Ligand Reports First Quarter 2015 Financial Results
Conference Call Begins at 9:00 a.m. Eastern Time Today
SAN DIEGO--
Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today reported
financial results for the three months ended March 31, 2015, and
provided an operating forecast and program updates.
Financial highlights for the first quarter of 2015 include:
-
Total revenues were $14.6 million and royalty revenues were $10.3
million, an increase of 31% compared with the first quarter of 2014
-
Adjusted EPS was $0.33 and GAAP EPS was $0.04
-
The company generated operating cash of $7.6 million, a significant
increase over $2.6 million of operating cash generated in the first
quarter of 2014
A description of adjusted calculations and reconciliation to comparable
GAAP financial measures is provided in the accompanying table titled
“Adjusted Financial Measures.”
“First quarter financial results feature continued strong growth in
royalty revenues from both of our lead commercial assets, Promacta™ and
Kyprolis®, and strong growth in operating cash flow,” said John Higgins,
President and Chief Executive Officer of Ligand. “Our growing roster of
partners made important clinical and regulatory progress with many of
our programs, both in the U.S. and in Europe and including orphan and
large-market indications. Notably, Promacta has now transitioned from
GSK to the highly capable stewardship of Novartis, and Amgen reported
favorable clinical trial results with Kyprolis in a head-to-head
comparison versus Velcade® in patients with relapsed multiple myeloma.
We also marked the successful IPO of a key partner and acquired a
portfolio of royalty-bearing programs. The team at Ligand is executing
extremely well and we are very pleased with our performance as we move
into mid-2015.”
First Quarter 2015 Financial Results
Total revenues for the first quarter of 2015 were $14.6 million,
compared with $16.0 million for the same period in 2014. Royalty
revenues increased 31% to $10.3 million from $7.9 million for the same
period in 2014 primarily due to higher royalties from Promacta and
Kyprolis. Material sales were $3.7 million compared with $5.7 million
for the same period in 2014 due to the timing of Captisol purchases for
use in clinical trials. Collaborative research and development and other
revenues were $0.6 million compared with $2.4 million for the same
period in 2014 due primarily to significant milestones earned in the
first quarter of 2014 from Merck for approval of Noxafil® and from Amgen
for a Kyprolis sales milestone.
Cost of goods sold decreased to $1.1 million for the first quarter of
2015 from $2.5 million for the same period in 2014, as a result of lower
material sales. Research and development expenses were $4.0 million
compared with $3.1 million for the same period of 2014. The increase was
primarily due to costs associated with funding internal development
programs. General and administrative expenses for the first quarter of
2015 were $6.0 million, compared with $5.1 million for the same period
in 2014.
Net income for the first quarter of 2015 was $0.8 million, or $0.04 per
diluted share, compared with net income for the first quarter of 2014 of
$2.1 million, or $0.10 per diluted share. Adjusted net income from
continuing operations for the first quarter of 2015 was $6.9 million, or
$0.33 per diluted share, compared with adjusted net income from
continuing operations for the first quarter of 2014 of $7.3 million, or
$0.35 per diluted share.
As of March 31, 2015, Ligand had cash, cash equivalents, short-term
investments and restricted investments of $177.8 million.
Full-Year and Second Quarter 2015 Financial Forecast
Ligand will provide a summary of the accounting impact of the
recently-completed initial public offering of Viking Therapeutics by
June 30, 2015 and will also update its 2015 financial forecast at that
time.
Currently, the Company affirms expectations for full-year 2015 total
revenues to be between $81.0 million and $83.0 million, and adjusted
earnings per diluted share to be between $2.14 and $2.18.
For the second quarter of 2015, Ligand expects total revenues to be
between $17.0 million and $17.5 million, and adjusted earnings per
diluted share to be between $0.37 and $0.40. Adjusted earnings per
diluted share guidance excludes changes in contingent liabilities,
mark-to-market adjustment for amounts owed to licensors, non-cash
stock-based compensation expense and non-cash debt related costs.
First Quarter and Recent Business Highlights
Partnered Program Progress
Promacta/Revolade
-
Novartis completed the acquisition of Promacta and related assets from
GSK on March 1, 2015. Compared with GSK, Novartis has significantly
larger oncology R&D and commercial capabilities.
-
A submission was made to the EMA seeking an additional indication for
the treatment of pediatric patients with chronic immune
thrombocytopenic purpura (ITP) who have had an insufficient response
to corticosteroids or immunoglobulins. The submission was based on the
results from the Phase 3 PETIT2 study and the Phase 2 PETIT study in
pediatric chronic ITP.
