Galapagos - Q2 2023
August 4, 2023
Transcript
Operator (participant)
Good day. Thank you for standing by. Welcome to the Galapagos H1 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1, 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sofie Van Gysel. Please go ahead.
Sofie Van Gysel (Manager of Investor Relations)
Thank you, operator, and welcome all to the audio webcast of Galapagos' H1.2023 results. I'm Sofie Van Gysel, Investor Relations, representing the reporting team at Galapagos. This recorded webcast is accessible via the Galapagos website homepage and will be available for download and replay later on today. 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 environments. 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 Paul Stoffels, CEO, and Thad Huston, CFO and COO. Paul will reflect on the operational highlights and provide an update on our pipeline. Thad will go over the commercial and financial results.
You will see a presentation on screen. We estimate that the prepared remarks will take about 25 minutes. Then we'll open it up to Q&A with Paul and Thad, joined by Michele Manto, Chief Commercial Officer, and Daniele D'Ambrosio, Head of Immunology. With that, I'll now turn over to Paul.
Paul Stoffels (CEO)
Thank you, Sofie, and thank you all for joining today's webcast. I'm very pleased to introduce to you Thad Huston. Thad joined Galapagos as our new CFO, COO, as of July 1. Over the years, Thad gained experience through several positions in finance, commercial, BD, and operations. He joined us from Kite Pharma, where he was Senior VP, Finance and Corporate Operations. Before, he was CFO of LivaNova, a listed medtech company. Thad was the CFO of J&J Medical Devices and CFO of Janssen R&D in earlier years. Thad spent 4 years in China as the President of Janssen China for Janssen. Thad and I have known each other for quite some time. I worked together with Thad at J&J, where he held a number of leadership positions for more than 25 years, and he was instrumental in transformational phase of Janssen Global R&D.
It goes without saying that his knowledge of R&D and cell therapy is a perfect fit for our company. We are very excited to have Thad on a board. On today's call, Thad will present the operational and financial section. Thad?
Thad Huston (CFO and COO)
Thanks for the introduction, Paul, and it's great to be here. I'm so excited to be joining forces with you again, Paul, and to work together with the Galapagos team to create value for our stakeholders.
Paul Stoffels (CEO)
Thank you, Thad, and happy to work again together and work with the teams. Here you see a slide summarizing our vision and mission statement. At Galapagos, we want to transform patients' outcome to life-changing science and innovation, aiming at bringing more years of life and quality of life. In order to achieve this, we go for groundbreaking science with an entrepreneurial spirit and a collaborative mindset. At the R&D Day, back in November 2022, we introduced the course that we have set out for the company in order to unlock significant value. On this slide, you see a snapshot of how we have been executing on the transformation of the company over the last 18 months. We continued to roll out a commercial organization in Europe for our first product, the Jyseleca.
In mid-2022, we announced the acquisition of CellPoint and AboundBio, propelling us into the space of next-generation CAR T therapeutics. We refocused the R&D organization on two therapeutic areas, immunology and oncology. Late last year and early this year, we presented encouraging initial safety and efficacy data on the two CD19 CAR-T trials in relapse/refractory NHL and CLL in point-of-care setting with our Cocoon platform. In parallel, we accelerated the discovery portfolio, both in small molecules and biologics. We also announced and completed the restructuring of our discovery activities. We transitioned the Romainville discovery activities to NovAliX in France. Let's move on to our pipeline as it stands today. As mentioned, the pipeline is focused on two therapeutic areas, immunology and oncology. I will come back on some of the programs in more detail below.
In summary, in immunology, unfortunately, the phase III trial in Crohn's disease did not bring us the results we had hoped for, but we have RA and UC on the market with a registrational trial in axSpA out of the gate now. We are progressing our TYK2 in dermatomyositis and SLE, and aim to start a patient study with our CD19 CAR-T GLPG5101 this year in severe refractory lupus. Meanwhile, we are working on multiple exciting preclinical targets that we are eager to push forward if we see a best-in-class potential. In oncology, we made good progress with the CD19 programs. I will come back on that later. We plan to start an BCMA program in multiple myeloma with GLPG5301 after the summer.
Meanwhile, with AboundBio as well as via external collaborations that we intend to close, we keep working on next generation CAR T and leverage our point of care Cocoon platform for those. Here, a reminder of our progress with TYK2 GLPG3667. We initiated the phase 2 trial in dermatomyositis, those are first patients with top line results expected in 2025. We also progressed 3667 in a lupus trial, we opened the first study centers that are in the process of screening patients, there the top line results are expected in 2026. Now let's move to oncology. Today, the approved CAR T products are manufactured through central production, which has several limitations. For example, product needs to be frozen and needs to be shipped.
