Company: GLPG
Filing Date: 2025-03-27
Form Type: 20-F
Source: 0001558370-25-003806
Chunk: 418

Company: GALAPAGOS NV
Filing Date: 2025-03-27
Form: 20-F
Item: Item 19
Chunk 418
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●   Assessing the reasonableness of significant inputs and assumptions used by management in
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●   the valuation model of the contingent consideration receivable, based on historical data and internal projections of Jyseleca® sales.
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●   Utilizing professionals with specialized skills and knowledge to assist in evaluating the appropriateness of the discount rate applied to the contingent consideration receivable.
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Impairment of goodwill and indefinite-lived intangibles assetsCritical Audit Matter Description
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As described in notes 13 and 14 to the consolidated financial statements, the Company reports a goodwill balance of 70.0 mEUR and indefinite-lived intangible assets valued at 28.2 mEUR associated with its CAR-T/Cell therapy operations. The Company conducted an impairment test on the CAR-T/Cell therapy cash generating unit at December 31, 2024, using a discounted cash flow model to determine its fair value less cost of disposal.
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Auditing the Company’s impairment test for goodwill and indefinite-lived intangibles was complex and required a high degree of judgment, largely due to the significant estimates needed to determine the fair value, less cost to sell, of the cash-generating unit CAR-T/Cell therapy. The fair value estimates are specifically based on assumptions tailored to CAR-T research and development activities and its product candidates. These assumptions critically impact the significant uncertainty involved in reaching clinical development milestones. Essential factors, such as the timing of anticipated future cash flows, long-term sales projections driven by patient volumes, market share and pricing, and the discount rate, are pivotal to these estimates..
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The primary procedures we performed to address this critical audit matter included: 

●   Critically evaluating and challenging the design and operating effectiveness of the Company's internal controls surrounding the goodwill and indefinite-lived intangible asset impairment exercise.
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F-3

●   Assessing the appropriateness of the valuation methodology used by the Company to estimate the fair value less cost of disposal of the CAR-T/Cell Therapy.
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●   Evaluating the Company’s rationale for defining the cash generating unit CAR-T/Cell therapy and examined the proper allocation of assets to the cash generating unit.
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●   Scrutinizing the key assumptions and estimates used by the Company, such as projected cash flows, discount rates, and probability of success of achieving clinical development milestones. We compared these assumptions with industry reports to assess their reasonableness and consistency with external