Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2020 Results Conference Call. I would now like to hand over the conference to your first speaker today, Elizabeth Goodwin. Please go ahead.
Hi, thank you all for joining us today for our third quarter results call. I'm Elizabeth Goodwin, investor relations, also representing our financial reporting team to bring you this information today. This recorded audio webcast is accessible via the Galapagos website homepage and will be available for replay later on today. Sell-side analysts and professional investors are invited to pose a question at the end of our call and can dial in using a series of numbers in our press release from last night. Here's one for Belgium. That's 3227933847. The code is 8542327, and I'll repeat that right before the Q&A start. I'd like to move now to our forward-looking statements and remind everyone that we will be making forward-looking statements during today's webcast.
These statements include remarks concerning future developments of the pipeline, future financial results, growth of our company, and possible changes in the industry and competitive environment. Because these forward-looking statements involve risks and uncertainties, Galapagos' actual results may differ materially from the results expressed or implied in these statements. Outside of filgotinib and rheumatoid arthritis in Europe and Japan, none of our drug candidates are approved by any regulatory authority. Today's call will be like our other quarterly calls. CEO Onno van de Stolpe will cover operational highlights for the third quarter. Chief Business Officer Andre Hoekema will present our deal with OncoArendi announced last night. Chief Operating and Financial Officer Bart Filius will highlight our financial results and close with the outlook for the coming months.
During their presentation, you'll see the slides progress on screen, this will be followed by a Q&A session with the executives at the end. At this point, I'd now like to hand over to Onno to talk about the third quarter operations. Go ahead.
Thank you, Elizabeth, and welcome, everybody. Good afternoon, good morning. We would like to start with the operational highlights. Clearly, the highlight of the year for us is the approval of Jyseleca, so that is filgotinib in rheumatoid arthritis in the EU and Japan, which, of course, is a hallmark moment for Galapagos. This was overshadowed by the complete response letter we received from the FDA for the U.S. approval. In the CRL, they listed two reasons. One, the MANTA and MANTA-RAy results that they are awaiting before making a decision on the approval, which is the testicular tox study that we are executing with Gilead. They expressed their concerns, the risk/benefit of the 200 mg. Very disappointing CRL, very unexpected, a reality we got to face with.
Thirdly, for Jyseleca, we were pleased last week to announce the filing of Jyseleca in the EU for ulcerative colitis, the second indication for this drug that we are going to go for. Very nice to announce that the first shipments were made both in Germany and the Netherlands. Germany started two weeks ago, and Netherlands actually started on Monday. On Tuesday, the first shipment was out of the order coming in on Monday. We are off and now we got to get off to a good start in the various countries. The other European countries are going to follow shortly. If we look at the rest of the pipeline, clearly we had a number of other news items. We presented the full SELECTION data of ulcerative colitis filgotinib trial at the conference.
That caused the front pages there because of the very good data that filgotinib showed in that trial. We also had a positive top-line result of ziritaxestat, so that's GLPG1690 in systemic sclerosis, the NOVESA trial. We were pleased with that data set and we're discussing how to proceed with ziritaxestat in that indication. We had a very disappointing outcome of the GLPG1972 molecule in the ROCCELLA study in osteoarthritis, a year-long treatment where we didn't see any difference between placebo and the drug, which means that GLPG1972 for osteoarthritis development is ended. We are bringing GLPG1972 back to the lab to see if we can find other indications, but we're not proceeding this in osteoarthritis. Very disappointing. Last week we did an extended science seminar on Toledo where we disclosed the targets, the SIK that we are focusing on.
I think it was a very good science and development update for Toledo. The whole package is very convincing. The identification of the targets and the assay, the literature evidence of the mechanism of these SIK targets, all the preclinical data that we have in the various diseases that are extremely convincing and a very positive phase I data that we saw a nice target engagement, but also a proof of principle because of the effect on IL-10 and TNF in that trial. We clearly have a confirmation in human that we have a dual mode of action, which is very reassuring. We also, from phase I, saw that we have a very nice window with regard to safety, which is, of course, important in the further development. We are now moving this forward in a number of different phase II trials that we discussed at the seminar.
That will lead to quite some news flow in 2021 and 2022. The first readouts of the POCs, three in 2021 with GLPG3970. Our second molecule for Toledo, targeting the SIK, will move into the clinic and give a readout in 2021. Then in 2022, we'll get a number of different readouts, and hopefully we get the first phase II-B readout in 2022, so we can prepare for phase III already in 2022. Clearly, we have a development plan set up to bring this innovation, this program with a lot of potential to patients as fast as possible. I think that is very important for the patients, but also for Galapagos.
We believe that this is a once in a lifetime opportunity that we're progressing, and we're extremely excited about the targets, the mechanism, as well as the first results that we have with GLPG3970 and GLPG4399. Let's hope that the good data will continue to come in this program, and you will hear much more about it in 2021 and 2022. With that, I would like to hand it over to Andre Hoekema, our Chief Business Officer, to talk about the deal that we announced with OncoArendi late last night. Andre.
