Company: GLPG
Filing Date: 2025-03-27
Form Type: 20-F
Source: 0001558370-25-003806
Chunk: 333

Company: GALAPAGOS NV
Filing Date: 2025-03-27
Form: 20-F
Item: Item 16I
Chunk 333
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 critical audit matter due to the judgement in identifying the different elements of the total consideration, determining the fair value of the contingent consideration receivable, and accounting for the transition agreement.

Auditing the fair value of the contingent consideration receivable was complex due to the significant judgment required in estimating the fair value. In particular, the fair value estimate required the use of a valuation methodology that was sensitive to certain significant assumptions, including net sales forecasts and the discount rate used in the model. Additionally, we exercised considerable judgment in auditing the research and development costs payable to Alfasigma, as required by the transition agreement, which was recognized as part of the overall gain from the divestiture of the Jyseleca® business. Variations in these judgments and estimates could notably affect the fair value of the contingent consideration receivable and the final gain realized from the disposal of the Jyseleca® business.

The primary procedures we performed to address this critical audit matter included:

  Testing the design and operating effectiveness of controls over management’s accounting treatment for the disposal of the Jyseleca® business, the derecognition of the disposal group, the calcul...  

  Evaluating management’s judgements over the identification of all assets and liabilities belonging to the disposal group by reading relevant agreements and assessing the Company’s ongoing invol...  

  Verifying the components of the gain on disposal of the Jyseleca® business, including the identification of disposed of assets and liabilities, the determination of the contingent consideration...  

  Assessing the reasonableness of significant inputs and assumptions used by management in  

  the valuation model of the contingent consideration receivable, based on historical data and internal projections of Jyseleca® sales.  

  Utilizing professionals with specialized skills and knowledge to assist in evaluating the appropriateness of the discount rate applied to the contingent consideration receivable.  

Impairment of goodwill and indefinite-lived intangibles assetsCritical Audit Matter Description

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.

Auditing the Company’s impairment test for goodwill and indefinite-lived intangibles was complex and required a high