new in vitro pharmacological data suggesting additional differentiation of 3667 from two other TYK2 inhibitors. 3667 demonstrated inhibition of the interferon-alpha and IL-23 pathways with no measurable impact on TYK2 independent pathways. Additionally, 3667 showed no inhibition of IL-10. These findings support our belief in the program's potential, and we are looking forward to reporting data from the two fully enrolled trials in early 2026, which will guide us towards the next steps to maximize value for this program.

Now let's review the other assets we have at Galapagos. Our significant scientific successes over our 25-plus year history have enabled Galapagos to attract significant capital. And today, we have the benefit of a significant cash balance as well as a portfolio of other attractive assets that can drive additional shareholder value.

Our cash balance of approximately EUR 3 billion represents approximately EUR 46 per share. This cash balance generates significant interest income. Through the first 9 months of this year alone, we received approximately EUR 77 million. In addition, we are receiving an attractive stream of royalties and earn-outs from Gilead and Alfasigma on their sales of Jyseleca, the JAK program developed here at Galapagos. The income related to Jyseleca has been approximately EUR 15 million to EUR 20 million annually and is expected to continue into the mid-2030s with potential upside.

In addition, we expect to receive tax receivables of approximately EUR 20 million to EUR 35 million per year over the next 3 years with additional opportunities for credits beyond that. We also have stakes in multiple private biotech companies such as Third Arc, Frontier and Onco3R, plus other private companies that haven't been disclosed.

Last but certainly not least, we own our building in Leiden. It's a fabulous building, easily the nicest lab and office building I've ever worked in, a state-of-the-art building in which we invested over EUR 70 million for construction and build-out. It opened in 2022 and it's a great asset. As you look at this portfolio in total, I believe we could see the potential for several hundreds of millions of additional value on top of our cash balance from this portfolio.

Let's go back to the ongoing transformation of the company. I am incredibly pleased that we have been able to attract new leadership talent to the company that, in my opinion, represents the team with the best business development expertise in our industry. This team has been through hundreds of M&A and business development transactions as principals and advisers. I won't go into their individual and very impressive bios, but they are summarized on the slide.

Aside from their bios, having worked closely with each of them, they are not only uniquely talented, but they are wonderful leaders with strong values and all are excited to be part of our transformation and drive significant value for patients and shareholders going forward. I am very proud to work with this talented group every day as we execute our mission and vision.

In addition to our executive talent, we have also assembled a fantastic group of outside advisers that have joined our Strategic Advisory Board. These four individuals have brought numerous drugs to patients, and we are collaborating closely with them as we prioritize the many potential BD transactions in front of us and diligence individual opportunities.

Let's jump into our business development strategy. Let me start with what Galapagos brings to the table as we pursue business development. We see several key strengths that provide us a unique advantage. First, we have built the team to execute creative BD deals. Second, we have significant capital to invest in promising programs and science.

Third, we can be incredibly flexible in our approach as we are not constrained by an existing pipeline. For example, we can enable external teams or companies to pursue their programs with our capital. Finally, we have a unique partnership with Gilead that I believe also represents a unique asset for us that I will discuss some more in a minute. We will be financially disciplined and focused on value creation while pursuing programs we believe can make a clear difference for patients.

We've identified some key focus areas for our activities. First off, we will focus on what we believe have been meaningfully clinically derisked and differentiated opportunities. We are looking for opportunities that can substantially enhance the standard of care in a disease and have clear patient impact. We will initially prioritize areas where there is a strategic synergy with Gilead.

Next slide, please. Now let me turn to our existing partnership with Gilead. We've been getting a lot of questions on why we believe it's in our best interest to work with Gilead on business development opportunities. So we wanted to address that here.

Let's start with the obvious. Gilead owns 25% of Galapagos and has an existing collaboration agreement, the OLCA as we call it, that allows Gilead to opt into U.S. rights of proof-of-concept assets at Galapagos at relatively favorable terms. These terms were originally envisioned for programs that came out of our original discovery platform, but they also apply to business development opportunities we would bring into the company at this stage.

For most assets we might consider bringing in, Gilead's option to acquire U.S. rights for $150 million upfront would likely represent too much value leakage to make a deal attractive for us. However, Gilead has expressed a willingness to renegotiate these terms, and we share a joint perspective that by working together, we can create win-win deal opportunities that create more value than each of us could drive individually.

