RBC expects business development to unlock the balance sheet value of this pharmaceutical stock
- RBC Capital Markets views NV Galapagos GLPG Jyseleca’s first-quarter earnings are in line, as the story focuses on whether new leadership can unlock value from GLPG’s bountiful balance sheet.
- Jyseleca’s first-quarter sales reached €14.4 million, with total sales up 20% year-on-year to €136.3 million.
- The company held a cash balance of €4.64 billion, with forecast cash burn of €450-490 million for FY22.
- Business development primarily involves agreements or collaborations around early-stage assets rather than subsequent or large acquisitions and openness to indications outside of areas in which GLPG has historically worked.
- RBC perceives a collaborative tone towards the partner Gilead Sciences Inc. BROWNalthough he feels that the structure of the agreement between the parties may need some tweaking for optimal value creation.
- With the internal and external strategic pipeline review still evolving, analysts expect the shares to trade online.
- Analysts raised the price target to $62 from $60 for model updates.
- Price action: Shares of GLPG are down 5.38% at $56.45 during Monday’s last check trading session.
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