Report of the Statutory Auditor
STATUTORY AUDITOR’S REPORT TO THE GENERAL MEETING OF GALAPAGOS NV FOR THE YEAR ENDED DECEMBER 31, 2025 (CONSOLIDATED FINANCIAL STATEMENTS)
In the context of the statutory audit of the consolidated financial statements of Galapagos NV (‘the Company’) and its subsidiaries (together referred to as 'the Group'), we hereby present our statutory auditor’s report. It includes our report of the consolidated financial statements and the other legal and regulatory requirements. This report is an integrated whole and is indivisible.
We have been appointed as statutory auditor by the general meeting of April 25, 2023, following the proposal formulated by the administrative body issued upon recommendation of the Audit Committee and upon presentation by the works council. Our statutory auditor’s mandate expires on the date of the General Meeting deliberating on the financial statements closed on December 31, 2025. We have performed the statutory audit of the consolidated financial statements of the Group for three consecutive years.
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
Unqualified opinion
We have performed the statutory audit of the Group’s consolidated financial statements, which comprise the consolidated statement of financial position as at December 31, 2025, the consolidated statement of income, and other comprehensive income/loss, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes, comprising material accounting policy information and other explanatory information, and which is characterized by a consolidated statement of financial position total of 3,406,518 thousand EUR and for which the consolidated statement of profit or loss shows a profit for the year of 320,884 thousand EUR.
In our opinion, the consolidated financial statements give a true and fair view of the Group’s net equity and financial position as at December 31, 2025, as well as of its consolidated financial performance and its consolidated cash flows for the year then ended, in accordance with the IFRS Accounting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium.
Basis for unqualified opinion
We conducted our audit in accordance with International Standards on Auditing (ISA) as applicable in Belgium.
Our responsibilities under those standards are further described in the 'Statutory auditor’s responsibilities for the audit of the consolidated financial statements’ section in this report.
We have complied with all the ethical requirements that are relevant to the audit of consolidated financial statements in Belgium, including those concerning independence.
We have obtained from the administrative body and company officials the explanations and information necessary for performing our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Completeness of provision related to the wind-down of the cell therapy business
Key audit matter description
On October 21, 2025, the Company announced its intention to wind-down the cell therapy business, and the Board of Directors approved the start of the wind down activities on January 5, 2026. As disclosed in notes 2, 4 and 28 to the consolidated financial statements, the wind down resulted in a provision of 16.3 million EUR as of December 31, 2025 related to early termination of contracts.
The provision related to the cell therapy wind down was identified as a key audit matter because of the significant (a) judgment required to determine the timing of recognition and compliance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and (b) estimation uncertainty and judgment involved in measuring the provision as of December 31, 2025.
Auditing the provision for early contract termination was complex because of significant judgments about when contracts would terminate in 2026, how and when the wind down plan would be executed, the uncertainty in the results of ongoing negotiations with collaboration partners and suppliers, and whether the recognition criteria in IAS 37 were met at year end.
How the key audit matter was addressed in the audit
The primary procedures we performed to address this key audit matter included:
Testing the design and operating effectiveness of controls over the recognition and measurement of provisions for early contract termination.
Assessing internal and external communications about the wind down, examining relevant legal and contractual documentation, and obtaining confirmations from the Company’s internal and external legal advisors.
Verifying the accuracy of the provision calculations by challenging management’s assumptions about the execution of the wind down plan, the expected timing of contract terminations, and by tracing those assumptions to supporting evidence, contracts and other communications that substantiate expected costs for undelivered purchase commitments and potential penalties.
Evaluating whether all obligations arising from the wind down had been identified by performing procedures designed to detect unrecorded liabilities, including assessing whether contract termination decisions or constructive obligations existed prior to year end.
Evaluating the appropriateness of the related disclosures included in notes 2, 4 and 28 to the consolidated financial statements in relation to these matters.
Revenue recognition related to the Option, License and Collaboration Agreement (OLCA) with Gilead
Key audit matter description
As disclosed in Notes 2 and 4 to the consolidated financial statements, following the 2025 amendments to the OLCA and the Company’s intention to wind down the cell therapy business, management derecognized the contract liability relating to Gilead’s access and option rights to the Company’s drug discovery platform and recognized the amount of 1,069 million EUR as collaboration revenue in the period ended December 31, 2025.
We identified the release of the contract liability as a key audit matter because of the significant judgment required to assess that no enforceable performance obligation remains that would support a contract liability as of December 31, 2025.
Auditing the release of the contract liability was especially challenging because of the significant management’s judgements involved. Key areas of judgement included management’s conclusions that (a) no internal program currently exists to which Gilead could apply its opt-in rights under the OLCA, and (b) while the OLCA could apply to future programs resulting from business acquisitions, any application would require a sovereign decision by the Board of Directors, on which two Gilead representatives sit but do not hold a majority, including an amendment to the OLCA.
How the key audit matter was addressed in the audit
The primary procedures we performed to address this key audit matter included:
Assessing and testing the design and operating effectiveness of controls over collaboration revenue recognition under the OLCA.
Obtaining and examining the OLCA and all subsequent amendments to identify and understand the contractual obligations impacting the contract liability.
Inspecting correspondence and minutes of Board meetings, and evaluating the external legal advice obtained by the Company.