What does that look like? Gilead has expressed a willingness to contribute capital to our BD activities and they are also bringing their capabilities to the table, such as their technical due diligence team. By working with them, we might be able to find unique value creation opportunities where, on a combined basis, we might be able to unlock more value in a portfolio than a single party would be able to.

And finally, Gilead's commercial expertise will bring additional credibility to our efforts. Our partnership also allows for creative deals that could drive structural and financial benefits that Gilead may not be able to achieve on their own.

I've known some of the key leaders at Gilead for many years, and I'm quite pleased with the close collaborative working relationship we have strengthened over the past several months. In conclusion, I am confident we can find win-win opportunities that will create value for Galapagos shareholders and Gilead.

Let's explore how working with Gilead may open opportunities that would otherwise not be available to us. There are many deal structures possible. However, we thought it would be helpful to share just three illustrative examples.

Starting on the left side, we can partner with Gilead to jointly acquire or license an opportunity. For example, these deals could potentially involve us acquiring public stock. In the middle, there could be opportunities where we at Galapagos may see value in one asset and Gilead may see value in another asset at the same company, thus enhancing our ability to structure a value-creating deal for a multi-asset company. And finally, on the right, our cash balance makes us a very attractive merger partner, recognizing we would, of course, require receiving fair value for our portfolio of assets in any business combination.

So how do we operationalize our strategy? We will be flexible on ideas but financial discipline will be key, and we will balance intrinsic risk of each opportunity with overall portfolio risk. Said in another way, if we dedicate a large portion of our capital to one opportunity, we must have very high confidence in that opportunity to create value. For any significant transaction, we believe we can renegotiate our existing agreement with Gilead to enable win-win deals for both.

Of course, nothing prevents us from doing transactions on our own to the extent that they could drive value over the long term. However, I hope I've been clear why we believe working with Gilead can broaden our set of opportunities and create shareholder value. As we execute on our strategy, we believe we can work to eliminate our current trading discount and open our deal aperture even more.

Now let me address a few other important topics. As I mentioned earlier during this call, the transformation of Galapagos is well underway. Looking ahead and if the intention to wind down is ultimately implemented, Galapagos would be a much leaner and strategically focused organization. We will maintain our headquarters in Belgium, leveraging the experience and talented teams in place there across a number of functions.

Many investors have asked us whether we will return capital to shareholders. While our goal is ultimately to drive value for our shareholders, it's important to recognize that any return of capital would require alignment with Gilead given their 25% ownership and the terms of our existing partnership agreement with them. In addition, even as permitted, Belgium law imposes certain limitations on capital returns to shareholders.

Given we do not have any distributable profits available at the current time, the ability to distribute would require a resolution at an EGM with at least 50% of shares present at the meeting and at least 75% approval. So again, while this could be an interesting alternative down the road, for now, we are focused on using our capital for business development opportunities.

With that overview, I would now like to turn the call over to Aaron Cox, our CFO, to review our 9 months financial results. Aaron?

Thanks, Henry, and hello, everyone. In the press release issued last night, we detailed our 9-month financial results through the quarter ended September 30.

Total operating loss from continuing operations for the first 9 months of 2025 amounted to EUR 462.2 million compared to an operating loss of EUR 125.6 million for the first 9 months of 2024. This operating loss was negatively impacted by an impairment on the cell therapy business of EUR 204.8 million as a result of the strategic alternatives process for the cell therapy business.

Additionally, there was also a EUR 135.5 million impact related to the strategic reorganization announced in January 2025. This EUR 135.5 million is comprised of severance costs of EUR 47.5 million, costs for early termination of collaborations of EUR 45.5 million, impairment on fixed assets related to small molecules activities of EUR 9.5 million, deal costs of EUR 21.4 million, accelerated noncash cost recognition of subscription rights plans related to good levers of EUR 9.8 million and other operating expenses of EUR 1.8 million.

Net other financial income for the first 9 months of 2025 amounted to EUR 30.4 million compared to net other financial income of EUR 71.7 million for the first 9 months of 2024. Interest income amounted to EUR 31.4 million for the first 9 months of 2025 compared to EUR 70.6 million of interest income for the first 9 months of 2024 due to a decrease in the interest rates and a shift from investments in term deposits generating financial income to investments in money market funds generating fair value adjustments.

Notably, fair value gains and interest income derived from cash, cash equivalents and current financial investments excluding any currency exchange rate impact amounted to EUR 77.2 million for the first 9 months of 2025. Financial investments, cash and cash equivalents totaled EUR 3.05 billion on September 30, 2025 as compared to EUR 3.32 billion on December 31, 2024.

