Ladies and gentlemen, thank you for standing by, and welcome to the Galapagos webcast. I must advise you that this conference is being recorded today, Wednesday the 16th of December, 2020. I would now like to turn the conference over to your speaker today, Elizabeth Goodwin. Please go ahead, madam.
Thank you all for joining us today to discuss the revised terms for filgotinib with Gilead. I'm Elizabeth Goodwin, Investor Relations, and this webcast is accessible via the Galapagos website homepage and will be available for replay later on today. Sell-side analysts and professional investors will be invited to pose a question at the end of the call, and if you want to have your question included, you could dial in now on 32, for Belgium, 2793847 and the code is 7689939. You can also consult other numbers in our press release. I'd like to remind everyone we'll be making forward-looking statements during today's webcast. These forward-looking statements include remarks concerning future developments of the pipeline, results of future or ongoing trials, future commercial and 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's actual results may differ materially from the results expressed or implied in these statements. Today, we'll hear from Onno van de Stolpe, our CEO, and Michele Manto, our Chief Commercial Officer. During their presentation, you will see some slides progress on screen, and this will be followed by a Q&A session with our management board executives. At this point, I'd like to hand over to Onno.
Thank you. Thank you all for calling in. I will give you an update on the news we received from the FDA and the consequences of that news for Gilead and for filgotinib. When we reported on the CRL earlier in the year, it became clear that there were two issues with regard to filgotinib getting to the market in RA. One was the MANTA study that needed to be completed, which was a big surprise for us. Secondly, the fact that the FDA had an issue with the 200-mg risk-benefit, which also was new to us. Following a CRL, the normal path is to have a meeting with the FDA, the so-called Type A meeting, to discuss what needs to be done to resolve the issues of the CRL.
That meeting took place last week. Based on the outcome of that meeting, Gilead has decided not to go forward with applying for registration of filgotinib in RA in the U.S. The reason is that the FDA has not changed its position with regard to the 200 mg. They still believe that risk-benefit of that dose is not positive in view of the 100 mg. The 100 mg is also an active dose that's effective for treatment of the disease. The FDA wants to stick to that dose. For Gilead, the 100 mg is not an option because of the competitiveness in the RA market. They decided to pass on the opportunity to launch this in the U.S.
As a consequence, the trials that were put on hold in the diseases that are associated to the RA disease segment in psoriatic arthritis, ankylosing spondylitis, and uveitis, the decision has now also been made to not continue in those indications in phase III and to file for these results for approval. That doesn't mean that Galapagos has given up on these indications. We will come back to you in due time if and how we are going to continue with these trials for the European market and the Japanese market. For the U.S., it doesn't make any sense to continue these large trials if there's no possibility to file for approval in those disease areas.
The second outcome of the Type A meeting was that with regard to the MANTA/MANTA-RAy studies, the FDA requires a follow-up of up to 52 weeks for any patient who does not recover fully by week 26, the data that become available in the first half of 2021. It could be that we have no extension of the trial review when there are no patients that have not recovered. It could also be that there is a continuation of the follow-up based on patients that have not fully recovered. There are no new data in the MANTA/MANTA-RAy studies on which the FDA has based its decision. It is clear that they are very cautious with regard to the outcome of this trial. Clearly not good news for filgotinib, for Gilead, Galapagos, and for patients.
It's the reality we got to deal with. Clearly, the IBD opportunity in the U.S. remains. We had a positive phase III readout in ulcerative colitis with the 200 mg, and we are continuing the phase III Crohn's disease trial, which data are expected in the first half of 2022. Gilead remains committed to that. We believe that even if the 200 mg is not acceptable for RA, it could be possible, it should be possible, to apply for the 200 mg in these indications. It's a different disease area with different medical needs. We believe there is still a way forward for these indications. It's a large indication as well, so we haven't given up on the U.S. for filgotinib. For RA, the door is shut.
The silver lining of this whole negative news is that we were able to negotiate and agree with Gilead on a commercialization of filgotinib in Europe. With the new deal, Galapagos will become responsible for all commercial activities in all indications in Europe. Quite different from the current situation, where Galapagos has only a very limited geographical responsibility for diseases in Europe. We now will get the full European rights to Galapagos in every aspect of the commercialization. That will not happen from day one to day two because the commercialization is underway. The launch is underway in Germany, and we're at the brink of launching in a number of other countries. Galapagos has launched in the Netherlands. We need to have a good transition of all these activities to Galapagos.