Thank you, Onno, and good afternoon, everybody. In our presentations, we often speak about our internal pipeline. Here I would actually like to highlight how we also add external assets. There's actually two reasons to do that. First of all, we have a very strong balance sheet. We really want to use that not only to grow our internal pipeline and accelerate programs through the clinic, but actually also add external assets to our R&D engine. Talking about that engine, both in discovery and in clinical, we have a lot of expertise. That engine really firing on all cylinders. In our view, it really makes a lot of sense to not only use it for internal molecules, but also add molecules from third parties that we think really make sense.
Of course, in that effort, we really focus on inflammation and fibrosis, the core indication areas of the company. It will not surprise you that when we talk about criteria, we really look for molecules that really fit Galapagos. That means novel modes of action, high risk, high reward, and in that way, they should strengthen our pipeline. On the next slide, you actually see the deals that we have signed this year. We've done a number of deals with molecules that hit all those criteria. Fibrocor and Scipher, both from North America, Canada, and Boston. Just a few words about it. Fibrocor has come up with novel targets in fibrosis based on patient samples, very complementary to what we do, and we've moved the first program that we licensed from Fibrocor to a candidate drug. Very pleased with that.
Scipher has a somewhat similar complementary technology, operating from Boston. They identify targets based on the molecular signature in patients, and we think that also fits very well with our own internal programs. Ryvu identified a novel inflammation target that we really liked. Company is located in Kraków, Poland. We've also seen that deal. Today I'm really pleased to say a few words about the first clinical-stage asset that we licensed from a company also in Poland, in Warsaw, in fibrosis. Let me first say a few words about the business deal. It's a collaboration on a really novel class of fibrosis targets. OncoArendi did really some breakthrough work in this target class, chitinases. Chitinases play a role in fibrotic diseases, mostly in lungs, so that really fits with our interest.
We have a fibrosis franchise underway with ziritaxestat and GLPG1205 and earlier programs. We really think there's a very nice niche where we can add another program. We decided to work with OncoArendi. You've seen the deal structure, an upfront of EUR 25 million, development, regulatory, and sales milestones for a total of EUR 320 million plus royalties. We've also negotiated the right to get access to their other chitinase programs in case those hit candidate as well. Let me say a few words about this novel target class. Chitinases are known to play a role in lung fibrosis. It is a very novel class. At the same time, we like it because there is quite a bit of validation. In knockout mice, you see that mice lines that miss those chitinases show a very reduced disease burden in the IPF models.
Moreover, the molecule that OncoArendi has in development, OATD-01, when dosed to mice, the same, they really reduce the disease burden. The target class are two chitinases, as I said, very well validated. We are not aware of any competition, typically Galapagos, first in class potential. We think there is really a lot of room to bring this into IPF and possibly in other fibrotic disorders. At this point, Piet and Walid are preparing a phase II-B study to bring this molecule forward. If I can have the next slide. Just a bit of detail on the validation that I just mentioned. Here you see some data that show what bleomycin, which is the standard animal model for IPF does. On the left, the control, you see healthy mice. On bleomycin treatment, you get a formation of lesions in the lung, expressed by Ashcroft score.
As you can see, the molecule from OncoArendi really reduces that effect similar to pirfenidone. This is one of the validations that I talked about, and we're really excited about this because a clinical asset that fits in right behind ziritaxestat, which is in a large phase III study, as you all know, and GLPG1205, where we will report the phase II data shortly. In summary, very happy to be adding this asset to our pipeline. With that, let me hand over to Bart to get you the Q3 financial data. Bart?
Thanks, Andre. Good morning everyone in the U.S., good afternoon in Europe. Happy to say a few words about the financial results for the quarter. I'll finish off with an overview of the short-term outlook in terms of events. First on the financials. As you can see here on the slide, starting off with our cash position. Healthy cash balance of EUR 5.3 billion at the end of September 2020, which brings our cash burn for the first nine months of the year to EUR 433 million. As usual, we exclude two particular categories of cash flows, both income and expense. On the cash income side, we are excluding EUR 25 million that we received over the first nine months due to increases in capital as a result of warrant exercises.
We also had a quarter which was, and this is nine months total, but we had a quarter where the US dollar weakened significantly compared to the euros. As we report in euros, we are incurring a translation effect. This is not realized, but it's a translation effect of our dollar position that we have on our balance sheets, which is roughly 20%-25% of our overall cash balance. That obviously in one quarter goes up and the other quarter it goes down. It's not included in our cash burn, nor is it in our guidance. EUR 433 million is the first nine months of cash burn in total. We retain our full year guidance of between EUR 490 million and EUR 520 million.
For those of you that are doing the math, EUR 433 million for nine months, if you divide by three, multiply by four, you get up higher than EUR 520 million. The key thing that's happening in terms of cash in the fourth quarter is also the receipts of the milestones for the approval of filgotinib from Gilead, which by the way, meanwhile, have been received in the month of October, which were $105 million. Our, let's say, cash runway to get from EUR 433 million to a max of EUR 520 million is a bit lower in the fourth quarter than it has been in the first nine months. On the P&L itself, let me highlight three categories. Revenues, first of all.
