Welcome all to the audio webcast of Galapagos's third quarter 2017 results. I'm Elizabeth Goodwin, investor relations, and I'll be hosting today's event. This recorded webcast is accessible via the Galapagos website homepage and will be available for replay later on today. That your questions can be included, we request that you call in to the following telephone number, which is also to be found on our web homepage. The number is 32 for Belgium, 240459, and there's an access code, 2890376. I would like to remind everyone that we will be making forward-looking statements during today's webcast. These forward-looking statements include remarks concerning future developments of the pipeline and 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's speakers will be Onno van de Stolpe, CEO, Walid Abi-Saab, our CMO, Piet Wigerinck, CSO, and Bart Filius, CFO and COO. Onno, Walid, and Piet will go through the operational highlights. Bart will explain the financial results. Onno will close with the outlook for 2017. You will see a PowerPoint presentation on screen. We estimate that the talk will take approximately 20 minutes, and then this will be followed by a Q&A session. With that, I would now like to hand over to Onno to start the presentation.
Thank you, Elizabeth, and thank you for attending the webcast. Q3 clearly has been a very exciting quarter for us, with two new modal actions showing activity in patients. It is a big complement to our discovery platform. We started this back in 2000, building our adenoviral library to come up with novel targets. The JAK1, filgotinib, is clearly the first one that made it to the patients. But now with GLPG1690 in idiopathic pulmonary fibrosis and MOR106 in atopic dermatitis, we have three programs where we have shown activity against the novel target that we discovered. That's quite unique, and that is the basis of Galapagos and will remain the basis of Galapagos with many more programs to come. In the meantime, filgotinib is continuing its strong path forward with multiple trials.
The phase III trial's underway, eight trials already in proof of concept stage, and more to come. Cystic fibrosis, very competitive area where Galapagos is pushing ahead together with AbbVie. We just got the go-ahead from the scientific advisory committee from the U.K. to file for the trials in the U.K. and other countries. We hope to start dosing the triple study by the end of the year. Exciting times there to come. All that with a fantastic cash position, EUR 1.2 billion. We are actually preparing for the next phase in the evolutionary model of the company, where after discovery and development, we are now starting to prepare for commercial operations. We were very pleased to hire Michele Manto as our Senior VP Commercial Operations, and he will be at the basis of creating the commercial operations for Galapagos.
If you look at the filgotinib pipeline, then that is quite a number of different diseases. These are all inflammatory diseases that we believe have a good chance to be treated with filgotinib. The 3 main programs where the phase III's are running in rheumatoid arthritis, ulcerative colitis, and Crohn's disease are running its course. We are now testing it together with our partner, Gilead, in 8 other diseases. A very impressive number. There's actually more to come. We are preparing more proof of concept studies with filgotinib. Blanketing the whole inflammatory disease area. Galapagos is clearly much more than just filgotinib. Here you see the pipeline of molecules that have passed the candidate stage and are now in preclinical phase I or phase II. You see in idiopathic pulmonary fibrosis, where we have at the moment 2 different mechanisms.
The autotaxin GLPG1690, the furthest advanced. We'll show you the data today. We also have a number of other new mode of actions, some partnered, some proprietary, that are moving forward. 2 are in an undisclosed area. We will shed some more light not so far from here, but at the moment, we still remain that in undisclosed. In cystic fibrosis, we're preparing for 3 different triples to move into patients. The first one, as I said, starting by the end of the year, the other 2 planned for next year. In our osteoarthritis program, we have a collaboration with Servier, where we are moving ahead with GLPG1972 and a molecule that hits the target ADAMTS-5. We are planning on a full phase II study worldwide together with MorphoSys to start next year. In the meantime, we are awaiting the data for our phase I-B study.