We will welcome a lot of the Gilead commercial team into Galapagos, and we anticipate about 100 people will transfer from Gilead to Galapagos over the coming months. We expect the full commercial organization to be in place, and the complete handover completed, by the end of 2021. What does this mean for the economics? Well, the 50/50 P&L share that's currently in place for the European commercialization will remain in place until the end of 2021. After that, Galapagos is responsible for the P&L. All commercial economics will go to Galapagos as of January 2022, and we have agreed on a royalty for Gilead between 8% and 15%, starting in 2024. By that time, the commercial activities in Europe should be profitable, and therefore, we are willing to give Gilead a royalty at that point in time.
There will be no more EU milestones to Galapagos for filgotinib, so no approval milestone for Crohn's or UC. As a balancing point, we will get a payment from Gilead of EUR 160 million. Gilead will retain commercial rights outside Europe, so nothing changes there, and all milestones and royalties outside Europe will remain intact. What is important to mention here is that the broader R&D collaboration that we signed with Gilead last year is not at all impacted by this decision by Gilead not to launch RA filgotinib. They have confirmed their commitment to the inflammatory market and to Galapagos with its collaboration that they signed and for which they paid a lot of money to get an option right to all the programs that we're going to develop over the next nine years.
We still see Gilead as a very important and strong partner, and it's unfortunate what has happened with filgotinib in the U.S., but we are ready to continue our collaboration and deliver a new mode of actions to the patients. Let's focus on Europe and our commercial vision there. We believe that having the European rights on filgotinib is value creative for us. Of course, the first years are money-losing as every launch of a pharmaceutical product in Europe is. We have to build up the commercial organization. We have to start the sales, which we're currently doing. In a couple of years, the break-even point will come, and after that, we see a nice profitable market for filgotinib in Europe, and that economic value, except for the royalties payable to Gilead, is then fully for Galapagos.
What this deal does, it accelerates our commercial presence across Europe. Something we have told investors that was our plan in view of the future launch of ziritaxestat, our second drug in phase III, that is developed for IPF, idiopathic pulmonary fibrosis. With this deal with Gilead, we can now build the commercial organization as we speak throughout Europe to be ready for our second product as well. What also is important to note is that now with the deal with Gilead, we are completely aligned with the overall R&D collaboration that we have with Gilead. filgotinib was an exception to the rule. All molecules that we have in the pipeline, and if Gilead takes an option, they will obtain the non-European rights.
Galapagos will keep the European rights, and therefore, filgotinib is now aligned with that collaboration, which makes perfect sense from an operating model, which makes it all simpler and more effective and more agile. Although the U.S. market of filgotinib being out is a big setback, this is clearly a very nice silver lining that we can now commercialize Jyseleca on the European market. We're very excited about it, and I hope we can show the investors that is a great opportunity for Galapagos. To explain that in more detail, I'm happy to hand it over to Michele Manto, our Chief Commercial Officer. Michele?
Yeah. Thank you, Onno, and good morning, good afternoon, everybody. Yeah, there is a clear market opportunity for Jyseleca in Europe. The market size, as you see, is about between EUR 5.5 billion and EUR 6 billion. At these prices, the big size of that, the big chunk of it comes from RA, of course, the largest indication. With the IBD indication you see in Crohn's with a high dynamic there and growth in the market due to the higher unmet need and also the launch of new mode of actions, and the fact also that the JAK inhibitors are not established there yet, will have also a bigger role to play. In this market, we have an ambition to reach EUR half a billion peak sales in the second half of this decade, reach through achieving a market share range of 8%-12% across geographies and across indications.
Of course, reflecting the different potential and different market development in each of the European countries, also timing of reimbursement. For Jyseleca itself, we see continuously a big opportunity to succeed in Europe. We are confident with the European label and also extended to Japan. That reflects the strength of our data. The data that helps differentiating towards the established biologic therapies with a fast onset of efficacy, the lasting activity, the monotherapy, also big demand for RA patients. Of course, the convenience of being oral. Also, there are elements that differentiate further in terms of safety profile on the associated adverse events that are typically connected to JAK inhibitors, and also the two doses that we have approved in Europe and Japan. Last but not least, the rapid robust responses that we have seen across the FINCH program.
