Hello, everyone. I am Elizabeth Goodwin, Investor Relations and I will be hosting today’s event. 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 last night’s press release, that’s 32 for Belgium, 24040659 and the code is 9171161. We also have this number on our homepage if you would like to double check it. 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’ 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, COO and CFO. Onno will lead and Piet will go through the operational highlights of 2017, Bart will explain the financial results and give guidance on 2018. Onno will then close with the late stage clinical news flow we expect this year. You will see a PowerPoint presentation on screen during the presentation. We estimate that the call could take about 20 minutes and will be followed by a Q&A session at the end. At this point, I would like to hand over to Onno. Go ahead.

Thank you, Elizabeth and thank you for attending the webcast. We clearly had solid 2017 with delivery in all aspects to the company. So, we are very pleased with the results that we can present to you today. If you first look at filgotinib, Gilead and us, initiated Phase 2 trials in 8 new indications on top of the 3 that were already ongoing. We also showed very nice DARWIN 3 results which is the long-term expansion study from the DARWIN 1 and DARWIN 2 trials that confirmed the profile with respect to activity and safety profile in rheumatoid arthritis. As we initiated the building of the commercial organization that Galapagos – that will prepare Galapagos for the launch of filgotinib in 8 European countries, so a good start in that side and that activity and that will accelerate in 2018 clearly. In IPF, idiopathic pulmonary fibrosis, we saw very nice data in a 12-week study, where we halted the disease progression in these patients, which gave us a lot of confidence that we have some very interesting molecule that will move into late stage trials in 2018. And on top of that, we announced that we have two other mechanism of actions that will move forward in IPF, so that enables us to build a franchise here of three independent molecules moving forward that on its own or in combination maybe good treatment for this deadly disease. In cystic fibrosis, we saw good results with our corrector 1 in-patient study in the ALBATROSS and FLAMINGO studies and we are now preparing to launch our first triple combination study that is our potentiator corrector 1 and corrector 2 in triple patients called FALCON, which is on track to start this quarter and we are looking forward to that dataset later…

Thank you, Onno. We have on the next slide please – we have great ambitions for the filgotinib’s profile based on the data generated so far in the Phase 2 studies in rheumatoid arthritis and in Crohn’s disease. We are very excited by filgotinib’s safety and tolerability profile which promises to be best in class. We believe this is due to a high selectivity for JAK1. With data from more than 2,000 patient year exposure to-date, we have been consistently impressed by the favorable safety and adverse event profile. We expect to present long-term data with up to 2 years of treatment from the DARWIN 3 open label study in rheumatoid arthritis patients at the upcoming ACR meeting this year. reading out 0308: Next slide, over the past year we have made great progress in the FINCH program in RA. This is a robust Phase 3 program in more than 3,000 patients, three large studies were both the 100 milligrams and 200 milligrams doses are fully being evaluated in methotrexate incomplete responder, methotrexate naive patient and in biologic incomplete responders. Results from the Phase 2 study in biological incomplete responders are expected in the second half of this year. In addition recruitment in the FINCH 1 study will be completed in the second quarter and the case of FINCH 3 in the third quarter of this year. Next slide, here you see our Phase 3 program in inflammatory bowel diseases, both UC and CD which is equally robust with approximately 2,600 patients in total. We expect the results of the interim futility analysis in the Phase 2/3 selection study in UC to be available in the first half of this year. We also expect the recruitment to be complete in the Crohn’s Phase 3 program in the second half of…