Our cash and cash equivalents and current financial investments included $2.16 billion held in U.S. dollars versus $726.9 million on December 31, 2024. These U.S. dollars were translated to euros at an exchange rate of 1.174.

As we announced with our first half 2025 results, we continue to hold approximately 60% of our cash in U.S. dollars and 40% in euros. As I mentioned, cash and investments as of 9/30/2025 was EUR 3.05 billion, representing EUR 46 per share. Looking forward, we anticipate ending 2025 with approximately EUR 2.975 billion to EUR 3.05 billion in cash, cash equivalents and financial investments excluding any business development activities and currency fluctuations.

As the intention to wind down is confirmed and implemented, following the Works Council processes, we would expect to incur the following cash impacts related to our cell therapy business: EUR 100 million to EUR 125 million of operating cash impact from Q4 2025 through 2026 with EUR 50 million to EUR 75 million of this being in 2026 and EUR 150 million to EUR 200 million of onetime restructuring cash costs in 2026. Lastly, as the intention of wind down is implemented and completed, we would expect to be cash flow neutral to positive by the end of 2026 excluding any business development activities and currency fluctuations.

Now let me turn it back to Henry to wrap up.

Thanks, Aaron. In summary, it has been a transformative time at Galapagos. We are committed to building a novel therapeutic pipeline that can have meaningful impact for patients. We will provide updates related to discussions with the Belgium and Dutch works councils as appropriate.

As I mentioned, our deal funnel has been building steadily and we will remain disciplined and will only execute on any opportunity in front of us if we believe we can create value. We are confident we have the team in place to execute and look forward to the future with optimism and purpose.

So with that, thank you all for your attention, and we will now open it up for your questions. Operator?

[Operator Instructions] We will now take the first question from the line of Faisal Khurshid from Leerink Partners.

Really phenomenal presentation today. I just wanted to ask, maybe for Aaron or for Henry, when you say that you expect to achieve cash flow neutral to positive status by year-end '26, can you talk a little bit about what the assumptions are that go into that?

Sure. Sure, this is Aaron. We will -- the assumptions that go into it are primarily related to interest income, one. So we made some assumptions on interest rates based on the forward curve and our cash balance. It doesn't assume any BD activity. Obviously, if we use cash for BD activity or take on additional burn with any BD activity, that could impact that forecast.

We also have income, as we outlined on Slide 7, related to Jyseleca. We have tax credits coming in related to tax refunds from Belgium and other countries in the region. And we also assume that we are through the works council process and we've implemented and completed the wind down.

Got it. That's helpful. And then for Henry or for Dan, you guys mentioned that you have -- that the deal funnel is currently building. To the extent that you're able to speak to it, could you talk to us a little bit about what kinds of opportunities are in the deal funnel, what those look like and your kind of level of optimism around that?

Yes. No, thanks. It's Henry. I'll start and I'll turn it over to Dan. I mean, as we outlined in the prepared remarks we're focused on opportunities that are clinically derisked. So we're looking at mid- to late-stage opportunities. Again, that can be M&A, partnerships. We're looking at many different structures.

But it's clear that there is a lot of capital required in biotech still. And while perhaps the access to capital has improved slightly, there are still many companies that would benefit from capital from us, partnerships, et cetera. So with that, maybe I'll ask Dan to put a little bit more color on it.

Thanks for the question. This is Dan. I would just add the therapeutic area overlay, which I think is an important one. We're in the fortunate position really not having too many legacy attachments of being able to consider opportunities across a wide range of therapeutic areas. But as Henry indicated, for the early deals, we think it's a high priority to the extent we can to collaborate with Gilead, to go in with Gilead on deals.

And that brings us to look for assets or at least deals that have some anchor asset that is mutually value-creating for both of us but also strategically aligned with Gilead's direction. That brings us to the therapeutic areas of oncology and immunology or inflammatory disease.

Got it. Okay. And then just one last one for me, if I can. Just kind of maybe combining like the two questions in a way. Henry, can you speak to us about the kind of like relative balance between kind of being conservative and you not going for a deal and kind of getting to the status of being cash flow positive versus doing BD? Like how do you kind of balance those two priorities in a way?