Looking at how we can deploy this in Europe, Onno already alluded to that it is a transition path. It's not an overnight change. We'll start, of course, with the focus on the key markets. The Benelux and the EU5, the core of Europe, where we already have our presence established and started with the deal we signed with Gilead last year. We have legal entities in these countries. We have already launching in the Netherlands. We are preparing the endorsement in other countries. Actually, we are now preparing for the intended transfer of the Gilead launching organization in Germany and U.K. for rheumatoid arthritis. For the other countries, we intend to have a transfer later by year-end of 2021 in the Alpine, Switzerland and Austria, the Nordic countries and Ireland.
There we will establish our legal entities and presence and then gradually transfer the organization in an efficient way, reflecting also our lean approach to commercialization. For the rest of Europe, highlighted here in green, we have a very programmatic approach. We know direct presence, really evaluating how we then make Jyseleca available as appropriate, also considering third parties or other efficient opportunities. In that sense, we'll come to a full transition by the year-end of 2021. In that sense, looking at next year, for filgotinib, we have different highlights, of course, both commercially and with development regulatory. Starting in the first half with the availability of the 26-week results for moderate to severe. Then the UC submission in Japan. Also expecting the CHMP opinion in Europe for UC, paving the roads then for the launch of UC in Europe.
having activated the commercial transition. In the second half of the year, we'll then move to have indeed the approval and the launch of UC in Europe, and then the conclusion of the commercial transition as I highlighted before. Moving then towards 2022, we'll have the Crohn's top line from DIVERSITY. Also there opening the next stage in the IBD commercialization, and then expecting the approval for UC in Japan, which then will move into 2022 second half with the potential submission for Crohn's disease in Europe and also in Japan. with that, I would pass back to Elizabeth.
Thank you very much. That does conclude the presentation portion of the webcast today. We invite sell-side analysts and professional investors to pose their questions. You can do so by pressing star one on the telephone. Let's give folks just a moment to do that. The first caller will be Dane Leone from Raymond James. Your line should be open now.
Can you hear me, Lisa? </edited_transcript
Yeah, I can hear you now. Go ahead.
Okay. Yeah, sorry. The operator jumped in there as well. Thanks for the update and giving the great detail on the go-to-market in the E.U. The questions that have been coming back to us last night and this morning are pretty directly related from investors around the verbiage within the press release and update for what the FDA is looking for the MANTA studies. As your teams walked us through over the years around a potential TTOX signal, everyone's been curious to understand when that will be resolved. I guess there's some concern that there might be a signal based on how the press release was written. I just wanted to give your team an opportunity to clear that up and what you've seen with MANTA and what the real discussion is with the U.S. FDA. Thank you.
Walid. Dane, this is Walid. Can you answer the question, please? Thank you. Thanks, Dane. This is Walid. Good afternoon. Good morning, everybody. No, the MANTA and MANTA-RAy studies are both ongoing studies. Both of them are blinded. There's been no signal, as I mentioned before. Those trials are monitored by a data monitoring committee, and at every chance that they review the data, they told us to continue with no changes. we have no reason to believe that there's any signal, and the FDA did not see any data that's different than what we have seen.
It's very difficult for me to explain the position of the FDA and why it moved from June 2019, where we were told that they could evaluate the risk-benefit of filgotinib 100 and 200 mg without seeing the actual data from the MANTA program, to requiring to see the data, which would be normally the end of the 26-week double-blind placebo-controlled portion of the study, which is designed in conjunction with the FDA and with every step of the way there, to now saying that they would want to see the full up to one-year recovery period after the 26-week data. No reason has been given to us. No rationale has been given to us. It's very difficult for me to explain it. I'll be very honest with you. I can tell you categorically, there's been no signal that we've seen, that they've seen that changed this.
The most informed people are the people on the data monitoring committee whose job is to make sure that we monitor the safety of the trial. These professionals have told us to continue the studies as designed. With that, as you know, we will have the top-line data from the 26 week at the first half of the year. Maybe also, I'll share this information with you. The FDA is keen that the team remains blinded, so there's going to be a very small unblinded team that will be working towards sharing the information with the regulatory authorities, particularly the EU and Japan, where we are actually selling our medicine. We need to adequately inform on the risk-benefit to our patients who are actually being prescribed this medicine.
also, we will be sharing this with the FDA, and we'll talk with Gilead about the way to do that. that's the best information that I can give you, and I hope I addressed your question, Dane.
Thank you very much. Yeah, no, I think that is very helpful to all of us. Thanks for the team. I'll get back in the queue.
