Since we raised Galapagos to Buy last October, we have seen the group report first Phase 1 data for its potentiator in cystic fibrosis, receive US$50 mn of milestones on the beginning of the Crohn’s Phase 3 study, receive US$10 mn of milestones for the ulcerative colitis Phase 2b/3 trial, and US$10 mn of milestones from beginning the Phase 2 trial for its C2 corrector in cystic fibrosis. We rate Galapagos Buy because we believe that while the market broadly prices the group’s cash and collaboration for filgotinib fairly, it undervalues the rest of Galapagos’ pipeline. We expect more news on this pipeline in 2017, which we believe will lead to focus on the other poportunities Galapagos has. The key value driver will be cystic fibrosis.
The next event we look for is the Phase 1 data for potential in G551D mutated cystic fibrosis patients, which we expect by year-end. In 2017, the key events we look for are the ongoing cystic fibrosis data updates and idiopathic pulmonary fibrosis Phase 2a data (which we expect in mid-2017, and which we believe is close to a free option).