Thank you, Walid. Let me start with MOR106. So earlier this week, at the dermatology conference in San Diego, we presented the Phase 1 data consisting of both an SAD in healthy volunteers and multiple ascending dose in patients. So, let me remind you IL-17C is a cytokine that is expressed mainly in the epithelia and shows very low systemic levels. So, we see it as a local amplifier of ongoing processes and as a target it holds the promise to show full efficacy with very low propensity of systemic side effects. So with Phase 1 data which we will show in the slide as well impressed both ourselves, partner MorphoSys and many people in external world. So with weekly intervals dosed the patients for 4x the atopic dermatitis patients first time and we saw a very nice efficacy both in terms of magnitude of efficacies, in terms of number of patients that responded to therapy. And most of all in terms of the length with which efficacy was maintained after which we stopped dosing. So we are quite impressed and working extremely hard to now initiate quite soon a large Phase 2 IV dose range of study which will kick off over the coming weeks. We hope to recruit almost 200 patients into that atopic dermatitis and the results will become available somewhere next year. In parallel to this large IV dose range of study, we will bring as well as the subcu form into healthy volunteers first and patients later this year and hope that we can bridge them at a moment when we have the IV data towards in a subcu program which will then be – which can then move into Phase 3. So on this slide, we have given the insight, which is one of…

Thank you, Piet. Let me take you through the financial results for the full year of 2017. And as usual, I will start with a view on our cash position and our cash burn during the year. As you can see on these slides, we have been able to increase our cash position to €1.15 billion during the year driven by on one hand a capital increase that we executed in April totaling approximately €350 million. There is a currency translation effect in our cash position this is for – as a reminder, this is non-cash in the sense that this is translation of our U.S. dollar position into euros on the balance sheet. We keep roughly 20% of our cash in dollar terms as a natural hedge against the dollar expenses that we have in some of our programs. Than our operational cash burn consists of two elements, on one hand, there is cash income from milestones, a little bit more than €30 million during the year and on the other hand, there is cash expenses, which are operational spend. The total of the two is a cash burn of €154 million, which is in our guidance, which was between €135 million and €155 million, I would say that it’s little higher than I anticipated back when we spoke in October, where I anticipated to be within the lower end of the guidance. This is due that to the fact that two milestones that we have received or that were accounted for in the fourth quarter on CF. We are both received in terms of cash in January. And as a result, we ended up a little bit higher, but on the expense side, it’s fully in line with expectations. So, a healthy position on the balance sheet in…

Thank you, Bart. Well, this cash burn is increased over 2017, but as you can see on this slide, we are expecting a lot of return for the money being spent. We will be initiating trials in a number of diseases in IPF, the late stage 1690 trial. We also start a Phase 2 trial in IPF with 1205, then we got the triple trials for cystic fibrosis, the osteoarthritis trial with 1972, which we are conducting together with Servier, but we are responsible for the U.S. part of that trial and we are initiating a full Phase 2 on MOR106 in atopic dermatitis together with MorphoSys. We will also see POC data of filgotinib in psoriatic arthritis and ankylosing spondylitis. And we will see the data, the proof of concept data in the – of the PELICAN and the FALCON trials, so a lot of data on proof of concept. And even more important the pivotal data that we are expecting on filgotinib in the FINCH 2 trial and the decision to move filgotinib in Ulcerative colitis to a full Phase 3 the go, no go decision that will take place this year. And also as already announced by Walid we have – we are expecting full completion of recruitment for the FINCH 1 and FINCH 3 trials. So a lot of activity there and you can expect as an investor the news flow regarding these trials in the month to come. With that I will hand it back to Elizabeth. Thank you very much.

Alright. Thank you. That concludes the presentation part of our call today. I would now like to ask our operator, Matt to connect us to any callers who have questions. Go ahead Matt. Explain how to post the question.

[Operator Instructions] And our first question will come from Brian Abrahams with RBC Capital Markets.

Hi guys. Thanks very much for taking my questions and congratulations on all the pipeline progress. A couple of questions on 106 and then I had a CF question follow-up, I guess on 106 you presented data recently showing some interesting maintenance of effect post dosing and I think you alluded to it in your prepared remarks as well, I am wondering if you can speak to sort of what that durability of effects on some of the different endpoints that you looked at might mean for just the overall potential frequency of administration for the drug in the future whether this represents any changes in the underlying biology that the drug is able to induce and really sort of curious as you move into Phase 2 your – like how you hope to elicit differentiation versus some of the latest stage programs, I guess on the efficacy and safety side what are some of the specific trial design elements that might be incorporated to show that?