Kyprolis
-
Interim analysis showed the Phase 3 ENDEAVOR clinical trial evaluating
Kyprolis (carfilzomib) versus Velcade (bortezomib) met the primary
endpoint of progression-free survival (PFS).
-
Patients with relapsed multiple myeloma treated with Kyprolis
lived twice as long without their disease worsening, 18.7 months
for Kyprolis versus 9.4 months for Velcade.
-
Kyprolis demonstrated superiority over Velcade for overall
response rate and lower neuropathy events.
-
The FDA accepted the sNDA of Kyprolis for the treatment of patients
with relapsed multiple myeloma who have received at least one prior
therapy. The FDA granted Kyprolis priority review with a PDUFA date
of July 26, 2015.
-
The EMA accepted the MAA of Kyprolis for the treatment of patients
with relapsed multiple myeloma who have received at least one prior
therapy. The MAA was granted accelerated assessment by the EMA.
Additional Pipeline and Partner Developments
-
Spectrum Pharmaceuticals announced that its NDA for Captisol-Enabled
Melphalan was accepted by the FDA and assigned a PDUFA date of October
23, 2015. Spectrum is now referring to CE-Melphalan as EVOMELA™.
-
Melinta Therapeutics announced positive top-line results from the
first of two Phase 3 PROCEED studies to evaluate delafloxacin against
vancomycin + aztreonam for the treatment of patients with acute
bacterial skin and skin structure infections (ABSSSI).
-
Delafloxacin met the study’s primary endpoint of a reduction in
the measurement of lesion erythema at the primary infection site
at 48-to-72 hours post-treatment, the endpoint required by the FDA.
-
Delafloxacin was comparable to vancomycin in the study’s secondary
endpoints, including investigator assessment of signs and symptoms
of infection at the follow-up visit, a metric required by the EMA.
-
SAGE Therapeutics announced completion of treatment for the first
patient enrolled in its Phase 3 open-label expanded access protocol.
Study 302 is designed to evaluate the safety of SAGE-547 in patients
with SRSE. In conjunction with this announcement, Ligand earned a
$500,000 milestone payment from SAGE.
-
Retrophin announced the FDA granted orphan drug designation to
sparsentan (RE-021) for the treatment of Focal Segmental
Glomerulosclerosis (FSGS). Orphan designation will provide sparsentan
with seven years of market exclusivity for FSGS upon approval. Prior
to FDA approval, orphan designation provides incentives for sponsors
including tax credits for clinical research expenses, the opportunity
to obtain government grant funding to support clinical research and an
exemption from FDA user fees.
-
TG Therapeutics announced the first presentation of preclinical data
demonstrating single-agent and combination activity with two of the
Company's IRAK4 inhibitor compounds under development. The data
demonstrated that:
-
Both IRAK4 inhibitors not only inhibited cell proliferation but
also induced apoptosis as single agents in various B-cell lymphoma
cell lines, potentially elucidating the mechanism of action of and
clinical rationale for IRAK4 inhibition.
-
In addition, both compounds demonstrated marked synergy when
combined with the novel targeted kinase inhibitors TGR-1202, the
Company's proprietary PI3K delta inhibitor, and with the BTK
inhibitor ibrutinib.
-
Viking Therapeutics closed its initial public offering on May 5, 2015.
In connection with the offering, Ligand received an equity milestone
payment of 3.4 million shares. Ligand invested an additional $9.0
million in the offering. Combining the value of the equity milestone
and additional direct investment, Ligand owned 49.8% of Viking’s
outstanding common stock at closing. Key programs licensed to Viking
include:
-
VK5211 (SARM) - Phase 2 program for hip fracture.
-
VK2809 and VK0214 (TRβ) - Phase 2 program for dyslipidemia and
nonalcoholic steatohepatitis (NASH). VK2809 is also in a
preclinical program for adrenoleukodystrophy (ALD).
-
VK0612 (FBPase) - Phase 2 program for type 2 diabetes.
-
EPOR - Preclinical program for anemia.
-
DGAT-1 - Preclinical program for obesity and dyslipidemia.
Recent Acquisition
-
Ligand acquired financial rights to potential future milestones and
royalties for more than 15 development programs from Selexis SA for $4
million in cash. The acquired programs include a mix of novel
biologics and biosimilars. The programs are in various stages of
development ranging from preclinical through Phase 3. Each acquired
program is fully funded by a development partner. The acquisition
expands Ligand’s portfolio to more than 120 fully-funded assets and
increases the number of partners to more than 70. Ligand previously
acquired a portfolio of biologic development programs from Selexis in
April, 2013.