EUR 370 million of revenues is to a large extent driven by accounting revenues for previous events, and those are related to our deferred income position on filgotinib, and our deferred income position on what we call the access rights to our platform. Both of which are a consequence of the transactions that we've signed with Gilead, as we recognize those receipts over time and not in one shot to the largest extent. Hence we have now recognized a big chunk of our total top line in terms of accounting revenues here. In terms of costs, a bit over EUR 500 million of operating expenses. That's an increase compared to the first nine months of last year, and that's driven on one end by the R&D investments that we're taking in filgotinib, in Toledo, and in our earlier programs.
It's also driven by increases in staff and most notably in the commercial area, where we're ramping up clearly for the launch of filgotinib in Europe and we're building out our infrastructure in the key European countries. Finally, net results. There is between operating results and net results, there's a gap that is driven by financial expenses. I've already highlighted the currency effect which you can find there. There's also a bit of accounting to be done on these Gilead warrants that are outstanding, which depending on the volatility of the share, can be a positive or a negative from one quarter to the next. Here you see the numbers that are in those line items. If I conclude this part of the prepared comments and the presentation, let me say a few words about the outlook. In two categories.
First of all, on filgotinib, and I'm sure we'll discuss that in a bit more detail in the Q&A as well, but we're still anticipating a Type A meeting with the FDA in the fourth quarter of this year. We are on filgotinib, also anticipating after the filing that we've done in Europe in Q4, we anticipate the filing in Japan in the first half of next year. Also, the first half of next year, we should get a peek at the MANTA and MANTA-RAy data, and get better understanding of what those are telling us. Then on the other programs still to come for the fourth quarter are the results on GLPG1205, our PINTA program. We have first dosing in a study with a molecule called GLPG3667.
We've not yet disclosed the target of that molecule, but we're doing a study in psoriasis, and we're anticipating first dosing in the fourth quarter. On Toledo, as you know, we have already dosed in a couple of POCs last month as we were discussing in the webinar. We're also anticipating in the beginning of next year to dose two further indications lupus and Sjögren's , . Finally, for the first half of next year, a big milestone obviously is also the futility analysis on ISABELA. Quite a lot of news flow in the, let's say, next six to nine months coming up. Let me conclude there, and Elizabeth, if you can take over for the Q&A, please.
Thank you. That does conclude the presentation today. We invite sell-side analysts and professional investors again to pose their questions. Here is the dial-in number for Belgium country code 3227933847, and the code is 8542327. For those already dialed in, I'd like to ask anyone interested in posing a question to press star one on the telephone and give folks a moment to do that. Our first question comes from Lenny Van Steenhuyse from KBC Securities. Go ahead, Lenny.
Thanks, Elizabeth. Congrats on the interesting OncoArendi deal. You're looking to further position this one in IPF clinical trials, mentioning a phase II-B trial. I was wondering if you could give some additional color on what we should expect in terms of clinical trial design. I hear you're mentioning a phase II-B, and in that sense, we might not expect a PINTA-like trial, but perhaps something more extended. Could you perhaps elaborate a bit on that? As a second question, the 3Q report also mentions a JAK1 inhibitor, GLPG0555, entering a phase I study again. I believe this compound also went through some safety studies quite some years ago. I was wondering a bit what triggered the revival of this compound, and what's the strategy indication-wise for this one? Thanks.
Thank you. We have Dr. Walid from the call available. Go ahead.
Thank you, Andre. It is Walid. I'll take the question on the OncoArendi, otherwise known as GLPG4716 now. It's been baptized today, actually. Our plan is to do a study where we test multiple doses, so that's why we're calling it phase II-B. We're still early in the design of the trial, but it will be a larger trial than PINTA. The duration probably will be about the same. We're talking about a trial, probably about 200 patients total, so significantly larger than PINTA, looking at patients with IPF with no background therapy and also on top of background therapy. That is the current plan, but we will come back with more details as we get closer to starting the study. I'll turn over to Piet to talk about the GLPG0555.
Okay, Walid. Thank you. GLPG0555, for those of you who follow us for a long time, in fact, this was the first molecule that GSK took on board. After a while, GSK gave that back to us. That came with a very interesting data package where they evaluated GLPG0555 in OA explants and a whole tox package with it, showing, in fact, that compared to other JAK inhibitors, GLPG0555 really did something special on the cartilage of OA patients. We've taken that package, and we've now started an intra-articular, because that was the whole game. Doing an intra-articular injection, which will be an injection once every six months in the end, to see whether we can pick up any signal in OA patients. Thank you.
Okay. Thank you very much for that. Our next question comes from Laura Sutcliffe from UBS. Go ahead, Laura.
Hello. Thank you for taking my questions. I'd just like to pursue the OncoArendi deal a little bit more. You've now got four IPF compounds at least, I think, if we include the mention that IPF got in your Toledo presentation. Could you just sort of outline how all of these things fit together for us in a little more detail? That would be great. I just want to check one thing on your ISABELA trial, if that's okay, please. Are those trials stratified by background therapy? If not, should we be concerned about whether or not you can get a useful result from them? Thank you.
Thank you. Let's start from the first question. We at Galapagos have been saying that we've been quite interested in building a franchise in fibrosis, and IPF is our lead indication that we have a number of compounds in development there. As you guys know, IPF is a very serious disease with a very poor prognosis. Essentially, these patients after diagnosis, their median survival is about two to five years. As such, there's a huge unmet medical need there to essentially stop the progression of the disease. Consequently, when you develop medicines to treat it, the idea is to develop a combination therapy, particularly when you have molecules with very good safety and tolerability profiles, and you combine them together with the ambition to stop the progression of the disease.