We have programs in atopic dermatitis, a small molecule program that's proprietary to Galapagos in preclinical, and then the antibody program with our collaborator, MorphoSys, that we released the Phase I-B data a couple of weeks ago. Further programs in inflammation and pain are still early, but extremely promising, especially the inflammation program GLPG3121. I want you to keep that number in your mind because that will be quite exciting when we are going to show the data at a later point in time. With all that information and excitement, I'm going to hand it over to Walid to talk us through our clinical programs.
Thank you, Onno. As you can see, filgotinib is really building up a consistently strong profile around safety in rheumatoid arthritis. Here you see a comparative overview of safety that we showed at our R&D update back in June. I'd like to highlight a few points here. First, you see that we compare filgotinib in the green column with multiple JAKs, plus tocilizumab and adalimumab. You should always exercise caution when comparing across studies. Secondly, you see the patient year exposure is involved in the first row. Filgotinib already has an extensive safety database with more than 1,300 patient years in RA. These results that we're showing here are based on the 16-week safety cutoff from our ongoing DARWIN 3 study. Consistently across all parameters shown here, filgotinib exhibited a superior safety profile.
Regarding thromboembolic events, such as DVT or PE in this data set, I remind you there was only one patient who experienced DVT followed by a PE in the study. This puts the rate of thromboembolic events at a very low level, considering the background rate in this patient population. Lastly, I'd like to highlight that at ACR in San Diego, Dr. Genovese will report on more than 1,700 patient years exposure with filgotinib from the same DARWIN 3 study based on the 84-week safety cutoff. We invite you to listen in on his talk there. From the abstract for his talk, you can already see that continued experience with filgotinib reinforces its solid positioning on safety in RA. Moving on to the next slide, we turn to our autotaxin inhibitor 1690. Here we show data from the proof of concept study FLORA in patients with IPF.
IPF is a serious orphan disease with high unmet medical need. On this slide, you can see the steep reductions in plasma LPA levels during the course of the study. This confirms target engagement in patients and is consistent with the results we showed in our phase I program. I remind you that FLORA was a double-blind, placebo-controlled trial in 23 IPF patients who were naive to treatment. These patients were randomized in a three to one ratio to 1690 or placebo for 12 weeks. Next slide. Here we see that patients who received placebo lost approximately 90 mils in forced vital capacity after 12 weeks in the study, which is consistent with what has been observed in similar trials.
What we were very excited to see is that patients who were randomized to 1690 managed to show no progress of their disease over the 12-week period, as evidenced by no loss in FVC. In fact, the mean change from baseline was an increase of eight mils. Next slide. Using functional respiratory imaging, or FRI for short, a more sensitive technology combining high-resolution CT and fluid dynamics, we showed a statistically significant difference between 1690 and placebo, whereby patients on placebo continued to show progression of the disease, as evidenced by an increase in airway volume and a drop in airway resistance. In contrast, disease progression appears to have been stopped in patients on 1690. These data demonstrate that 1690 is the first autotaxin inhibitor to show promise in patients in IPF.
These exciting results, coupled with a benign safety and tolerability profile, strongly support moving 1690 into late-stage development. With that, I will turn the presentation to Piet Wigerinck . Piet?
Thank you, Walid. During Q3, we also obtained the first patient data with MOR106, our antibody against IL-17C. IL-17C is a cytokine we picked up as a target using our drug discovery platform, and together with MorphoSys, we decided to generate an antibody to block this cytokine. On IL-17C, some work is published and that points to a dual mechanism of action, meaning when there is IL-17C somewhere in the skin, it will activate Th17 cells, and those cells will give more IL-17A. On its own, as a direct action as well on the epithelia, IL-17C will activate the immune reaction. We believe we are the first company, and this is a first in class that we develop in the autoimmune space. IL-17C in our models really behaves as a local amplifier of the immune response.
Independent or whether the trigger is Th1 or Th2, IL-17 for both of these triggers will locally amplify. It's another mechanism of action with a potential broad application. Next slide. In September, we released as part of a press data, the phase I-B patient data. We did an SAD in healthy volunteers, then went over to 24 patients in three different cohorts. Patients got 4-week infusions in a dose-escalating mode. What we saw was very nice efficacy data in the sense that we saw a fast onset of action. At the top dose, after the last infusion, we once saw that the activity remains visible for over two months. Secondly, more than 80% of the patients showed a 50% improvement of the disease score.
