Berenberg
Date: Thu, 28 Mar 2019 23:44:16 +0000
Subject: Galapagos (GLPG NA) - FINCH data points to best-in-class safety profile
Galapagos (GLPG NA, Buy; PT EUR 112.00)
Gilead and Galapagos reported top-line data from two Phase III studies evaluating filgotinib, a JAK1-specific inhibitor, in rheumatoid arthritis (RA) patients, called FINCH 1 and FINCH 3. These were the second and third Phase III studies in the FINCH program, and follow the positive FINCH 2 data readout from September. Separately, Gilead/Galapagos also reported week 24 safety data from the FINCH studies, and long-term safety data from the Phase IIb DARWIN 3 long-term extension study in patients with RA. Filgotinib is in a class of drugs called JAK inhibitors, which includes Pfizer’s Xeljanz, Eli Lilly’s Olumiant, and AbbVie’s upadacitinib (approval expected H219).
In FINCH 1, two doses (100mg and 200mg) of filgotinib were compared to adalimumab (Humira) or placebo, on a stable background dose of methotrexate (MTX) in patients with prior inadequate response to MTX. The primary endpoint was the proportion of patients who achieved a 20% improvement in ACR response (ACR20) at week 12, and key secondary endpoints included ACR50 and ACR70, as well as the proportion of patients achieving clinical remission (DAS28(CRP) <2.6) and low disease activity (DAS28(CRP = 3.2) at week 12. All endpoints versus placebo were met; in addition, filgotinib 200mg was non-inferior to adalimumab on disease activity. On ACR20, filgotinib 200mg was numerically higher than adalimumab.
In FINCH 3, two doses (100mg and 200mg) of filgotinib with MTX and one dose (200mg) of filgotinib monotherapy in MTX-naïve patients were compared to MTX. The primary endpoint was the proportion of patients who achieved ACR20 at week 24, and key secondary endpoints included ACR50, ACR70, and clinical remission. All endpoints in the filgotinib with MTX arms were met. Filgotinib 200mg just missed achieving superiority vs. MTX on ACR20, though showed nominal superiority on ACR50 and ACR70.
Filgotinib secured best-in-class safety status among the JAK inhibitors for RA, in our view. Although the compelling efficacy data was reassuring, the safety data is where filgotinib really stands out. For instance, aggregated data from FINCH 1, 2, and 3 (2,088 patients received filgotinib) include just one deep venous thrombosis/pulmonary embolism (DVT/PE) (vs. three in the placebo group). Rates of serious infections, herpes, death, malignancies, and major adverse cardiac events were also low compared to other JAKs. Notably, in the Phase IIb DARWIN 3 long-term extension trial (739 patients received filgotinib, 2,203 patient years), there were just 2 DVT/PEs, or 0.1 events per 100 patient-years (PYE), which compares very favorably to AbbVie’s JAK1 upadacitinib, which generated 0.5 PYE (3,300 patient years).
Bottom line: if approved, filgotinib should gain a strong position among the JAKs for RA. The FINCH and DARWIN data give us confidence in our 25% peak share assumption for filgotinib among the JAKs in RA, which would imply global sales of more than $1.5bn (un-risk adjusted). In all indications, we forecast peak sales of $4bn (un-risk adjusted).
Our valuation is based on our SOTP. The key risk to our thesis is disappointing clinical data readouts on important assets such as filgotinib (IBD, PsA, AS), '1690 (IPF), '1972 (OA knee), and MOR106 (AtD).
Patrick R. Trucchio, CFA
Analyst