Hopefully, patients with this illness will no longer have to worry about dying from IPF and actually living with a disease that's not going to progress anymore. That is our ambition. It's a tall ambition, but that's our ambition. For that, you need multiple shots on goal. It's beyond the scope of our discussion today, but we look to target multiple approaches, looking at a variety of cellular mechanism, biological mechanism, from fibrosis to inflammation, to be able to have complementary efficacy with these programs. Our plan is to advance these molecules, and as they show efficacy, if they lend themselves to be combined with each other from biological mechanisms, as I mentioned, and also from safety and tolerability, our plan will be to combine them together moving forward. Going to the ISABELA program.
Indeed, the ISABELA program, we stratify between the treatment arms, placebo and the two doses of ziritaxestat. We stratify based on background therapy, either on no background therapy, on nintedanib, or on pirfenidone. We do stratification in those trials. Just to remind you, based on discussions with the FDA, these studies have been reviewed with them and also with Europe, but specifically with the FDA. This type of design will allow us to get an indication for the treatment of IPF. I hope I addressed your question there, Laura. Thanks.
You did. Thank you.
Okay. Thanks very much, Laura. Our next question comes from Emily Field from Barclays. Go ahead, Emily.
Hi. Thanks for taking my question. On Gilead's recent call, they seemed to indicate at least that they expect that they could learn something somewhat definitive from this Type A meeting regarding the path forward for filgotinib in RA. It seemed to indicate that perhaps there could be some indication of whether there remains a path forward for 200 mg. I was just wondering if you could give any thoughts on that, when we would expect that meeting to occur, just what exactly will be communicated to investors. Also, if you have any insights into when the decision was made to pause the other trials for PsA, AS, and uveitis, and when we could expect or what the bar will be to get those trials restarted. Thank you.
Thank you. I hope you guys can hear me better now. I was told that the voice before was not as great. I'm not sure I'm going to be able to add much more color than what Gilead actually has been sharing. Essentially, the Type A meeting will take place, as Bart said a few minutes ago, still this year, before the end of the year. That's our expectation. In terms of what we'll be getting out of it, that could be a number of potential ways forward. That, I think, Merdad, the CMO at Gilead, talked about this a few days ago.
There's going to be an effort to seek clarity about the path forward for the CRL to address the concerns that the agency has on the risk-benefit of the 200 mg, and also specifically, the exact data that would have to be shared about the MANTA program. Based on that, coming out of the meeting, I think Gilead will have a sense about the prospects of filgotinib, and as a result, whether or not the trials that were paused will be able to resume. I think they will guide right after that meeting based on the outcome of the meeting.
The meeting is expected to occur before the end of the year?
That's correct.
Okay. Thank you.
All right. Thank you very much for that. Our next question comes from Nick Nieland from Citi. Go ahead, Nick.
All right. Thanks for taking the questions. Just a quick one. Does Gilead have opt-in rights for the OncoArendi asset? Secondly, for Bart, a few directional questions on the breakdown of your R&D spend, please. Firstly, do you expect your filgotinib spend in 2021 to be lower than 2020? Secondly, you've spent less on ziritaxestat in 2020 than you did in 2019. I was wondering why that was, and will that be more in 2021? Toledo's spend looks like it will nearly double this year. What growth can we expect for that in 2021? Can you just describe what's within the other programs that's nearly half your spend and which is growing at over 50% so far this year?
Just a very quick question on the accounting question on the $105 million milestones, over what period these will be recognized in your revenue. Thank you.
Bart, you take those?
Yeah, I'll take those questions. I was just keeping notes to make sure I keep track of all the points that you raised, Nick. First of all, does Gilead have an opt-in right on the OncoArendi asset? The answer is yes. As with all our compounds, both in-licensed and self-developed, at the end of phase II-B, there is an opt-in moment for Gilead, and they pay us a milestone of EUR 150 million, following which they will share the rest of the R&D expenses 50/50, and they get the rights for ex-Europe against a royalty of 20%-24%. That follows the normal economic structure of all compounds. On the R&D breakdown, a couple of points that you raised. First of all, filgotinib 2021. It's a bit difficult to assess at the moment, as Walid was just expressing the question mark around psoriatic arthritis, ankylosing spondylitis, and uveitis.
That's going to be obviously a driving factor in the expenses for 2021 as well, depending on whether that's resumed or paused. That's an answer that I cannot really give you today. On Ziri, it's less, but that's only mechanical, because last year before the collaboration, we were taking 100% of the costs on ziritaxestat. We started to share this 50/50 on the as of September 2019. If you look at the comparison of the first nine months this year against last year, you see a decline, but it's effectively an underlying increase in the actual expense, but it's shared with Gilead.
