Galapagos NV

AMS : GLPGA
PINKSHEETS : GLPYY
LSE : GLPG


November 12, 2012 01:50 ET

Galapagos receives positive ruling on Patent Income Deduction

Effective tax rate below 5%

MECHELEN, BELGIUM--(Marketwire - Nov 12, 2012) - Galapagos NV (EURONEXT BRUSSELS: GLPG) announced today that it has received a positive ruling from the Belgian tax authorities, enabling Galapagos to benefit from the Belgian patent income deduction on patent related income arising from its global collaboration with Abbott on GLPG0634.

As a result of this ruling, 80% of Galapagos' qualifying income from the collaboration agreement with Abbott, based on the Galapagos patents covering JAK1 inhibitor GLPG0634 currently in Phase 2A clinical trials in RA, is exempt from Belgian corporate income tax. This will result in an effective income tax rate of under 5% for Galapagos for this income. This ruling is valid for 5 years and may be renewed thereafter. Galapagos received an $150 million initial upfront fee from Abbott for rights related to the global collaboration. Upon successful completion of the RA Phase II studies, Abbott will license the program for a one-time fee of $200 million if the studies meet certain pre-agreed criteria. Abbott will assume sole responsibility for Phase III clinical development and global manufacturing. Pending achievement of certain developmental, regulatory, commercial and sales-based milestones, Galapagos would be eligible to receive additional patent-based milestone payments from Abbott, potentially amounting to $1.0 billion, in addition to tiered double-digit royalties on net sales upon commercialization.

"The tax ruling announced today is very important for Galapagos and its shareholders," said Guillaume Jetten, Chief Financial Officer of Galapagos. "In this way, Galapagos may have more funds available to invest in its R&D programs coming up behind GLPG0634, thereby increasing our chances of developing valuable intellectual property in those programs as well. This is a clear benefit of our Mechelen headquarters and the supportive nature of the Belgian government towards biotech."

About Galapagos

Galapagos (EURONEXT BRUSSELS: GLPG) (PINKSHEETS: GLPYY) is a mid-size clinical stage biotechnology company specialized in the discovery and development of small molecule and antibody therapies with novel modes-of-action. The Company is progressing its JAK1 inhibitor GLPG0634, as well as one of the largest pipelines in biotech, with four programs in development and over 30 discovery programs. The Galapagos Group has over 800 employees and operates facilities in six countries, with global headquarters in Mechelen, Belgium. More info at: www.glpg.com

This release may contain forward-looking statements, including, without limitation, statements containing the words "believes," "anticipates," "expects," "intends," "plans," "seeks," "estimates," "may," "will," "could," "stands to," and "continues," as well as similar expressions. Such forward-looking statements may involve known and unknown risks, uncertainties and other factors which might cause the actual results, financial condition, performance or achievements of Galapagos, or industry results, to be materially different from any historic or future results, financial conditions, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this document. Galapagos expressly disclaims any obligation to update any such forward-looking statements in this document to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless required by law or regulation.

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Galapagos NV via Thomson Reuters ONE

[HUG#1656809]

Contact Information

  • CONTACT

    Galapagos NV
    Elizabeth Goodwin
    Director Investor Relations
    Tel: +31 6 2291 6240
    Email Contact