I think they're both really key focus areas. I mean, we have to get through the works council process that we outlined as quickly as we can and then leverage again the broad set of assets we have today and outlined, so the cash balance that generates interest, the good growing and attractive royalty stream, we're getting the tax benefit. So that sets the base.

But look, the intent is to ultimately use our cash balance to find opportunities that create a positive return and incremental return on that cash balance. And as we've outlined, we have EUR 46 per share in cash and we're trading obviously at a much, much lower number. So to the extent we can put that cash to work and create a return on that cash, I think there's tremendous upside in our story here. And so that's what we're focused on.

We will now take the next question from the line of Brian Abrahams from RBC Capital Markets.

I'm curious if you could talk about what your expectations would be for Gilead to contribute to the deal process really in terms of their expertise. Would this be kind of expertise in identifying a transaction? Or might you expect commitment to providing resources or expertise on development prior to a formal opt-in?

And then just secondarily, really quickly. In the past, I think you've talked about virology as another area that might be of interest. You didn't mention it today. Just wondering if we should assume that, that's not as high a priority as oncology and immunology and inflam?

Yes. Brian, it's Henry. Thanks for the question. So on the first part, I'd say, again, I'm incredibly pleased with the relationship that we've strengthened with Gilead. And on several of the opportunities that we've looked at, they have contributed really along the lines of what you've talked about both their diligence expertise in looking at those opportunities. They've offered capital both upfront and, in some cases, if there's a portfolio of assets, to take some of these assets and develop them at Gilead, leveraging their infrastructure. So it can really take many forms.

I think the bigger point is that I think they're coming to the table, as are we, with a very constructive sort of win-win attitude. And that can take many different forms. So we don't have to limit ourselves to that current partnership agreement where we would do the deal and then they would opt into certain opportunities. It can be really a much broader situation. And again, we're quite pleased with their commitment in our working relationship. And I'll ask Dan maybe to talk about the therapeutic area and the question on virology.

Yes, that's fair. Thanks, Henry, and thanks also for the question. Before that, I'll reiterate Henry's point. I mean, we will make our own decisions about deals that we do. We will do our own careful diligence on key aspects of any asset we consider bringing in.

In terms of the question about virology, I would say you're correct that it is of lower priority. I wouldn't say we would necessarily rule it out, but this is an area of enormous strength for Gilead. And frankly, our funnel is very, very nicely filling with oncology and I&I already.

We will now take the next question from the line of Phil Nadeau from TD Cowen.

Just one question on the Gilead relationship. We understand the strengths of working with Gilead due to their expertise and the commitments you have through the OLCA agreement. But it seems like one potential drawback would be speed in collaborating and getting to a decision point.

In the past, we've seen big organizations take a long time to sometimes make decisions. So how is that contemplated in your strategy? Are there ways that you can assure that Gilead is ready when you need them and the two of you even collaborating can be competitively fast?

Yes. Phil, it's Henry. Look, good observation. And we have to be fair, yes, that does create some complexity. So that is a fair comment. But I think it goes back to having a very collaborative relationship. Gilead is represented on our Board so they see some of the activity we're doing. And again, as I said, I'm very pleased with the ongoing dialogue we have.

And so the more we can do in terms of working together and doing joint work ahead of making a formal approach to a company, as an example, or tabling an offer term sheet, if we can in a way sort of prewire some of what it would look like in terms of us and Gilead, then it really shouldn't impact the process ultimately with a potential partner or target. But yes, we do have to acknowledge there's some additional complexity.

I guess the last thing I'd say is, look, we've built the team here that has been through many, many very, very complex BD transactions. So it's nothing that anybody here hasn't done in prior context. And I think on a combined basis, I feel we have just a phenomenal team to work through that complexity.

We will now take the next question from the line of Jason Gerberry from Bank of America Securities.

This is Chi on for Jason. There's obviously a lot of focus on bolstering the pipeline from external means. But my question is actually on the internal existing pipeline. Can you talk about the potential plans for 3667 upon completion of the two Phase III enabling studies in lupus and dermatomyositis?

Are you leaning towards divesting the asset in favor of BD activities? And how might the different data scenarios help inform that decision? And I'm also wondering, do you have any refined thoughts on the strategy for dermatomyositis given the brepocitinib top line results from the VALOR study in the DM?

Yes. It's Henry. Thanks for the question, Chi. So the company prior to us arriving had started a process talking to potential partners about 3667. Just recognizing that if that asset has the type of data in Phase II that would enable a comprehensive Phase III program, that would take expertise and resources that we currently don't have. And so in that context, a partnering process was started earlier in the year.