Over 2018, we together with MorphoSys, will start up a phase II study IV, and in parallel, develop a subcu formulation in phase I, allowing us to bridge into a late stage subcu program for IL-17C. Let's now move to CF, where, as you all know, we are developing multiple triples, and the plan is to bring three triples into patients over the coming 12 months. On this slide, I've depicted them again. In gray, you see how the dual platform of Vertex compares in our in vitro assays. For each of our triples, in fact, we expect a significantly stronger activity compared to the dual platform of Vertex. The first one that will move into patients is 22-22, 27-37, 24-51. During Q3, we went for scientific advice to MHRA, discussed with them our design for the first into patient study.
Discussed with them all our pre-clinical and clinical data, and they agreed that we can move forward now and submit the trial application in the coming days. The second triple that will move to patients is one with 22-22, 27-37, and 30-67. That triple currently we've completed the dual in healthy volunteers. In Q4, we will move and do the triple in healthy volunteers, and then early next year, this will move into patients. Finally, 32-21 is a new C2 type of compound, and that will move into phase I in Q4 as well. If you now look to the patient studies, we have in total six studies on the books. ALBATROSS is a phase II study where we dose 22-22 on top of Kalydeco in G551D patients, and those data will read out over the coming weeks.
Also the second phase II study, which is a mono study of 22-22 in F508del patients. We will have all the data around year-end. The first triple is in fact 27-37 on top of ORKAMBI. We've got approval, in the countries where we have submitted, and that study has started in the meanwhile. You see the first of our in full in-house triple. 24-51, we will file the application in the coming days and then start that study. 30-67 base first triple will move into patients early next year, and then the triple based on 32-21 will move later, second half of next year into patients as well. That's the overview of our CF patient study up to now. In Q3 as well, we've moved forward in the field of osteoarthritis.
There 1972 in fact during Q3, Servier took the option on the rights on this program ex U.S. We own all of the U.S. rights. In the meanwhile, we had a phase I-B study running in the U.S. In that study, we've included for the first time patients, we've included for the first time female adults, and third is that we have extended the typical dose range beyond the age of 65 because most of the OA patients we want to test in phase II will be around that age. Those data as well, that study is fully recruited, and that study will read out early next year and will allow us to move then in phase II. That will be a phase II proof of concept study we will do together on a global scale with Servier kicking off early next year.
It's a compound blocking ADAMTS-5, which is as well one of those novel targets we have discovered in our platform, and we as well believe we are the first oral compound now moving into the clinic in phase II against ADAMTS-5. With this, I've done the overview of the clinical studies, and I hand over to Bart for the operational highlights. Finance.
Thank you, Piet, and good afternoon, everyone in Europe. Good morning in the U.S. I'll take you through a couple of slides on the financials. For those of you who've been tracking the company, they will look familiar to you in terms of setup and format. First, let's talk about the cash position and the cash burn. At the end of September, we were in a comfortable position of EUR 1.2 billion of cash coming from end of December, USD 980 million, as you see on this slide. As a reminder, we did a follow-on offering of EUR 350 million in April of this year, which is the big driver for the increase, obviously, in the first nine months. There is a currency translation effect. I've shown this also at the end of June.
USD to EUR as we keep a part of our cash position, roughly 20% in USD for future USD expenses. Those are translated in EUR, so this is unrealized. Those are translated in EUR in our balance sheets and flow through our P&L to the tune of EUR 25 million in the first nine months. We get to the actual cash burn, which is almost EUR 90 million. This is increasing quarter-on-quarter. We are reflecting the many programs that we are running that have just been described by Walid and by Piet, reflecting also the increase in expenses that will continue for a little while longer as these trials get broader and the patient inclusion, especially on filgotinib, is also increasing. EUR 89 million for the first nine months. Anticipating for the full year to be at the lower end of our previous guidance.