As mentioned, with the acquisition of CellPoint last year, we pivoted into cell therapy with a point of care solution, striving for infusion of fresh cells, a fresh cell product with a 7-day vein to vein time in a decentralized setting, close to the patient. Here you see a picture of, that many of you've seen before, of the Cocoon point of care solution. We have exclusive license for hematological cancers with Lonza, for the Cocoon in the point of care setting, allowing us to invest in that platform and provide global access to hospitals. The teams are further optimizing the CAR T production process and automating the quality release testing, simplifying the point of care manufacturing on-site. Today, only a small portion of patients that are eligible for CAR T receive the treatment.
High unmet need cancer patient populations that are not helped today would benefit from CAR T therapy. These are patients with fast progressing cancers that can be helped by quick access and a seven-day vein to vein time, as well as patients with poor prognosis or with cancers for which no standardized treatment strategy is available today. As mentioned before, within the pool of patients that have been found eligible for CAR T treatment, we see that today only 10%-20% receive CAR T products due to barriers in terms of logistics, manufacturing, limiting access to the products. Our aim is to increase the addressable patient population, leveraging the point of care model. Let's move to the progress update on our CD19 CAR T trials. Here you see the design of the CD19 CAR T phase I/II trial in relapsed refractory NHL.
This is a basket trial recruiting patients with diffuse large B-cell lymphoma, follicular lymphoma, mantle cell lymphoma, and marginal zone lymphoma. Encouraging initial results have been communicated on seven patients with an overall response rate of 86% and a complete response rate in all of the 86% of the overall responders. Only mild ICANS and CRS were reported, and the median vein to vein time for administration was seven days. This quarter, we made an important progress in our phase 1 trial in NHL. We decided to recruit additional patients to generate larger datasets for specific subpopulations of patients with high unmet medical needs. This allows us to build a robust package in support for a pivotal study. We submitted an abstract to a future scientific conference and plan to provide updated safety and efficacy data on the NHL trial before the year ends.
The phase II expansion part of the NHL study is already open, and we are actively dosing the first patients in indolent lymphoma as well as in mantle cell lymphoma in those cohorts. We selected our first US-based point-of-care manufacturing site, and tech transfer activities have started. We are preparing an IND submission, which we'll plan to submit in the first half of 2024. Here you see the design of the CD19 CAR T phase one, two trial in relapse refractory CLL. Earlier this year, we announced encouraging initial results on seven patients with an overall response rate of 100% and a complete response rate of 86%. Advanced CLL, and especially patients with Richter's transformation, remain a high unmet medical need patient subgroup, and as announced earlier this year, we are encouraged by the initial safety and efficacy results.
No CRS above grade three and no ICANS were reported, and the mention, the, the median vein to vein time was 7 days for this initial patient population. The first half of the year, we made important progress in our CLL clinical trial, and we are now closing to complete the phase one recruitment with the last patient identified. In the first half of 2024, we aim to initiate a phase two dose expansion part of the study, and we established the recommended phase two s, dose based on the safety profile efficacy observed. As for our NHL study, we submitted an abstract to a future scientific conference and plan to provide updated safety and efficacy data on the CLL trial before the year ends. Over to our discovery portfolio.
Last year, we implemented a new operating model and R&D strategy with a goal to accelerate innovation and rebuild our product pipeline to achieve shorter time to patients. We build on strong therapeutic area expertise in immunology and added oncology, bringing in new top talent and capabilities. Additionally, to complement our internal discovery, we are combining internal and external innovation. We now apply best-in-class target approach, going for transformational products in high unmet medical needs. The research teams have performed an internal exercise and identified and selected a set of targets and indications in immunology and oncology. We can now build on both our expertise in small molecules and our innovative biology discovery platforms with the team of AboundBio.
For immunology, on the, on the cell therapy front, we have nominated a preclinical candidate that is a fully human CD19 CAR-T, targeting a unique epitope and with differentiated binding kinetics. The small molecule teams identified over five targets across several immune indications that fit with our renewed approach and that are currently in different stages of preclinical development, sorry. For oncology, the team of Abound identified over five targets across hematology and solid cancer indications, and multiple differentiated armoring strategies have been set forward alongside a multi-targeting approach. We certainly see an opportunity to leverage our small molecule expertise in oncology, which ties in with our aim to deliver precision medicine. A review of the landscape has been done, and the teams have identified five targets across cancer types.
