A. History and development of the Company Our legal and commercial name is Galapagos NV. We are a limited liability company incorporated in the form of a “naamloze vennootschap” / “société anonyme” under the laws of Belgium. We were incorporated in Belgium on June 30, 1999 for an unlimited duration. We are registered with the Register of Legal Entities (Antwerp, division Mechelen) under the enterprise number 0466.460.429. Our principal executive and registered offices are located at Generaal De Wittelaan L11 A3, 2800 Mechelen, Belgium and our telephone number is +32 15 342 900. Our agent for service of process in the United States is C T Corporation System, located at 28 Liberty Street, New York, New York, 10005, United States of America. Our fiscal year ends December 31. We also maintain a corporate website at www.glpg.com. Information contained on, or that can be accessed through, our website does not constitute a part of this annual report. We have included our website address in this annual report as an inactive textual reference only. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants, such as us, that file electronically with the SEC. We are currently operating as a single operating segment. On June 21, 2022, we acquired all outstanding shares of CellPoint B.V., or CellPoint, a Dutch company dedicated to developing CAR-T therapies at the point-of-care, and AboundBio, Inc., or AboundBio, a privately held U.S. biotechnology company. Each was acquired through an all-cash transaction. CellPoint was acquired for an upfront payment of €125 million, with milestone payments of up to €100 million. AboundBio was acquired for a payment of $14 million. At the time of these acquisitions, we believed we reinforced our portfolio through the acquisitions by gaining access to a new therapeutic area, oncology, as well as a decentralized and automated cell therapy supply model and a fully human antibody-based therapeutics platform. On October 30, 2023, we signed a letter of intent contemplating a transfer of the Jyseleca® business to Alfasigma S.p.A., or Alfasigma. The final agreement was signed on December 30, 2023 and the transaction was closed on January 31, 2024. The transfer included the European Union and UK Marketing Authorizations, and the commercial, medical affairs and development activities for Jyseleca®. In connection with the completion of the transaction, approximately 400 of our positions in 14 European countries transferred to Alfasigma to support business continuity and ongoing patient access for the Jyseleca® business. We received a €50 million upfront payment in connection with the transfer, and expect to receive potential milestone payments totaling €120 million and mid-single to mid-double-digit earn-outs on European sales. We contributed €15 million in 2024 and contributed another €25 million in 2025 to Alfasigma for Jyseleca® related development activities. The European Commission decision approving the marketing authorization transfer for Jyseleca® from us to Alfasigma was adopted on August 22, 2024; the Medicines and Healthcare products Regulatory Agency (MHRA) decision approving the marketing authorization transfer for Jyseleca® from us to Alfasigma S.p.A was received on September 9, 2024 and entered into effect on September 30, 2024. The transfer of our Jyseleca® business has been determined to meet the criteria to be classified as held for sale and discontinued operations in our financial statements for the years ended December 31, 2023, 2024 and 2025. We also presented all income statement items fully related to the Jyseleca® business transferred on a separate line “Net profit/loss (-) from discontinued operations, net of tax” in our consolidated income statements. ​ 75 Table of Contents In January 2025, we announced a plan to separate into two publicly traded entities, allocating the majority of available cash to a newly established company focused on pipeline development through strategic transactions, as well as our plans to discontinue our small molecule discovery programs and seek potential partners to take over our small molecules assets. As the year progressed, evolving market conditions and regulatory feedback led the Board of Directors to reassess this approach. In May 2025, a new CEO was appointed to lead a strategic alternatives process for the cell therapy activities, assessing strategic alternatives, including a potential divestiture. After a thorough evaluation of all available options and a comprehensive sale process for the cell therapy business, the Board announced in October 2025 its intention to wind down the cell therapy activities, subject to the conclusion of works council consultations in Belgium and the Netherlands. Following completion of these consultations, the Board of Directors decided in January 2026 to initiate the wind-down of the cell therapy activities. As a result of the January 2026 Board decisions, all cell therapy activities will be wound down and approximately 365 employees across Europe, the U.S. and China will be impacted, and the sites in Leiden (the Netherlands), Basel (Switzerland), Princeton and Pittsburgh (U.S.), and Shanghai (China) will be closed. Our remaining organization will be repositioned for long-term growth through transformational business development, and will keep a dedicated presence at the headquarters in Mechelen, Belgium. We will continue to manage the non-cell therapy activities. Our actual capital expenditures for the years ended December 31, 2023, 2024, and 2025 amounted to €19.3 million, €82.1 million, and €13.9 million respectively. These capital expenditures primarily consisted of land, buildings, laboratory equipment, leasehold improvements, and intangible assets. We anticipate our capital expenditure in 2026 to be financed from our cash reserves. For more information on our capital expenditures, see the section of this annual report titled “Item 5.B.—Liquidity and capital resources—capital expenditures.” B. Business Overview We are a biotechnology company built to bring meaningful medicines to patients with serious diseases. We combine world-class deal making expertise with capital to identify, acquire, and advance promising opportunities that drive value for patients and shareholders. Applying a modality-agnostic asset selection approach and operational flexibility, we prioritize oncology and immunology & inflammation (“I&I”) programs with clear clinical proof-of-concept in emerging areas. As of December 31, 2025, our clinical pipeline included 1) GLPG3667, a TYK2 inhibitor currently in Phase 2 clinical trial in DM and SLE; 2) GLPG5101, a CD19 CAR-T product candidate decentralized manufactured, currently in Phase 1/2 in relapsed/refractory non-hodgkin lymphoma (“R/R NHL”), and 3) GLPG5301, a B-cell maturation antigen (“BCMA”) CAR-T product candidate decentralized manufactured, currently in Phase 1 in relapsed/refractory multiple myeloma (“R/R MM”). GLPG5101 and GLPG5301 are both cell therapy products, while GLPG3667 is a non-cell therapy product. In both our oncology and I&I portfolios, we had multiple product candidates in early research stages as of December 2025. ​ Our total net revenues amounted to €1,112.2 million for the year ended December 31, 2025, including the release in revenues of the remaining deferred income (contract liability) of €1,069.0 million related to the OLCA with Gilead. We refer to the notes 6 and 7 of our consolidated financial statements for more details on revenue breakdown and geographical information. ​ ​ 76 Table of Contents On October 21, 2025, we announced our intention to wind down our cell therapy activities and to pursue new transformational business development transactions using our available cash resources. Specifically, as part of our strategic transformation, we had appointed new members to our senior management and Board of Directors with experience and expertise in business development, and engaged in a review of strategic alternatives for our cell therapy business, including a potential divestiture. In October 2025, after a thorough evaluation of all available options, we announced our intention to wind down our cell therapy activities, which was subject to the conclusion of consultations with works councils in Belgium and the Netherlands. Following completion of the works council processes in Belgium and the Netherlands, our Board of Directors announced in January 2026 its decision to initiate the wind-down of our cell therapy activities, which is expected to be substantially completed by the end of the third quarter of 2026. This step marks the transition from strategic evaluation to execution and is intended to enhance operational efficiency while enabling us to focus our resources on building a pipeline of novel therapeutics through strategic business development transactions, under the leadership of our new management team. Once our wind-down is complete, our pipeline will consist solely of GLPG3667. For more information about the wind-down of our cell therapy business, please see the section titled “Oncology”. The following sections present our key R&D achievements in immunology and oncology during 2025. While the oncology cell therapy portfolio is being wound down following the Board of Directors’ decision in January 2026, our remaining organization will be repositioned for long-term growth through transformational business development. Below, we summarize the achievements, scientific progress and execution delivered during the 2025 reporting period. Lead Programs IMMUNOLOGY ​ Below, we present our small-molecule immunology pipeline as of December 31, 2025. The pipeline includes one clinical-stage program, GLPG3667. Following our announcement of topline data in our GALACELA and GALARISSO studies in SLE and DM, respectively, in December 2025, we are evaluating all strategic alternatives for GLPG3667. ​ ​ ​ 1. TYK2 program: GLPG3667 GLPG3667 is an investigational reversible and selective TYK2 kinase domain inhibitor that we discovered and evaluated in a Phase 1 healthy volunteer (“HV”) study in 2020. The Phase 1 study was a randomized, double-blind, placebo-controlled dose escalation study that evaluated the safety, tolerability, pharmacokinetics (“PK”) and pharmacodynamics (“PD”) of single and multiple ascending oral doses of GLPG3667 for 13 days. Blood was drawn at multiple time points on Day 1 and on Day 10 of the study and stimulated ex vivo with several cytokines, including IFNα, to analyze the level of inhibition of inflammation, including the effect on phosphorylated signal transducer and activator of transcription (“pSTAT”) signaling as well as on hematological parameters, lipids, and creatine phosphokinase (“CPK”) (see graphs below). ​ 77 Table of Contents ​ ​ 78 Table of Contents Following these results, we initiated a randomized, placebo-controlled, double-blind Phase 1b study in 31 patients with moderate to severe plaque psoriasis. Patients were randomized in a 1:1:1 ratio to a daily oral dose of GLPG3667 (low dose or high dose) or placebo, for a total of 4 weeks. In July 2021, we announced positive topline results demonstrating that GLPG3667 was generally well-tolerated with a positive response signal at Week 4 of the study (see graph below): ● At Week 4, 4 out of 10 patients in the high dose group had a Psoriasis Area and Severity Index (“PASI”)50 response, defined as at least a 50% improvement in PASI from baseline, compared to one out of 10 subjects on placebo. There were no subjects with a PASI 50 response on the low dose of GLPG3667. The 4 responders in the high dose group of GLPG3667 achieved a 52%, 65%, 74% and 81% improvement respectively in their PASI scores from baseline, while the subject randomized to placebo improved by 52%. Positive efficacy signals were also observed with the high dose for other endpoints, including affected Body Surface Area and physician and patient global assessment, versus placebo at Week 4. ​ ● One subject in the low dose group interrupted participation in the study for one day due to exacerbation of psoriasis. The majority of treatment related adverse events (“AEs”) were mild in nature and transient. There were no deaths or serious adverse events (“SAEs”) in this 4-week study. ​ 79 Table of Contents 1.1 GLPG3667 in DM GALARISSO is a Phase 2 randomized, double-blind, placebo-controlled, multi-center study to evaluate the efficacy and safety of GLPG3667. A daily oral administration of GLPG3667 150mg or placebo will be investigated in approximately 62 adult patients with DM over 24 weeks. The primary endpoint is the proportion of patients with at least minimal improvement in the signs and symptoms of DM at Week 24 according to the American College of Rheumatology (“ACR”) and the European League Against Rheumatism (“EULAR”) criteria. On December 18, 2025, we announced topline results from the GALARISSO study, which are summarized below: The GALARISSO DM study met its primary endpoint, showing that GLPG3667, administered once daily at 150 mg (N=21) in addition to standard-of-care therapy, achieved a statistically significant clinical benefit in the Total Improvement Score (“TIS”) at Week 24 (p=0.0848; Δ: 14.26), compared to placebo (N=19). The pre-specified threshold of statistical significance was set at 10% (α=0.1). GLPG3667 also showed meaningful clinical improvements compared to placebo on several secondary endpoints of disease activity, including TIS20, TIS40, TIS60 and m-CDASI-A. GLPG3667 demonstrated a favorable safety and tolerability profile throughout the 24-week treatment period. As part of our ongoing efforts to maximize the value of this program for both patients and ourselves, we are evaluating all strategic options. These include potential partnership and business development opportunities to accelerate development of GLPG3667 in DM. Additionally, we continue to explore opportunities to expand into other severe autoimmune diseases with significant unmet medical need. ​ 80 Table of Contents 1.2 GLPG3667 in SLE GALACELA is a Phase 2 randomized, double-blind, placebo-controlled, multi-center study to evaluate the efficacy, safety, tolerability, pharmacokinetics, and pharmacodynamics of GLPG3667 in adults with active SLE. Two once-daily oral doses of GLPG3667 (75 mg and 150 mg) or placebo are being investigated in adult patients with SLE for 48 weeks. The primary endpoint is the proportion of patients who achieve the SLE responder index (“SRI”)-4 response at Week 32. The secondary efficacy endpoints are the proportion of patients who achieve SRI-4 response at Week 48, the British Isles Lupus Assessment Group (“BILAG”)-based Composite Lupus Assessment (“BICLA”) response at Weeks 32 and 48, proportion of patients with >=50% reduction in Cutaneous Lupus Erythematosus Disease Area and Severity Index Activity (“CLASI-A”) score at Weeks 32 and 48, proportion of patients who achieve Lupus Low Disease Activity State (“LLDAS”) at Weeks 32 and 48 and change from baseline in the 28-joint count for tender, swollen, and tender and swollen (active) joints at Weeks 32 and 48. On December 18, 2025, we announced topline results from the GALACELA study, which are summarized below: In the GALACELA SLE study, GLPG3667, administered once daily at 75 mg (N=59) and 150 mg (N= 64) in addition to standard-of-care therapy, the primary endpoint analysis of dose-response on SLE responder index (SRI)-4 at Week 32 did not meet statistical significance. However, GLPG3667 showed numerical improvements over placebo (N=63) on several secondary endpoints, particularly on skin-related outcomes. The safety profile was consistent with previous studies with GLPG3667. The GALACELA study is currently ongoing, and the final Week 48 data, expected in the second quarter of 2026, will be essential to assess the totality of the evidence and determine potential next steps for the SLE program. ​ ​ 81 Table of Contents ONCOLOGY As noted below and further discussed in the section titled “A New Strategic Direction”, on October 21, 2025, we announced our intention to wind down our cell therapy activities and pursue new transformational business development transactions using our available cash resources. This intention followed a comprehensive review of strategic alternatives, including a potential divestiture. Following completion of the required consultations with the works councils in Belgium and the Netherlands, the Board of Directors announced in January 2026 its decision to initiate the wind-down of our cell therapy activities. The section below presents our key R&D achievements in oncology cell therapy during 2025. Our clinical-stage cell therapy pipeline included: ● GLPG5101: a second generation anti-CD19/4-1BB CAR-T product candidate, which we were evaluating in a Phase 1/2 study in patients with R/R NHL (ATALANTA-1). In connection with the wind-down, we notified study investigators of the early termination of the ATALANTA-1 study, with the last patient visit anticipated for the end of May 2026. Patients will be asked to roll over into the long-term HESPERIA study to monitor long-term safety. ● GLPG5301: a second-generation/4-1BB BCMA-directed CAR-T product candidate, which we were evaluating in a Phase 1/2 study in patients with R/R MM (PAPILIO-1). in connection with the wind-down, we notified study investigators of the early termination of the PAPILIO-1 study, with the last patient visit anticipated for the end of May 2026. Patients will be asked to roll over into the long-term HESPERIA study to monitor long-term safety. ​ In addition, our next-generation early-stage cell therapy pipeline comprised of multi-targeting, armored cell therapy constructs designed to prevent resistance and improve the potency and persistence of CAR-Ts in high-unmet need hematological and solid tumors, including multiple myeloma, small-cell lung cancer, neuro-endocrine and platinum-resistant ovarian cancer. We initiated the wind-down of such programs in January 2026 alongside our clinical-stage programs. ​ A New Strategic Direction We continuously evaluate our strategic direction to ensure that our resources are deployed where we can deliver meaningful value to patients and shareholders. We do this by leveraging our strengths in capital allocation and dealmaking