To a certain extent, that happens on Filgo, but in the other direction, their costs are increasing, but that's also reflecting that we are spending 20% of those costs in 2019, at least on the first, say, six months, and then 50% in the remainder of the year. Toledo growth. Correct. That indeed is growing significantly this year compared to last year. We do anticipate some further growth as those proof of concept studies are getting online as we speak and will be continuing to run throughout 2021. Indeed, for Toledo, you should expect some further increases. Finally, the other portfolio. That's really the whole portfolio that's in development, both in preclinical development and in the clinic. Those include the molecules that we referred to earlier in the call, such as GLPG3667, GLPG0555 , as Piet was highlighting.
At the moment, I think we have in PCC and phase I status, if I'm not mistaken, somewhere between five and 10 different programs that we're running. That's explaining why this other category is meaningful and is also growing. Lastly, your question on the accounting treatment for the milestone. It's actually treated together with all the other filgotinib income that we have received in the past and that we will be receiving in the future. We are basically lumping them all together and spreading them out over the periods of the development program of filgotinib. That basically is currently estimated to be, I mean, the regulatory development program for the next three to four years still to go. It's a bit of a complicated accounting treatment, but we don't recognize everything out of $ 105 million immediately.
We actually are spreading that out over the period. I hope I have answered your question, Nick.
That's very helpful. Thank you, Bart.
Thanks, Nick. Our next question will come from Peter Welford from Jefferies. Go ahead, Peter.
Hi. Thanks for taking my questions. I've got two. Just returning to Gilead, if we can, just with the comments they made on psoriatic arthritis and AS. Just curious here how this works insofar as, obviously, this is now a 50/50 cost share, but obviously Gilead does understandably have a focus on the U.S. Clearly for these indications as well, those trials are essential for other geographies as well. I guess, curious to understand the thinking behind pausing these studies given this is an FDA specific problem and how Galapagos thinks about this and what we can sort of think of a path forward given obviously the potential challenges that there could be within the U.S., but equally the significant opportunity there is elsewhere.
Secondly, on chitinase inhibitors, just curious if you can add, is this a target that you have tried addressing with your internal drug discovery platform efforts? If so, I guess curious why you think this particular asset is differentiated or perhaps why they've done something that you couldn't do, if it's the case, or why you haven't pursued it, I guess, internally. Just a quick one for Bart, is the EUR 27 million that you're paying to OncoArendi, I presume that's within the cash burn guidance for this year, but could you just clarify that that is right? Thank you.
Let me take the first question on the Gilead. Well, look, I think these programs on psoriasis, ankylosing spondylitis, and uveitis were designed with the idea to address the global regulatory sort of situation. As the U.S. situation is less clear, Gilead decided to pause these in consultation with us. We were aligned with that because we need to have clarity as to what's happening in the U.S. and what is the future plan there before we can decide whether the studies, the way they are designed, they could go and they would address the geographies where we're interested in and where we're going to have a way forward in. It seemed like a sensible way to go forward to have this much more informed by the discussion with the FDA. There needs to be some changes made, and that's why it stopped.
We'll see where we go from there after we have that meeting and we can adjust accordingly. We will be talking much more with much more clarity at that point after we do that.
This is Elizabeth. Walid, I just think it might be helpful to add that it's a pause in enrollment only. Is that correct? It's a pause in enrollment.
That is. Yeah, that's correct. Yeah.
Thank you. We had a question on the chitinase inhibitors, why they're differentiated.
Piet, take that one.
Okay. No, thank you. Peter, did we find this target ourselves? The answer is no, and that's for a very simple reason, is that this target is expressed only in active macrophages, and we never did that type of target screens, or we never did a target screen in that type of cells for fibrosis. In that sense, as we didn't screen macrophages for fibrosis, we didn't set up ourselves to find it. We were impressed with the data. It's a complete novel target, makes sense in the disease, and both the compound data and the knockout data for IPF make great sense. We believe it nicely complements our internal IPF portfolio. That's why we did the deal. Thank you. Was there a third question or not, Bart?
Yeah, that's mine. Peter, see, I can confirm your question. The EUR 27 million that is paid to OncoArendi as part of this transaction is part of our cash burn forecast of between EUR 490 million and EUR 520 million.
That's great. Thank you.
Okay. Thanks very much for that. Our next question will be coming from Rushee Jolly at Bernstein. Go ahead, Rushee.
Hi, Rushee Jolly, Bernstein. Thanks for my question. My question is on the small molecule GLPG4059 that entered the clinic in the quarter. Last year at your R&D update, you showed preclinical data on the asset demonstrating an impact on triglycerides, weight, and blood, and as well as hinting at combinability with metformin. I appreciate the mechanism was undisclosed at present and it's very early. Could you talk a little about any aspects of the molecule that you feel may be particularly differentiated? That's given that we have several oral diabetes drugs on the market with effects that stretch beyond weight and blood sugar. Tied to that, SIK as well also seems to be an interesting target for diabetes and obesity. Do you have any plans to push any of the Toledo assets into these diseases as well? Thank you.
Okay, I'll take both questions. Let us start on SIK and metabolic. That's an easy one. We are aware of those publications, and we follow up with every molecule, in every animal model, whether or not we see something that points us into that direction as a potential application for the Toledo platform. If we decide at a certain moment that indeed this is a path forward, you will hear from us. It's well-known, and it's on our radar. On GLPG4059, that compounds moves to phase I. It's a complete novel target, and in that sense, on its own, already working in a complete different way than older and more recent drugs. We want to see what it does in type 2 diabetes. We believe it has a position on its own.