Great. Thank you. Our next question comes from Phil Nadeau from Cowen and Company. Go ahead, Phil. </edited_transcript
Morning. Thanks for taking my question. My question's on the commercial ramp as you assume the responsibilities for filgotinib. Could you give us a little bit more detail about where Gilead was in building out its infrastructure in the EU5? You mentioned that you'd take on maybe 100 or so people from Gilead. Do you think that's all you'll need to promote in Europe? What other infrastructure will you need to build as you assume the responsibilities of filgotinib?
Michele.
Sure.
Thank you for the question. To recap, with the previous agreement, Gilead was responsible for rheumatology in Germany and the U.K., and we are responsible for rheumatology in France, Italy, and Spain. At the current moment, the Gilead team performed and is performing the launch in Germany with the actual promotion and first sales coming in and preparing the launch pending the NICE reimbursement in the U.K. This is the bulk of the people that on the other two, when mentioned the hundred. These are organizations that we are
Effectively staffed and prepared to have a strong launch and impact in these two markets. In the meantime, we have been preparing for our launch in rheumatology in France, Italy, and Spain. There, of course, the timeline is slightly different because of the different reimbursement timelines with the three countries, then expecting reimbursement in the first half of next year. They're also ramping up in their activities. That's how then we will integrate our forces. Yeah, we see that the sizing and the quality of the people we got on board are really strong. Sizing adequate to the competition in the countries. Also the quality of the people coming with the strong experience from biologics, rheumatology, coming from the market leaders companies, then, to either Gilead or Galapagos, to make a strong launch with Jyseleca.
Great. Just one clarification follow-up. Do you feel like you're in a position to launch in France, Italy, and Spain in the first half of 2021, as soon as reimbursement is secured?
Yes. This has been all the preparation we started a year ago, with the 2019 deal with Gilead. We established our entities there. We've been recruiting, we have been acting on the reimbursement path. We have our organization there ready to go.
Perfect. Thanks for taking my questions.
Okay. Thanks very much. Our next question comes from Brian Abrahams at RBC. Go ahead, Brian.
Hi, this is Steve on for Brian. Thanks for taking my question. Could you remind us what the circumstances surrounding MANTA data would be to a patient review? What could potentially lead to a delay in filing? Is it possible to run a post-approval study, or would the filing be delayed under that review? Thanks.
I think that's a question for me. I'm not sure I caught exactly your question. Which indication were you talking about? Is it an RA or?
Following the MANTA data for UC, potentially. </edited_transcript
For UC. Right. The FDA now is asking to look at the 52-week data. However, once we have the top-line results from the 26-week, we will be discussing this with Gilead to see what is the best way to engage with the FDA. It's going to be a discussion that will be driven by data, and hopefully, we will be in a position to actually make a case to be able to move faster than the 52 weeks after the 26 weeks kind of thing.
Thanks.
Okay. Thank you very much. Our next question comes from the line of Matthew Harrison from Morgan Stanley. Go ahead, Matthew. Okay, we'll move on. Next will be Jason Gerberry from Bank of America.
Oh, hey, guys. Thanks for taking my questions. Just on the language in the press release about the different measures of sperm count measures for greater than 50% reduction, is that just an endpoint measure, or is there a specific reason why that threshold was mentioned in the PR? Just wanted to clarify on that. just one quick question, just on your market sizing for inflammation, roughly EUR 6 billion. It looks like that's on a list price basis. I wonder, with the impact of recent biosimilars, I think with TNF HUMIRA having come down about 50% on price, what you think that market may be on a net sales basis, inclusive of the biosimilar impact of recent. Thank you.
Jason, this is Walid. I'll take the first question before I pass it on to Michele. Yes, the 50% reduction in sperm count, that's the primary endpoint of the trial. This trial, or both trials, actually, have been designed based on the FDA white paper where they essentially detail the design, the endpoint, the duration, and the analysis. This is a very well-choreographed, designed study based fully on a white paper by the FDA. Actually, there are other studies that have been conducted that are similar to this, and that's the standard endpoint that should be used in that trial.
Yeah, here's Michele. I'll take the second one on the market sizing. Of course, in Europe, we have different systems, different countries that apply prices in a different way. what you alluded to, the biosimilar will not impact all the countries in the same ways. also then JAK inhibitors as a class are not necessarily linked to that pricing. that's a more elaborate answer. you could consider a range between 15 and 20% of differences between the list price and the net prices, but it really depends on the geographies.