to identify and advance clinical-stage opportunities with the potential to become meaningful medicines for patients with serious diseases. ​ At the start of 2025, we announced our intention to separate into two publicly listed entities. However, in May 2025, in light of regulatory and market developments, the Board of Directors re-evaluated the proposed separation and determined to evaluate all strategic alternatives for our cell therapy business, including a potential divestiture. Over the following months, a dedicated team, supported by external advisors, conducted a structured and comprehensive process to explore divestiture opportunities. Despite more than five months of intensive efforts, no viable proposals emerged that offered financing sufficient to support a sustainable future for the cell therapy business. ​ After reviewing all strategic alternatives and considering the substantial ongoing investment requirements, evolving market dynamics, competitive landscape, and implications for stakeholder value creation, the Board of Directors concluded that reallocating resources toward new business development opportunities represents the best path forward for us. Accordingly, in October 2025, the Board decided to pursue an intention to wind down our cell therapy activities. Following completion of consultations with works councils in Belgium and the Netherlands, implementation of the wind-down was initiated in January 2026. Exiting the cell therapy business reflects our commitment to defining a clear and sustainable path forward and focusing our efforts where we can create the greatest patient and shareholder value. ​ ​ 82 Table of Contents Since May 2025, under Henry Gosebruch’s leadership, we have adopted an updated strategy built on a clear vision for our pipeline, enhanced business development capabilities, a lean operating model, disciplined capital stewardship, and a commitment to long-term value creation. This strategy positions us for a stronger and more sustainable future, focused on disciplined portfolio construction, effective risk diversification, and long-term value for patients and shareholders. ​ A Strong Foundation for Sustainable Growth We enter 2026 with a robust financial position: ● As of December 31, 2025, approximately €3.0 billion in cash and cash equivalents, and financial investments, representing roughly €46 per share and generating significant interest income. ● Ongoing royalty streams and earn-outs from Jyseleca®, expected to continue into the mid-2030s. ● Tax credits and receivables providing additional cash inflows. ● Valuable assets, including equity stakes in private biotech companies and real estate holdings. This strong foundation enables us to pursue transformative business development opportunities with agility and without the constraints of legacy infrastructure. ​ Current Strategic Priorities Our strategy is anchored in five pillars: ​ 1. Rebuild the Pipeline Through Business Development We aim to partner or acquire differentiated, clinically de-risked programs with clear proof-of-concept and the potential to become meaningful medicines for patients. This approach is groundedin three core principles: ● Clinical de-risking: prioritizing assets supported by proof-of-concept data. ● Differentiation: selecting programs that deliver clear and meaningful advantages for patients. ● Disciplined valuation: applying rigorous commercial, competitive, scientific, and technical assessments to ensure sustainable value creation. ​ 2. Focus on High-Potential Assets in Prioritized Therapeutic Areas Our current priorities are oncology and I&I, areas of significant unmet need and strategic alignment with our long-standing partner, Gilead. We are prioritizing assets with demonstrated clinical proof-of-concept to balance opportunity with disciplined risk management. We are evaluating a range of opportunities, including biologics, bispecific antibodies, antibody-drug conjugates, and small molecules, applying a modality-agnostic approach focused on operational feasibility, clinical proof-of-concept, and value creation for shareholders and patients. ​ 3. Leverage Our Unique Partnership with Gilead Our long-standing OLCA with Gilead is a key enabler of our business development-led strategy. As a major shareholder owning more than 25% of our equity, Gilead provides a flexible collaboration framework, the OLCA, that supports both internally developed and externally sourced opportunities. ​ 83 Table of Contents Together, we share a common view that alignment and adaptability are essential to maximizing value, and Gilead has expressed a willingness to evolve elements of this framework to support attractive, value-accretive transactions for all stakeholders. Beyond capital, Gilead brings deep technical, development, regulatory, and commercial expertise, enhancing our ability to evaluate and execute complex transactions and strengthening our credibility as a partner of choice. The partnership enables a range of transaction structures, from joint acquisitions or licenses to more complex strategic combinations, supporting disciplined capital deployment and sustainable value creation for patients and shareholders. ​ 4. Apply Financial Discipline and Flexibility We aim to deploy capital with rigor, maintain a balanced risk profile, and preserve flexibility to support late-stage development where potential impact is greatest. Our business development approach spans a range of transaction types, from licensing agreements to acquisitions, and is designed to manage risk at both the individual asset and portfolio levels. While recognizing the inherent uncertainty of drug development, we seek to maximize the likelihood of delivering meaningful medicines to patients through disciplined portfolio construction. We will pursue transactions thoughtfully and selectively, prioritizing opportunities that support sustainable growth and long-term shareholder value. ​ 5. Maintain a Lean, Focused Organization Following the wind-down of the cell therapy activities, we will operate as a lean organization headquartered in Mechelen, Belgium, with a streamlined team of approximately 35 to 40 professionals based in Mechelen, Chicago, and San Francisco, excluding the impact of any potential business development transactions. This structure enhances agility, strengthens decision-making, and positions us to move quickly in a competitive market. ​ Looking Ahead Our transformation is well underway. We will deploy capital with discipline and focus, prioritizing value-accretive opportunities that align with our operational strengths and long-term ambitions. With a highly motivated new leadership team with unparalleled dealmaking experience, a strong balance sheet, and a clear strategic vision in place, we believe we are well positioned to build a pipeline capable of delivering meaningful medicines to patients. ​ While oncology and I&I remain priority areas, we are open to other fields where our competitive strengths position us to create exceptional value for shareholders. Our longstanding partnership with Gilead provides a strategic advantage in sourcing, evaluating, and advancing these opportunities globally, including in emerging markets where innovation is accelerating. ​ This strategy is designed to unlock our full potential and deliver sustainable long-term value for patients, shareholders, and other stakeholders. To reflect this new direction, the Board of Directors proposes changing our name from Galapagos NV to Lakefront Biotherapeutics NV, subject to approval by shareholders at the upcoming Extraordinary General Meeting (“EGM”) in April 2026. ​ The proposed new name and logo symbolize our commitment to that our mission and our focus on breakthrough therapeutic innovation. ​ ​ 84 Table of Contents Intellectual property The proprietary nature of, and protection for, our product candidates, their methods of use, and our platform technologies are an important part of our strategy to develop and commercialize novel medicines. We have obtained patents relating to certain of our product candidates, and are pursuing additional patent protection for them and for our other product candidates and technologies. We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. Additionally, we have registered and unregistered trademarks, including amongst others our Company name. Our success will depend significantly on our ability to obtain and maintain patent and other proprietary protection for commercially important products, technologies, inventions and know-how related to our business and our ability to defend and enforce our patents, preserve the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties. We also rely on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain the proprietary position of our development programs. As of March 1, 2026, the patent rights we held relating to our product candidates include the following: GLPG3667 product candidate: We have one granted U.S. patent application, and one pending U.S. patent application. We also have one patent granted via the European Patent Office (“EPO”) and one pending patent application at the EPO; as well as further granted patents inter alia in Japan and Australia. In addition, we have counterpart foreign patent applications that are pending in Canada, China and other foreign countries claiming GLPG3667 compositions of matter and methods of treatment using GLPG3667. Patents, if any, that issue based on this pending patent application are estimated to expire in 2038, not including any potential extensions for the marketed product that may be available via supplementary protection certificates or patent term extensions. We also have one U.S. pending patent application as well as other foreign jurisdictions claiming dosage regimen, and any patent, if granted is estimated to expire in 2042. Finally, we have four pending applications under the Patent Cooperation Treaty (“PCT”) disclosing solid forms, metabolites, and/or methods for treating inflammatory disorders using GLPG3667; any patents, if granted, based on these patent applications are estimated to expire in 2043. The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the date of filing the application. In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the United States Patent and Trademark Office (the “USPTO”), in granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier-filed co-owned patent. In addition, in certain instances, a patent term can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period. However, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval. In certain foreign jurisdictions similar extensions as compensation for regulatory delays are also available. The actual protection afforded by a patent varies on a claim by claim and country to country basis for each applicable product and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory related extensions, the availability of legal remedies in a particular country, and the validity and enforceability of the patent. Furthermore, the patent positions of biotechnology and pharmaceutical products and processes that we intend to develop and commercialize are generally uncertain and involve complex legal and factual questions. No consistent policy regarding the breadth of claims allowed in such patents has emerged to date in the United States. The patent situation outside the United States is even more uncertain. Changes in either the patent laws or in interpretations of patent laws in the United States and other countries can diminish our ability to protect our inventions and enforce our intellectual property rights; more generally, changes could affect the value of intellectual property. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents. The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights. Our ability to maintain and solidify our proprietary position for our product candidates and technology will depend on our success in obtaining effective claims and enforcing those claims once granted. We do ​ 85 Table of Contents not know whether any of the patent applications that we may file or license from third parties will result in the issuance of any patents. The issued patents that we own or may receive in the future, may be challenged, invalidated or circumvented, and the rights granted under any issued patents may not provide us with proprietary protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may be able to independently develop and commercialize similar drugs or duplicate our technology, business model, or strategy, without infringing our patents. Because of the extensive time required for clinical development and regulatory review of a drug we may develop, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent. We may rely, in some circumstances, on trade secrets and unpatented know-how to protect our technology. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our consultants, scientific advisors, and contractors and invention assignment agreements with our employees. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our consultants, contractors or collaboration partners use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Our commercial success will also depend in part on not infringing the proprietary rights of third parties. It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies, or our product candidates or processes, or obtain licenses or cease certain activities. Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our product candidates may have a material adverse impact on us. If third parties have prepared and filed patent applications in the United States that also claim technology to which we have rights, we may have to participate in interference proceedings in the USPTO to determine priority of invention if the patent applications were filed before March 16, 2013, or in derivation proceedings to determine inventorship for patent applications filed after such date. In addition, substantial scientific and commercial research has been conducted for many years in the areas in which we have focused our development efforts, which has resulted in third parties having a number of issued patents and pending patent applications relating to such areas. Patent applications in the United States and elsewhere are generally published only after 18 months from the priority date. The publication of discoveries in the scientific or patent literature frequently occurs substantially later than the date on which the underlying discoveries were made. Therefore, patent applications relating to drugs similar to our current product candidates and any future drugs or discoveries and technologies we might develop may have already been filed by others without our knowledge. For more information on these and other risks related to intellectual property, see “Item 3.D.—Risk Factors—Risks Related to Our Intellectual Property.” Collaborations We have entered into multiple collaboration agreements with pharmaceutical partners, which have generated €4,982.2 million ($5,854.1 million converted at EUR/USD closing rate on December 31, 2025) in cash through December 31, 2025 to fund discovery and development. As part of our strategic transformation, we determined to focus on strategic business development transactions and have adjusted our pipeline prioritization strategy and resource allocation in order to enable the acquisition, partnering or licensing of product candidates that we believe to have commercial potential. We expect to continue to collaborate selectively with pharmaceutical and biotechnology companies . Our current alliances include the alliance with Gilead. The OLCA with Gilead In July 2019, we entered into a ten-year global R&D collaboration with Gilead. We closed the transaction on August 23, 2019. ​ 86 Table of Contents Upon closing of OLCA, we received an upfront payment of $3.95 billion and a €960.1 million ($1.1 billion) equity investment from Gilead. Under the terms of its equity investment, Gilead nominated two individuals to our Board of Directors. Under the terms of the OLCA, Gilead received (a) an exclusive R&D license for Gilead to conduct certain contributions contemplated by the license and collaboration agreement and (b) an option to acquire exclusive commercial licenses in all countries outside of Europe to all of our current and future clinical programs (other than filgotinib, which is already subject to an existing collaboration between the parties, and certain other programs already committed to other companies) being developed during the ten-year initial option term of the collaboration (subject to extension in certain circumstances). Under the OLCA, we would continue to lead and fund all discovery and development of our programs until the end of the relevant Phase 2 clinical trials. After the completion of the relevant Phase 2 clinical study for each program, Gilead would have the option to acquire an exclusive commercial license to that program in all countries outside of Europe. If an option were exercised, we would co-develop the corresponding product and share costs equally with Gilead. For all programs included in the OLCA, Gilead would make a $150 million opt-in payment per program with no subsequent milestones if Gilead decides to exercise its option. If Gilead declines to exercise its option with respect to a program, such program shall no longer be subject to the OLCA and we may progress the program independently. In addition, we would receive tiered royalties ranging from 20-24% on net sales of all products from all programs licensed by Gilead in all countries outside of Europe as part of the OLCA subject to customary royalty terms and adjustments. Upon Gilead’s exercise of its option with respect to any of our programs, Gilead will assume responsibility for seeking regulatory approval for the optioned product and for all regulatory matters in its territory. Each party would be solely responsible for all commercialization activities and costs for the optioned product in its territory. Upon termination of the OLCA with respect to any program licensed by Gilead, all rights and licenses granted by us would terminate, and we will obtain an exclusive, perpetual and irrevocable license