Thank you, Brian for this question. Indeed as I said during the presentation, we but also many others were impressed by the maintenance of efficacy post dosing, what it typically means is that at least that we are probably dosing – we have been dosing at the higher end of the dose range because it’s after dosing the efficacy goes away immediately, clearly shows that you are within your dose response and often is not approved often then your efficacy is maintained over a longer period of time. It can mean that you saturate your target under this time for just to come off. In this study indeed we dosed once weekly and so in the phase – those ranges actually will give the design when finally approved that we explore dosing every two weeks and every four weeks. So we really don’t anticipate that we will have to dose weekly and in order to be competitive with current medications for atopic derm and with medications which are in development. We hope we can get it to once a month and that once every two weeks should be really feasible as well. Differentiation, the first Phase 2 dosing is mainly of dose ranges so that we want to explore one, the magnitude of efficacy, how frequently do we need to dose what is optimal dose. We have a large couple of other smaller studies as well to promote the differentiation. But they will launch later and that will – we will comment on those when we open those studies. Thank you.

That’s very helpful. And then maybe just shifting gears to the CF program and the FALCON study, the triple study, wondering if you could provide any more clarity on sort of the potential trial design there, whether you will be looking at – the types of patients you will be looking at perhaps duration, whether we should be looking for interim data maybe from the dual run in or from the triple around the middle of this year. And then you mentioned that too, you had sign-offs from I guess two of three organizations on the start of that study, any additional kind of rate limiting steps or gating factors to getting the final approval to initiate that study. What are the next steps there? And I will hop back in the queue. Thanks.

So, FALCON will be proof-of-concept study with this first triple design, we will be dosing for 4 weeks of triple, both homozygous in the study as well, we will include het/minus patients, but if we – as long as we don’t have the final sign-off of everybody, again trial has not started and online officially. So, we will comment on the full design, but you are executing as I said according to the plan and we should have the top line data of the first cohorts around the mid of the year, so that is just – that’s well planned for. Anything else?

Thanks.

And we will now hear from Anastasia Karpova with Kempen.

Good afternoon and two questions on IPF and a general one on the pipeline. Given that there are two late-stage compounds going into full late-stage trials in pulmonary fibrosis. Do you see any challenges in recruitment for your late-stage trial? Furthermore, the competitive compounds have at least some safety data in combination with standard of care, either in nintendanib and pirfenidone, while that was not explored in Florida and if that is any impediment or a delay for your Phase 3 trial? And finally on 1205, how do you see it positioned alongside 1690 and mechanistically do you see any potential synergies in targeting GPR84 and out of action simultaneously? And maybe the final one on the general pipeline, the 13 Phase 2 trials that you are guiding this year do they only include the compounds that are currently listed in the presentation or shall we also expect additional drugs coming out of the woodwork?

Okay, Anastasia. Thank you. This is Walid. I will take your question. With regard to recruitment, we have conducted our feasibility and also in talking to major KOLs across the U.S. and Europe and actually the rest of the world, we are getting a very positive response to the profile that we have seen with our compound. So based on what we know today, I don’t expect any difficulties in recruitment. I understand this is a competitive field and then obviously this is a rare disease, but so far the response we have got is positive and we feel quite positive about our ability to move this forward. With regard to 1205, we will be conducting our Phase 2 study now and then we will, based on these data, be able to decide the performance of the drug, how does it compare to 1690 and opportunities to mix together, but at the same time, as you can imagine as we heavily invested in the space from a biological standpoint to understand this, we are doing our preclinical work to evaluate models by which we can predict whether combination of these two medicines could lead to improved efficacy. This is definitely something on our radar screen. With regard to the pipeline question around the trials, the ones that you have seen are from the pipeline that we have shared with you at least the molecules that we have shared with you in our pipelines. I am not sure if I missed any of your questions, but I think that’s covered them all.