We've compared heavily to older and newer drugs, and with the profile we see, it is different from what is out there. The moment we move into phase II, we will update you more fully on how we see this drug fitting in the total field there. Thank you.
Thank you.
All right. Our next question comes from Evan Seigerman at Credit Suisse. Go ahead, Evan.
Thanks, Elizabeth. Thank you for taking my question today. One for Bart. Can you expand on some of the differences that EMA and FDA see between the JAK class? I think in the U.S., we don't realize how more open the European regulators are to JAKs, and I think that might help put into context the launch that you're starting with filgotinib. Thank you.
Yeah, let me transfer that question, Evan, to Michele, our Chief Commercial Officer-
Okay.
who's also on the line.
Perfect.
I think he's happy to take it.
All right, cool.
Here's Michele Manto. We've seen also the difference in the uptake of the molecule. If you look at, of the class, if you look at Europe, we've seen that the class is really growing strong. We've seen that before only with Olumiant and XELJANZ in the market. They achieved a 15% share. We're also seeing where Rinvoq also came into the market earlier. In Germany, this went up to 20%. The class keeps growing and also not cannibalizing between the molecules, which is also leaving a good base for our ongoing launch. What we are seeing is that at least in the dynamic markets, the advanced ones, so like Germany, you see 20% of the bio-naive really going on JAK inhibitors and one-third of these patients going on JAK inhibitors.
You see also different base of use and, of course, at the same time, RINVOQ is growing strongly as well in the U.S., indicating that the demand is there. For the rest, of course, difference in the regulatory scene between FDA and EMA is something that Walid already addressed, and the next news will come with the Type A meeting outlook, as already indicated. Hope this answers your question.
No, that is helpful. I guess one more thing to follow up there. Do they look at the risk-benefit of JAKs differently in Europe? It seems that FDA is a little more conservative when you look at baricitinib and now filgotinib, whereas you have approvals in Europe.
Walid, would you like to take that on the regulatory side?
Sure. I think that's a fair assessment. If you compare the situation with baricitinib between Europe and the U.S., it pointed to that direction. I'm not sure what more to add to it. Honestly, I think these agencies form their own opinions based on the review of the same data. Sometimes they talk to each other, but in the end, their opinions could be different. I think in this case, you see Europe going one direction and the U.S. a different direction. Let's hope filgotinib will prove that theory wrong, and we'll get it approved with both doses in the U.S. and see which way we go forward from there.
Excellent. Thank you so much, guys.
Thanks, Evan. We now turn to Brian Abrahams at RBC. Go ahead, Brian.
Thanks so much for taking my questions. On filgotinib, I guess two questions for me. First off, can you talk about the potential for approval of the 200 mg dose for a more narrow, say, TNF refractory RA population? Is this something that's planned for discussion at the Type A meeting? Would you want to potentially commercialize it in RA in the U.S. with that kind of label, if your partner, Gilead, does not wish to? Secondly, can you frame for us your expectations on, I guess, specifically on the possible durations of follow-up necessary for the MANTA and MANTA-RAy studies, and how that might shape you and your partners go forward decisions on filgotinib? Thanks.
Yeah, let me take the clinical questions, the regulatory questions, then I'll ask Michele to answer the hypothetical commercial question. Look, I think the Type A meeting is meant to engage with the FDA to see what potential avenues we can have going forward. The FDA, as we've said before, and Gilead actually said, raised questions about the risk-benefit of the 200 mg and the target indication. Therefore, there could be potentially a way forward when you look at patients where the risk-benefit is a bit more different, as essentially people who are biologic incomplete responders, where the difference between 100 mg and 200 mg on efficacy is a bit more prominent, and those are patients usually are in need of new medicines. That's a potential way forward, and it's something that will be discussed.
Whether that will be a way forward or not, whether Gilead would be excited about it, all of these are part of the myriad of potential outcomes of the Type A meeting, and it would be very difficult to speculate on this. Regarding MANTA, I think those studies have been designed with a clear collaboration with the FDA and actually to a great extent, dictated by them, as they describe those studies in a white paper. There is a similar study that was done, obese and healthy subjects, with a compound by Pfizer called pregabalin. Those studies are well designed and are standard. Again, the primary endpoint of the study will be at week 13, although the double-blind proportion of the study is 26 weeks of treatment, as we talked about.
Now, as any of those studies, we do follow the patients afterwards for those who might have a reduction in sperm count. We follow them for a period of a year after the end of the 26 weeks or until they reverse. We do stop following them. That's how the studies are designed. I think those are also explained on clinicaltrials.gov. For the commercial question, I'll turn it over to Michele.
Thank you, Walid. On the bio-naive, it's definitely a growing segment also in the U.S. concerning the number of therapies, and we see also the JAK inhibitors also taking good place there. On top of that, we've seen in phase II, so the 200 mg has a very strong profile for filgotinib. From this to the commercial scenario and opportunities, this highly depends on the actual outcome and the different combination that would come out of the label and the Type A meeting. It's not the moment to have a straightforward answer here. We'll need to see what the Type A and the outcome of the discussion with the FDA will bring us.