from Gilead under certain intellectual property rights to exploit the licensed product that is the subject of development or commercialization at the time of termination in the field in the applicable terminated region (provided that if such termination is the result of our material breach, such license will be royalty-bearing). Either we or Gilead may terminate the OLCA for the other party’s uncured material breach. Either we or Gilead may terminate the OLCA in the event of specified insolvency events involving the other party. Gilead may also terminate the OLCA in its entirety or on a program-by-program and country-by-country basis with advance notice for convenience. The OLCA also contains customary provisions including representations and warranties of the parties, terms as to governance of the collaboration, commercialization and regulatory responsibilities of the parties, and manufacturing and supply. Either party may, without the consent of the other party, assign the OLCA to an affiliate or successor. If we undergo a change in control, all intellectual property of our acquirer or that becomes owned or controlled by our acquirer after such change of control shall be excluded from the scope of rights granted in the OLCA. In January 2025, in connection with an intended separation of our Company into two publicly traded entities, in which we would spin out a newly to be formed company (to be named at a later date, hereinafter “SpinCo”), we and Gilead entered into a separation agreement to restructure our existing relationship. Within the framework of this intended separation, we and Gilead agreed to assign the OLCA to the newly formed SpinCo as of the effective date of the separation. In connection with the separation, we would have been released from the collaboration and would have had full global development and commercialization rights to our pipeline, which would no longer be subject to Gilead’s opt-in rights under the OLCA, subject to payment of single digit royalties to Gilead on net sales of certain products, subject to customary reductions and adjustments. ​ 87 Table of Contents Gilead further agreed to waive its rights under the OLCA with respect to all of our and our affiliates’ small molecule R&D activities and programs. In May 2025, following regulatory and market developments, we re-evaluated the proposed separation and determined to evaluate all strategic alternatives for the cell therapy business. To facilitate this process, we and Gilead entered into a cell therapy royalty and waiver agreement in July 2025, pursuant to which Gilead agreed to waive its rights under the OLCA with respect to all of our cell therapy R&D activities and programs. As a result, our cell therapy business is no longer subject to Gilead’s opt-in rights under the OLCA, subject to payment of (i) a single digit percentage payment on revenues derived from the divestment of our cell therapy programs and (ii) single digit royalties to Gilead on net sales of certain products, in each case subject to customary reductions and adjustments. This waiver permits us to wind down, license, divest, partner, or take other similar actions in respect of the cell therapy programs without Gilead’s consent or veto. After a thorough evaluation of all available options and a comprehensive sale process for the cell therapy business, we ultimately determined not to pursue the proposed separation. In October 2025 we announced our intention to wind down the cell therapy activities, subject to the conclusion of works council consultations in Belgium and the Netherlands. Following the completion of these consultations, in January 2026, we initiated a wind-down of our cell therapy activities. Exclusive collaboration agreement with Gilead for filgotinib In December 2015, we entered into a global collaboration agreement with Gilead to develop and commercialize filgotinib for the treatment of inflammatory indications. In connection with entering into the OLCA with Gilead, in August 2019 we amended and restated this agreement to increase our involvement in filgotinib’s global strategy and participate more broadly in the commercialization of filgotinib in Europe. In December 2020, we agreed to amend this agreement again, as a result of which we have assumed all development, manufacturing, commercialization and certain other rights for filgotinib in Europe through a transition completed by the end of 2022. Gilead retains commercial rights and remains marketing authorization holder for filgotinib outside of Europe, including in Japan. In connection with our entry into the collaboration agreement, we received in January 2016 an upfront payment of $725 million consisting of a onetime, non-refundable, non-creditable license fee in the amount of $300 million and a $425 million equity investment. In November 2016, Gilead initiated a Phase 3 trial in CD, for which we received a $50.0 million payment. In December 2016, Gilead initiated a Phase 2 trial in UC for which we received a $10.0 million payment. In April 2017, we initiated a Phase 2 trial in psoriatic arthritis as a new indication, for which we received a $10.0 million payment. In May 2018, Gilead initiated a phase 3 trial in UC for which we received $15.0 million. In December 2019, Gilead initiated a Phase 3 trial in psoriatic arthritis as a new indication, for which we received $10.0 million. Also in December 2019, Gilead filed an NDA for filgotinib in the U.S. for which we received a $20 million payment in January 2020. In September 2020, Gilead obtained marketing authorization for filgotinib in Europe and Japan for which we received an aggregate payment of $105.0 million (€90.2 million) payment in October 2020. In connection with the agreement that we entered into with Gilead pursuant to the binding term sheet entered into in December 2020 to amend the existing arrangement for the commercialization and development of filgotinib, Gilead has agreed to irrevocably pay us €160 million, subject to certain adjustments for higher than budgeted development costs. Gilead paid €35 million in January 2021 an additional €75 million in April 2021 and €50 million in 2022. In addition, we will no longer be eligible to receive any future milestone payments relating to filgotinib in Europe. However, we will remain eligible to receive tiered royalty percentages ranging from 20% to 30% on Gilead's global net sales of filgotinib outside of Europe and future development and regulatory milestone-based payments of up to $275 million and sales-based milestone payments of up to $600 million. All payments by Gilead to us are made in U.S. dollars. Under the terms of the collaboration, Gilead is primarily responsible for seeking regulatory approval of filgotinib in countries outside of Europe. Pursuant to the amended arrangements agreed in December 2020, we are responsible for commercializing filgotinib in Europe. ​ 88 Table of Contents Under the amended and restated filgotinib agreement, we agreed on a 50/50 cost split for development costs of filgotinib, in lieu of the 20% (us) / 80% (Gilead) cost split under the original filgotinib agreement. Beginning on January 1, 2021, we bore the development costs for certain studies, in lieu of the equal cost split contemplated by the 2019 agreement. These studies include the DARWIN3, FINCH4, FILOSOPHY, and Phase 4 studies and registries in RA, MANTA and MANTA-RAy, the PENGUIN1 and 2 and EQUATOR2 studies in PsA, the SEALION1 and 2 studies in AS, the HUMBOLDT study in uveitis in addition to other clinical and non-clinical expenses supporting these studies and support for any investigator sponsored trials in non-IBD conditions and non-clinical costs on all current trials. The existing 50/50 global development cost sharing arrangement will continue for the following studies: SELECTION and its long-term extension study (LTE) in UC, DIVERSITY and its LTE, DIVERGENCE 1 and 2 and their LTEs and support for Phase 4 studies and registries in Crohn’s disease, pediatric studies and their LTEs in RA, UC and Crohn’s disease, and support for investigator sponsored trials in IBD. Under the 2021 amendment, the 50/50 development cost sharing arrangement ceased for DIVERSITY and its LTE starting from April 1, 2022. As from that date, we were solely responsible for all development costs. In consideration for us assuming responsibility for the DIVERSITY study, Gilead made a one-time payment to us of $15 million in 2022. The original filgotinib agreement included a co-promotion / co-commercialization option for filgotinib, which we exercised with respect to eight European countries in December 2017. We agreed in December 2020 with Gilead to transfer the sole right to commercialize filgotinib in Europe to us after a transition period, pursuant to which most activities were transferred to us by December 31, 2021 and that we completed in 2022. Until December 31, 2021, we continued to share equally with Gilead in the net profit and net losses in each of the Netherlands, Belgium, Luxembourg, France, Germany, Italy, Spain and UK. During this period, this profit and loss sharing replaces our right to receive royalties with respect to filgotinib sales by Gilead in these countries. All commercial economics on filgotinib in Europe transferred to us as of January 1, 2022, subject to payment of tiered royalties of 8 to 15% of net sales in Europe to Gilead, starting in 2024. Gilead will retain sole responsibility for commercializing filgotinib outside of Europe. We will be eligible to receive tiered royalty percentages ranging from 20% to 30% on Gilead’s global net sales of filgotinib outside of Europe. The royalties payable to us under the filgotinib agreement may be reduced under certain circumstances. Our right to receive royalties under the filgotinib agreement continues, on a country-by-country basis, until the later to occur of certain specified events. If the collaboration agreement terminates in its entirety for any reason, all rights and licenses granted by either party will terminate, and we will obtain an exclusive, perpetual, irrevocable, royalty-bearing license from Gilead under certain intellectual property rights to exploit filgotinib. If the filgotinib agreement is terminated in a specific territory, all rights and licenses granted by us will be deemed to be amended not to include such territory, and we will have a corresponding license with respect to such terminated country. The filgotinib agreement also contains other termination rights specified therein. Either party may, without the consent of the other party, assign the filgotinib agreement to an affiliate or successor. Any other assignment requires written consent of the other party. However, with respect to an assignment to an affiliate, the assigning party will remain bound by the terms of the filgotinib agreement. In September 2021, we and Gilead agreed to further amend the collaboration. Following such amendment, we assumed sponsorship of and operational and financial responsibility for the ongoing DIVERSITY clinical study, evaluating filgotinib in CD, and its long-term extension study. The transfer was completed by March 2023. Under the terms of the agreement, Gilead made a one-time payment of $15 million to us in consideration for us assuming responsibility for the DIVERSITY clinical study. From April 1, 2022, we were also solely responsible for all development costs for the DIVERSITY clinical study. In addition, if the EMA grants regulatory approval of filgotinib for the treatment of CD based on data from the DIVERSITY trial, then royalties payable by us to Gilead will be reduced by 30% across all filgotinib indications and will become 5.6 to 10.5% of net sales in Europe. On February 8, 2023, we announced that we decided not to submit a Marketing Authorization Application in Europe based on topline data from the DIVERSITY study and as a result, these adjustments to the royalties will not be made. These royalties are payable as of 2024. Gilead remains responsible for commercial activities outside of Europe. ​ 89 Table of Contents In March 2022, we and Gilead agreed to further amend the collaboration. Following such amendment, we assumed sponsorship of and operational responsibility for the MANTA study and its long-term extension. The transfer was largely completed by December 31, 2022. On March 28, 2022 filgotinib was approved by the Japanese Ministry of Health, Labour and Welfare for UC, for which we received a $20.0 million regulatory milestone payment from Gilead in May 2022. Also in March 2022, we and Gilead agreed to further amend the collaboration by adding the following countries to our territory: Andorra, San Marino, Monaco, and Vatican City. In October 2023, we and Gilead agreed to amend the collaboration to terminate the existing 50/50 global development cost sharing arrangement with us bearing the costs going forward, and to terminate our obligation to pay tiered royalties to Gilead on net sales of Jyseleca® in Europe, in addition to other amendments, including a simplification of the governance and certain other technical amendments. Effective January 31, 2024, following the closing of the transaction between us and Alfasigma S.p.A. to transfer the Jyseleca® business to Alfasigma S.p.A., we assigned our rights and obligations under the filgotinib collaboration to Alfasigma S.p.A., except for our right to receive royalties from Gilead on net sales in the Gilead Territory (meaning all countries in the world other than the countries included in the Galapagos Territory, which comprises the EU member states (per July, 2019), Iceland, Norway, Lichtenstein, Switzerland, Andorra, San Marino, Monaco and Vatican City) under a separate agreement between Gilead and us entered into in October 2023. Distribution agreement for Jyseleca® with Sobi In October 2021, we signed an agreement (as amended from time to time) with Swedish Orphan Biovitrum AB (‘Sobi’) regarding the distribution of Jyseleca. Sobi acted as our distribution and commercialization partner of Jyseleca® and distributed the medicine in Central and Eastern Europe, Greece, Portugal, and the Baltic countries. Launches or first sales of Jyseleca® in the aforementioned countries triggered milestone payments. In 2022, we recorded milestones of €2.0 million triggered by the first sale of Jyseleca® in the Czech Republic and Portugal by Sobi. Effective January 31, 2024, following the closing of the transaction between us and Alfasigma S.p.A. to transfer the Jyseleca® business to Alfasigma S.p.A., we assigned our rights and obligations under the Sobi agreement to Alfasigma S.p.A. Drug discovery collaboration transaction with NovAliX Effective July 1, 2023, we entered into an integrated drug discovery collaboration with NovAliX, a drug-discovery focused Contract Research Organization based in Strasbourg, France. Under the terms of the agreement, our drug discovery and research activities conducted in Romainville, France, and our employees in Romainville, which were exclusively dedicated to the operation of these activities, were transferred to NovAliX who will assume all ongoing research and discovery activities in Romainville, and this for no consideration. In return, we were committed to utilizing the research capabilities and expertise of NovAliX through a five year-collaboration and within the context of the Company’s R&D portfolio, during which we were committed to purchase for a total of €73.8 million services from NovAliX. As a result of the strategic reorganization of our small molecule activities announced early January 2025, we terminated the majority of the work orders under our five-year collaboration agreement with NovAliX as of the end of March 2025. NovAlix initiated certain claims. In 2026, the parties entered into a settlement agreement, bringing all related discussions to a definitive close and fully and irrevocably terminating the collaboration. The agreed settlement amount was in line with the restructuring provision accounted for in our consolidated financial statements for the year ended December 31, 2025. ​ ​ 90 Table of Contents Seasonality Our business is currently not materially affected by seasonality. Manufacturing and supply We currently rely on a limited number of third-party contract manufacturers to produce the drug substance and drug product for our non-cell therapy product candidate, GLPG3667, which is also our only active product candidate following the initiation of the wind-down of our cell therapy programs. We expect to continue to outsource all manufacturing activities necessary to support future preclinical studies, clinical trials, and any future commercial supply for this product. We maintain a framework of master service agreements with most of our external service providers, under which they generally provide services to us on a project-specific basis. ​ The raw materials required for the manufacture of our remaining non-cell therapy product are sourced from multiple suppliers. We have supply arrangements in place with manufacturers and vendors that we believe have, or can secure, sufficient capacity to meet our projected clinical and, if approved, potential commercial requirements. However, because we rely on external suppliers for all raw materials, drug substance, and drug product, we are subject to risks associated with third-party manufacturing, including capacity constraints, quality issues, supply interruptions, and regulatory compliance. ​ In light of our decision to initiate the wind-down of our cell therapy programs, we have begun discontinuing activities related to the establishment and operation of our decentralized manufacturing network for our cell therapy product candidates. As part of this process, we are terminating, or allowing to expire, agreements with manufacturing sites previously engaged in manufacturing or testing our cell therapy product candidates, and we are overseeing the completion of all associated Good Practice (“GxP”) and decommissioning activities. We do not expect to rely on these facilities or related infrastructure for future manufacturing needs. ​ Manufacturing is subject to regulations that impose various procedural and documentation requirements, which govern record keeping, manufacturing