Okay. Thank you.
Okay. Our next question comes from Peter Welford at Jefferies. Go ahead, Peter. </edited_transcript
Hi. Yes. Can you hear me all right? Just one question, actually, and a follow-up. The question actually is just with regards to the R&D. I wonder if you could give us any sort of idea as to the rough level of R&D spend we should be thinking about for filgotinib in 2021, given obviously, you obviously have to take on some extra responsibilities. If there are any sort of niche indications you could potentially consider. I know you mentioned that you disclose future plans for these in the current sort of psoriatic arthritis type indications, but I guess, is there anything else you'd potentially consider now that perhaps Gilead didn't before, given you're obviously in a slightly different situation now, and do you have the flexibility to do that? Then if I could just ask Walid, sorry, just going back to the point about MANTA.
I know we're dwelling on this, but your point about the fact that the team remains blinded, does that mean that from our perspective, we shouldn't expect potentially any visibility on MANTA until, I guess, we get a response from FDA, yes, no, if you like? Because it sounds as though, potentially even management won't necessarily get any visibility on what's going on with MANTA. Thank you.
Okay. Hi, Peter. Let me take the first one. This is Bart speaking. Good morning, good afternoon, everyone. R&D spend for 2021 for Filgo. I'm going to give you an answer on the suspense before implementing all the effects of this transaction, and I'll explain that in a second in a bit more detail. We anticipate under the existing construct, where we pay 50% of the development cost, that we would spend somewhere between EUR 80 million and EUR 100 million in the course of 2021 on filgotinib development. Most notably, that is going to the Crohn's study, which is the biggest study that is still alive. The other studies, FINCH 4 long-term extension, DARWIN 3 long-term extension, are also included in that package. That gives you that the 50% cut on what the actual total expense of the program would be during that year.
What you're going to see in our P&L is going to be a bit different at the end of the day, because Gilead has, under this arrangement, agreed to pay us an upfront of, in total, EUR 160 million, which covers their 50% share of development cost for a couple of years on a selection of trials. We will be recognizing that revenue also progressing the years and progressing the trial execution. That's, again, a bit of a complicated accounting method, but it gives you a bit of perspective on those expenses. With regard to the niche indications and MANTA, Walid, can I give that to you as a question?
Sure. Thanks, Bart. Yeah. the FDA would like to see the data of the 52 weeks monitoring phase or up to 52 weeks, as Onno has described before. Depends on whether there will be people who will be meeting the criteria that we talked about at the end of 26 weeks and how long they will last. the maximum will be 52 weeks before they reverse. They wanted the study to remain blinded so that they don't introduce any bias. as such, Gilead put together what we call a data integrity plan that's been reviewed and approved by the FDA, which posits that the team that's actually working on the study will remain blinded, and there's going to be a small team that will be unblinded, such that they will be able to communicate with the regulatory authorities on the group-level results.
Indeed, I think, in terms of the information that will be shared externally, this is something that we need to discuss with Gilead and align on. To respect the data integrity plan, we cannot be sharing information about any details of this, because otherwise, again, the team will become unblinded and biased. We'll provide more clarity on this as we move forward, but the assumptions at this point is that we will not be sharing information detailing the results of MANTA. We will be communicating directly with the regulatory authorities.
Thanks. On the niche indications, and if I could just go back to Bart, just with regards to the cost then. Do we understand that in 2021 now you'll be booking the full cost, if you like, of the study, not your 50%, but that will be offset by the Gilead money in the revenue line, if you like. Is that the way we should think of this? You're paying for the studies now, but the 50% is offset by revenue rather than you booking half as you currently do.
Yeah. That's almost correct, Peter. There's two categories. It's also drafted in the press release, but there's two categories of trials. One category where we continue to book 50% of the cost and Gilead will pay the other 50%. Then there's another category where we will book 100% of the cost and the 50% share of Gilead is actually affected through this prepayment. Indeed, that will be recognized then as those costs will be progressing through 2021 and 2022.
Peter, what was the question regarding the niche indication? I missed it.
Yeah, I guess I'm just thinking with regards to some other indication. I think it was mentioned at the start by Onno that you may consider future plans of things like psoriatic arthritis. I guess I'm thinking what about other indications that were not previously part of the agreement? Do you have the flexibility to do that, and are there any other potential niche indications that maybe Galapagos considered interesting, whereas obviously weren't perhaps under the broad collaboration that previously existed?