Got it. Thank you so much.
Thank you. Our next question comes from Matthew Harrison at Morgan Stanley. Go ahead, Matthew.
Great. Thanks, Elizabeth. Good afternoon, everybody. I guess two things for me. One, can you just remind us of sort of the steps for commercialization in Japan and pricing there relative to some of the other geographies? Secondly, I guess any updates or any clearer thoughts on when we could see the futility analysis for ISABELA? I remember there was a piece around further enrollment that influenced that. Thanks very much.
Okay. Hi, Matthew. I take the first one on the commercialization in Japan. There is to remind this is territory that Gilead owns and where they act. Pricing as well will be a decision that they take. In Japan, Gilead operates also in collaboration with the local companies, with Eisai to maximize the operations there and t hat also is an indication of the opportunity to maximize the market there with the presence that Eisai has in the rheumatology market. I will pass it to-
Yeah. Thanks, Michele. Essentially, for the futility for ISABELA, I think, currently we are still planning for having the futility in the first half of next year, with the big caveat of the uncertainty around COVID right now. As a matter of fact, that applies for all of our pipelines, just like any other company right now. We'll see how that's going to evolve. So far, we're sticking with that plan, and we will be guiding, in the future, if we have any change in these. Thank you.
Great. Thanks. Now next up is Phil Nadeau from Cowen. Go ahead, Phil.
Good morning. Thanks for taking my question. My question's actually on the Toledo phase II trials. In reviewing the designs, it struck us as a bit small. It looks like in each of the trials in RA, psoriasis, and UC, only about 15-20 patients will actually get GLPG3970. When we compare that to the phase II proof of concept studies for filgotinib, those trials were more like somewhere between 100-150 participants. What's the rationale for the smaller patient numbers in the Toledo program, and do you think those trials are each large enough to give you a clear signal for efficacy and safety in the different indications? Thanks.
Piet, do you want me to take that?
You can go on it.
Okay. Thank you. Phil, thanks for the question. Great question. Look, this is our approach at Galapagos, the way we develop our medicines in general. We cast a wide net. In the case of Toledo, we really want to learn from the lead compound to inform the whole platform and build the bridge from the preclinical data to the phase I pharmacodynamic data that we shared with you to the proof of concept data that we see and see whether our story, as we build it based on the biology preclinically on the models, are holding out when we go to the clinic. If we want to do larger studies, then it will be a significant investment, and as such, you need to choose.
We think then you lose the ability to explore the wide array of potential diseases that could benefit from it, from adaptive to innate immunity, as we shared with you also a week ago or so. As such, we do smaller studies where you can have one of three outcomes. Either you see nothing and therefore it is not worthwhile continuing to fish in that pond for that particular disease, or you see something that is, wow, very impressive, that will allow you to take a very decisive next step and then go straight into larger trials. You get something that gives you a signal that is worthwhile pursuing, maybe changing of the type of the patient, maybe go in a subpopulation, maybe change the endpoint that you look for and learn from it. That is kind of the approach that we take there.
With the five proof of concepts that we see across psoriasis, UC, RA, Sjögren's, and lupus. As we talked the other day, and I'm putting the plot for it again, in the case of psoriatic arthritis, because of the mechanism of action, because it sits to benefit from both innate and adaptive immunity, a model based on what we understand of the biology, we decided to take a bet there and go straight into dose range-finding study in psoriasis, psoriatic arthritis, I should say, because that is the chance that we get to bring this particular class of medicine fastest to patients, by jumping straight in a dose range-finding study.
That's helpful. Thank you.
Thanks.
Okay, thanks, Phil. So our next question comes from Dane Leone from Raymond James. Go ahead, Dane.
Hi. Thank you for taking the questions. I'll just keep mine, I guess, kind of brief and targeted. Before year-end, you're expecting the top-line results of the PINTA-GLPG1205 study, in IPF. Two just points of interest on that one. Based on ClinicalTrials.gov, that study completed in August. Just wanted some color in terms of, it now being November, what analysis is being done or kind of the context that you're putting in from that study to then deliver the top-line results. Secondly, and I'm not sure how much you can get into it, but there have been questions around the PK profile of GLPG1205, from the IBD studies or the healthy volunteer studies maybe, that were dose ascending. There was accumulation of the drug, given the long half-life.
Could you just comment in terms of how that might be different in terms of the dosing strategy, whether you just need to use lower doses in IPF, relative to IBD that had been explored? Thank you.
Okay, I'll take the PINTA questions. In the PINTA, it's a 26-week study in IPF patients with the three different backgrounds, and we will report out on FVC and FRI. FRI on its own, it's a massive data set, and so we are making our way through that, and we want to understand it fully at the moment that we present those data. The analysis is ongoing.
FVC is huge, I can tell you, and we want to be 100% sure that we have everything ready when we come out. The PK profile of GLPG1205, the compound gets to a steady state level. We did a PINTA study where we took a single dose. Based on target coverage, we can go lower if that's needed later. We do not anticipate that there's a difference between IBD patients and IPF patients, but the data will need to show that. Anything else?
No, that's it. Thank you.