Given we're so close to data now with data expected early next year, that process is currently not active, but I think it's something we would come back to. So to answer your question, I think we would look at the data very carefully and then we would think through what are the capabilities required if there's a path forward and who is best positioned to maximize the value. And that may well not be us. That may well be one of the players with established infrastructure, and that's sort of how we would how we look at that.

As to your specific question on dermatomyositis, I mean, of course, we're paying close attention to the TYK2 landscape and the other landscape in I&I that impacts these diseases. And we'll look at what the target product profile is and what the bars we need to meet in these Phase II studies. So the team is all over that. But all of that will go into a decision sometime early next year in terms of the next steps for 3667.

We will now take the next question from the line of Sean McCutcheon from Raymond James.

This is [ Yang ] for Sean. We have a question on the cell therapy wind down process. Could you please walk us through the timeline for the wind down and the continued efforts in this process? And also, do you think you may get some additional interest getting the update on the incoming ASH?

Yes. No, thank you for the question. So again, I recognize that for many American investors or analysts, you may not be as familiar with the way the process works in Europe. But in Europe, the Board can really only form an intention to wind down and that intention is subject to consultation with works council.

So you're essentially explaining to works council what the rationale is, why it's the best decision for the company. And that process usually takes several months. As we said in our prepared remarks, it's hard to predict exactly how long that takes, but we expect that to be concluded in Q1. So that's what we can say about that.

During the process, we are open to receiving viable proposals. But as we said in the prepared remarks, at this point, nobody has come to the table with committed financing. As I said, it would take several hundreds of millions of euros of committed financing to not only take the business forward but stand behind with a pretty sizable employee obligations. And we, of course, are going to treat our employees very fairly in all of this.

So again, if an offer does emerge during this process, we're quite open to considering it. But again, we hope to have resolution here in Q1. And we'll, of course, keep the market posted as we make progress in these consultations with works council. So I hope that answers your question.

We will now take the next question from the line of Jacob Mekhael from KBC Securities.

I have one on the topic of BD. You mentioned that you will after derisked programs with proof-of-concept. So I'm just curious, how will you ensure that you obtain such programs in a cost-effective way? And perhaps, are you prepared to pay a bit more in order to get access to the best programs and targets?

Yes. It's Henry. Let me start on that question. We're going to be quite financially disciplined. So at the end of the day, it's really about do we see an opportunity that we think allows us to create value from here. Again, that may well involve partnering with Gilead on the basis we outlined where, on a combined basis, maybe we can see that incremental value that would be hard to realize for other parties.

So at the end of the day, yes, when you are ultimately the party that does the transaction, generally speaking, you're going to pay more than everybody else. Otherwise, you won't be able to do the deal. But again, I'm quite confident given the environment and given how our deal funnel is building, we'll find those opportunities. But we're going to be quite disciplined.

So if it takes another quarter or 2 or 3 to find the right deal, it will take another quarter or 2 or 3. We're not going to rush into anything, I think. Well, of course, I recognize shareholders and analysts want some clarity of what the deal is and what the pipeline looks going forward. We're not going to compromise on the financial criteria that we'll use to analyze the deal. Does that answer your question?

Yes, very clear. Maybe just a follow-up on that. Given that any deal that you would take over, you'd need to continue developing it until approval either by yourself or in collaboration with Gilead, can you share anything on how much capacity for deal making does that leave you with?

Yes. No, it's a good comment. So look, our roughly EUR 3.1 billion is really a phenomenal starting point plus, again, these other assets that are helping us get to positive cash flow on top of that. But yes, of course, we need to reserve some capacity for what might be a Phase IIb or Phase III spend for any asset we bring in. So that is absolutely part of the deal modeling we're doing.

And that's the comments we made earlier. Again, if we dedicate a large portion of that capital into one opportunity, we really have to be quite confident that, that opportunity will create value. If we spread the risk over several opportunities, maybe we could have a slightly different perspective. But the ongoing development requirements are absolutely something that we're quite focused on.

And there, again, this is where the partnership with Gilead could come in, where we might be able to split some of those ongoing requirements and on a joint basis come up with a mutually value-creating structure.

We will now take the next question from the line of Sebastiaan van der Schoot from Van Lanschot Kempen.

Really clear on the strategy. I just had one question for our side. Can you provide some clarity on whether potential transactions, whether they would also bring in R&D capabilities? Or is that something that you don't want to take on with newer transactions?