Our aim is, again, to nominate the first clinical candidate from the discovery, discovery portfolio in 2024. This concludes my review of R&D with the strategic change we made over the last 12 months. Now I hand it over to Thad. Thad?
Thad Huston (CFO and COO)
Thank you, Paul. I will provide an operational financial update for our first half results, then I'll open the call for Q&A. We had another soft quarter in Q2 for Jyseleca, with the sales coming in at EUR 28 million, or EUR 54 million for the first half of 2023. We see a number of headwinds for Jyseleca with the slowdown of the JAK class, reflecting the impact of the Article 20 outcome and label change, increased competition in UC, the effect of the Vemis in Crohn's disease as a third indication. We are evaluating various strategic options for Jyseleca, more information will follow later this year.
As a result of the slower growth in sales for the first half of 2023, we have lowered our 2023 net sales guidance to EUR 100 million-EUR 120 million for the year. A few words on our cash position. Our cash and cash equivalents reached EUR 3.9 billion at the end of Q2 2023. Our operational cash burn for the first half of 2023 reached EUR 224 million. Although the second quarter burn is higher compared to Q1, we are confirming our full-year cash burn range of EUR 380 million-EUR 420 million. The higher burn in Q2 is partly due to a prepayment for future services from NovAliX as part of the collaboration agreement with NovAliX in Q1.
For our cash balance at the end of the year, we anticipated positive contribution from interest income offsetting the higher burn rate in Q2, and we expect approximately 3% return on our outstanding cash balance. We continue to be disciplined and remain focused on managing our resources effectively while we continue to pursue opportunities to drive value and growth. Going to our P&L, we reported a net profit of EUR 28 million in the first half of 2023, in part driven by higher revenue recognition for filgotinib. Collaboration revenues increased mainly due to revenue recognition related to the collaboration agreement with Gilead for the filgotinib development, amounting to EUR 155 million in the first six months of 2023, compared to EUR 115 million in the same period last year.
This increase is primarily driven by a positive catch-up of revenue, explained by a decrease in the total estimated remaining cost to complete the filgotinib development. This was a consequence of the top-line results from the phase III DIVERSITY trial, filgotinib in Crohn's disease, and our decision not to submit a marketing authorization application in Europe. The revenue recognition for the platform is stable quarter-over-quarter at EUR 115 million year to date. Jyseleca sales were EUR 54 million in the first half of 2023, and we received a sales milestone of EUR 1 million and EUR 3 million in royalties for Jyseleca year to date.
We also saw a reduction in total operating expenses of EUR 50 million, or down 13% versus prior year, due to lower R&D expense in Q2, primarily due to a prior year impairment and a decrease in subcontracting costs due to portfolio rationalization, as well as lower sales and marketing expenses in Q2. We also received higher interest income in the first half of 2023. Before we move on to the outlook for 2023, a small word on our BD approach. I want to highlight that BD is key to our vision to create shareholder value. M&A is essential to our success, and we have a clear M&A roadmap, and we will deploy capital to broaden and strengthen our portfolio. Let's look ahead with the outlook for the remainder of 2023.
It's important to note that our next progress update on GLPG5101 and GLPG5102 in NHL and CLL will be in Q4 2023. We hope to confirm the encouraging safety and efficacy data on a larger patient pool and present more durability data to further validate our point of care approach with the Cocoon platform. In oncology, we aim to make regulatory progress with an IND submission for a CD19 in the first half of 2024. The CTA for our BCMA candidate GLPG5301 has been approved, and we aim to initiate the trial this year. We also submitted the CTA for our CD19 GLPG5101 in refractory SLE. We also plan several trial initiations. We recently dosed the first patient in axSpA with filgotinib, and the first patient in dermatomyositis with GLPG3667.
The lupus trial with GLPG3667 has been initiated, and we hope to dose the first patient soon. We also aim to kick off another trial in severe lupus patients with the CD19 CAR-T this year. We'll also execute on the NHL and CLL expansion cohorts with the CD19 programs and start the phase 1B multiple myeloma with BCMA CAR-T GLPG5301. We continue to execute on our company's transformation, we are focused on accelerating our early-stage pipeline, building on our renewed discovery portfolio. We continue to broaden our late-stage pipeline, pushing forward our internal programs and scouting for new business development opportunities. We aim to execute on our plans in oncology, progressing our CAR-T programs, and expanding our footprint with our Cocoon platform.