processes and controls, personnel, quality control and quality assurance, among others. The organizations we use to manufacture our product candidates need to comply with current good manufacturing cGMP conditions. cGMPs are regulatory requirements for the production of pharmaceuticals that will be used in humans. For most of our manufacturing processes a back-up cGMP manufacturer is in place or can easily be identified. Competition Our industry is highly competitive and subject to rapid and significant change. While we believe that our development and commercialization experience, scientific knowledge, and industry relationships provide us with competitive advantages, we face competition from pharmaceutical, medical device, and biotechnology companies, including specialty pharmaceutical companies, generic drug companies, academic institutions, government agencies, and research institutions. For example, GLPG3667 faces significant competition in both the fields of DM and SLE. In the field of SLE, corticosteroids, antimalarials and B-Cell modulators are commonly used to control lupus disease activity. Only two products are currently approved to treat SLE, both as add-on to standard therapy: Belimumab (Benlysta®) (anti-BAFF) from GSK and recently anifrolumab (Saphnelo® - both IV and SC formulations) (anti -IFN) from AstraZeneca. There are currently over 10 products in Phase 3 clinical development for SLE, of which the majority are injectable therapies, focusing on advanced disease. There remains a minority of oral therapies, under development – most notably deucravacitinib (SotyktuTM) (TYK2) from BMS, upadacitinib (RinvoqTM ) (JAK) from Abbvie and cenerimod (S1P1) from Idorsia/Viatris. ​ 91 Table of Contents In the field of DM, physical therapy, exercise and medication including corticosteroids, immunosuppressants or immunoglobulin treatment, are typically used to treat DM. Treatment of this disease has relied for many years on off-label medication – however, in 2021 the FDA approved immunoglobulin treatment Octagam® (“IVIg”), based on the Phase 3 ProDerm trial from Octapharma. In September 2025, brepocitinib (oral JAK1/TYK2; Proviant) met its primary endpoint Trial Improvement Score at Week 52) in the Phase 3 VALOR trial, supporting a regulatory filing which is currently planned for early 2026. Additionally, there are a number of Phase 3 compounds (dazukibart (anti-IFN; Pfizer), anifrolumab (Saphnelo®; anti-IFN; AstraZeneca) and efartigimod (Vyvgart®; anti-FcRn; Argenx) which could launch before the end of the decade. Many of our competitors have significantly greater financial, technical, and human resources than we have. Mergers and acquisitions in the pharmaceutical, medical device and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Our commercial opportunity could be reduced or eliminated if our competitors develop or market products or other novel therapies that are more effective, safer, or less costly than our current or future product candidates, or obtain regulatory approval for their products more rapidly than we may obtain approval for our product candidates. Our success will be based in part on our ability to identify, develop, and manage a portfolio of product candidates that are safer and more effective than competing products. Government regulation Government regulation and product approval Government authorities in the United States at the federal, state, and local level, and in other countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, marketing, export, and import of products such as those we are developing. In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (the “FDCA”) and related regulations, and biological products under the FDCA and the Public Health Service Act (the “PHS Act”) and related regulations. Drugs and biological products also are subject to other federal, state, local and foreign statutes and regulations. U.S. regulation U.S. drug development and biological product process The process of obtaining regulatory approvals and compliance with appropriate federal, state, local, and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process, or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, or license revocation, a clinical hold, untitled or warning letters, voluntary or mandatory product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. The process required by the FDA before a drug or biological product may be marketed in the United States generally involves the following: ● completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices regulations; ● submission to the FDA of an investigational new drug application (“IND”), which must become effective before human clinical trials may begin; ● performance of adequate and well-controlled human clinical trials according to Good Clinical Practices (“GCP”), to establish the safety and efficacy of the proposed drug or biological product for its intended use; ● preparation and submission to the FDA of a new drug application (“NDA”), or biologics license application (“BLA”); ​ 92 Table of Contents ● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product candidate, or components thereof, are produced to assess compliance with cGMP; ● potential FDA audit of the clinical trial sites that generated the data in support of the NDA or BLA; and ● FDA review and approval of the NDA or BLA. The testing and approval process requires substantial time, effort, and financial resources and we cannot be certain that any approvals for our product candidates will be granted on a timely basis, if at all. Once a pharmaceutical or biological product candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies. An IND sponsor must submit the results of the preclinical tests together with manufacturing information, analytical data, and any available clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical trial, dosing procedures, subject selection, and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance, and may be imposed on all product candidates within a certain class. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical trials of a certain duration or for a certain dose. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. These regulations include the requirement that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an institutional review board (the “IRB”), must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and reapprove the study at least annually. An IRB considers, among other things, whether the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his or her legal representative, and must monitor the clinical trial until completed. Each new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: ● Phase 1. The product candidate is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some product candidates for severe or life- threatening diseases, especially when the product candidate is suspected or known to be unavoidably toxic, the initial human testing may be conducted in patients. ● Phase 2. Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product candidate for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule. ● Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy, and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit relationship of the product candidate and provide an adequate basis for physician labeling. ​ 93 Table of Contents Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA. Within 15 calendar days after the sponsor determines that the information qualifies for reporting, written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies or animal or in vitro testing that suggest a significant risk to humans, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information. Phase 1, Phase 2, and Phase 3 testing may not be completed successfully within any specified period, if at all. The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements, or if the product candidate has been associated with unexpected serious harm to patients. Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the composition and physical characteristics of the product candidate and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. A drug or biological product being studied in clinical trials may be made available to individual patients in certain circumstances. Pursuant to the 21st Century Cures Act (the “Cure Act”), as amended, the manufacturer of an investigational drug or biological product for a serious disease or condition is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for individual patient access to such investigational product. This requirement applies on the earlier of the first initiation of a Phase 2 or Phase 3 trial of the investigational product, or, as applicable, 15 days after the drug or biological product candidate receives a designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy. Further, the Right to Try Act of 2017, among other things, provides a federal framework for certain patients to request access to certain investigational products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval. There is no obligation for a pharmaceutical or biological product manufacturer to make its investigational products available to eligible patients as a result of the Right to Try Act. U.S. review and approval processes The results of product development, preclinical studies, and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the product candidate, proposed labeling, and other relevant information, are submitted to the FDA as part of an NDA for a new drug or BLA for biological product, requesting approval to market the product candidate. The submission of an NDA and BLA is subject to the payment of a substantial user fee; although a waiver of such fee may be obtained under certain limited circumstances. For example, the agency will waive the application fee for the first NDA or BLA that a small business or its affiliate submits for review. The sponsor of an approved NDA and BLA is also subject to an annual prescription drug product program fee. ​ 94 Table of Contents The FDA reviews all NDAs and BLAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for filing. The FDA may request additional information rather than accept an NDA or BLA for filing. In this event, the NDA or BLA must be re-submitted with the additional information. The re-submitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether a drug is safe and effective for its intended use, and the FDA reviews a BLA to determine, among other things, whether a biological product is safe, pure and potent for its intended use. For both NDAs and BLAs, the FDA also reviews whether the manufacturing is cGMP-compliant to assure the product’s identity, strength, quality, and purity. Before approving an NDA or BLA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. The FDA may refer the NDA or BLA to an advisory committee for review, evaluation, and recommendation as to whether the application should be approved and under what conditions. An advisory committee is a panel of experts, including clinicians and other scientific experts, who provide advice and recommendations when requested by the FDA. The FDA is not bound by the recommendation of an advisory committee, but it considers such recommendations when making decisions. The approval process is lengthy and difficult and the FDA may refuse to approve an NDA or BLA if the applicable regulatory criteria are not satisfied or may require additional clinical data or other data and information. Even if such data and information are submitted, the FDA may ultimately decide that the NDA or BLA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data. The FDA will issue a complete response letter if the agency decides not to approve the NDA or BLA in its present form. The complete response letter usually describes all of the specific deficiencies that the FDA identified in the NDA or BLA that must be satisfactorily addressed before it can be approved. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the NDA or BLA, addressing all of the deficiencies identified in the letter, or withdraw the application, or request an opportunity for a hearing. If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages, or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings, or precautions be included in the product labeling. In addition, the FDA may require post-approval studies, including Phase 4 clinical trials, to further assess a product’s safety and effectiveness after NDA or BLA approval and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. As part of the NDA or BLA, the FDA also may require the submission of a risk evaluation and mitigation strategy (the “REMS”), to ensure that the benefits of the product outweigh the risks of the product. The REMS plan could include medication guides, physician communication plans, and elements to assure safe use, such as restricted distribution methods, patient registries, or other risk minimization tools. An assessment of the REMS must be conducted at set intervals. Following product approval, a REMS also may be required by the FDA if new safety information is discovered and the FDA determines that a REMS is necessary to ensure that the benefits of the product outweigh the risks of the product. ​ 95 Table of Contents Expedited programs Fast track designation The FDA has a fast track program that is intended to expedite or facilitate the process for reviewing new drugs or biological products that meet certain criteria. Specifically, new product candidates are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the condition. Fast track designation applies to the combination of the product candidate and the specific indication for which it is being studied. The sponsor of a new drug or biological product may request the FDA to designate the drug or biological product as a fast track product concurrently with, or at any time after, submission of an IND, and the FDA must determine if the product candidate qualifies for fast track designation within 60 days of receipt of the sponsor’s request. In addition to other benefits, such as the ability to engage in more frequent interactions with the FDA, the FDA may initiate review of sections of a fast track drug’s NDA or BLA before the application is complete. This rolling review is available if the applicant provides, and the FDA approves, a schedule for the submission of each portion of the NDA or BLA and the applicant pays applicable user fees. However, the FDA’s time period goal for reviewing an application does not begin until the last section of the NDA or BLA is submitted. Additionally, the fast track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process. Accelerated approval Under FDA’s accelerated approval regulations, the FDA may approve a drug or biological product for a serious or life-threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. In clinical trials, a surrogate endpoint is a marker, such as a measurement of laboratory or clinical signs of a disease or condition that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. A product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of post-approval clinical trials sometimes referred to as Phase 4 trials to confirm the effect on the clinical endpoint. Under the Food and Drug Omnibus Reform Act of 2022 (the “FDORA”), the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval. FDORA also requires sponsors to send updates to the FDA every 180 days on the status of such studies, including progress toward enrollment targets, and the FDA must promptly post this information publicly. FDORA also gives the FDA increased authority to withdraw approval of a drug or biologic granted accelerated approval on an expedited basis if the sponsor fails to conduct such studies in a timely manner or send the necessary updates to the FDA, or if such post-approval studies fail to verify the drug’s predicted clinical benefit. Under FDORA, the FDA also is empowered to take action, such as issuing fines, against companies that fail to conduct with due diligence any post-approval confirmatory study or submit timely reports to the agency on their progress. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA, unless otherwise informed by the FDA. ​ 96 Table of Contents Breakthrough designation The FDA expedites the development and review of a breakthrough therapy. A drug or biological product can be designated as a breakthrough therapy if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. A sponsor may request that a drug or biological product be designated as a breakthrough therapy concurrently with, or at any time after, the submission of an IND, and the FDA must determine if the product candidate qualifies for breakthrough therapy designation within 60 days of receipt of the sponsor’s request. If so designated, the FDA shall act to expedite the development and review of the product candidate’s marketing application, including by meeting with the sponsor throughout the product candidate’s development, providing timely advice to the sponsor to ensure that the development program to gather preclinical and clinical data is as efficient as practicable, involving senior managers and experienced review staff in a cross-disciplinary review, assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor, and taking steps to ensure that the design of the clinical trials is as efficient as practicable. Regenerative medicine advanced therapy designation As part of the 21st Century Cures Act, Congress amended the FDCA to facilitate an efficient development program for, and expedite review of regenerative medicine advanced therapies (“RMATs”), which include cell and gene therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products. RMATs do not include those human cells, tissues, and cellular and tissue based products regulated solely under section 361 of the Public Health Service Act and 21 CFR Part 1271. This program is intended to facilitate efficient development and expedite review of regenerative medicine therapies, which are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition and qualify for RMAT designation. A sponsor may request that the FDA designate a product candidate as a RMAT concurrently with or at any time after submission of an IND. The FDA has 60 calendar days to determine whether the product candidate meets the criteria, including whether there is preliminary clinical evidence indicating that the product candidate has the potential to address unmet medical needs for a serious or life-threatening disease or condition. A BLA for a product candidate that has received RMAT designation may be eligible for priority review or accelerated approval through use of surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites. Benefits of RMAT designation also include early interactions with FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval. A product candidate with RMAT designation that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence from clinical studies, patient registries, or other sources of real world evidence, such as electronic health records; the collection of larger confirmatory data sets; or post-approval monitoring of all patients treated with such therapy prior to its approval. Priority review Priority review is granted where there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition. If a product candidate that contains a new molecular entity is granted priority review, the FDA aims to review the application six months after it accepts the application for filing. If criteria are not met for priority review, the application is subject to the standard FDA review period of ten months after FDA accepts the application for filing. Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval. ​ 97 Table of Contents Post-approval requirements Any products which we receive FDA approval for are subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, tracking and tracing requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements. The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions of the approved label. Further, manufacturers must continue to comply with cGMP requirements, which are extensive and require considerable time, resources, and ongoing investment to ensure compliance. In addition, changes to the manufacturing process generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval. In addition, the Drug Supply Chain Security Act (the “DSCSA”), was enacted in 2013 with the aim of building an electronic system to identify and trace certain prescription drugs and biologics distributed in the United States. The DSCSA mandates phased-in and resource-intensive obligations for pharmaceutical manufacturers, wholesale distributors, and dispensers over a ten-year period that culminated in November 2023. The FDA established a one-year stabilization period until November 2024 for trading partners to continue to build and validate interoperable systems and processes to meet certain requirements of the DSCSA. In late 2024, the FDA announced it is allowing a further exemption period for eligible trading partners who have successfully completed or made documented efforts to complete data connections with their immediate trading partners, but still face challenges exchanging data. The exemption period for eligible manufacturers and repackagers was extended until May 27, 2025. The DSCSA requirements include the quarantine and prompt investigation of a suspect product, to determine if it is illegitimate, notifying trading partners and the FDA of any illegitimate product, and compliance with product tracking and tracing requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. Manufacturers and other entities involved in the manufacturing and distribution of approved products, and those supplying products, ingredients, and components of approved products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. The cGMP requirements apply to all stages of the manufacturing process, including the production, processing, sterilization, packaging, labeling, storage, and shipment of the product. Manufacturers must establish validated systems to ensure that products meet specifications and regulatory standards, and test each product batch or lot prior to its release. We rely, and expect to continue to rely, on third parties for the production of clinical quantities of our product candidates. Future FDA and state inspections may identify compliance issues at the facilities of our contract manufacturers that may disrupt production, or distribution, or may require substantial resources to correct. The FDA may withdraw a product approval if compliance with regulatory requirements is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market. Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications, and also may require the implementation of other risk management measures, including a REMS, or the conduct of post-marketing studies to assess a newly discovered safety issue. FDA has authority to require post-market studies, in certain circumstances, on reduced effectiveness of a product, and FDA may require labeling changes related to new reduced effectiveness information. Further, the failure to maintain compliance with regulatory requirements may result in administrative or judicial actions, such as fines, untitled or warning letters, holds on clinical trials, voluntary or mandatory product recalls, product seizures, product detention or refusal to permit the import or export of products, refusal to approve pending applications or supplements, restrictions on marketing or manufacturing, injunctions, or civil or criminal penalties. ​ 98 Table of Contents From time to time, legislation is drafted, introduced, and passed in Congress that could significantly change the statutory provisions governing the approval, manufacturing, and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations, guidances, and policies are often revised or reinterpreted by the agency in ways that may significantly affect our business and our product candidates. It is impossible to predict whether further legislative or FDA regulation or policy changes will be enacted or implemented and what the impact of such changes, if any, may be. Patent term restoration and marketing exclusivity Depending upon the timing, duration and specifics of FDA approval of the use of our product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA or BLA plus the time between the submission date of an NDA or BLA and the approval of that application, less any time the applicant did not act with due diligence. Only one patent applicable to an approved drug or biological product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent terms extension or restoration. In the future, we intend to apply for restorations of patent term for some of our currently owned or licensed patents to add patent life beyond their current expiration dates, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA; however, there can be no assurance that any such extension will be granted to us. Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (“ANDA”) or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. ​ 99 Table of Contents A biological product is granted twelve years of exclusivity from the time of first licensure of the biological product, which is referred to as a reference biological product. This twelve year exclusivity period was created by the Biologics Price Competition and Innovation Act of 2009, which was part of the Patient Protection and Affordable Care Act of 2010, which created an abbreviated approval pathway for biological products shown to be biosimilar to, or interchangeable with, an FDA-licensed reference biological product. This amendment to the PHS Act attempts to minimize duplicative testing. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical trial or trials. Interchangeability requires that a biological product is biosimilar to the reference biological product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the product and the reference product may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biological product. The first biological product determined to be interchangeable with a branded reference product for any condition of use is also eligible for a period of exclusivity, during which time the FDA may not determine that another product is interchangeable with the same reference product for any condition of use. The FDA may approve multiple “first” interchangeable products so long as they are all approved on the same first day of marketing. This exclusivity period, which may be shared amongst multiple first interchangeable products, lasts until the earlier of: (1) one year after the first commercial marketing of the first interchangeable product; (2) 18 months after resolution of a patent infringement suit instituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the first interchangeable product, based on a final court decision regarding all of the patents in the litigation or dismissal of the litigation with or without prejudice; (3) 42 months after approval of the first interchangeable product, if a patent infringement suit instituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the first interchangeable product is still ongoing; or (4) 18 months after approval of the first interchangeable product if the applicant that submitted the application for the first interchangeable product has not been sued under 42 U.S.C. § 262(l)(6). Pediatric exclusivity is another type of exclusivity in the United States. A biological product or drug can obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds an additional six months to existing exclusivity periods for all formulations, dosage forms, and indications of the active moiety and, for drugs, patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection and, for drugs, patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining. Orphan drugs Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs or biological products intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the United States or that affects more than 200,000 individuals in the United States and for which there is no reasonable expectation that costs of R&D of the product for the indication can be recovered by sales of the product in the United States. Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the generic identity of the drug or biological product and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first NDA or BLA applicant to receive FDA approval for a particular active ingredient to treat a particular disease or condition with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product, for that indication. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA or BLA application user fee. During the exclusivity period, the FDA may not approve any other applications to market the same drug or biological product for the same approved use or indication, except in limited circumstances, such as if the second applicant demonstrates the clinical superiority of its product to the product with orphan drug exclusivity through a demonstration of superior safety, superior efficacy, or a major contribution to patient care. Orphan drug exclusivity does not prevent FDA from approving a different drug or biologic for the same approved use or indication, or the same drug or biologic for a different approved use or indication. ​ 100 Table of Contents Pediatric information Under the Pediatric Research Equity Act of 2003 (the “PREA”), as amended, NDAs, BLAs or supplements to NDAs or BLAs must contain data adequate to assess the safety and effectiveness of the drug or biological product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective or the biological product is safe, pure, and potent. The FDCA requires that a sponsor who is planning to submit a marketing application for a product candidate that includes a new active ingredient, new indication, new dosage form, new dosing regimen, or new route of administration to submit an initial Pediatric Study Plan (the “initial PSP”), within sixty days of an end-of-phase 2 meeting or as may be agreed between the sponsor and the FDA. The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of data or full or partial waivers. The FDA and the sponsor must reach agreement on the PSP. A sponsor can submit amendments to an agreed-upon PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials, and/or other clinical development programs. Generally, the requirements of PREA do not apply to an application to market a drug for an orphan-designated indication. Additionally, for molecularly targeted cancer drugs, beginning after February 3, 2029, the FDA may require testing of certain novel single ingredient or combination regimens to yield clinically meaningful pediatric study data that is gathered using appropriate formulations for each age group for which the study is required, regarding dosing, safety, and preliminary efficacy to inform potential pediatric labeling. Disclosure of clinical trial information Sponsors of clinical trials of FDA-regulated products, including drugs and biological products, are required to register and disclose certain clinical trial information, which is publicly available at www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also obligated to disclose the results of their clinical trials after completion. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs. ​ 101 Table of Contents Pharmaceutical coverage, pricing and reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any drug products for which we may obtain regulatory approval. In the United States, sales of any products for which we may receive regulatory approval for commercial sale will depend in part on the availability of coverage and reimbursement from third-party payers. Third-party payers include government programs such as Medicare and Medicaid, managed care providers, private health insurers, and other organizations. The process for determining whether a payer will provide coverage for a drug product may be separate from the process for setting the reimbursement rate that the payer will pay for the drug product. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services (the “CMS”), an agency within the U.S. Department of Health and Human Services. CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payers tend to follow CMS to a substantial degree. Third-party payers may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drugs for a particular indication. Moreover, a payer’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. Third-party payers are increasingly challenging the price and examining the medical necessity and cost- effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of any products, in addition to the costs required to obtain regulatory approvals. Factors payers consider in determining reimbursement are based on whether the product is: ● a covered benefit under its health plan; ● safe, effective and medically necessary; ● appropriate for the specific patient; ● cost-effective; and ● neither experimental nor investigational. Our product candidates may not be considered medically necessary or cost-effective. If third-party payers do not consider a product to be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit. The U.S. government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on the Affordable Care Act, or the ACA contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries, and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceuticals. ​ 102 Table of Contents Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement. In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price, or ASP, and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs. The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payers fail to provide adequate coverage and reimbursement. In addition, an increasing emphasis on cost containment measures in the United States has increased and we expect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Other healthcare laws and compliance requirements If we obtain regulatory approval of our products, we may be subject to various federal and state laws targeting fraud, waste, and abuse in the healthcare industry. These laws may impact, among other things, our proposed sales, marketing, and education programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business. The U.S. laws that may affect our ability to operate include: ● the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation. Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act or federal civil money penalties statute (as discussed below); ● U.S. federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent, making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing such an obligation. Manufacturers can be held liable under the federal False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The federal False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery; ​ 103 Table of Contents ● the U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and its implementing regulations, which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, which impose certain obligations, including mandatory contractual terms, on covered healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates, with respect to safeguarding the privacy, security and transmission of individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition, there may be additional federal, state and non-U.S. laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; ● The U.S. federal Physician Payments Sunshine Act which requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services information related to payments or transfers of value made to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners, and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; ● federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; ● federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and ● analogous state and laws and regulations in other jurisdictions, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers, including private insurers, and state and laws in other jurisdiction governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. Many U.S. states have adopted laws similar to the federal Anti-Kickback Statute and False Claims Act, and may apply to our business practices, including, but not limited to, research, distribution, sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors, including private insurers. In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America’s Code on Interactions with Healthcare Professionals. Several states also impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state and require the registration of pharmaceutical sales representatives. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. ​ 104 Table of Contents Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, in the event we obtain regulatory approval for any one of our products, it is possible that some of our business activities could be subject to challenge and may not comply under one or more of such laws, regulations, and guidance. Law enforcement authorities are increasingly focused on enforcing fraud and abuse laws, and it is possible that some of our practices may be challenged under these laws. Violations of these laws can subject us to administrative, civil and criminal penalties, damages, fines, disgorgement, the exclusion from participation in federal and state healthcare programs, individual imprisonment, reputational harm, and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws. Efforts to ensure that our current and future business arrangements with third parties, and our business generally, will comply with applicable healthcare laws and regulations will involve substantial costs. Patient Protection and Affordable Care Act and Healthcare Reform In 2010, the ACA was enacted, which included measures that significantly change the way health care is financed by both U.S. governmental and private insurers. Among other changes, the ACA: ● subjected biologic products to potential competition by lower-cost biosimilars; ● increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; ● extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; ● subjected manufacturers to new annual fees and taxes for certain branded prescription drugs; ● created a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and ● provided incentives to programs that increase the federal government’s comparative effectiveness research. In addition, other legislative and regulatory changes have been proposed and adopted in the United States since the ACA was enacted: ● The Budget Control Act of 2011 and subsequent legislation, among other things, created measures for spending reductions by Congress that include aggregate reductions of Medicare payments to providers of 2% per fiscal year, which remain in effect through 2031. The U.S. American Taxpayer Relief Act of 2012 further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021, and subsequent legislation. Medicare payments to providers were further reduced starting on January 1, 2025. In addition to provider payment cuts under Medicare, the American Rescue Plan Act of 2021 also eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024. These laws and regulations may result in additional reductions in Medicare and other healthcare funding available for healthcare providers and may otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used. ​ 105 Table of Contents The Inflation Reduction Act of 2022 (the “IRA”), includes several provisions that may impact our business to varying degrees, including provisions that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2025, thereby effectively eliminating the coverage gap; impose new manufacturer financial liability on certain drugs under Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition; require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation; and delay until January 1, 2032 the implementation of the HHS rebate rule that would have limited the fees that pharmacy benefit managers can charge. Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one orphan designation and for which the only approved indication is for that disease or condition. Under the One Big Beautiful Bill Act of 2025, this restriction was eliminated; and effective for the 2028 initial price applicability year, all orphan drugs, regardless of the number of orphan drug designations or indications, are exempt from the Medicare drug price negotiation program. The implementation of the IRA is currently subject to ongoing litigation challenging the constitutionality of the IRA’s Medicare drug price negotiation program. The effects of the IRA on our business and the healthcare industry in general is not yet known. At a federal level, President Trump reversed some of President Biden’s executive orders including rescinding Executive Order 14087 entitled “Lowering Prescription Drug Costs for Americans." President Trump may issue new executive orders designed to impact drug pricing. A number of these and other proposed measures may require authorization through additional legislation to become effective. Congress and the Trump administration have indicated that they will continue to seek new legislative measures to control drug costs. On April 15, 2025, the Trump administration published Executive Order 14273, “Lowering Drug Prices by Once Again Putting Americans First,” which generally directs the federal government to take measures to reduce drug prices, including eliminating the so-called “pill penalty” under the IRA that creates a distinction between small molecule and large molecule products for purposes of determining when a drug may be eligible for drug price negotiation. On May 12, 2025, the Trump administration published Executive Order 14297, “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” which generally, among other things, directs the federal government to establish and communicate most-favored-nation (“MFN”) price targets to pharmaceutical manufacturers to bring prices for American patients in line with comparably developed nations. Further, the Executive Order directs the federal government to support regulatory paths to allow direct-to-patient sales for companies that meet these targets. It also states that the Administration will take additional aggressive action (for example, examining whether marketing approvals should be modified or rescinded or opening the door for individual drug importation waivers) should manufacturers fail to offer American consumers the MFN lowest price. It also directs the Secretary of Commerce and the U.S. Trade Representative to “take all necessary and appropriate action to ensure foreign countries are not engaged in any act, policy, or practice that may be unreasonable or discriminatory or that may impair United States national security . . . including by suppressing the price of pharmaceutical products below fair market value in foreign countries.” Notably, a similar MFN pricing rule enacted under the first Trump administration was subject to an injunction resulting from judicial challenges to the rule, which was formally rescinded by the former Biden Administration in August 2021. On December 19, 2025, CMS released two proposed rules that would incorporate MFN pricing principles into federal reimbursement for prescription drugs. The first proposal, the Global Benchmark for Efficient Drug Pricing Model (“GLOBE”) for Medicare Part B, would require manufacturers of specified single source drugs and sole source biologics to pay incremental rebates based on international benchmark prices, with participation triggered for products meeting CMS’s spending and eligibility criteria. The second proposal, the Guarding U.S. Medicare Against Rising Drug Costs (“GUARD”) model for Medicare Part D, would similarly mandate manufacturer rebates for qualifying sole source drugs where the Medicare net price exceeds an MFN benchmark derived from international reference pricing methodologies. As proposed, GLOBE would begin a five year performance period on October 1, 2026 and GUARD would begin its performance period in 2027. These proposals will likely be subject to legal challenges that could delay their implementation or modify their impact on manufacturer pricing and revenue. Additionally, in November 2025, CMS introduced the GENErating cost Reductions for U.S. Medicaid (“GENEROUS”) Model, a voluntary MFN framework for manufacturers participating in the Medicaid Drug Rebate Program. Although it is voluntary, the GENEROUS Model could also impact the drug pricing landscape for manufacturers. ​ 106 Table of Contents At the state level, legislatures have increasingly passed legislation and implemented regulations similar to those under consideration at the federal level, as well as laws designed to control pharmaceutical and biotherapeutic product pricing, including restrictions on pricing or reimbursement at the state government level, limitations on discounts to patients, marketing cost disclosure and transparency measures, restrictions or other limitations on patient assistance, and, in some cases, policies to encourage importation from other countries (subject to federal approval) and bulk purchasing. Certain states are also pursuing cost containment efforts through Prescription Drug Affordability Boards (“PDABs”) and similar entities. While many PDABs have been granted authority to promote drug price transparency and reporting, some states have granted PDABs more expansive authority, including to set Upper Payment Limits (“UPLs”) on select, high price drugs. The adoption and implementation of UPLs may put downward pressure on drug prices and impact our Company’s future revenues. We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare drugs and services, which could result in reduced demand for our drug candidates or additional pricing pressures. European Union and United Kingdom regulation Regulation in the United Kingdom The UK formally left the EU on January 31, 2020. Following the end of the Brexit transition period on January 1, 2021 and the implementation of the Windsor Framework on January 1, 2025, the UK is not generally subject to EU laws in respect of medicines. EU laws that were transposed into UK law through secondary legislation continue to apply in the UK as retained EU law (as amended), however new EU legislation, such as the EU Clinical Trials Regulation, does not apply in the UK. As a result of the Northern Ireland Protocol, different rules applied in Northern Ireland for a period following Brexit, which continued to follow the EU regulatory regime. However, on January 1, 2025 a new arrangement called the “Windsor Framework” came into effect and reintegrated Northern Ireland under the regulatory authority of the Medicines and Healthcare products Regulatory Agency (“MHRA”) with respect to medicinal products. The MHRA is now responsible for approving all medicinal products destined for the UK market (i.e., Great Britain and Northern Ireland), and the EMA no longer has a role in approving medicinal products destined for Northern Ireland under the EU centralized procedure. A single UK-wide marketing authorization is granted by the MHRA for all novel medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK. However, although a separate authorization is now required to market medicinal products in the UK, under a international recognition procedure, which was put in place by the MHRA on January 1, 2024, the MHRA may take account of decisions on the approval of a marketing authorization from the EMA and other trusted regulators in Australia, Canada, Japan, Switzerland, Singapore, and the United States, when considering an application for a UK marketing authorization. Since January 1, 2025, joint packs, also known as common or shared packs, can no longer enter the UK supply chain (packs already released to the market may continue to be supplied until their expiry date). A joint pack is one that is shared with another EU country or countries, and which presents administrative details for both the UK and the other markets sharing the pack. Since this date, medicines must be packaged in a UK-specific outer carton that is labelled ‘UK only’. Shared inner packaging components, such as multi-lingual blister foils and joint leaflets may continue to be used, provided that the UK and EU authorizations remain aligned. Following the end of the Brexit transition period, the MHRA continues to authorize clinical trials in the UK. The UK has implemented the now-repealed Clinical Trials Directive into national law through the Medicines for Human Use (Clinical Trials) Regulations 2004. However, on December 12, 2024, the UK government introduced a legislative proposal - the Medicines for Human Use (Clinical Trials) (Amendment) Regulations 2024. The resultant Medicines for Human Use (Clinical Trials) (Amendment) Regulations 2025, which were approved on April 28, 2025, aim to provide a more flexible regime to make it easier to conduct trials in the UK and increase the transparency of clinical trials conducted in the UK. This includes a notification scheme to enable lower-risk clinical trials to be automatically approved by the MHRA, where the risk is similar to that of standard medical care (although such trials would still require ethics committee approval). These amendments enter into force on April 28, 2026. ​ 107 Table of Contents Regulation in the European Union Product development, the regulatory approval process, and safety monitoring of medicinal products and their manufacturers in the EU proceed in much the same manner as they do in the United States. Therefore, many of the issues discussed above apply similarly in the context of the EU. In addition, drugs are subject to the extensive price and reimbursement regulations of the various EU Member States. Clinical trials In April 2014, the EU adopted the Clinical Trials Regulation (EU) No 536/2014), which replaced the previous Clinical Trials Directive. The Clinical Trials Regulation entered into application on January 31, 2022. The Clinical Trials Regulation harmonizes the assessment and supervision processes for clinical trials throughout the EU, via a Clinical Trials Information System (“CTIS”). CTIS contains the centralized EU portal and database for clinical trials provided for by the Clinical Trials Regulation. The goal of the Clinical Trials Regulation is to create an environment that is favorable to conducting clinical trials in the EU, with the highest standards of safety for participants and increased transparency of trial information. The Regulation requires: ● consistent rules for conducting clinical trials throughout the EU; and ● information on the authorization, conduct and results of each clinical trial carried out in the EU to be publicly available. This aims to increase the efficiency of all trials in the EU with the greatest benefit for those conducted in multiple EU Member States. It aims to foster innovation and research, while helping avoid unnecessary duplication of clinical trials or repetition of unsuccessful trials. The key benefits of the Clinical Trials Regulation include: ● harmonized electronic submission and assessment process for clinical trials conducted in multiple EU Member States; ● improved collaboration, information-sharing and decision-making between and within EU Member States; ● increased transparency of information on clinical trials; and ● highest standards of safety for all participants in EU clinical trials The authorization and oversight of clinical trials remains the responsibility of EU Member States, with the EMA managing CTIS and supervising content publication on the public website. Marketing approval Marketing authorizations in the EU may be obtained through a centralized, mutual recognition or decentralized procedure. The centralized procedure results in the grant of a single marketing authorization that is valid throughout the EU Member States, as well as the additional countries of the European Economic Area (Norway, Iceland and Liechtenstein) (EEA). ​ 108 Table of Contents Pursuant to Regulation (EC) No. 726/2004, the centralized procedure is mandatory for certain products, including those developed by means of specified biotechnological processes, advanced therapy medicinal products (gene therapy, somatic cell therapy, and tissue-engineered products), products for human use containing a new active substance for which the therapeutic indication is the treatment of specified diseases, including AIDS, HIV, cancer, diabetes, neurodegenerative disorders, auto-immune diseases and other immune dysfunctions and viral diseases, as well as products designated as orphan medicinal products. The Committee for Medicinal Products for Human Use (“CHMP”), of the EMA also has the discretion to permit other products to use the centralized procedure if it considers them sufficiently innovative or they contain a new active substance or they may be of benefit to public health at the EU level. In the marketing authorization application (“MAA”), the applicant has to properly and sufficiently demonstrate the quality, safety, and efficacy of the drug. Under the centralized approval procedure, the CHMP, possibly in conjunction with other committees, is responsible for drawing up the opinion of the EMA on any matter concerning the admissibility of the files submitted in accordance with the centralized procedure, such as an opinion on the granting, variation, suspension or revocation of a marketing authorization, and pharmacovigilance. The CHMP and other committees, such as the Committee for Advanced Therapies (“CAT”), are also responsible for providing guidelines and have published numerous guidelines that may apply to our product candidates. These guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of drug products and may include, among other things, the preclinical studies required in specific cases; the manufacturing and control information that should be submitted in a MAA; and the post-approval measures required to monitor patients and evaluate the long-term efficacy and potential adverse reactions. Although these guidelines are not legally binding, we believe that our compliance with them is likely necessary to gain approval for any of our product candidates. Under Regulation (EC) No. 726/2004, the maximum timeframe for the evaluation of an MAA by the CHMP under the centralized procedure is 210 days after receipt of a valid application, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP. Clock stops may extend the timeframe of evaluation of a MAA considerably beyond 210 days. Where an application