Yes. Sebastiaan, it's Henry. That's a very good question. Again, one of the, I think, very attractive features we have here at Galapagos is that we can be flexible on what that looks like. So it could be that, yes, with an acquisition, there might come a very capable team. In fact, it might be very attractive for certain teams just to join us at Galapagos and essentially stay intact and continue to work on their asset.

But it might also be that our capital just enables an external party to continue to do the work and we won't have that capability at the company, but we essentially fund that existing capability at a third party. So honestly, we're not focused on one over the other. I think it's whatever is right for any opportunity, whatever is the best way to create value.

Now I will say we do have the TYK2 development team still in place. So that does give us a starting point if we wanted to build it further from there. But again, it really depends on the opportunity, and we want to be open to whatever creates the most value going forward.

Got it. And then I'm just wondering whether -- if you compare it to the past, whether Gilead's involvement in the setting process for potential transactions has increased compared to before. Maybe you can comment on that.

Well, look, I don't want to really talk about the past. I'm really more focused on how we're moving forward and how we create value from here. And I think to this question and also the question that I think Phil asked a little bit earlier, I do think it's important that we coordinate with Gilead on these joint opportunities. And yes, that involves talking to them, meeting them, understand mutually how we can create value on certain transactions.

So again, I can't talk about the past. I can only talk about the future. And as I think we've been clear on, we don't have to go through Gilead. We don't have to work on everything with Gilead. But we think for opportunities that are jointly aligned, that can create more value for our shareholders than doing it on our own. And I think our approach will be to continue to work with them very collaboratively. Again, I'm quite pleased with how that's going. They're coming really with a kind of a can-do attitude and we plan on continuing that approach.

[Operator Instructions] We will now take the next question from the line of Delphine Le Louet from Bernstein.

Hello, can you hear me well?

Yes, we can hear you fine.

Perfect. I was wondering, and a bit of a follow-up regarding the Gilead partnership, regarding their investment which was so far mostly philanthropic. I was wondering how long the collaboration would last for or will take place for now? Is it something like a 5-year agreement that you have in mind? Or is it shorter, 3-year time?

And I was also wondering, what is the underlying KPI? Is it an ROI number? Is it a number of assets? Is it a progress in the pipeline? Can you be more specific on that, please?

Okay. We heard a little bit of background noise. So I think you asked what's the length of the Gilead agreement. Is that the question?

In a way, because Gilead is obviously a preferred partner so far and will help you in the selection. But obviously, I'm asking, will that long for 3, 5 years? Or what is the underlying KPI? Is it an ROI number? Is it a number of asset? Is it progress in the pipeline? What is the underlying you should have in mind?

Okay. Yes. I'm sorry, there was a lot of background noise, but let me attempt to answer your question. So what we're talking about is what we call the OLCA agreement. So that is that broad collaboration agreement that was signed roughly 6, 6.5 years ago. That was a 10-year agreement. So that has another, call it, 3.5 years running.

And it is that agreement that provides Gilead's -- yes, sorry, we're getting a lot of background noise. But again, to stick with the answer, that agreement has another about 3.5 years running. And so it is really that period that we are focused on that goes back to the original deal 6.5 years ago. And in terms of KPIs, again, that agreement was entered with a view towards Gilead having the ability of opting into programs that came out of the Galapagos research platform.

Now of course, with time moving on, this is no longer the current situation today. So now it's really more about business development that we would be doing and working with Gilead in this period, as we've outlined, to jointly complete transactions that will create value for them but very importantly, of course, for our company as well. Does that answer your question?

All right. Yes, yes, definitely.

Thank you. There are no further questions at this time. I would like to turn back over to Glenn Schulman for closing remarks.

Thanks, Sandra, and thanks, everyone, for your time today and your attention. As the team discussed, there's indeed a bright future as we continue to undergo these transformations at Galapagos.

For your awareness, I wanted to mention that our corporate events calendar is provided here in the deck and also posted on our investor website. With respect to upcoming investor conferences, the team will be hosting a fireside chat in 2 weeks at the Jefferies London Conference on Wednesday, November 19. And looking ahead to 2026 already, the team will be attending the Annual JPMorgan Conference in San Francisco and the TD Cowen Conference in next March up in Boston.

Please feel free to reach out to your respective bank reps to request a meeting with the team, or you can reach out to me directly to find the time to catch up. Thanks, everyone, and have a great day.