Yeah. No, that's a fair question. I think that the easiest one are the indications that were being considered previously. I think the team is actively looking to see whether we can think of a development plan that would be appropriate for Europe and tailor-made for Europe. Of course, that requires discussion with the CHMP on that. Other niche indications as well are on the table. Again, we have the flexibility to do that. It's premature right now because the team hasn't really had the chance to dig into this and figure out a path forward that would be viable both scientifically and commercially for filgotinib for Europe on these. We will communicate on those once we have clarity.
Thank you very much. The next question will be from Lenny Van Steenhuyse from KBC Securities. Go ahead, Lenny.
Thanks a lot, and good afternoon. Two questions from my side, if I may, quickly. Do you anticipate any additional sales and marketing costs for 2021, considering the additional markets that you will be tackling with the revised agreement? Could you give us a sense of what those additional costs could be for that first year? Secondly, could you please remind us of the timelines on the fistulizing and small bowel Crohn's disease trials that are ongoing? Gilead is, of course, in the lead in these trials. In that sense, are these news elements that will be explicitly communicated when they arrive? Thank you.
Yes, Lenny. Let me take the first one, and then Walid, you can maybe take the questions on the other indications in Crohn's. The ramp-up on the investment for sales and marketing in 2021 will indeed continue. Let me remind everyone that the costs, so the P&L results of filgotinib in 2021 will remain 50-50 shared between Galapagos and Gilead. Obviously, we were already under the old arrangements, planning to ramp up the investments on both sides, both Gilead and Galapagos, as we are launching in the various countries that Michele was describing. Yes, we will be seeing additional cost in the course of 2021. My current estimate, but we will give more detailed guidance in February. My current estimate is that this will be an additional roughly EUR 50 million for the year 2021, compared to 2020.
Regarding the studies DIVERSITY and I think one and two, one of them, the small intestine Crohn's and the other one was in fistulizing Crohn's. Those were, as you know, small proof-of-concept studies, exploratory studies to some degree in that space to better understand the efficacy of filgotinib in these indications. Those studies are, I believe we stopped them a bit earlier because, again, they were small, and it was very difficult to recruit and wanted to focus mostly on Crohn's disease, considering also the corona situation. We should be communicating on those, I think sometime in the first half of next year. We should be in a position to share more information about that.
All right. Thanks a lot.
Okay. Thank you. Our next question comes from Graig Suvannavejh from Goldman Sachs. Go ahead, Graig.
Okay. Thanks, Elizabeth, and thank you for taking my questions. I've got three if I could. My first just has to do with, in terms of comments, maybe, Onno, from you earlier that you do expect, I guess, break even for filgo from a P&L perspective. Is there a year or a timeline that you're envisioning where filgotinib in Europe will become break even, and what might that be? My second question just has to do with the launch that is underway in Germany and the Netherlands. I'm wondering if you can provide any color or quantifiable metrics on how that launch is going, and if you do intend to provide some of that on a go-forward basis.
my last question just has to do with, in Europe, how do you intend to message differentiation and/or the value proposition of Jyseleca in Europe to patients, physicians, and payers, especially vis-a-vis the AbbVie JAK inhibitor that's already out there. Thank you.
Okay. The second and third question for Michele. The first question, yes, you can kind of read it in the press release where we agreed with Gilead on a royalty starting from 2024. We believe that that is the year that filgotinib will be profitable in Europe. Michele.
Yes. On the launches underway, yes, the first country is Germany, in the hands of the Gilead team, and the Netherlands now. It's still early weeks to provide a full sales volume or sales update there. What I can say is that we are tracking on a weekly basis very intensively all the launch metrics that you would normally consider, right? The access, reimbursement, contracting, and it's all going very intensively and very well. The other part is about the uptake and the adoption ladder. The input and the feedback is very strong as well in terms of appreciation of the differentiation features in efficacy and in safety. Also confirming that the launch strategy is going the right direction.
In terms of updates, we'll see next year to give regular updates on how the launch is going in the different countries, and then provide also more clarity on these steps. As of the messaging, well, we have, as anticipated early in the presentation, we are very confident about the profile and the label. We have two doses approved, which give the right flexibility for physicians to prescribe with the 200 mg recommended dose for most patients, but also for the patients who might need a lower dose. We have that, too. The key part would be the safety profile that we've been discussing for all along the readouts of the FINCH trials that really
Make us different in the typically JAK-associated adverse events. That, again, on early feedbacks we get from advisory boards, the individual rheumatologists, et cetera, resonates very well.