Challenging management’s judgements in derecognizing the contract liability by inspecting and assessing supporting evidence, including internal program plans, acquisition criteria, board governance documents and external communications.
Evaluating the appropriateness of the related disclosures included in notes 2 and 4 to the consolidated financial statements in relation to these matters.
Responsibilities of the administrative body for the drafting of the consolidated financial statements
The administrative body is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with the IFRS Accounting Standards as adopted by the European Union and with the legal and regulatory provisions applicable in Belgium, and for such internal control as the administrative body determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.
In preparing the consolidated financial statements, the administrative body is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the administrative body either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Statutory auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a statutory auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
When executing our audit, we respect the legal, regulatory and normative framework applicable for the audit of the consolidated financial statements in Belgium. However, a statutory audit does not guarantee the future viability of the Group, neither the efficiency and effectiveness of the management of the Group by the administrative body. Our responsibilities regarding the continuity assumption applied by the administrative body are described below.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control;
Evaluate the appropriateness of accounting policy information used and the reasonableness of accounting estimates and related disclosures made by the administrative body;
Conclude on the appropriateness of the administrative body’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our statutory auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern;
Evaluate the overall presentation, structure and content of the consolidated financial statements and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation;
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the management, the supervision and the performance of the Group audit. We assume full responsibility for the auditor’s opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control identified during the audit.
We also provide the Audit Committee with a statement that we respected the relevant ethical requirements relating to independence, and we communicate with them about all relationships and other issues which may influence our independence, and, if applicable, about the related measures to guarantee our independence.
From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year, and are therefore the key audit matters. We describe these matters in our statutory auditor’s report, unless law or regulation precludes public disclosure about the matter.
OTHER LEGAL AND REGULATORY REQUIREMENTS
Responsibilities of the administrative body
The administrative body is responsible for the preparation and the contents of the Director’s report on the consolidated financial statements, including the consolidated sustainability information and the other information included in the annual report on the consolidated financial statements.
Responsibilities of the statutory auditor
In the context of our mission and in accordance with the Belgian standard (revised version 2023) which is complementary to the International Standards on Auditing (ISA) as applicable in Belgium, it is our responsibility to verify, in all material aspects, the Director’s report on the consolidated financial statements and the other information included in the annual report on the consolidated financial statements, and to report on these elements.
Aspects relating to the Director’s report on the consolidated financial statements and to the other information included in the annual report on the consolidated financial statements
The Directors’ report to the consolidated financial statements includes the consolidated sustainability information that is covered by our separate limited assurance report. This section does not cover our assurance on the consolidated sustainability information included in the Directors’ report. For that part of the Directors’ report on the consolidated financial statements, please refer to our separate report on this matter.
In our opinion, after having performed specific procedures in relation to the Director’s report, this Director’s report is consistent with the consolidated financial statements for the same financial year, and it is prepared in accordance with article 3:32 of the Code of companies and associations.
In the context of our audit of the consolidated financial statements, we are also responsible for considering, in particular based on the knowledge we have obtained during the audit, whether the Director’s report on the consolidated financial statements and the other information included in the annual report on the consolidated financial statements contain a material misstatement, i.e., information which is inadequately disclosed or otherwise misleading. Based on the procedures we have performed, there are no material misstatements we have to report to you.
Statement concerning independence
Our audit firm and our network did not provide services which are incompatible with the statutory audit of the consolidated financial statements and our audit firm remained independent of the Group during the term of our mandate.
The fees related to additional services which are compatible with the statutory audit as referred to in article 3:65 of the Code of companies and associations were duly itemised and valued in the notes to the consolidated financial statements.
European Single Electronic Format (ESEF)
In accordance with the standard concerning the audit of conformity of the annual report with the European Single Electronic Format (hereinafter “ESEF”), we also audited the conformity of the ESEF format with the regulatory technical standards established by the European Delegated Regulation No. 2019/815 of 17 December 2018 (hereinafter: “Delegated Regulation”) and with the royal decree of 14 November, 2007, concerning the obligations of issuers of financial instruments that are admitted to trade on a regulated market.
The administrative body is responsible for preparing an annual report in accordance with ESEF requirements, including the consolidated financial statements in the form of an electronic file in ESEF format (hereinafter “digital consolidated financial statements”).
It is our responsibility to obtain sufficient and appropriate supporting information to conclude that the format of the annual report and mark-up language XBRL of the digital consolidated financial statements comply in all material aspects with the ESEF requirements under the Delegated Regulation and with the royal decree of 14 November, 2007.
Based on our work, we believe the digital format of the annual report and the tagging of information in the official Dutch version of the digital consolidated financial statements included in the annual report of Galapagos NV as of December 31, 2025, and which will be available in the Belgian official mechanism for the storage of regulated information (STORI) of the FSMA, are in all material respects in accordance with the ESEF requirements pursuant to the Delegated Regulation and the royal decree of November 14, 2007.
Other statements
This report is in compliance with the contents of our additional report to the Audit Committee as referred to in article 11 of regulation (EU) No 537/2014.
Zaventem, March 26, 2026
BDO Bedrijfsrevisoren BV
Statutory auditor
Represented by Ellen Lombaerts*
Auditor
*Acting for a company