Following the changing market dynamics and revised sales guidance for Jyseleca, we are evaluating strategic options for Jyseleca, and we commit to stay disciplined in our use of cash to focus our investments to maximize value. Thank you all for your support and your interest in Galapagos. Now let's open the line up for Q&A.
Sofie Van Gysel (Manager of Investor Relations)
Thanks so much, Paul and Thad. That concludes the presentation portion of today's audio conference call. I would now like to ask the operator to open up the line for Q&A.
Operator (participant)
Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We will now take the first question from the line of Brian Abrahams from RBC. Please go ahead.
Joe Coletti (Director of Client and Marketing Strategy)
Hi, this is Joe in for Brian. Thank you for taking our question. Can you elaborate more on the strategic options you're considering for Jyseleca? And I, I guess you mentioned that you'll be looking at subgroups for your CD19 CAR-Ts. Can you also talk a little more about these subgroup analyses, please? Thank you.
Thad Huston (CFO and COO)
Yes, that's... Why don't you take the first one? Yeah. I'll, I'll follow up. Yeah. We are adapting, obviously, to this changing market dynamics in the environment and obviously taking our responsibility as a company to ensure that we're, we're creating long-term value. We are gonna do this strategic evaluation of various scenarios and options for Jyseleca as quickly as possible. We anticipate coming with an outcome of that assessment in the coming months, and we can provide an update at that point in time. We can't provide any further details at, at this call.
Yeah, for the subgroups, we had, as I said, indicated in the call, several, several indications within the NHL, within the NHL, and we are missing a few patients in some of the subgroups to have a complete response, comparing to the competitors as well as for submission with the FDA, with the regulatory authorities. That's why we have continued to recruit until we have in each of the subgroups, the patients we need. That will happen in the next few weeks to 2 months or so, and we'll have an update on that before the year end.
Joe Coletti (Director of Client and Marketing Strategy)
Got it. That was very helpful. Thank you. If I could ask a follow-up on IND filing for the first half of next year for CAR T cells, can you also comment on the level of engagement with the FDA ahead of the filing? So, if you could just talk about some of the requirements for the filing. Can you share with us your latest strategy there, any specific regions of focus and how you're thinking about prepping the potential clinical sites ahead of the filing? Thank you.
Thad Huston (CFO and COO)
Yeah, the most important critical step for us is to have a clinical trial production center ready, which has to be submitted with the IND. There, we have done an extensive evaluation of centers, the first tech transfer to the U.S. site is active, and that is determining the timing of our submission for the IND. Before that, we had a very good engagement in a pre-IND meeting with the FDA on all the aspects we need to start clinical trial. What I just told you was the having the first center validated on U.S. ground, on U.S. soil, is the critical step, and that's why we indicate that we'll start our, we'll submit our IND first half of next year.
Since the first one is ongoing, I think that will be quite optimistic. We, in, in the course of, of the earlier months in the next year. That's where we are. Obviously, we are trying to focus closer by home at the moment, so we started at the East Coast.
Paul Stoffels (CEO)
... and we'll, we'll reach out later to all the parts of the US, but that's where we start our first scan of, of the, of potential centers. As we speak, that's ongoing. Multiple centers are in discussion and contract discussions.
Thad Huston (CFO and COO)
Mm-hmm. Great. Thank you so much.
Operator (participant)
Thank you. We would like to kindly ask participants to ask one question per person. We will now take the next question from the line of Emily Field from Barclays. Please go ahead.
Emily Field (Director and Lead Analyst of European Pharmaceuticals)
Hi. Thanks for taking my questions. Sorry, I, I wasn't listening if you said ask 1 or 2, but, you know, just on the Jyseleca point, I was just wondering if while you're going through this review, will you be making any changes to the commercial promotion of the product? I saw that you're initiating the axSpA phase 3 study, so any changes on the R&D side while this review is ongoing or anything operational that would change? If I could just slip in 1 more, just any initial color you could provide on the small molecule discovery program in oncology, would this maybe move into solid tumors, or would you expect this to be in hemonc? Any color you can provide would be great. Thank you.
Thad Huston (CFO and COO)
Regarding Jyseleca and the promotion, you know, of course, we are gonna be evaluating, and doing a deep dive analysis, a very thoughtful analysis, market by market, and understanding kind of, you know, how we can maximize the, the potential value of the asset. Also, looking at just the, the resources and, and obviously supporting, you know, the, the current promotion of the product, and just seeing how we can further optimize that. We'll come back with more details as after we do this assessment.