The guidance was EUR 135 million-EUR 155 million, we anticipate to be at the lower end of that range. To the P&L revenues, healthy increase of 64% to EUR 106 million over the first nine months. Really two drivers. On one end, there is milestones in blue here on the slide. That is cash income that has been generated over the first nine months. The main increase is the recognition of deferred revenues. These are revenues that have been, from a cash point of view, generated when we signed up with Gilead in early 2016. The recognition thereof, in proportion of the cost that we are making, is going over the entire development period. This is something that you have seen before, is driving a big chunk of the increase compared to the first nine months of last year.
In operating expenses, as a result, we see the same evolution, an increase there as well, mainly on the development fronts as there is more and more programs in late-stage development and the programs around filgotinib get more and more mature. We are almost at EUR 100 million now over the first nine months in development, and total expenses on the company are closing to EUR 170 million over nine months. Net results are a combination of the two above, increase in revenues but also an increase in expenses. The operational evolution on the slide here is EUR 14 million negative. That is the combination of those two drivers that I was referring to before. There are two other comparators that are important in our numbers, if you compare this to the first nine months of 2016.
One is the non-cash financial asset adjustment that we had as a result of the Gilead deal. I have explained it quite a few times on the phone, this is in the numbers as a positive in 2016 and obviously non-recurring in 2017 for EUR 57.5 million. There is the FX fluctuation, the translation effect that I was describing previously, for EUR 22 million that is also negatively affecting our net results, bringing the total net result to EUR 85 million negative. All in all, financials in line with expectations on our perspective. With that, I hand it over back to Onno.
Thank you, Bart. If we go to the outlook, it's clear that our programs are on track and are delivering filgotinib in a number of different inflammatory diseases. The CF triple combo going into patients. GLPG1690 going in a late-stage program in idiopathic pulmonary fibrosis. MorphoSys in atopic dermatitis. MOR106, very interesting program as well. Of course, our osteoarthritis program, 1972, which will go in a phase II, of which Galapagos will run the full phase II study in the U.S. More proprietary clinical programs moving forward, and we will announce more data on that at a later stage. At the meantime, we have initiated building the commercial organization. All in all, I'm very pleased with how things are going in the company, both on the science side as well as on the development side.
This is all backed by a solid balance sheet, we can actually finance the programs to what they need and make the best choices to get the most value for the shareholders long term. With that, I'll turn it back to Elizabeth for the Q&A. Thank you.
All right. Thank you, gentlemen. That concludes the presentation portion of our audio conference call. I'd now like to ask the operator, Celia, to connect us to any callers who may have questions for our team.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure that your mute function is turned off to allow your signal to reach our equipment. Again, that is star one for questions. We'll go first to Brian Abrahams with RBC Capital Markets.
Thanks very much for taking my questions and congrats on all the continued progress. First question is on MOR106. I was wondering if you could maybe expand on any new learnings that you have on the IL-17C mechanism and really where you see the most potential for differentiation there, given the competitive bar and where this could be novel. Also curious if you could talk a little bit more about the status of the subcu form and the estimates for the frequency, volume, viscosity, or needle size for administration there. I have a follow-up after on CF. Thanks.
Okay. Thank you, Brian, for the question. MOR106. We're investigating MOR106 broadly in a number of animal models in inflammatory conditions. It really continuously pops up only in those disease model where a local epithelial process is ongoing. That is in the different skin models then, skin
Diseases pops up as a very promising option for a therapy. We've done psoriasis studies, animal models scored excellently, there, the bar is quite high, we'll not move there immediately. Atopic dermatitis is second as well in different models, shows very nice results. Haven't gone yet or didn't see a model yet where we can fairly compare it to the dupilumab of today, we haven't done a comparison. It is completely novel, in fact, it works independently of the pathways, that's where we think it could have a broad application. Asthma is on our agenda, of course, we will announce further studies the moment we engage on them. It's more the fact that it's a local amplifier. We expect and we don't see any systemic side effects, in fact.
