Welcome all to the audio webcast of Galapagos's First Quarter 2017 Results. I am Elizabeth Goodwin, Investor Relations, and I will be hosting the call today. This recorded webcast is accessible via the Galapagos website homepage and will be available for replay later on today. So that your questions can be included, we request that you call in to the telephone number given in today's press release. So here's the Belgian number: 32 for Belgium, 2-404-06-59, and there's an access code, 5402616. 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-Saad, CMO; Piet Wigerinck, CSO; and Bart Filius, CFO. Onno will lead and Piet will go through the operational highlights and Bart will explain the financial results. Onno will then close with the news flow, and you will see a PowerPoint presentation on screen during their talk. We estimate that the presentation will take approximately 20 minutes. This will be followed by a Q&A session. I would now like to hand over to Onno to start the presentation.

Thank you, Elizabeth. We can look back on another excellent quarter for the Company. We have seen very good progress, both in the research as well as and in the development part of the Company. Most eye catching has been the rollout of filgotinib in a large number of diseases inflammatory diseases. It is now in nine different Phase 2 and Phase 3 studies and there's more to come later in the year. Also, the CF program has seen a lot of activity in the first quarter, where we multiple starts -- clinical starts. And we have started to do a combo with a triple on track for the summer. But Galapagos is clearly more than CF and filgotinib. We have in idiopathic pulmonary fibrosis a Phase 2 ongoing that will read out in the second half. It is fully recruited now. Financially, we received some milestones from AbbVie for the CF program, a total of 7.5 million. And we ended the quarter with almost 1 billion in cash. And after the quarter, we did a very successful placement on the net debt, where we raised 360 million -- €365 million. With that, I would like to hand it over to Walid to take us through the filgotinib program. Walid, over to you.

Thank you, Onno. Good morning, good afternoon everybody. I am very excited to make my debut at these quarterly results today. On this slide, I wanted to share with you that our excitement with the program progressing very nicely with filgotinib in our Phase 3 program, both in RA and IBD. In addition, as you've heard through a number of communications that we have shared, that we've started a number of Phase 2 studies, both within Galapagos and with Gilead to investigate other types of Crohn's disease, a Phase 2 study to complement the lead indication. In addition, a number of studies in Sjogren's syndrome, ankylosing spondylitis, psoriatic arthritis, and most recently cutaneous lupus erythematosus to evaluate these indications further. On the next slide, this is not really new information. I think we have shared this with you previously, but I want to highlight here our programs both in RA, and then on the next slide that you will see in IBD, where we fully evaluate both our 100 milligram and 200 milligram across all of these studies. And we believe this type of assessment will enable us to truly have a very good sense, data-driven, on the risk-benefit of these two doses across these various indications. And with that, I would like to turn it over to Piet Wigerinck. Piet?

Thank you, Walid. So I will cover the rest of the pipeline. And as you all know, most of our attention goes to the cystic fibrosis program, where we have the ambition to come with the best triple combination for CF patients. In that program, we have made nice progress during this quarter. We've completed the dosing in the [JEWEL] studies, 2451, 2222. We have initiated a first-into-human study with 3067, which is a backup molecule for 2451. We have initiated two Phase 2 studies with the corrector one, 2221. I will give some explanations on those designs. And we've also completed dosing of 2737 in the first-into-human study containing a multiple ascending, a single-ascending and multiple-ascending dosing design. Safety in this study was so good that we have extended the dose range beyond what we've planned, and all of those dosings have been completed. We gather the data, and with all those data, we are ready to kick off our triple program over the summer this year. Next to CF, we're looking forward to look to the data on 1690, the first autotaxin inhibitor ever being in IPF patients. As Onno said, we announced a full recruitment of this study. In the meanwhile, all patients have completed dosing there as well. We have a couple of fellow [AbbVie's] of patients collected data and will report out over the summer. Then today, the ORC is ongoing. We disclosed at the ORC meeting the target of our osteoarthritis program. I will give some more explanations later, but that is the ADAMTS-5 enzyme. Then very pleased to announce as well that we are well progressed in our multiple-ascending dose study with MOR106 at the antibody we together with MorphoSys developed. It is as well an [antagonist] of action, IL17C. We are proud…