Paul Stoffels (CEO)
Yeah, your comment on axSpA, it will be going until we conclude on the options, what we do going forward. On oncology, we both are working in solid and heme oncology, immunological oncology. We'll use one of the next meetings to give you further detail on the different targets, the different fields, and we'll bring in a head of research for having that discussion or having that presentation. Wait for an update there for one of the next meetings where we'll come back.
Emily Field (Director and Lead Analyst of European Pharmaceuticals)
Thank you.
Thad Huston (CFO and COO)
Thank you.
Operator (participant)
Thank you. We will now take the next question. From the line of Jason Gerberry from Bank of America. Please go ahead.
Jason Gerberry (Managing Director and Equity Research Analyst of Pharma and Biotech)
Hi, guys, thank you for taking my question. Mine was just as you look to move the BCMA CAR-T program into the clinic, just curious, sort of as you've evolved with the CD19 program and optimized the manufacturing process, how portable is that to new antigen-directed BCMAs, or I guess, CAR-Ts, in terms of the process, are there meaningful changes, or is there a lot that you can leverage as you move into new CAR-T programs? Thanks.
Paul Stoffels (CEO)
Yeah, that's a very good question, and we can leverage the entire packaging, entire system. We have done the validation of the BCMA on volunteer sample, on volunteer blood, which is done. Now we are starting the initiation of the study to do on patients, on patient blood. It is like, it's like very transferable and so far with good validation for the BCMA. Of course, then you work on disease material in the next phase. We'll be able to confirm that in our next report. We see no issues on transferring the process. It's a very simple process, automated process, where, of course, the vector is different. The cell growth has to be studied. So far so good.
We see no issues in scaling up the BCMA. Of course, what we did with CD19, we observed in the clinical trials a very good efficacy and safety profile because of the way we produce cells and the seven days vein to vein, fresh vein to vein. Very difficult to dissect what is the cause of the good efficacy, good safety, but we observe that it works, and that's now the next phase for BCMA. We'll do the same. We do a study, evaluate, and we'll look at the results before making commitments to go forward with the full development.
Jason Gerberry (Managing Director and Equity Research Analyst of Pharma and Biotech)
Okay. Okay. Thank you.
Thad Huston (CFO and COO)
Thank you.
Operator (participant)
Thank you. We will now take the next question. From the line of Mike Ulz from Morgan Stanley. Please go ahead.
Mike Ulz (Executive Director of Biotechnology Equity Research)
Hey, guys. Thanks for taking the question. Maybe just a quick follow-up on Jyseleca. Just, you know, given you're starting the strategic review, can you give us a sense of, you know, when you might be able to provide some final decisions there? Thanks.
Thad Huston (CFO and COO)
Yeah. No, thanks, Mike. We, we are, we're actively working on this. The process is ongoing. I think it's gonna, you know, we'll have an outcome of that assessment in the, in the coming months, and we can provide an update then.
Mike Ulz (Executive Director of Biotechnology Equity Research)
Great.
Thad Huston (CFO and COO)
I'm obviously new on board and here just over a month. Of course, we're, you know, all working very hard to do a very thoughtful assessment.
Paul Stoffels (CEO)
Yeah, that did a, did a deep dive on the whole organization, commercial organization, the operations, in last month and now ready to engage in next steps. It will take some time, and like Thad is saying, next few months, a couple of months, we'll we'll bring clarity and and an outcome. Mm-hmm. Mm.... Thank you.
Operator (participant)
Thank you. We will now take the next question. From the line of Brian Balchin from Jefferies, please go ahead.
Brian Balchin (Equity Analyst)
Thank you. 23 guide cut for Jyseleca, but what about the peak sales target of EUR 400 million? I don't think that's baked in label restriction just yet, so should we be expecting further cuts there?
Thad Huston (CFO and COO)
Yeah.
Brian Balchin (Equity Analyst)
Yep. Sorry.
Thad Huston (CFO and COO)
Go ahead, Brian. I'm sorry to interrupt.
Brian Balchin (Equity Analyst)
Sorry, I was, yeah, it's fine. I was just gonna squeeze in a cheeky second one. How, how confident are you in then being able to get CAR-T to the market by 2026, 2027, as previously stated, given pushed timelines?
Thad Huston (CFO and COO)
Yeah, I'll take the first part on the Jyseleca. I mean, obviously, you know, the higher sales number, $400 million, is probably, you know, given kind of where we are with sales trends, probably, you know, not, not, not likely. We want to do also a thorough assessment of the sales potential and, and revise our, our models and forecasts, and then obviously come back when we do this assessment and look at the overall business case.