Thanks, Dane. Okay, our next question comes from Jason Gerberry from Bank of America. Go ahead.
Hey, guys. Thanks for taking my questions. I guess first one for me, one of the hypotheticals Gilead talked about on their call was a potential, path forward or moving forward with UC, but not RA. I just want to make sure I understand that correctly, because that would presume that you have an approval for 200 mg for UC, but not perhaps RA. Is there a rationale there? Is it potentially that you need to push dose with UC, or maybe an inherent predisposition of RA patients to blood clots that presuppose that scenario? My second question is just, the European launch and realizing that there's probably a lot of nuance at the country level, but how do you guys think about order of entry, effectively kind of third amongst the next generation JAKs? Do you look at the Olumiant launch?
Do you think that, as later entrants come into the market, are there any price negotiation considerations that come into play? Just wanted to know if you can kind of clarify some of the order of entry considerations with the broader EU launch. Thanks.
Thanks, Jason. I'll take your first question. Indeed, actually, we've seen and we know from the biology and from prior molecules that in UC, you often need a higher dose than what you have in RA. I want to be very clear, the FDA never said that the 200 mg in RA is not approvable because of a specific safety concern with that dose. What the FDA has said, and we've been very clear on this, is that they believe that the risk-benefit of the 200 mg compared to the 100 mg, and they have concerns about that. In other words, the 100 mg looks very good, so in their opinion, it's not warranted to use the 200 mg in that indication. They specifically said in that indication. I think it's a different scenario in UC. The population is different.
You've seen recently when we shared the data from SELECTION at UEGW, you've seen more color on efficacy, but also on safety. You see the profile at 200 mg continues to look very good as well in this patient population. I think that the agency will have to make that determination on its own. Of course, they're not going to completely ignore all the data that they have from other indications, but I don't think the read-through is 100%, because they need to evaluate the risk and benefit of the 200 mg in the IBD population. I'll pass it on to Michele.
Yeah. Thank you, Walid. On the European launch, of course, there are differences in the different countries on the healthcare system, reimbursement, and et cetera. The first thing is that we really started after the EU approval with all the procedures to really be on speed, and get there reimbursed and accessible as soon as possible. In terms of pricing, well, without getting too much deeper, of course, we have systems in different countries which are now basically prepared for the negotiation and discussion for JAK inhibitors. That's a good one because we can navigate those systems without too many complexities or new things, which again, can play on timing, on helping us accelerate the reimbursement and at the same time without really getting on price on different levels than what we've seen before in the market.
In terms of order of entry, there is no special consideration here that we would consider. Time is now passing and that's what we are aiming at.
Great. Thank you.
Thanks, Michele. I know we're coming up on the hour, but we've got one more question from Benoit Louage at Degroof Petercam. Go ahead, Benoit.
Hello, good afternoon. Thank you for taking my questions. I have two related to the IPF franchise, more specifically for GLPG1205. I was just wondering, now awaiting the PINTA trial readout, if this trial would be positive, on which timeframe approximately could we expect you communicating on the next steps going forward with this compound in IPF and actually as well in systemic sclerosis. As a follow-up on that, I was just wondering what your view and Gilead's view would be in the speed of trying to evaluate GLPG1205 and ziritaxestat in as kind of a combination therapy setting in phase III. Would that be something for within the very near future to look into and to initiate? Would you await maybe some monotherapy evaluation in phase III first before taking or engaging into such strategies? Thank you.
Thank you, Benoit. This is Walid. I'll take those questions. I think we've talked a little bit about our plans for the OncoArendi program to evaluate this in dose range finding in a phase II program. I think the idea would be, depending on the results of PINTA, if the results are fantastic, we can jump straight into an ISABELA program phase III. If they are somewhere in the middle, we can propose something like the OncoArendi or GLPG4716 program going forward. Regarding the timeline for it, again, it's really hard to predict these ahead of time. We scenario play for all these, we prepare, until you see the data, it's very hard to predict. If it's straightforward, the delay will be very short because we usually plan for these things ahead of time.
If the data required us to scratch our head, that might take a little bit longer for us to come up with a clear path forward as to what we want to do. Regarding combination 1690, that is always been an option. Again, these things, as you can imagine, if you have two experimental drugs and you do not know the dose for neither one of them, then doing these factorial design type of trials become prohibitive. I think we must think cleverly about it and do some combination work that will enable us to figure out which dose we would use going forward. There is a little bit of thinking already on that, and we are starting to do some work pre-clinically to allow us to do so, but we do not have any clear clinical plan that I can share with you right now.
It's definitely something that is on our radar screen and something we are certainly interested in across all of our IPF franchise and candidate compounds, as I said before. Thank you.
Okay. Thank you for the feedback.
All right. Thank you very much. Then we're going to wrap up today. Please reach out to the IR team, Sofie van Gijsel or myself, if you have any questions. Looking ahead, we'll be webcasting executive presentations at the Jefferies Healthcare Conference later this month and at the J.P. Morgan Healthcare Conference in January. Our next scheduled financial results call will be for the full year 2020 results on the 19th of February 2021. We thank all callers for participating today, and please stay safe and well. Thank you. Bye-bye.
That does conclude our conference for today. Thank you for participating. You may all disconnect.