Thank you, Piet. Then allow me to show you a couple of slides on the financials over the first quarter. So good morning, everyone, in the U.S. good afternoon in Europe. On the first slide that is in front of you now here is our cash position. We ended the year at €981 million. There were warrant exercises that generated 4 million and currency translation effects of negative 2.5 million. But our cash burden in the quarter is €24 million, split into an income in cash terms in milestones from AbbVie, $10 million, €9.5 million, and offset by 33.5 million in cash expenses, so net of 24 million. I am splitting it out this time, in previous quarters; I actually have always combined those two numbers into one splitting it out this quarter to clarify during the year 2017 how expenses and milestones are coming in over the quarters. End-of-quarter position: €960 million. And with this cash burn, we are comfortable to maintain our cash guidance between €135 million and €155 million. For the full year, we are reflecting larger expenses in the quarters to come in 2017 than in the first quarter, as especially the recruitment of the filgotinib trials is going to accelerate quite dramatically over the year. I have added to this -- to the very right, our post-financing cash position. So after our placement that we did two weeks ago in the US: $390 million, a net of €350 million. We are a little over €1.3 billion of cash, well financed to invest in our portfolio of programs that we have elaborated on before. Maybe then to the P&L side. Revenues and other income increasing -- more than doubling, actually, increasing by €25 million from the first quarter last year to the first quarter of this…

Thank you, Bart. If you look at the news flow, it's going to be a busy rest of the year of the various programs. The two slides -- on the first slide, I want to highlight the DARWIN 3 interim results that will be presented at the ULAR conference in June, where we have the long-term efficacy and safety data of filgotinib in the RA trial. Also, of course, we're looking forward to start the triple in CF in patients that will be happening this summer. And if you go to the next slide, I would like to highlight the IPF data with 1690. The FLORA study that will read out in the second half of next year -- of this year, sorry. And also the atopic dermatitis data that we are doing together with MorphoSys that will read out in the second half of the year. So a lot to look forward to. And if you look at the outlook, clearly we are in very good shape. Filgotinib in Phase 3 and in Phase 2 trials. The CF program going according to plan, moving towards the triple combo in patients. We are getting lots of patient data in various trials with our proprietary molecules. And the discovery engine continues to deliver, which will lead to more programs going into preclinical and reaching human clinical trials. And all of that with a very solid balance sheet with 1.3 billion in cash. With that, this is the end of the formal presentation and I hand it back to Elizabeth.

All right. Well, thank you very much. That does conclude the presentation portion of our audio conference call. I would now like to ask the operator to connect us to any callers with questions for the executives.

[Operator Instructions] We will now take the first question from Timothy Woodward from Goldman Sachs. Please go ahead

Thanks very much for taking my questions. I have three, please. Onno, you mentioned your strong balance sheet, and it certainly is. Could you just discuss what the rationale was for your recent capital raise and how you envisage those proceeds being spent? And then on the cystic fibrosis side, could you talk a bit about how you are thinking about the design of that Phase 2 trial in triple combination -- for the triple combination? What do you think timelines are there? And how we should be thinking about that trial. And also, as you think about eventually going from a Phase 2 to a Phase 3 trial for the triple combination, data for how many combos will you need to make a decision on which triple combination to advance into Phase 3? Thanks very much.

Thank you, Tim. I have all these great executives with me, so I will hand the first question to Bart.