is submitted for a marketing authorization in respect of a medicinal product which is of major interest from the point of view of public health and, in particular, from the point of view of therapeutic innovation, the applicant may request an accelerated assessment procedure. If the CHMP accepts such request, the time limit of 210 days will be reduced to 150 days (not including clock stops), but it is possible that the CHMP can revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment. If the CHMP concludes that the quality, safety, and efficacy of the product are sufficiently proven, it adopts a positive opinion. This opinion is sent to the European Commission which drafts a decision. After consulting with the EU Member States, the European Commission adopts a decision and grants a marketing authorization, which is valid for the whole of the EU. The marketing authorization may be subject to certain conditions, which may include, without limitation, the performance of post-authorization safety and/or efficacy studies. Pursuant to Regulation (EC) No. 726/2004, a new marketing authorization is valid for five years and may be renewed for an unlimited period on the basis of a re-evaluation of the risk-benefit balance after submission of a consolidated version of the initial marketing authorization application in addition to the pharmacovigilance data reported and all variations introduced since granting of the marketing authorization. The marketing authorization shall cease to be valid if the grant of such marketing authorization is not followed by the actual launch of the product on the market within three years or, if the product is no longer available on the market for three consecutive years. ​ 109 Table of Contents European Union legislation also provides for a system of regulatory data and market exclusivity. According to Regulation (EC) No. 726/2004 and Directive 2001/83/EC, upon receiving marketing authorization, innovative medicinal products approved on the basis of a complete, independent data package benefit from eight years of data exclusivity and an additional two years of market exclusivity. Data exclusivity prevents generic or biosimilar applicants from referencing the innovator’s pre-clinical or clinical trials data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization, for a period of eight years from the date on which the reference product was first authorized in the EU. During the additional two-year period of market exclusivity, a generic or biosimilar marketing authorization can be submitted, and the innovator’s data may be referenced, but no generic or biosimilar medicinal product can be marketed until the expiration of the market exclusivity. The overall ten-year period will be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder (“MAH”) obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. There is no guarantee that a product will be considered by the EMA to be an innovative medicinal product, and products may not qualify for data exclusivity. Even if a compound is considered to be an innovative medicine and the innovator is able to gain the period of data exclusivity, another company nevertheless could also market another version of the drug if such company obtained marketing authorization based on an MAA with a complete independent data package of pharmaceutical test, preclinical tests and clinical trials. However, products designated as orphan medicinal products enjoy, upon receiving marketing authorization, a period of ten years of orphan market exclusivity limited to the therapeutic indication for which orphan designation has been obtained—see also “—Orphan Regulation” below. Depending upon the timing and duration of the EU marketing authorization process, products may be eligible for up to five years’ additional patent protection under a supplementary protection certificate (“SPC”), pursuant to Regulation (EC) No. 469/2009. Such SPCs extend the rights under the basic patent for the drug. Orphan regulation In the EU, Regulation (EC) No. 141/2000, as amended, provides that a medicinal product will be designated as an orphan medicinal product if its sponsor can establish that: ● it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; ● either such condition affects no more than five in ten thousand persons in the EU when the application is made, or where without incentives it is unlikely that the marketing of the product in the EU would generate sufficient return to justify the necessary investment in its development; and ● there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, that the product will be of significant benefit to those affected by that condition. Regulation (EC) No. 847/2000 sets out further provisions for implementation of the criteria for designation of medicinal products as an orphan medicinal product. In the EU, an application for the designation of a product as an orphan medicinal products must be submitted before filing of a marketing authorization application. ​ 110 Table of Contents If an EU-wide centralized marketing authorization in respect of an orphan product is granted or if all the EU Member States have granted marketing authorizations in accordance with the procedures for mutual recognition, the EMA and the Member States will not, for a period of 10 years, accept another application for a marketing authorization, or grant a marketing authorization or accept an application to extend an existing marketing authorization, for the same therapeutic indication, in respect of a “similar medicinal product” to such authorized orphan product. A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. This period may however be reduced to six years if, at the end of the fifth year, it is established, with respect to the product concerned, that the criteria for orphan medicinal product designation are no longer met, such as when it is shown on the basis of available evidence that the product is sufficiently profitable not to justify maintenance of market exclusivity (cf. Article 8(2) of Regulation (EC) No. 141/2000). Notwithstanding the foregoing, Regulation (EC) No. 141/2000 provides that a marketing authorization may be granted, for the same therapeutic indication, to a similar medicinal product if: ● the holder of the marketing authorization for the original orphan medicinal product has given its consent to the second applicant; ● the holder of the marketing authorization for the original orphan medicinal product is unable to supply sufficient quantities of the product; or ● the second applicant can establish in the application that the second product, although similar to the orphan medicinal product already authorized, is safer, more effective or otherwise clinically superior. Other incentives available to orphan medicinal products in the EU include financial incentives such as a reduction of fees or fee waivers and protocol assistance. Orphan designation does not convey any advantage in, or shorten the duration of the regulatory review and approval process. Pediatric investigation plan An application for marketing authorization of a medicinal product for human use which is not yet authorized in the EU shall be considered valid only if it includes a pediatric investigation plan (the “PIP”), according to Regulation (EC) No. 1901/2006, unless a waiver or deferral applies (for example if the disease or condition for which the product is intended occurs only in adult populations). The PIP or the application for waiver shall be submitted with a request for agreement, except in duly justified cases, early during the product development phase and not later than upon completion of the human pharmacokinetic studies in healthy subjects. In any case, submission of the PIP cannot be after initiation of pivotal trials or confirmatory (Phase 3) trials. The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which marketing authorization is being sought. The Pediatric Committee, a scientific committee of the EMA, shall assess the content of any PIP, waivers and deferrals for a medicinal product submitted to it in accordance with the regulation on medicinal products for pediatric use and formulate an opinion thereon. If a marketing authorization is obtained and trial results in accordance with an agreed PIP are included in the product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension. In the case of orphan medicinal products, a two-year extension of the orphan market exclusivity may be available. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted. ​ 111 Table of Contents Manufacturing and manufacturers’ license Pursuant to Directive 2001/83/EC and Directive (EU) 2017/1572, as transposed into the national laws of the EU Member States, the manufacturing of investigational medicinal products and approved products is subject to a separate manufacturer’s license and must be conducted in strict compliance with cGMP requirements, which mandate the methods, facilities, and controls used in manufacturing, processing, and packing of drugs to assure their safety and identity. Manufacturers must have at least one qualified person permanently and continuously at their disposal. The qualified person is ultimately responsible for certifying that each batch of finished product released onto the market has been manufactured in accordance with cGMP and the specifications set out in the marketing authorization or investigational medicinal product dossier. cGMP requirements are enforced through mandatory registration of facilities and inspections of those facilities. Failure to comply with these requirements could interrupt supply and result in delays, unanticipated costs and lost revenues, and subject the applicant to potential legal or regulatory action, including but not limited to warning letters, suspension of manufacturing, seizure of product, injunctive action or possible civil and criminal penalties. Wholesale distribution and license Pursuant to Directive 2001/83/EC, the wholesale distribution of medicinal products is subject to the possession of an authorization to engage in activity as a wholesaler in medicinal products. Possession of a manufacturing authorization includes authorization to distribute by wholesale the medicinal products covered by that authorization. The distribution of medicinal products must comply with the principles and guidelines of good distribution practices (“GDP”). Collection and use of personal data in the European Union and the United Kingdom The General Data Protection Regulation (EU) 2016/679 (EU GDPR) and the UK General Data Protection Legislation (UK GDPR) regulate the collection and use of personal data in connection with the EU and UK respectively. These regulations operate alongside applicable data protection laws in effect in the EU Member States and in the UK, including the UK Data Protection Act 2018, which further govern the processing of personal data. Unless stated otherwise, references to the GDPR in this annual report, encompass both the EU GDPR and UK GDPR. The GDPR applies to any business, regardless of its location, if it processes personal data in connection with (a) offering goods or services to individuals in the EU/UK, or monitoring their behavior; or (b) in the context of the activities of an establishment in the EU/UK. Accordingly, the GDPR may apply to our activities in the EU/UK. The GDPR imposes strict requirements on controllers and processors of personal data, including special protections for “sensitive information,” which includes health and genetic information of individuals in the EU/UK. The GDPR grants individuals the opportunity to object to the processing of their personal data, allows them to request deletion of personal data in certain circumstances, and provides the individual with an express right to seek legal remedies in the event the individual believes his or her rights have been violated. Further, the GDPR imposes strict rules on the transfer of personal data out of the EU to regions that have not been deemed to offer “adequate” privacy protections, such as the U.S. in certain circumstances. Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States/the UK, which may deviate slightly from the GDPR, may result in warning letters, mandatory audits, suspension of processing and financial penalties, including fines of up to 4 percent of global revenues, or €20,000,000 (£17.5 million for the UK GDPR), whichever is greater. We may be required to put in place additional mechanisms to ensure compliance with the GDPR. Following the UK’s decision to leave the EU on January 31, 2020, the UK’s data protection regime is independent from but aligned to the EU’s data protection regime. However, the UK government approved the Data (Use and Access) Act 2025 on June 19, 2025. This act does not replace the UK GDPR, Data Protection Act 2018 or the Privacy and Electronic Communications (EC Directive) Regulations 2003, but it does make some changes to them, which may alter the similarities between the UK and EU data protection regime. These potential future changes to UK data protection laws may alter the similarities between the UK and EU data protection regime. Data protection authority activity differs across the EU and UK, with certain authorities applying their own agenda which shows there is uncertainty in the manner in which data protection authorities will seek to enforce compliance with GDPR. For example, it is unclear whether the authorities will conduct random audits of companies doing business in the EU/UK, or act solely after complaints are filed claiming a violation of the GDPR. The stringent obligations under the GDPR, enforcement uncertainty and the costs associated with ensuring GDPR compliance are onerous and may adversely affect our business, financial condition, results of operations and prospects. ​ 112 Table of Contents Other regulatory requirements A marketing authorization holder (“MAH”), for a medicinal product is legally obliged to fulfill a number of obligations by virtue of its status as an MAH. The MAH can delegate the performance of related tasks to third parties, such as distributors or marketing partners, provided that this delegation is appropriately documented and the MAH maintains legal responsibility and liability. The obligations of an MAH include: Manufacturing and batch release. MAHs should ensure that all manufacturing operations comply with relevant laws and regulations (as set forth above), applicable good manufacturing practices, with the product specifications and manufacturing conditions set out in the marketing authorization and that each batch of product is subject to appropriate release formalities. Availability and continuous supply. Pursuant to Directive 2001/83/EC, as transposed into the national laws of the EU Member States, the MAH for a medicinal product and the distributors of the said medicinal product actually placed on the market in an EU Member State shall, within the limits of their responsibilities, ensure appropriate and continued supplies of that medicinal product to pharmacies and persons authorized to supply medicinal products so that the needs of patients in the EU Member State in question are covered. Pharmacovigilance. MAHs are obliged to establish and maintain a pharmacovigilance system, including a qualified person responsible for oversight, submit safety reports to the regulators and comply with the good pharmacovigilance practice guidelines adopted by the EMA. Advertising and promotion. MAHs remain responsible for all advertising and promotion of their products, including promotional activities by other companies or individuals on their behalf and in some cases must conduct internal or regulatory pre-approval of promotional materials. Regulation in this area also covers interactions with healthcare practitioners and/or patient groups, and in some jurisdictions legal or self-regulatory obligations to disclose such interactions exist. In the EU, the promotion of prescription medicines is subject to intense regulation and control, including EU and national legislation as well as self-regulatory codes (industry codes). Advertising legislation inter alia includes a prohibition on direct-to-consumer advertising of prescription only medicinal products. All prescription medicines advertising must be consistent with the product’s approved summary of product characteristics, and must be factual, accurate, balanced and not misleading. Advertising of prescription medicines to healthcare professionals pre-approval or off-label is not allowed. Some jurisdictions require that all promotional materials for prescription medicines be subjected to either prior internal review and approval or regulatory review and approval. Medical affairs/scientific service. MAHs are required to disseminate scientific and medical information on their medicinal products to healthcare professionals, regulators and patients. Preparation, filing and maintenance of the application and subsequent marketing authorization. MAHs must maintain appropriate records, comply with the marketing authorization’s terms and conditions, fulfill reporting obligations to regulators, submit renewal applications and pay all appropriate fees to the authorities. We may hold any future marketing authorizations granted for our product candidates in our own name, or appoint an affiliate or a collaboration partner to hold marketing authorizations on our behalf. Any failure by an MAH to comply with these obligations may result in regulatory action against an MAH and ultimately threaten our ability to commercialize our products. ​ 113 Table of Contents Price and reimbursement In the EU, the pricing and reimbursement mechanisms set by private and public health insurers vary largely by country and even within countries. The public systems reimbursement for medicines is determined by the rules or guidelines established by the legislator or the competent national authority. The approach taken varies by EU Member State. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. Other EU Member States allow companies to set their own prices for medicines, but monitor and control company profits and may limit or restrict reimbursement. The downward pressure on healthcare costs in general, particularly prescription drugs, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products and some of EU Member States require the completion of studies that compare the cost-effectiveness of a particular product candidate to currently available therapies in order to obtain reimbursement or pricing approval. Special pricing and reimbursement rules may apply to orphan medicinal products. Inclusion of orphan medicinal products in reimbursement systems tend to focus on the medical usefulness, need, quality and economic benefits to patients and the healthcare system as for any product. Acceptance of any medicinal product for reimbursement may come with cost, use and often volume restrictions, which again can vary by country. In addition, results-based reimbursement schemes may apply. Regulation (EU) 2021/2282 on health technology assessment (“HTAR”) entered into force on January 11, 2022 and has applied since January 12, 2025. The Health Technology Assessment (“HTA”) Regulation focuses on clinical aspects of HTA, i.e., the relative clinical effectiveness and relative clinical safety of a new health technology as compared with existing technologies. EU Member States’ HTA bodies will conduct joint clinical assessments of new medicines and certain high-risk medical devices. They will also engage in joint scientific consultations to advise technology developers on clinical study designs that generate appropriate evidence. Moreover, “horizon scanning” exercises will identify, at an early stage, promising health technologies, to help health systems prepare for them. In addition to this mandatory scope of the HTAR, EU Member States may also engage in further voluntary cooperation, e.g., on health technologies other than medicines and medical devices, or on economic aspects of HTA. The new rules under the HTAR will be introduced in stages, with joint clinical assessments initially applying to new cancer medicines and advanced therapy medicinal products, and ultimately being extended to all medicinal products authorized under the EU centralized procedure. Reform of general pharmaceutical legislation On April 26, 2023, the European Commission proposed to reform the EU’s pharmaceutical legislation as part of a wider EU Pharmaceutical Strategy, including through a proposal for a new medicines Directive and Regulation, to modernize, simplify and replace the following existing legislation: Directive 2001/83/EC and Regulation (EC) No 726/2004 (referred to as the ‘general pharmaceutical legislation’), Regulation (EC) No 1901/2006 on medicines for children (‘Pediatric Regulation’), and Regulation (EC) No 141/2000 on medicines for rare diseases (‘Orphan Regulation’). The European Commission provided the legislative proposals to the European Parliament and the European Council for their review and approval. In April 2024, the European Parliament adopted its position on the legislative proposals, and in June 2025 the Council of the European Union adopted its position. A common position on the text has been agreed upon on December 11, 2025, in the context of subsequent inter-institutional trilogue negotiations. The proposed revisions remain to be adopted, and are not expected to become applicable before 2028. Legal proceedings From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. ​ ​ 114 Table of Contents Glossary of terms Term Description ADS American Depositary Share; Galapagos has a Level 3 ADS listed on Nasdaq with ticker symbol GLPG and CUSIP number 36315X101. One ADS is equivalent to one ordinary share in Galapagos NV Antibody A blood protein produced in response to and counteracting a specific antigen. Antibodies combine chemically with substances which the body recognizes as alien, such as bacteria, viruses, and foreign substances ATALANTA-1 ATALANTA-1 Phase 1/2 study with decentralized manufactured CD19 CAR-T candidate, GLPG5101, in R/R NHL Auto-immune indication Autoimmune diseases result when your immune system is overactive, causing it to attack and damage your body's own tissues. Normally, your immune system creates proteins called antibodies that work to protect you against harmful substances such as viruses, cancer cells, and toxins. But with autoimmune disorders, your immune system can't tell the difference between invaders and healthy cells. BCMA B cell maturation antigen (BCMA) is a member of the tumor necrosis factor receptor superfamily that plays an important role in regulating B-cell proliferation and survival. BCMA is central to the survival of multiple myeloma cells Biologics Biologics, also referred to as Biologicals, are those class of medicines which are grown and then purified from large-scale cell cultures of bacteria or yeast, or plant or animal cells. Biologicals are a diverse group of medicines which includes vaccines, growth factors, immune modulators, monoclonal antibodies, as well as products derived from human blood and plasma. What distinguishes biologics from other medicines is that these are generally proteins purified from living culture systems or from blood, whereas other medicines are considered as 'small molecules' and are either made synthetically or purified from plants Black & Scholes model A mathematical description of financial markets and derivative investment instruments that is widely used in the pricing of European options and subscription rights CAR-T Chimeric antigen receptor T cells (also known as CAR-T cells) are T cells that have been genetically engineered to produce an artificial T cell receptor for use in immunotherapy Cash position Current financial investments and cash and cash equivalents CD19 CD19 is a protein found on the surface of B-cells, a type of white blood cell. Since CD19 is a hallmark of B-cells, the protein has been used to diagnose cancers that arise from this type of cell, notably B-cell lymphomas Cell therapy Cell therapy aims to treat diseases by restoring or altering certain sets of cells or by using cells to carry a therapy through the body. With cell therapy, cells are cultivated or modified outside the body before being injected into the patient. The cells may originate from the patient (autologous cells) or a donor (allogeneic cells) Complete Response Rate (CRR) Term used for the absence of all detectable cancer after the treatment is completed Compound A chemical substance, often a small molecule with drug-like properties Contract research organization (CRO) Organization which provides drug discovery and development services to the pharmaceutical, biotechnology and medical devices industry Decentralized cell therapy manufacturing The manufacturing of cell therapies close to cancer treatment centers Dermatomyositis (DM) Dermatomyositis is a rare inflammatory disease. Common symptoms include distinctive skin rash, and inflammatory myopathy, or inflamed muscles, causing muscle weakness Development All activities required to bring a new drug to the market. This includes preclinical and clinical development research, chemical and pharmaceutical development and regulatory filings of product candidates ​ 115 Table of Contents Discovery Process by which new medicines are discovered and/or designed. At Galapagos, this is the department that oversees target and drug discovery research through to nomination of preclinical candidates Dose-range finding study Phase 2 clinical study exploring the balance between efficacy and safety among various doses of treatment in patients. Results are used to determine doses for later studies Double-blind Term to characterize a clinical trial in which neither the physician nor the patient knows if the patient is taking placebo or the treatment being evaluated EC European Commission Efficacy Effectiveness for intended use EMA European Medicines Agency, in charge of European market authorization of new medications FDA The U.S. Food and Drug Administration is an agency responsible for protecting and promoting public health and in charge of American market approval of new medications Filgotinib Small molecule preferential JAK1 inhibitor, approved in RA and UC in the European Union, Great-Britain and Japan, and marketed under the brand name Jyseleca®. The Jyseleca® business has been transferred to AlfaSigma in 2024 ​ ​ FORM 20-F Form 20-F is an SEC filing submitted to the US Securities and Exchange Commission FSMA The Belgian market authority: Financial Services and Markets Authority, or Autoriteit voor Financiële Diensten en Markten FTE Full-time equivalent; a way to measure an employee’s involvement in a project. For example, an FTE of 1.0 means that the equivalent work of one full-time worker was used on the project G&A expenses General & administrative expenses GALACELA Phase 2 (Phase 3-enabling) study with GLPG3667 in patients with systemic lupus erythematous GALARISSO Phase 2 (Phase 3-enabling) study with GLPG3667 in patients with dermatomyositis GLPG3667 A TYK2 kinase inhibitor discovered by us, evaluated in two Phase 2 studies in DM and SLE GLPG5101 A second generation anti-CD19/4-1BB CAR-T product candidate currently in Phase 1/2 study in R/R/ NHL GLPG5301 A BCMA CAR-T product candidate in Phase 1/2 study in R/R MM Immunology The study of the immune system and is a very important branch of the medical and biological sciences. The immune system protects humans from infection through various lines of defence. If the immune system is not functioning as it should, it can result in disease, such as autoimmunity, allergy, and cancer In vitro Studies performed with cells outside their natural context, for example in a laboratory In vivo Studies performed with animals in a laboratory setting In-/out-licensing Receiving/granting permission from/to another company or institution to use a brand name, patent, or other proprietary right, in exchange for a fee and/or royalty Intellectual property Creations of the mind that have commercial value and are protected or protectable, including by patents, trademarks or copyrights JAK Janus kinases (JAK) are critical components of signaling mechanisms utilized by a number of cytokines and growth factors, including those that are elevated in RA. Filgotinib is a preferential JAK1 inhibitor Jyseleca® Brand name for filgotinib Lymphocyte Type of white blood cell that is part of the immune system MHLW Japanese Ministry of Health, Labor and Welfare (MHLW), in charge of Japanese market authorization of new medications MHRA Medicines and Healthcare products Regulatory Agency in Great Britain ​ 116 Table of Contents Milestone Major achievement in a project or program; in our alliances, this is usually associated with a payment Multiple myeloma (MM) Multiple myeloma (MM) is typically characterized by the neoplastic proliferation of plasma cells producing a monoclonal immunoglobulin. The plasma cells proliferate in the bone marrow and can result in extensive skeletal destruction with osteolytic lesions, osteopenia, and/or pathologic fractures Non-Hodgkin's lymphoma (NHL) Non-Hodgkin lymphoma is a type of cancer that begins in the lymphatic system, which is part of the body's germ-fighting immune system. In non-Hodgkin lymphoma, white blood cells called lymphocytes grow abnormally and form tumors throughout the body Objective Response Rate (ORR) The response rate is the percentage of patients on whom a therapy has some defined effect; for example, the cancer shrinks or disappears after treatment. When used as a clinical endpoint for trials of cancer treatments, this is often called the objective response rate Oncology Field of medicine that deal with the diagnosis, treatment, prevention, and early detection of cancer Oral dosing Administration of medicine by the mouth, either as a solution or solid (capsule, pill) form Outsourcing Contracting work to a third party PAPILIO-1 Phase 1/2 study with GLPG5301 in patients with relapsed/refractory multiple myeloma Pharmacokinetics (PK) Study of what a body does to a drug; the fate of a substance delivered to a body. This includes absorption, distribution to the tissues, metabolism and excretion. These processes determine the blood concentration of the drug and its metabolite(s) as a function of time from dosing Phase 1 First stage of clinical testing of an investigational drug designed to assess the safety and tolerability, pharmacokinetics of a drug, usually performed in a small number of healthy human volunteers Phase 2 Second stage of clinical testing, usually performed in no more than several hundred patients, in order to determine efficacy, tolerability and the dose to use Phase 3 Large clinical trials, usually conducted in several hundred to several thousand patients to gain a definitive understanding of the efficacy and tolerability of the candidate treatment; serves as the principal basis for regulatory approval Pivotal studies Registrational clinical studies Placebo A substance having no pharmacological effect but administered as a control in testing a biologically active preparation Preclinical Stage of drug research development, undertaken prior to the administration of the drug to humans. Consists of in vitro and in vivo screening, pharmacokinetics, toxicology, and chemical upscaling Preclinical candidate (PCC) A new molecule and potential drug that meets chemical and biological criteria to begin the development process Product candidate Substance that has satisfied the requirements of early preclinical testing and has been selected for development, starting with formal preclinical safety evaluation followed by clinical testing for the treatment of a certain disorder in humans R&D operations Research and development operations; unit responsible for discovery and developing new product candidates for internal pipeline or as part of risk/reward sharing alliances with partners Refractory "Refractory" refers to a patient with cancer that is/has become resistant to, or does not respond to, treatment Relapsed "Relapsed" refers to a patient with cancer that develops cancer again after a period of improvement S&M expenses Sales and marketing expenses SEC Securities and Exchange Commission in the US Systemic lupus erythematosus (SLE) An autoimmune disease, with systemic manifestations including skin rash, erosion of joints or even kidney failure ​ 117 Table of Contents Target Protein that has been shown to play a role in a disease process and that forms the basis of a therapeutic intervention or discovery of a medicine TYK Tyrosine kinase is an enzyme that can transfer a phosphate group from ATP to the tyrosine residues of specific proteins inside a cell. It functions as an "on" or "off" switch in many cellular functions. Tyrosine kinases belong to a larger class of enzymes known as protein kinases which also attach phosphates to other amino acids such as serine and threonine. GLPG3667 is a reversible and selective TYK2 kinase domain inhibitor ​ ​ ​ ​ C. Organizational structure. As of December 31, 2025, we had 12 subsidiaries. The following table sets out for each of our subsidiaries, the country of incorporation, and percentage ownership and voting interest held by us (directly or indirectly through our subsidiaries) (situation as per December 31, 2025). ​ On January 7, 2025, we incorporated Galapagos (Shanghai) Bioscience Co., Ltd., in the People’s Republic of China, and on February 14, 2025 we incorporated Galapagos Cell Therapeutics NV (formerly XYZ Spinco NV) in Belgium. On August 5, 2025, we incorporated Lakefront Biotherapeutics, Inc. in the United States. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company ​ ​ ​ Country of incorporation ​ ​ ​ Percentage ownership and voting interest ​ ​ ​ ​ ​ ​ Galapagos B.V. ​ The Netherlands ​ 100% ​ Galapagos GmbH ​ Switzerland ​ 100% ​ GLPG US Holding Inc. ​ United States ​ 100% ​ Galapagos SASU ​ France ​ 100% ​ Galapagos Real Estate Netherlands B.V. ​ The Netherlands ​ 100% ​ Galapagos U.K. Limited ​ United Kingdom ​ 100% ​ GLPG US Inc. ​ United States ​ 100% ​ Xenometrix, Inc. in liquidation ​ United States ​ 100% ​ Lakefront Biotherapeutics, Inc. ​ United States ​ 100% ​ Galapagos Holding PTE. LTD. ​ Singapore ​ 100% ​ Galapagos (Shanghai) Bioscience Co. Ltd. ​ China ​ 100% ​ Galapagos Cell Therapeutics NV ​ Belgium ​ 100% ​ ​ ​ D. Property, plants and equipment. We have our principal executive, operational offices and laboratory space located in Mechelen, Belgium. Our main facilities owned or leased as of December 31, 2025 are set forth in the following table: ​ ​ ​ ​ ​ ​ ​ Facility location ​ ​ ​ Use ​ ​ ​ Approx. size (m2) ​ ​ ​ Lease expiry Mechelen, Belgium (leased) Headquarters, R&D, Operations 426 ​ June 30, 2026 Mechelen, Belgium (leased) Headquarters, Operations 1,732 ​ December 31, 2034 Oegstgeest, the Netherlands (owned) ​ R&D, Operations ​ 6,943 ​ Pittsburgh, United States (leased) ​ R&D, Operations ​ 966 ​ September 30, 2028 Chicago, United States (leased) ​ Operations ​ 685 ​ February 20, 2029 San Francisco, United States (leased) ​ Operations ​ 27 ​ May 1, 2026 ​ ​ 118 Table of Contents In addition to the facilities listed in the table above, we also lease office space in Basel (Switzerland), Princeton (United States) and in Shanghai (China). Since February 1, 2025, we have terminated our lease in Romainville (France), which included office and R&D space. In December 2024, we signed a share purchase agreement regarding the shares of Galapagos Real Estate Belgium BV. The only tangible asset owned by Galapagos Real Estate Belgium BV was the plot of land located in Mechelen, Belgium, which we acquired in 2019. The closing of the transaction occured on March 31, 2025. The wind-down will result in the closure of the sites in Leiden (the Netherlands), Basel (Switzerland), Princeton and Pitsburgh (U.S.), and Shanghai (China). Environmental issues For more information on environmental issues that may affect our utilization of our facilities, please see the section of this annual report titled “Item 3.D.—Risk factors—Risks related to our organization, structure and operation—.” We could be subject to (a) liabilities under environmental, health and safety laws or regulations, and (b) if we fail to comply with such laws and regulations, fines, penalties or other sanctions, or otherwise incur costs, that could have a material adverse effect on the success or operational results of our business.