Yes, on safety with standard of care for 1690 and if you would need additional healthy volunteers trials or say run-ins into late stage trials?

I can say that we do not have to do any additional trials before we start our late stage program.

Thanks a lot.

Thank you.

And our next question will come from Adam Walsh with Stifel.

Hi, this is [indiscernible] for Adam. Thanks for taking my questions. First, congrats on all your progress in the year 2017, I have also a question on IPF, now you have three assets and it allows you full potential combination study, could you please provide any additional comments on the rationale of combo study, what have you learned so far from these three drugs in terms of [indiscernible] or any data that make you think a combo will be better compared to a monotherapy?

Maybe I had – so maybe this is Walid. I will take the first part of it and then I will turn over to Piet to talk a little bit more about the mechanism. I mean I think in this disease which is very serious and lethal, we are seeing also from the guidance from the agency that there is very interest to add treatment on top of that of care to be able to achieve the efficacy. There has been some data reported in this in small trials combining nintendanib and pirfenidone together where there is some semblance of increased efficacy when you combine the two. Obviously the study was not powered for that and it was small, but again those are the encouraging data that combining treatment could lead to improved efficacy. If you have seen also some data that was shared that from the Prometic compound as well on top of nintendanib at least that they do see some proven effects. So there is some initial clinical data that suggest combining different mechanism of actions together could lead to an improvement and it certainly in this disease where there is a high unmet medical need this is highly needed and desired. So from that perspective I think there is good rationale to go forward. So and then I will turn to Piet with regard to mechanism of action and the work we have been doing here.

So in the IPF since we have almost the first component is autotaxin, the second is GPR84 antagonist and the third we didn’t disclose yet. And but in principal they tackle this disease from complete different angle. All three of them we are looking very hot now to see in which models we can find sufficient window to test also either in vivo, how good combination will perform versus the monotherapies. But for example the bleomycin is not a very suitable model to that because of very limited between those. So as part of the full development this year, we will do many of the combo studies preclinically and this will be in the combination both of in vitro work and in vivo work. And hopefully by the end of the year it can show nice data why certain combos might make more sense than others. But in general the trend in the field is still is the little disease that intensifies a treatment and this is not a request yet to show effect that the combination that’s much, much better than a single compound. But we will report on those combo studies over the coming months this year. Thank you.

Since the 1690 trial is much more advanced is 1205 or 3499 going to be studied only for add-on to 1690, is that the case? Thank you.

I think it’s a bit premature to answer you to be honest. We are internally discussing this and also taking into consideration the feedback we were receiving from the health authorities regarding the 1690. Good question and maybe we will be a better position to answer it next time we talk.

Alright. Thank you.

And now we will go to Peter Welford with Jefferies.

Hi. Thanks for taking my questions. And on the CF first of all, I wondered you could just talk about the FALCON study whether or not we should still be anticipating and leading with the doublet and then going to a triple and whether and you can talk about the dosing that you are considering with the different components. Also then on the second triple, if you filed your INDs for 2737 or 3067, I know 2222 I think has an IND, but just wondering about 2737 and 3067, I presume you may need those before we can start then the global Phase 2. And then given Bart on a couple of financial ones, first of all on the tax, it was a wonderful topic, but just to understand the filgotinib tax, given the European co-promote that you have, how should we think about the tax rate for filgotinib, is that going to impact how we should book the profits through the P&L given presumably some of that comp be classified as income deduction or can it? And then also on the R&D cap for filgotinib, are we anywhere near reaching that capital, such that we should be thinking of knocking off the future milestones from Gilead or are you still tracking below the cap at the present and therefore we don’t need to worry about that? Thank you.

I will take those first, Peter and then I will hand it over to Piet to give you the feedback on the CF questions. So, first of all on the copromote and this – and those financial flows, basically the way the tax authorities look at this is that embedded royalty, so royalties that would actually be at arm’s length between different subsidiaries would also qualify under the IID. So, the copromote will lead basically to a similar type of IID benefits than a normal royalty stream, obviously everything in terms of profits that comes on top of that would not qualify for the IID. And the second question on the cap. We do indeed have a cap on the contribution to the filgotinib expenses. Currently, we anticipate we are still tracking below that gap clearly and we anticipate that we will do the year 2018 and 2019 still within the cap, but once we get to the later quarters of ‘19 or in 2020 we will have reached the cap levels, Peter. And to Piet?

