The phase IIa PELICAN trial from Galapagos NV testing the C2 corrector GLPG-2737 in homozygous F508del cystic fibrosis (CF) patients met the primary endpoint, with a statistically significant decrease from baseline in sweat chloride of 19.6 mmol/L compared to placebo (p=0.02). That was the good news, and the only upside from PELICAN for the Mechelen, Belgium-based biotech. Through day 28, the mean absolute change from baseline in percent predicted forced expiratory volume in 1 second (ppFEV1) was just 3.4 percent for the GLPG-2737 arm compared to placebo, missing statistical significance (p=0.08). The trend, while positive, fell below the threshold of 5 percent ppFEV1 improvement expected by most analysts and sufficiently disappointed partner Abbvie Inc. that the North Chicago-based pharma decided to pass on a triple combo try with potentiator GLPG-3067, C1 corrector GLPG-2222 and GLPG-2737.

Galapagos shares (NASDAQ:GLPG) dropped $3.63, or 3.8 percent, Friday to close at $92.18. Vertex Pharmaceuticals Inc., instead, was the clear beneficiary of the PELICAN data, with its shares (NASDAQ:VRTX) gaining $22.37, or 15.2 percent, to close at $169.96.

PELICAN was the first phase II trial to examine the performance of GLPG-2737 on top of Orkambi (lumacaftor/ivacaftor, Vertex) in individuals with CF. The study, conducted at multiple sites in Germany, enrolled 22 adult CF patients who were on stable treatment with Orkambi for at least 12 weeks prior to initial administration of the study drug and required to continue Orkambi for the duration of the trial.

Participants were randomized to GLPG-2737 (n=14) or placebo (n=8) over a four-week period, with up to three weeks of follow-up. Change from baseline in sweat chloride concentration compared to placebo at day 28 was assessed along with co-primary endpoints of safety and tolerability, according to Cortellis Clinical Trials Intelligence. In addition to ppFEV1, secondary endpoints included area under the curve from zero until eight hours, Cmax, Ctrough and change from baseline in the respiratory domain of the CF questionnaire-revised, or CFQ-R.

Galapagos said GLPG-2737 was well-tolerated by patients and that adverse events (AEs) were mild to moderate, with no apparent difference compared to placebo. No deaths, serious AEs or premature discontinuations due to AEs occurred, according to the company, which said additional details will be reported at an upcoming conference.

Last month, the company began to enroll individuals with CF in the phase Ib FALCON trial, which is testing the combination of potentiator GLPG-2451 and GLPG-2222 with or without GLPG-2737 and assessing higher exposures of GLPG-2737. Data from that trial, expected to enroll 24 individuals across 18 sites in Europe, are expected to report by the second quarter of 2020, according to Cortellis, though a first interim peek is expected in the third quarter.

Galapagos said it was "reviewing the future of its CF collaboration with Abbvie" following the pharma's decision to pass on the second triple combo effort and did not respond to BioWorld. Abbvie, likewise, was silent on any additional conversation with Galapagos beyond the triple combo pass.

'Filgotinib catalysts coming'

The global alliance between the companies to discover, develop and commercialize potentiator and combination therapies in CF dates back to 2013, when Abbvie paid $45 million up front for rights related to the alliance. Galapagos was eligible to receive another $360 million in development and regulatory milestone payments, plus sales milestones based on minimum annual thresholds and double-digit royalties. (See BioWorld Today, Sept. 25, 2013.)

The CF alliance was based on a 2012 deal between the companies for GLPG-0634 (filgotinib), the Galapagos JAK1 inhibitor for rheumatoid arthritis, initially worth $1.35 billion, plus royalties, to Galapagos, including an up-front payment of $150 million. (See BioWorld Today, March 1, 2012.)

But that friendship fizzled in 2015, when Abbvie declined to exercise its option to in-license the asset, instead electing to advance its own same-class candidate, ABT-494. The decision pummeled Galapagos shares but resulted in the return of full filgotinib rights to the company. (See BioWorld, Sept. 28, 2015.)

That was the second scorched partnership for GLP-0634, after Glaxosmithkline plc axed its development program for the asset, formed nearly a decade earlier. (See BioWorld Today, Aug. 11, 2014.)

But months after Abbvie bowed out, Gilead Sciences Inc. swooped in, laying down $725 million up front and promising up to $1.35 billion more in milestones, for rights to filgotinib. (See BioWorld Today, Dec. 18, 2015.)

Since then, filgotinib has pierced the development cycle like an arrow. Less than a year later, the phase III FINCH program was underway, FINCH 1 and FINCH 3 are evaluating filgotinib alone or in combination with methotrexate in adults with moderately to severely active rheumatoid arthritis (RA). FINCH 2 is assessing filgotinib compared to placebo in adults with active RA who did not respond to biologic disease-modifying antirheumatic drugs, or DMARDs. The trio of global trials has fully enrolled about 3,500 participants, with the first data expected to report by the fourth quarter. Gilead also has opened the multicenter, double-blind FINCH 4 long-term extension study.

Galapagos insisted back in 2015 that it had sniffed out Abbvie's RA rebuff before it came, and the same may be true in CF, but the performance of the candidates is starkly different. Following early bumps in the road, filgotinib has consistently met the expectations of investors, analysts and, most importantly, its current partner. In December, Gilead opted in on the co-promotion of filgotinib in eight European countries, where it will share net profits and losses equally with Galapagos. Outside of the territories, Galapagos is eligible for tiered royalties ranging from 20 percent to 30 percent on global net sales.

The PELICAN findings suggest a more modest future awaits GLPG-2737.

"Unfortunately, GLPG-2737's efficacy data fall short of the bar set by VX-659 and VX-445, and in fact even the standard that GLPG management had themselves indicated prior to the study results," Cowen and Co.'s Phil Nadeau wrote in a quick take, hailing Vertex as "a top large cap pick" in CF. "While cross-trial comparisons can be fraught with complications, the design of the phase II trials for GLPG-2737, VX-445 and VX-659 in F508del homozygous patients are similar enough that the comparison is informative."

Although the path forward for Galapagos in CF is "unclear," Nadeau added, "we continue to think GLPG is undervalued for filgotinib and its non-CF pipeline."

Others agreed.

"We are leaving our CF estimates in for now, but generally think that with inconclusive results to date, coupled with a strong competitor (Vertex), it is unlikely that GLPG can move the CF program forward into pivotal testing without a large biopharma partner," wrote BTIG analyst Dane Leone. "Untangling the partnership agreement could be difficult, but GLPG seems open to moving the program forward without Abbvie."

Jefferies Group LLC analyst Peter Welford saw a bit of upside in both programs for Galapagos.

"PELICAN provides important [proof of concept] for C2 corrector '2737 in CF," he wrote in a flash note, observing that the ppFEV1 lung function missed statistical significance and came in "on the lower end" of expectations "but is in the context of a low dose on top of Vertex's suboptimal Orkambi backbone. Taken with Abbvie's decision not to pursue the follow-on CF triple, with the collaboration under review, we see the stock trading down, but note longer term regaining full CF rights could be value accretive."

In the meantime, "filgotinib catalysts [are] coming," Welford said, including the FINCH-2 RA data in patients post-biologics and findings from the phase II TORTUGA study in ankylosing spondylitis. Results could "further confirm our view of the broad commercial potential," he said. If safety is clean, particularly regarding thrombotic events, "filgotinib could be best-in-class," he maintained, predicting peak sales of $6 billion and modeling a 65 percent probability of success.