Hi, Tim, Bart Filius speaking. Thanks for the question. So indeed a strong balance sheet 1.3 billion, as I mentioned in the presentation. We felt that a capital raise was the right thing to do at the moment. As, we have in our use of proceeds for our capital raise identified specifically filgotinib and CF as being two main targets. On filgotinib, that we are now in nine different studies. And we are actually very helpful that some of these proof of concept studies will also indeed lead to further Phase 3 programs later on. In the timeline of development, that will require further investments both from Gilead and from ourselves. And secondly, we are also intending this year to elect for commercialization of filgotinib in the European market -- the big five European markets. And the Benelux -- Belgium, Netherlands, and Luxembourg. And this will also require some upfront cash investments as we build out that structure. And then on CF, what we see are the number of programs is increasing exponentially and that is indeed an important use of proceeds as well. And then finally, as we have explained quite often to the markets, we also want this cash position to be there as a strategic reserve to be able to benefit from any opportunity that might arise either in licensing or in M&A. No specific plans before that. No specific plans today on the table, but we want to be in a position to execute on this swiftly if something arises.

Thanks, Bart. Hand it over to Pete for the CF question.

Thank you, Tim, for the questions on the CF study. So the plan is to do studies in both homozygous patients and hit the heterozygous-[minus] patients as well so that we are really tackling immediately the areas of highest unmet medical need. As you said as well is that we are progressing, well, all the focus is with [this RFS] combo and we have rights to that. In terms of portfolio, we were as well developing other molecules, and over time, plan to do more than one combo. In one way, we would say the more the better because it increases the chance that we find a very highly effective treatment for the patients. On the other hand, there is an element of speed as well there. So I think the window will close at, within one to two years. So that it is indeed a plan to develop, let's say, two to three of those combos over time, but hopefully the first one we kick off over the summer is maybe an excellent one and another one that can progress quickly into Phase 2 and Phase 3 later.

We will now take our next question from Peter Welford, Jefferies. Please go ahead.

Thank you for taking my questions. So the first question, just staying with cystic fibrosis for a minute. Just wondered if you could just repeat the commentary you made on 2737. Did I correctly understand that the Phase 1 in both the single- and multiple-ascending dose has now been completed, but you've expanded the dose range? And will we get the data from the full expansion to all the doses being investigated at the DCFS conference later on this quarter? And then just moving further on then, is the, at this stage now, is there any other trial by the PK or preclinical or other trials that are required before potentially then a triple trial could be conducted in healthy volunteers? I guess I'm thinking it's particularly relevant to 2737, but also any of the other components? Are all the other trials now in place to be able to start that healthy volunteer study once those results are in? And then secondly, just on filgotinib, just wondering whether all of the proof-of-concept studies, are there any restrictions at all on use of the 200-milligram dose in those trials? Or is that dose of the 200-milligram once-daily being used in those studies, irrespective of perhaps prior drugs male/female status? Thank you.

Thank you, Peter. I will kick off with the CF questions. 2737, indeed I can confirm that dosing have been completed, so the full SAD/MAD study and dosing is finished and completed. As I said, safety allowed us to dose farther than we planned at the beginning, and that's why we decided to add another cohort and go higher than what we had in the initial filing. So it was good news and proves that the compound is well tolerated in this Phase 1 study. Second question was do we need more studies now with these data. So the JEWEL 2451, 2222, 2727, we have the package announced. Also the preclinical data to put together all the elements for the triple combo design, which we will kick off this summer. And then I will give over to Walid for the filgotinib question.

All right, Peter. So regarding filgotinib POC studies, I confirm we do not have any restrictions on the dose. I'm presuming you're asking about the 200 milligram. So I think we're good to go there in the ANDA studies that we are doing.

Okay. So just returning to triple combo then, I guess just to follow up. I guess if all the -- say the MAD studies are done and obviously you have gone into higher dose, and I guess obviously 2222 and 2451 are still in combination. I guess what is the limiting factor between now and the summer that is, for want of a better word, delaying start of a triple combo in health here? Is it that you want to get some insights on the interactions of 2222 and 2451 together first in a dual? Or I guess what is the gating factor before you can start a triple trial?