Yes. Okay, Bart, thank you for the FALCON study, every Phase 2 study we will kick off with a triple combination, we will have a dual lead-in. That’s the current plan as we first do couple of its dual lead-in and then bring a third component on top to see the incremental efficacy triggered by the third component. On the IND, indeed, we have 2222 open, but to start in the U.S. we are in the process of filing 3067 IND and so the 2737 open IND will be part of that launch of that triple study in the U.S. We have agreed with FDA on the principle, so there is no need first do another study and then we have to wait for the data of that study, where we have discussed with them. And our anticipation is currently that we will open IND 2737 at start of that triple study and before that have opened at 3067. Thank you.

That’s great. Sorry, can I just come back to the tax, just so I can understand so you are saying that some of the European copromote profits will fall outside the IID just to be clear. So I understand the embedded royalty is coming, but you are saying not all of the European copromote can be classified as IID is that what you are saying?

It’s very nuanced but basically what I am trying to say is that everything that is in terms of economics at the bottom end of the P&L comparable to royalties would be qualifying under the IID, but if there will be excess profits, it will not qualify under the IID. So, only to the extent that we co-promote delivers a higher profit, it would not be IID.

And our next question will come from Phil Nadeau with Cowen & Company.

Good morning. Thanks for taking my questions. Couple on the upcoming results. Just first on the PELICAN result that we are going to get into second quarter. Could you give us some sense of what you would consider proof-of-concept being achieved in that trial? I believe in the recent data released by Vertex tezacaftor plus ivacaftor and it’s triples in homozygous patients we saw like a 7% to 9% improvement in FEV1. Is that the bar that we should be thinking of or are there other factors that we should consider when looking at the PELICAN data?

Thank you, Phil for asking me to predict the optimal loss. So, well it’s the first time we dosed 2737, so I don’t think we are going to put the bar up 13% of FEV, I think everything, which come close to that is a success. Don’t forget this is a complicated trial in terms of drug interactions. In principle, we are comfortable that we should keep sufficient 2737 on board in view of how it’s metabolized, but we will see. And the time when we can bring the data we will mainly depend on all of the case studies, all the PK measurements that we have included and that we will need to analyze. Basically that anything below 5% is a failure I would say and I am between 5% and 13% I think would be a sign of good efficacy.

Got it, that’s very helpful. And then second question on filgotinib and psoriatic arthritis, basically the same question for [indiscernible] we have seen about a 20% to 30% improvement in ACR20 although that data I believe is 12-week data, not 16-week data, so when we look at filgotinib and psoriatic arthritis is that 20% to 30% ACR20 increment above placebo. generally what we should have in mind or are there other complicating factors in that in interpreting that data as well?

I think the data the study design is fairly straightforward. So I don’t think there are complicating factors in interpreting it. I think the target that you set is a good place to start with. We are hoping we would do better than that, but again we are waiting eagerly to the see the results.

Great. And then one last question for me on a second CF triple, I noticed your 2018 milestone charts there wasn’t a mention of the data from that second CF triple reading out this year, was that an omission or is that actually expected in kind of early 2019?

Well, it is a quite large study where we do the full combination as well. So it probably will be early 2019 but with all that we can – as we can and we see where we come out.

Good. Thanks for taking my questions and congratulations on the progress.

Thank you.

And we will now hear from Matthew Harrison with Morgan Stanley.

Hi everyone. This is the Vikram on for Matthew. So we have two questions from our side, one on IPF and then one on CF, so on IPF and I am not sure if you are willing to talk about this, but or when you get into pivotal studies, do you think you are needing to run studies versus placebo on top of standard of care. And then on yes, it wasn’t clear to me exactly what’s pending with the discussions with regulators to start the FALCON study and if you can comment on any kind of monitoring that may have been put in place for the long-lived metabolite you saw earlier that would be helpful? Thanks.