It should be a very safe way of inhibiting inflammatory responses in the skin broadly. Atopic dermatitis is the first of what we tackled on. The status on the subcu. We are currently running the talks with on the subcu formulation we have developed, that will move into phase I next year. As soon as we have the data from that, we will inform you. We are confident that we will have a patient-friendly system to administer locally as a subcu this drug in the future. Thank you.
Got it. That's very helpful. Thanks. Just one other question, on the CF program. It sounds like you have clearance and regulatory buy-in to proceed with the triple combo. Wondering if you could talk a little bit more about sort of the nature of the discussions, the, I guess, regulatory comfort in testing multiple new drugs together and how this might apply kind of going forward, best ways to assess the safety PK and follow-up of the long-acting metabolite that you've seen with 2451, and how you guys are thinking about the design of that study, how we should think about what the next specific steps would be for that initial trial. Thanks so much.
On CF, indeed, as you point out, bringing three novel compounds together is not an easy task and is a complex task. We spent most of the time explaining them the data we had, the tox coverage we had, the way you calculate safety margins, the similarities between the single component tox and the combo tox studies in the package. As such, they felt comfortable that we now move into a patient study. They did not give any comment on the long-acting nature of the metabolite. That was discussed extensively, that did not seem for them, I think, an issue at the moment. No, it was a very constructive meeting, focusing on what patients really need, and these are novel triple treatments.
We have one of the promising there, they were very supportive of us moving forward into a combo study, which will be triple agent study, high dose in patients. We'll disclose the full nature as soon as that is coming online. Thank you.
Thanks again, congrats again on all the progress.
We will go next to Dane Leone with BTIG.
Hi, thank you for taking the questions and congratulations on all your progress. Can I follow up actually on the last question? From here to get the triplet study started, what are the remaining steps to get the trial up and running? Can you just remind us of the different trial sites and the general logistics of the study?
Okay, thank you. It will be a multi-country study. We're now finalizing based on the input from the meeting, the protocol addressing what they really thought was for the most important, making that clear in the text. It's a clinical trial application, which we then expect we will get approval quickly. That's our experience in general. If you discuss those complex trials upfront with the authorities, if they see major issues in the package, then they make it clear it doesn't make sense neither for them, neither for us that we submit a trial application for them to turn it down, because according to them, some major things are missing. We discussed that and everything what's needed is there. We are finalizing that text.
We'll submit it, that will get approved, we hope, somewhere in November so that we can start this study this year. These are the steps. We'll have three countries in Europe involved in the studies, probably.
How do you think about, I guess two follow-ups on that. How do you think about the study design and the data generation that will come from this study and how that would be applicable to a potential U.S. study? After this first triplet study that you're planning to run, is AbbVie then in charge of the next steps, the next clinical steps in the program?
Okay. What we'll do is a proof of concept study, and there will be separate cohorts for the homozygote and the het minus patients. As soon as we have done proof of concept, because then that's the proof of concept of our in-house triple, we will do a phase II dose range study. At that moment, probably we will need to decide whether it's a 3067 base or a 2451 base study, but that will then be based on the data. We will do that study. It depends a little bit on how the regulatory landscape pans out. If it's the classic way, if it's a phase III, then normally AbbVie will perform the phase III. Second question relates to the U.S./E.U. as part of the program.
We have an open IND for 2222, and we will open the other INDs next year. We will, after this proof of concept, open studies in the U.S./E.U. as well. Thank you.
Okay, great. If I could squeeze in one last more actually on filgotinib. That program's expanding quite rapidly after some great data competitively and some developments that seem to work in your favor quite recently. I was curious, as the indications keep building for what you're looking at with filgotinib, do all these new indications that you're starting to lay out still fall in the master agreement with Gilead? Are there potentially different economics as you continue to build out different indications of interest under that program?