All right, our next question will be from Benoit Louage from Degroof Petercam. Go ahead, Benoit.
Hello, good afternoon. Thank you for taking my questions. I have three from my side. Again, also a bit on the cost perspective for the upcoming years. I was just wondering whether you can give us a certain level of guidance on should we expect a dramatic increase now in the cash burn versus the full year 2020 guidance? Would this be more EUR 50 million increase, as was referred to in the expected increase in sales and marketing versus this year? On the peak sales ambition of half a billion euros, could you just confirm that this would imply for across all the indications, so both RA and IBD? Is this solely for RA that you mentioned this?
To finalize, I was just wondering whether you could give us your perspective on the recent phase III results of AbbVie's RINVOQ on their induction data, which was, I think, a couple of weeks ago. Thank you.
Yes, Benoit. Let me take the first two questions, and then I'll give the floor to Walid for that perspective on the phase III data. In terms of guidance for 2021, again, this will come in all details in the beginning of next year. As a reminder, as a company this year, we've guided for a spend between EUR 490 million and EUR 520 million. That was a net spend, including the receipts of about EUR 100 million in approval milestones for filgotinib in Japan and Europe. Our actual underlying spend in 2020 is, let's say, roughly a bit north of EUR 600 million, between EUR 600 million and EUR 620 million. That's the starting point. Indeed, we'll have an increase in sales and marketing costs, as I was just describing. Otherwise, we try to keep our budget under control as much as we can.
We want to obviously balance properly the R&D investments that we can make and that we need to make in our pipeline with the cash burn objective that we have as a company. We'll try to stabilize our expenses on R&D as much as possible. On sales and marketing, indeed, and to a little extent also on G&A, you will find some increases, as I was describing earlier on in the call, of that base of a little north of 600. Just to clarify the point, indeed, the peak sales ambition is across RA and IBD. Walid, on the phase III program.
I'm sorry, I missed the question. Can you please repeat that? Benoit, what was your question on phase III, please?
Maybe we've lost Benoit. He did not say which indication. If we don't have him on the line, then Okay. I think we'll have to ask Benoit to-
Yeah.
Yeah.
Yeah. Okay. Sorry.
I think we'll ask him to get back into queue.
Okay.
No, me neither. Okay, our next question is going to come from Jason McCarthy at Maxim Group. Go ahead.
Hi, this is Michael Okunewitch on the line for Jason. I'd like to ask about the MANTA trial real quick and one follow-up after that. I'd like to see just across your existing clinical data, have you observed any significant incidents of impact to semen parameters that would indicate whether or not you would have to continue for the 52 weeks?
The only thing that we measured in any of our trials were looking at hormones, reproductive hormones, and we see no changes in those in our trials. We do not measure any semen parameters in our trials. These are notoriously highly variable, and that's why actually the agency is very prescriptive in the way a study to evaluate these parameters has to be designed. Actually, it's very technical. It has to be analyzed in a certain way in a very sort of sophisticated type of laboratory settings that specialize in that. No, we have not been measuring this. I think this links to a question that Dane asked earlier. There's no indication from any of our clinical trials, any new indication that would suggest that we need to be looking beyond this. That is not the rationale why the FDA is looking for the 52 data.
Just to be clear on that point.
All right. Thank you. The follow-up is, would an extension of the MANTA trial necessarily delay the filing for ulcerative colitis in the U.S., or is there a possibility that the Division of Gastroenterology and Inborn Errors accepts the 22-week data for filing?
No, the position of the FDA is similar. As a matter of fact, discussions on MANTA involve virtually all the divisions, RA, GI, and actually GU, the urology division whose responsibility is specifically this organ system, so to speak. The default position is that the 52 weeks will be needed before UC can be filed. As I mentioned before, once we see the 26-week data, we will have discussions with our partners to see whether there's an opportunity for us to reopen the discussion with the FDA based on those data to see if there's a path forward that will allow us to file before the maximum of 52-week observation after the 26-week data.
All right. Thank you very much.
Okay. Thanks, Michael. Okay, we're going to go back to Matthew Harrison and open up the line for him. Go ahead, Matthew.