Paul Stoffels (CEO)
Yeah, Brian, on, on the timing of, of the, of the CAR-T to market, it will depend on how we choose our, our indications, as we indicate -- as we have shown in the first seven patients and then the patients within that on risk of transformation. We see, like, a very strong effect and a very high medical need, and we are deciding as we go, already based on, on the, on the basket study and then the broader CLL activity, on where should we focus to really address a very high unmet medical needs in order to get this accelerated recruitment, but also accelerated development path.
For now, while we set the target around 27, it's, it's, it's 26, late 26, 27, that still would be possible if we get breakthrough designation and have a very high unmet medical need to be addressed. To be decided when we move for the pivotal study and discussions with the regulatory authority. The demand is very, very high. What we see in our clinical trial, especially in these indications, people flock to the clinical trials to get to get in, especially in the high medical need, unmet medical needs. Hopefully we can, with broadening the centers in the world, including in the U.S., recruit fast and have a very strong observation. That's, that's what we hope.
As we see in the phase 1, 2 study, if we see the same observation in the pivotal study, we can still reach this, this timeframe. Yeah. Thank you for the question.
Brian Balchin (Equity Analyst)
Thank you.
Operator (participant)
Thank you. We will now take the next question. From the line of Xian Deng from UBS. Please go ahead.
Xian Deng (Director and Equity Research of European Pharmaceuticals)
Hi, this is Xian from UBS. Thank you for taking my question. Maybe just for 1 question for Thad, please. Now, this is your first appearance as the new, as the new CFO, so just wondering, if you could share, some of your thoughts on the first impression of Galapagos. What's your overall strategy here? I mean, of course, you have Jyseleca commercialization, you have internal R&D, and you have, of course, M&A. So, so just wondering, you know, what, what do you like the most? Where do you want to change? Will you accelerate M&A? Yeah, any thoughts, that'll be great. Thank you.
Thad Huston (CFO and COO)
Oh, thank you so much for your question. Yeah, I'm just incredibly excited and honored to be part of this team. I think obviously working together with Paul again, we've been through transformations in the past, and certainly we think that there's a tremendous... I believe there's a tremendous opportunity for us to really drive an innovative approach to, you know, bringing, you know, life-saving therapies to patients in, in, in Galapagos. I think we're doing some things that the other players are not doing, that I think is really exciting. Of course, I have CAR-T experience and oncology experience, I think can also be beneficial in terms of what could be done with point of care.
I also am just so excited to think about what, what are the possibilities for us to really, allocate resources, to do business development deals, to, to further innovate and to make a difference for patients. It's not easy, of course. I mean, there's a lot to do, but that's also the, the opportunity that we have. It's not also lost on me that, you know, our, our, where our valuations are. I just see that there's a tremendous opportunity to change that.
Xian Deng (Director and Equity Research of European Pharmaceuticals)
Thank you.
Thad Huston (CFO and COO)
Thank you.
Operator (participant)
Thank you. We will now take the next question. From the line of Phil Nadeau from TD Cowen, please go ahead.
Phil Nadeau (Managing Director and Senior Research Analyst of Biotechnology)
Good morning. Thanks for taking our question. We wanted to ask about the, the program of moving your CD19 into autoimmune diseases, particularly, lupus. Given the size of the market, those programs have created a lot of excitement, for some other companies. Can you talk about the timeline of your investigations in, in SLE? When could that trial start? When could we see data? Then maybe more generally, what's the value proposition for point of care in a more slow-moving disease like lupus? Thank you.
Paul Stoffels (CEO)
Yeah, the, the, the status is that we submitted in Europe a clinical trial application, we'll wait for that outcome and the discussion, we hope and trust that we can start the study later this year. What is attractive as a complement to our CAR T network is that, of course, the hematologist, they do the, they do the- the, the hematologist is the, is the physician who treats the patient, in this intervention, the hematologist is doing the, the, the, the, the application. That's where this goes very well together with the point of care in centers where we have, in the centers where we have today, our point of care, CAR T, they're already asking where they can, they can participate. They see the benefit of the, the, the manufacturing on-site.
There also, again, yes, will we see benefit from a fresh approach? The current approach with Erlangen use was a fresh cell approach done, produced locally. What, what are we going to see from the approach we are going to do in the clinical trial center? I think there's the benefit of the complementarity on the sites where this is done, as well as the approach we have taken and the center who has on the first patient has taken to their approach on treating patients. Will we see better results or different results? Of course, to be determined, but I think before the year ends, we'll be significantly on recruiting in this trial.