Thank you. This is Onno. I'll take that question. Yeah, this falls all in the master agreement that we agreed with Gilead. We agreed to pay 20% of all further development costs, actually capped to a max. If we get above that max, further contribution of the 20% will be taken out of a future late-stage milestone that we expect from Gilead at some point.
Okay, thank you.
We'll go next to Phil Nadeau with Cowen and Company.
Good morning. Congratulations on the progress and thanks also for taking my questions. Just one follow-up on the cystic fibrosis trials. I know you mentioned that there'll be separate cohorts for homozygous and HetM patients in the studies. Can you give us some more sense of the designs? How long will the patients be dosed for, how many dose levels will be tested, and will all patients be given the triple, or will there be some patients in the trial being given some subset of the candidates?
Thank you for the question. It's a proof of concept. All patients will get access to the triple therapy, but in separate cohorts. We will include typically two dose levels so that we have an idea, an early view on whether we quickly pick up on a dose response. Normally we expect to see a quite solid signal both on sweat and on FEV. That will be the end points. Patients will be dosed for four weeks in this proof of concept setting. Thank you.
Great. In the past, you've guided total data from this study around mid-year 2018. Is that still your expectation now that you've been through consultation with the regulators?
Yeah, that's correct. That's still the plan. Thank you.
Great. One last question from me on filgotinib. We've seen great data from other JAKs in atopic dermatitis. It doesn't seem like that's an area that Gilead is planning to do proof of concept studies. Is that correct? Is filgotinib not going to be investigated in atopic dermatitis, and if so, why is that?
Well, thanks for the question, Phil. Yes, I think we always look at these data and evaluate and react to what's happening out there. I think there's good reason to believe that filgotinib, like other JAKs, should work in this, and this will be part of our evaluation as to whether we want to test it going forward. That's where we are today.
Okay. No decision has formally been made, yes or no-
There's no decision now to start the study, no. It's on the radar screen, as you can imagine.
Okay. Great. Thanks for taking my questions and congratulations again.
Thank you.
We'll go next to Christopher Marai with Nomura Instinet.
Yes, hi. Good morning. Thanks for taking the questions. I was wondering if you quickly touch upon GLPG1690 and IPF. You studied it over 12 weeks, if I recall earlier in the FLORA study. I was wondering if you had further follow-up or a long-term extension study from FLORA and when you might share that data. Secondarily, if you could maybe comment on any potential toxicities you'd be looking at with longer-term dosing of autotaxin inhibitors. Some of our checks have suggested that there's some CNS side effects that might crop up later in dosing after longer-term dosing of the autotaxins. Would love to hear your commentary on that and remind us of the path forward there. Thank you.
Well, thanks, Chris. This is Walid. I'll take this call to this question. At the time when we conducted FLORA, we had the detox package that would allow us to dose for three months. As a result, we did not have a longer-term extension for that trial. In the trial, we have seen no signs of any CNS side effects that would be of concern to us. Now, since then, we have conducted the preclinical package that would allow us to dose chronically. Again, I can confirm in those studies, we see, again, nothing that would make us concerned about CNS toxicity.
Okay, thank you.
We'll go next to Matthew Harrison with Morgan Stanley.
Great. Good afternoon. Thanks for taking the questions. I have two. First, on MOR106, can you just talk about what the path forward there is, what kind of studies we should expect next, and what sort of timeline we can think about? Then, can you just confirm in terms of when you went for scientific advice on the CF program, are there any monitoring or longer follow-up or any conditions that they placed related to the long-lived metabolite? Thanks.
Thank you, Matthew, for the questions. I'll take them. First on MOR106. We've no longer tox coverage. The next study will be a dose range of phase II study, IV dosing, We'll dose every other week, not weekly, every other week or with bigger intervals. That study will start quickly. We are finalizing protocols there. We will submit and then kick that off early next year. That will keep us busy full of 2018. Will be more than 100 patients as well, so will be a quite large study. In the meanwhile, as I said before, so we have a sub-Q formulation ready that's in preclinical tox right now, and that will move into phase I.