Hi, this is Connor on for Matthew. Thanks for putting us back in. We just had a question basically on what your expectations are for your base case in terms of IBD in the U.S. You mentioned that it sounds like you'll need the 52-week MANTA data. I guess, how comfortable are you with that being a possibility that you move forward? I guess what is your base case in the context of IBD in the U.S.? Thank you.
I'm assuming this is a question from a regulatory perspective, not a commercial perspective, right?
Correct. I guess how confident are you that it will be possible to move forward eventually with a commercial launch in IBD?
All right. I'll take the first part, and then I'll let Michele tackle the commercial element. We believe that we have a package that is very comprehensive, evaluating actually both doses in induction and maintenance. We've demonstrated that with the 200 mg, we hit our primary endpoint and a number of secondary endpoints in the biologic-naive, but also in the biologic IR, we hit the primary endpoint, and nominally a number of secondary endpoint. Most importantly, in the maintenance trial, we saw very clinically meaningful effects in terms of maintenance of efficacy as well as steroid-free remission, in addition to the primary endpoint which is the EBS remission. We're quite confident in the efficacy profile of the 200 mg. The safety as well, we've shown these data at UEG Week.
The safety and tolerability profile of filgotinib remains very good. We believe the risk-benefit for that dose is positive in our opinion. It's going to be difficult for the FDA to engage in fairness in evaluating this before we resolve the MANTA situation, which remains open, as we talked about. I think once we resolve that point, we will see what are the opportunities that would be possible in the U.S. The default position today is that the 52-week data from MANTA will be needed. It's not very clear to us to what degree we'll be able to convince the FDA otherwise, once we see the 26-week data and we share with them. That's my best guess at this point.
Anything beyond that, I think I'm taking too much liberty at trying to interpret, and it might not be very valuable, to be honest with you. Michele?
Yeah, to build on this, the key question indeed is about the regulatory situation there. Once it is clarified, the opportunity for in UC and IBD is big in Europe and by definition, even bigger in the U.S. The unmet need there is clear is bigger than it is in rheumatoid arthritis. We've seen that with a faster uptake that the new mode of action had in the UC indications, in the IBD indications. With the golimumab, for example, that is much stronger, much faster than we would see in RA. Also the question about access, et cetera, that are in RA are to be taken a much lighter way, I would say, in IBD.
There, of course, would depend on our label, on our situation, but the point that Walid highlighted with the steroid-free remission, the fast onset of action, the durability tested in a very difficult-to-treat population as we had in selection, all point to a big opportunity, again, provided that the regulatory situation then supports that.
Great. Thank you.
All right. I think probably our last question will come from the team at Kepler Cheuvreux. Go ahead. Your line is open. </edited_transcript
Hello, gentlemen. Thank you for taking my question. I would like to know, could you give us more color about Jyseleca opportunity in RA outside Europe and mainly in Japan? What is Gilead position regarding this market? Maybe another, a very quick one, about the opportunity in PsA and AS. Will you try to launch in Europe? Or does the market is too small to launch by your own?
Thank you. I'll take the first Japan, give a first step on the PsA/AS, and then bring it back to Walid for the regulatory and studies there. for Japan, Gilead, as announced, is cooperating with Eisai. It's a Japanese company that has a big presence in rheumatology, so that is indeed supporting the launch there and has all the elements, connections, and understanding of the rheumatology market to do that. in Japan, rheumatology is a very diffused specialty, so with a lot of individual physicians. again, Eisai has all the connections and presence and relationships to make that successful. also the label in Japan is, as it is in Europe, favorable with the two doses and reflecting the strength of the data from the FINCH program. For PsA and AS, well, they are two very important indications.
of course, we would be glad to capture those opportunities, provided that the studies and the development, the regulatory environment supports that, given that, of course, we have to change the direction after the situation in the US. Walid, if you can comment again on the point of how we could progress there.
Yeah, no, I think we are in the midst of evaluating what type of studies we would need that would allow us to get an indication for ankylosing spondylitis and psoriatic arthritis in Europe. Once we put together a plan that would be doable, viable, and sort of in line with the commercial opportunity, then we will go talk to the health authorities in Europe and see if that would be acceptable to them. If that's the case, then we will embark on this. We're not there yet, so we're still looking at this and evaluating our options. We'll communicate once we have a clearer idea about the next steps in those indications.
Thank you. We understand.
All right. Thank you, everyone. That does conclude our Q&A session today. Please reach out to the IR-