Phil Nadeau (Managing Director and Senior Research Analyst of Biotechnology)
Perfect. Thank you.
Operator (participant)
Thank you. One moment, please. We will now take the next question. From the line of Dane Leone from Raymond James. Please go ahead.
Dane Leone (Managing Director)
Thank you for taking the questions, you know, kind of a consistent question for me that I hear from a lot of investors. You still have a sizable cash balance to draw down on for more meaningful external asset acquisitions. On kinda counterbalancing that, you, you still are retaining quite a high R&D burn rate, even with Jyseleca activities maybe winding down a bit or continuing to wind down a bit. How are you thinking about balancing that out going forward and, and perhaps even into 2024, if you could entertain that far into the future? Are we still expecting to do something more meaningful on the business development front, perhaps away from cell therapy and, and more into traditional I&I?
What we kinda see on the table from your team today is probably gonna be the core area to build out around from, and we should expect maybe more bolt-on acquisitions to supplement, you know, the activities that are already ongoing internally. What can we get that cash burn down to, you know, now that we are winding these larger I&I studies down, with filgotinib, while ramping up maybe more targeted studies with the cell therapy platform? Thank you.
Paul Stoffels (CEO)
Yeah, first, let me start, and that will follow up. Is one, first, we absolutely just don't focus-- we do not focus only on CAR-T. The reason we stepped into CAR-T, we were able to bring two teams together with Abound and CellPoint, which accelerated us in oncology, and we are there now since 13 months. 13 months ago, Galapagos had no oncology. We were able, with two teams, bringing them in, the teams, the capabilities and the products to, to, to where we are today. It allows us to have a fast time to market in the next, 4-5 years, and that was the main reason to, to enter oncology via the big door and go fast in transformational therapies.
In parallel, I can tell you our BD teams have been evaluating many options, which are not in the CAR T space, complementary with some of the capabilities we have in the company, but also considering other fields. But we have a very high bar for bringing products in. Either they come as a product with a strong team, and that typically would be an acquisition, or they come in as a strong product. The product is the core here, where you have to have, address a differentiated, a high unmet medical need, and where we can reach the market with a differentiated product. That is the definition for us to do a good BD. Then secondly, it has to be a global deal, yeah.
We could consider or we can consider local deals in Europe, but that's not value-creating enough for the money we spent. We always will try to go global deals, highly differentiated products in a very high unmet medical needs. That are the criteria, and we hold all our BD discussions we do against that. That's how we tackle BD, and I hope we can bring significant deals in the next 18 months, working on that.
Thad Huston (CFO and COO)
Yeah, and addressing the cash burn, I mean, it's clear that actions have been taken, this past year to reduce the cash burn from even the prior year operationally. We're gonna continue to be very disciplined in focusing on managing our resources effectively to really continue to drive the, you know, long-term value and, and also growth and finding those opportunities. Also, as Paul mentioned, the, the deals are really gonna fit our M&A strategy. At the same time, I think that we are seeing some benefits in interest rates that also help our interest income, as well as, you know, we're gonna make good portfolio decisions and allocate resources appropriately.
Operator (participant)
Thank you. As a reminder, if you wish to ask a question, please press star 11 on your telephone. Wait for your name to be announced. That's star 11, if you wish to ask a question. We will now take our next question from the line of Sebastiaan van der Schoot from Van Lanschot Kempen. Please go ahead.
Sebastiaan van der Schoot (VP of Equity Research)
Great. Thank you. Hi, team. Thank you for taking my question. I just wanted to ask regarding the delay in the IND filing towards H1 2024, can you maybe go into the factors that you are still discussing, why, the IND has not come off the ground? Also quickly talk about the different CD19 CARs, and also one specifically for autoimmune disease. Can you maybe highlight what the differences are between autoimmune disease and oncology that would require a different CD19 CAR? Thank you.
Paul Stoffels (CEO)
Yeah, first on the IND, we had a pre-IND discussion, and so to submit the IND, the FDA required to have a site validated on US soil. That takes some time as we need to transfer technology, first, install the technology, transfer the technology, validate. That will take us up till the end of the year. At that moment, we can submit an IND, when that validation is done, and that is the basic reason why, why, getting to a contract, getting to a centers, on, and have that done, took maybe somewhat longer than expected, but basically the IND requirement was the most important one, that it brings it over the year-end. The difference on the CD19 CAR, there is no clear insight what type of CD19 CAR will work best.