First of the PK, eventually we'll do some multiple dosing patients as well, so that those data come together with the outcome of the dose ranger, then see whether we can move to phase III immediately. On CF scientific advice, no, they have not implied any long-term monitoring. We do what is required to do in the field of CF. We follow up the patients, as we have done before in the phase I, there was no question to add any extra measures there. Thank you.
We'll go next to Adam Walsh with Stifel.
Good morning, guys. This is Neil on for Adam. On MOR106, given the differentiated safety profile, could you guys just share some color on how you think it fits within the current treatment paradigm?
In view of the mechanism of action, there is no reason why we think there should be any restriction currently on patients we can include. We don't see any restrictions there. How clinically this will pan out and compare to DUPIXENT, that's a bit early. From what we've seen, or by the fact that we haven't seen anything and safety like that, we feel comfortable that safety will not be a limiting factor for MOR106 as well. If you look to how and where IL-17C works, if you do the paperwork, it's one of the safest targets we have ever seen. We are quite comfortable that if efficacy pans out as was in the first study, we will have a high rate of efficacy combined with an excellent safety and hope that that will be a competitive profile.
Whether we can be combined with DUPIXENT or not, that still needs to be worked out. Thank you.
We'll go next to Anastasia Karpova with Kempen.
Good afternoon, thank you for taking my questions. Three, if I may. Initially on IPF program, can you update where you are in the discussions with the regulators considering phase II, phase III trials, would you consider to do combination or monotherapy as well? Do you need to do any bridging studies to open up the IND in the U.S., given that the trial, the FLORA was conducted in Europe? The second question is regarding ALBATROSS. Given that Vertex phase III in a similar population did not demonstrate improvement in FEV1, in contrast to phase II trial, have your expectations for efficacy signal in the ALBATROSS changed? What do you expect to learn from there? Finally, what magnitude of biomarker movements would you consider compelling in the OA trial that is reporting early next year?
This is Walid. I'm going to take the IPF question first and then turn it over to Piet. Regarding the IPF, we will initiate a placebo-controlled study on top of the standard of care in the first quarter of 2018, as this study design has already been discussed previously with both the FDA and EMA. In addition, we will be discussing additional studies with both agencies in order to complete our registrational programs. Specifically whether we need to do any bridging before we go to the U.S., the answer is no. We can go straight to the U.S. with the package that we have now. Piet?
Okay, thank you, Anastasia, for the question on CF. We designed the phase II study on top of Kalydeco, hoping to see a sweat chloride signal and an FEV signal.
Clearly, that was based on the phase II results of products which were positive. In the meanwhile, phase III is negative. I think anything we can show there in terms of efficacy illustrates that at least we will have a very active 2222 compound. We should not hope for extreme high activity because if the larger study fails, the window to see clinical efficacy is probably limited there. We are still hopeful that both sweat chloride and FEV will read out in a positive way there. That's for ALBATROSS study. OA, as I said, is we for the first time include female patients in the study with extended age range and as well with those not two weeks but four weeks. The biomarker signal in the healthy volunteers was still in an ascending phase while we were stopping the study.
We hope that we now as well see where the maximum effect is in terms of the biomarker and hope that within one month, in fact, we should see the maximal efficacy in plasma. It will be the same biomarker, but over dose range and for longer, and then both in males and females. That should give us nice complementary data to then move further into phase II. Thank you.
Thank you.
We'll go next to Nick Nguyen with Citi.
Hi, guys. Thanks for taking my questions. I've got three, please. The first one is, how does the development of GLPG1690 impact your planned cash burn for next year, and has it changed the scale of the commercial organization that you're building? The second one is, are we still expecting a futility analysis and milestones for the SELECTION study in Q4 this year? Thirdly, what do the milestone payments look like with regard to the CF program with the initiation of the triple combination, over the next few months? Thank you.