No, what is now limiting is we have to get all the data that we have observed in a finalized three parts on there that we can add that to the filing and so that we have a solid data package everybody can review that needs to review. So the bringing together of all of those data and have there of completed reports is what is time critical. This is well planned. And this will allow us to kick off the triple program over the summer. [Multiple speakers].

Okay, that's great. Thank you.

We will now take our next question from Anastasia Karpova from Kempen. Please go ahead madam.

Three questions, if I may. First, regarding the recruitment of homozygous patients in the U.S. one of your competitors had experienced significant delays in that specific market. Specifically in regards to FLAMINGO trial, which is probably not going to demonstrate any efficacy, would you envisage any challenges in recruitment? And what are you doing to avoid that? Secondly, in the context of your collaboration with AbbVie, if the Phase 2 triple combo trial is positive, would you envisage AbbVie to take over the development from there, or there would be additional steps required? And finally on osteoarthritis target, Pfizer and GSK both had early-stage programs targeting also ADAMTS-13 and one discontinued on for pharmacokinetics and the other one dropped because of negative or unwanted activity on aggrecan substrate. So what are you doing differently that would allow you to avoid those mistakes or challenges? Thank you.

Thank you, Anastasia. Let me start with the FLAMINGO recruitment, as you point out rightly. So this is a study in which there is not too much benefit to be expected for the CF patients. So we have discussed this extensively as well with the CFF network. They see a possibility to recruit this. So from the two studies we have ongoing now, ALBATROSS and FLAMINGO will take somewhat more time, which we are nicely on schedule in terms of getting patients in. So it's a study, and I agree with you -- for the patient, there's not too much benefit. On the other hand, this is a highly motivated field and we are confident that we will have it recruited as we have planned it. Then on the AbbVie Phase 2/Phase 3. So according to the contract, we do Phase 1s, Phase 2s, and as soon as Phase 2 is complete, they will execute the Phase 3. So that's -- at that moment, when we have Phase 2, we selected a dose regimen, all of that, AbbVie will take over. And we hope that if we can go in with one today to only be a question of picking the right dose of the triple component. Then finally on OA, indeed, there has been earlier attempts by Pfizer [White], let's say that indeed they were limited by PK. And I think everybody has seen our animal model data agrees that what we believe here is a different type -- is a different level of efficacy. We -- the exposures are higher, the inhibition is better, and we are shown in two different animal models, in fact, that we have an impact of -- beneficial impact on the cartilage. So I think everybody [afield] recognizes that our molecule is way different and better than what was tested in the clinic a number of years ago. You pointed as well to the GSK program. That's an antibody. As far as we saw the data, they were concerned because they saw cardiovascular side effects. So we have done extensive cardiovascular safety evaluation and could not detect anything around there. And that was for us the trigger then to move forward into the clinic with this molecule. Okay, thank you.

We will now take the next question from Phil Nadeau, Cowen. Please go ahead.

Thanks for taking my questions and congratulations on the progress. First one on cystic fibrosis. Have you completed the preclinical carcinogenicity studies for 2451, 2737, and 2222? And for those that you have completed, what were the findings, if any?

Okay, thank you for the question, Phil. So we are extensively preclinical testing these molecules, but carbs to these typically only start when you have Phase 2 and running power. We're Phase 2 to Phase 3, so this is too early to expect any carb net, honestly. So which we have done the multiple piece, we have done the combo therapies, toxicities. We need to move to the triple program, but for the carb studies, this is a bit too early to expect data. Thank you.

Okay great. And then second question is just a follow-up to a prior question. It sounds like you've got all the data you need for 2451, 2737, and 2222. And all that is between you and starting the triple combo in patients is literally paperwork. Is that a correct interpretation of what you said?

Paperwork is a -- we are finalizing the design as we speak. We will discuss the design with the CFF network and then submit those filings. So there is indeed a lot of work to be done, but it is not pending any scientific data, that's correct.

Great. Then last question is actually on filgotinib. I'm just curious to hear your impression of the FDA's issues with baricitinib's filing and whether it has any implications for filgotinib's development program or the data that you will seek before filing for FDA approval of filgotinib.