Okay, Vikram, this is Walid. I will respond to the IPF question. So, what we have prepared to say today is that we had a very productive meeting with the FDA a couple of weeks ago and we have also received initial feedback from EMA with whom we will be meeting the first week of March. So, the feedback from both the agency is consistent. I am quite confident that we will finalize the study design soon after the EMA meeting and then at that time we will be able to get into more details about the design of the trials. As I said, we should expect to hear back from us in the March-April timeframe around these.

Okay. On the FALCON study, so we got approval from MHRA. So, we also got an approval from the CF European Clinical Trial that think it’s a very important study to be run in their center. And so as I said during the call, we are awaiting for the committee approval now. And there was also a question on the monitoring for the long-lived metabolite, so we will follow up the patients and we have [indiscernible] on the watch out will PK – our samples for PK risk patients after they stopped the medication and will follow up them as long as we can see plasma levels. Thank you.

Thank you.

And our next question will come from Christopher Marai with Nomura Instinet.

Hi, this is [indiscernible] on for Christopher Marai. Thanks for taking my questions. I just have a couple of questions regarding 1972 in OA. First, regarding the recent Phase billion data, were there any differences in the biomarker reduction between patients with OA of the hip, knee or other regions? Maybe more broadly, do you see any particular activity or limiting factors that may limit the addressable population like the one discontinued patient in the high-dose cohort was he on any concurrent symptomatic treatment? Secondly, I know it maybe a bit early, but can you talk about the efficacy endpoints under consideration for the Phase 2 trial? Like are we looking at Western Ontario with McMaster OA? And conceptually, can you discuss how the biomarker reduction could be correlated to functional outcomes and what kind of treatment duration we should expect for functional outcomes to improve? And lastly, any milestones attached to the planned Phase 2 trial?

Okay, thanks Allen. So, again it’s Walid. So, in terms of the study results, I mean, you have seen the study as a sort of small number of subjects per arm. Our goal was to look at the change in ARGS in the blood. For that, the end was sufficiently ample to see the very tight error bars actually on the slides that we shared with you. But that doesn’t allow us at all to look at subtypes of patients or people who are hip versus knee OA. But he can tell by how tight these data are that there is no difference really between the patients and as well, these data are very consistent with the healthy subjects as well data in terms of negative effect and changes over time. So, I am pretty confident that our target engagement and subsequent reduction in ARGS is consistent in human beings in general. In terms of study design, we will be in a better place to describe that study in more details once approved and ready to go forward, it should be a matter of months from now, but you should expect a trial that’s long, I am talking about a year. The endpoints are going to be the typical endpoints that you look at from imaging using MRI, but also looking at x-ray and using the functional endpoints that you mentioned WOMAC and other key endpoints. In terms of correlation between the changes between ARGS and the functional effects, I expect them to be good. That’s why we are doing the trial, but I guess it will remain to be seen. Maybe I can ask Bart to comment on the milestones please.

Yes, sure Walid. So, the milestones are not significant. There are some milestones, but it’s very smallish. Really, the real value for us in the program clearly is that we have the U.S. rights for this molecule and Servier has the right for the rest of the world and we will be running the trial. So, together with our partner, we will be running the part in the U.S. So, milestones are there, but it’s not significant.

Got it. Thank you very much. That’s very helpful.

Thanks, Allen and thanks everybody who has asked questions today. I am afraid we have run out of time. This was our last question. I think we have had some really good ones today. Paul van der Horst over in Europe and I, Elizabeth Goodwin, over here in the States are available to take any questions that you were not able to pose today, anything else that’s come up, please contact us. Please also look for publication of our annual reports 2017 on or around March 23. We think all the audience members, all the people who have called in for your support and your participation today. Take care and we will speak again soon. Bye.