Hi, Nick, it's Bart speaking. Let me take a couple of those questions. Maybe first on GLPG1690. Indeed, if we're expanding the program into registrational trials next year, we will anticipate that the cash burn next year will go up. I said that previously, I think, on other calls as well already. We'll give precise guidance by the time we get to the full year results in February. One should expect indeed a meaningful increase in cash burn compared to this year, driven by, on one hand, filgotinib is accelerating, and on the other hand, GLPG1690 is adding to that as well and CF is continuing. In terms of commercial, indeed, we have decided and articulated that we want to be the sole owner of this drug, including the commercial opportunity.
Michele Manto, who joined us to build out the commercial organization in our company is also looking at the opportunity in IPF and evaluating our options there for commercialization of the drug as well. Secondly, your question was on the UC transition. We anticipate that in the first half of 2018. Indeed, there should be some financial compensation associated with that as well. Thirdly, on CF, your milestone question on CF. I think you've seen several announcements of milestones all to the tune of, let's say, EUR 10 million over the past 12 months for different trial initiations. As this program continues with additional phase I, but also with some of the more advanced patient studies, you'll see a couple of more announcements coming up to that same level.
No major increases suddenly, but there will be some smaller milestones from AbbVie associated to development in the CF program.
Great. Thank you.
We'll go next to Peter Welford with Jefferies.
Hi. Yeah, thanks for taking my questions. I think I've three little ones left. Firstly, on GLPG1972, I wonder if you could confirm, are the dose levels the same as those in the prior phase I, or are you investigating different doses? A similar vein question in CF. You mentioned there were 2 dose levels that were going to be studied over four weeks. Given the dosing work that's been done, perhaps is more extensive with the corrector one, GLPG2222, and I guess a little bit more is known about GLPG2451. Is the plan just to flex the dose of one of the correctors, or is the plan to have a low and a high dose of all three components as part of that triple? Finally on GLPG1690.
You mentioned a little bit about the fact you were going to do a phase III combo trial or phase II-III combo trial, I guess, first in the early part of 2018. Actually just discuss when you've had the discussion with the regulatory authorities about that, what duration of dosing the regulators are looking for in an IPF pivotal study. Also what endpoint they'd like to look at in that combo study. Thank you.
Okay, Peter. Thank you. I'll go first on 1972. The dose levels indeed are the ones we have tested before as part of the phase I. We did choose to go lower because we did not have a dose with a suboptimal biomarker response. That's why we decided to explore as part of the study, the lower end here to really see where we pick up a dose response on that biomarker, but it is within the safety exploration as what we've done before. More on dosages for CF. We will escalate one. We will keep fixed two out of the three components in the combo and have one component which will have a lower and a high dose included there.
It's not going to be the triple high dose, and then for each of the three, a lower dose. No, we will keep two of them constant and only vary one. Thank you. Over to Walid.
I'll take the question on 1690. This is Walid. Regarding the study in the double-blind, placebo-controlled study that I discussed, the duration of dosing will be one year long, and there will be also a long-term open label extension that the patients can roll into and be followed for longer term for safety, as well as we can monitor efficacy as well. With regards to endpoints, we will be looking at the usual primary endpoint of change in FVC annualized rate, but also we will be looking at other major events, hospitalization, death, the usual, and the functional endpoint of six-minute walk test. The primary will be the forced vital capacity change.
Great. Thank you.
We have no further questions at this time.
Okay. I think that we've had a great question and answer session this morning. We'll wrap it up with that. I look forward to seeing many of you at our IR event at NACFC in Indianapolis on the 2nd of November, at ACR the week after. You can reach out to me directly for more details on that. Our next financial results webcast will be on the 23rd of February 2018, when we present our full year 2018 results. We thank all callers today for their support and participation, and thank you very much. Bye-bye