Thank you, Phil. Yes, like you and many others, we have been watching very carefully the response from the FDA to baricitinib. Frankly, I'm not going to be speculating. You guys can do as well as anybody to look at this and try to estimate what that could be. But what I want to say is really that we are quite confident in the program that we have. And one of the reasons that we are showing you today on the slides the size of our program and the fact that both doses are really fully evaluated in our program, we believe that we have really done a very good job. And at the end of the day, we will have a very robust data package that would allow adequate assessment of a risk benefit for either one of those doses in either of the indications. So I think to really conclude, from our perspective, our confidence has not changed at all with filgotinib based on the recent developments with baricitinib. And there was nothing that currently we plan to do differently as a result of that.

That's helpful. Thanks for taking my questions.

We will now take the next question from Adam Walsh from Stifel. Please go ahead.

Thanks so much for taking my questions and congrats on all the progress. My first question is on -- just a clarification question. I just want to make sure I am clear in my own mind. When you talk about having everything ready to start the triple combo study, are you speaking -- we still need to go through the Phase 1 triple, correct? That needs to be done first, and then of course you will begin the Phase 2 triple in CF patients. That's my first question. And the second question is would you consider running dual combo Phase 2s in parallel to the Phase 2 triple combo therapy? Thank you.

Okay, Adam. Thanks a lot. So on the triple program, we will share with you the designs and how we take it on as soon as we have agreed this with these CFF first and then the regulator second. So I will not comment on that today. In terms of how much duals we plan to take later, I think as part of the dose ranging, there will be cohorts there that -- where we compare duals to triples, but the [ID'd] countries that that can be done in single studies, rather than then we have to have many [panels] to this. If overtime we round out panels to this or better, we still can do that, with the idea that as part of a dose range, you can evaluate duels and triples that are the current ideas in the field. Thank you very much.

Great. And on the Phase 1 clarification? For the triple?

Well, as I said, we are discussing that design with the CFF network as we speak, so it's not a moment now to disclose any real designs on our Phase 1 triple program today. So because it can change if you get the feedback next week, so I don't think that's a good moment now.

Right. But just to be clear, so that is the gating factor before you put the triple into CF patients. So we are still going to do the Phase 1 triple and then you go into CF patients in the summer?

Well, as I said, we are discussing various designs on how to bring this to the patients with the CFF experts. And depending on what they really ask, we will adapt our design so that [gets done]. I'm not disclosing any designs here now because they can change as we have active discussions with the experts in the field.

Understood. Thank you.

[Operator Instructions] We will now take the next question from Vamil Divan, Credit Suisse. Please go ahead.

Thanks so much for taking my questions. I think most of mine have already been asked. But just with the several additional indications that you have started trials with filgotinib, I wonder if you could give a little bit more insight into the ones that you maybe have a little bit more confidence on. Not obviously the later-stage ones like RA, Crohn's, and UC, but the newer ones you started. Which ones do you have maybe a little bit more data to base your decisions on and which ones are maybe higher risk? Thanks.

Wow. You're asking me to choose which of my children I like the most. It's a tough decision, to be honest with you. I, look, I mean, I think we are, it's safe to say that we are quite confident that we have good reason to believe that we will work based on the preclinical data, based on also some other data that we have clinically from the class in general or from anti-inflammatory agents in general. It's going to be very difficult for me to pick one over the other. We have good enough reason to run them. But also, as you know, we do these studies to see what our drug will perform in these patients and how beneficial it would be. So I'm just going to leave it at that and wait to see what we find out at the end of it.

Okay. And maybe just one quick follow-up and this was sort of asked a little bit before. But are all of these using the once-daily dosing for filgotinib, all these new indications?

Yes, that's correct.

We will now take the next question from Matthew Harrison, Morgan Stanley. Please go ahead. It seems he has stepped away. There no further questions in the telephone queue.