Major Investor Says Galapagos Is 'Undervalued,' Plans To Push On Company's 'Performance' And 'Strategic Opportunities'

Galapagos NV GLPG stock is trading higher on Monday as Ecor1 Capital reported a 9.9% stake in the European biotech firm in a 13D filing.

EcoR1 Capital is now planning to talk to the Belgian biotech about its performance, business, operations, strategic opportunities, and governance, including Board composition.

By June 2023, the biotech-focused investment fund had accumulated a 9.87% stake in the company.

Also Read: Galapagos Downgraded, Pharma Firm Faces Uphill Battle With Slow Pipeline Progress: Analyst.

The SEC filing provides details of how EcoR1 views Galapagos and how it plans to use its stake to try to shape the direction of the biotech, with the investor stating that the company’s shares are “deeply undervalued and represent an attractive investment opportunity.”

Galapagos’ share price has fallen more than 25% over the past year, but the stock has performed even worse over a longer period.

Galapagos, once seen as one of Europe’s leading drug innovators, has struggled in recent years due to R&D failures, regulatory challenges, and ineffective partnerships, Stat News noted.

In 2022, Paul Stoffels, a renowned drug developer and former Johnson & Johnson executive, returned from a brief retirement to become the company’s CEO.

Stoffels vowed to revamp Galapagos’ R&D, focusing on CAR-T cancer therapies, but the report adds that progress has been sluggish and underwhelming in Wall Street’s eyes.

According to data from Benzinga Pro, the company’s enterprise value is negative $2.1 billion, indicating that its cash reserves outweigh the value of its assets, including its drug pipeline.

Most recently, the FDA cleared Galapagos’ Investigational New Drug application for ATALANTA-1 Phase 1/2 multicenter study evaluating the feasibility, safety, and efficacy of GLPG5101 in patients with relapsed/refractory non-Hodgkin lymphoma.

Price Action: GLPG stock is up 10.4% at $28.59 at last check Monday.

Illustration of Phrama lab worker created with MidJourney.

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