Yeah, the Erlangen used the Miltenyi CAR T, which is very well known. We are using a different CAR T for ours, which one developer cells, one we licensed in. We'll use one of our two CAR Ts to go into the SRE, but it's not clear which ones will work. They will have to experimentally be proven that they work. It's very difficult to predict what safety and efficacy will be for the different products. That's, that's all I can say at this moment on that.
Sebastiaan van der Schoot (VP of Equity Research)
Okay. Okay, got it. Thank you. Maybe then I can squeeze in a last question, and I'm also the last in queue. You mentioned for non-Hodgkin lymphoma, that you are already in dose expansion. Does it also mean that we will get results from the dose expansion by year-end, and that you can maybe prepare for a study in 2024 for phase II in non-Hodgkin lymphoma?
Paul Stoffels (CEO)
It, it, the non-Hodgkin lymphoma is divided into different buckets, as I described it in my talk. Two of them are in, in, in, expansion. We'll present all of the data later this year, but we'll make a decision based on the highest med- medical need and the most urgent clinical, clinical benefit we can deliver as the first indication we will bring forward. That's where the diffuse large B-cell is, is still one which we have to recruit additional patients in, and that we'll, we'll do in the next. Yeah. You will see all the data we'll have in, in that abstract, which will, is submitted, and, and available, and will become available hopefully at an upcoming call.
Sebastiaan van der Schoot (VP of Equity Research)
Very clear. Thank you, Paul.
Paul Stoffels (CEO)
Thank you.
Operator (participant)
Thank you. Once again, as a reminder, please press star, one and one if you wish to ask a question. We will now take the next question from Jacob Mekhael from KBC Securities. Please go ahead.
Jacob Mekhael (Equity Research Analyst of Life Sciences)
Hi there, and thanks for taking my question. I have 1 just regarding the ATALANTA-1 trial. You mentioned that you will include more patients of certain subpopulations. Does that mean that the plan trial size of 4 trial patients will now be larger? And if so, how, how many patients have been recruited so far, and how many additional patients do you plan to recruit? And I have a follow-up later on as well, on the IND that will be filed, in the US for the CD19 CAR-T. Do you also plan to file an, an IND for the BCMA CAR-T as well? What is the expected timeline for that?
Paul Stoffels (CEO)
Okay. I, I, I have very difficult to understand the first part of your question. You should repeat that. On the IND for the BCMA, yes, we'll file that. At the moment, we have a dose-finding study done in Europe, so that will take some time, and that's not for this year, of course. That will take another several months before that will be done. The first part of the question I, I missed.
Jacob Mekhael (Equity Research Analyst of Life Sciences)
Okay. Yeah, sure. Just the plan file size for the ATALANTA-1 trial is 45 patients. I'm just curious if that's still the same or is that going to be increased?
Paul Stoffels (CEO)
Yeah, it is in that range. It's the, the dose finding is was indicated as about 15 patients, and then the expansion dose was about 30. The total size of the population is about 45. It depends a little bit how many patients will be in which of the, the subgroups in the, in the study. We won't stop recruiting patients until we close this study, so we'll we will be around that number at the end of the year.
Jacob Mekhael (Equity Research Analyst of Life Sciences)
Okay, thank you. I just have 1 more question, actually. Also, on the IND for the U.S., will those trials be an extension of the phase 2 trials, or do you expect that in the U.S., you will go into a larger trial there that builds on the data set generated in Europe?
Paul Stoffels (CEO)
It's a lot of. We want to use the data we have in Europe, generated in Europe, to start a pivotal study in the US and Europe. In parallel, we'll submit an IND as well as go to the European authorities to do a clinical trial in Europe in order to get to a pivotal studies and get to the outcome.
Jacob Mekhael (Equity Research Analyst of Life Sciences)
I see. All clear. Thank you.
Operator (participant)
Thank you. There are no further questions at this time. I would like to hand back over to the speakers for final remarks.
Sofie Van Gysel (Manager of Investor Relations)
Thank you very much, operator. That concludes today's earnings call. Please feel free to reach out to the IR team if you still have questions. Our next financial results call will be our Q3 2022 results on November third. Thank you all for participating, and have a great rest of your day.
Paul Stoffels (CEO)
Thank you all for participating. Have a good day.
Operator (participant)
That does conclude our conference for today. Thank you for participating. You may now disconnect.