New Licensing Deal
-
Ligand and Sermonix Pharmaceuticals announced the signing of a license
agreement for the development and commercialization of oral
lasofoxifene in the U.S. and additional territories. Under the terms
of the agreement, Ligand has received an undisclosed initial payment,
and is entitled to receive up to $45 million in potential regulatory
and commercial milestone payments and tiered royalties of 6% to 10% on
future net sales. Lasofoxifene is an estrogen partial agonist for the
treatment of osteoporosis and other diseases.
Internal Program Progress
-
Ligand announced that enrollment was completed for the Phase 1b
Multiple-Ascending Dose trial of the Glucagon receptor antagonist
LGD-6972. Data from the trial will be presented in a poster
presentation at American Diabetes Association 75th
Scientific Sessions in Boston on June 7th at 12:00 p.m. ET.
The Company will also host an investor presentation that evening
beginning at 7:00 p.m. ET in Boston.
Adjusted Financial Measures
The adjusted financial measures discussed above and in the tables below
for the three months ended March 31, 2015 and 2014 exclude changes in
contingent liabilities, mark-to-market adjustment for amounts owed to
licensors, non-cash stock-based compensation expense, and non-cash debt
related costs.
Management has presented net income, net income per share, income from
continuing operations and income from continuing operations per share in
accordance with GAAP and on an adjusted basis. Ligand believes that the
presentation of adjusted financial measures provides useful
supplementary information to investors and reflects amounts that are
more closely aligned with the cash profits for the period as the items
that are excluded from adjusted net income are all non-cash items.
Ligand uses these adjusted financial measures in connection with its own
budgeting and financial planning. These adjusted financial measures are
in addition to, and not a substitute for, or superior to, measures of
financial performance prepared in conformity with GAAP.
Conference Call
Ligand management will host a conference call today beginning at 9:00
a.m. Eastern time (6:00 a.m. Pacific time) to discuss this announcement
and answer questions. To participate via telephone, please dial (877)
407-4019 from the U.S. or (201) 689-8337 from outside the U.S., using
the passcode “Ligand.” A replay of the call will be available until
August 11, 2015 at 9:00 a.m. Eastern time by dialing (877) 660-6853 from
the U.S. or (201) 612-7415 from outside the U.S., using passcode
13608254. Individual investors can access the webcast at www.ligand.com.
About Ligand Pharmaceuticals
Ligand is a biopharmaceutical company with a business model focused on
developing or acquiring royalty generating assets and coupling them with
a lean corporate cost structure. Ligand’s goal is to produce a bottom
line that supports a sustainably profitable business. By diversifying
the portfolio of assets across numerous technology types, therapeutic
areas, drug targets and industry partners, we offer investors an
opportunity to invest in the increasingly complicated and unpredictable
pharmaceutical industry. In comparison to its peers, we believe Ligand
has assembled one of the largest and most diversified asset portfolios
in the industry with the potential to generate revenue in the future.
These therapies seek to address the unmet medical needs of patients for
a broad spectrum of diseases including diabetes, hepatitis, muscle
wasting, Alzheimer’s disease, dyslipidemia, anemia, asthma and
osteoporosis. Ligand’s Captisol platform technology is a
patent-protected, chemically modified cyclodextrin with a structure
designed to optimize the solubility and stability of drugs. Ligand has
established multiple alliances with the world's leading pharmaceutical
companies including Novartis, Amgen Inc., Merck, Pfizer, Baxter
International and Eli Lilly & Co. Please visit www.captisol.com
for more information on Captisol and www.ligand.com
for more information on Ligand.
Follow Ligand on Twitter @Ligand_LGND.
Forward-Looking Statements
This news release contains forward-looking statements by Ligand that
involve risks and uncertainties and reflect Ligand's judgment as of the
date of this release. Words such as “plans,” “believes,” “expects,”
“anticipates,” and “will,” and similar expressions, are intended to
identify forward-looking statements. These forward-looking statements
include, without limitation, statements regarding: Ligand’s future
growth, Ligand's outlook for Captisol orders, expected value creation
for shareholders and guidance regarding second-quarter and full-year
2015 financial results. Actual events or results may differ from
Ligand's expectations. For example, Ligand may not receive expected
revenue from material sales of Captisol, expected royalties on partnered
products and research and development milestone payments. Ligand and its
partners may not be able to timely or successfully advance any
product(s) in its internal or partnered pipeline. In addition, there can
be no assurance that Ligand will achieve its guidance for 2015 or
beyond, that Ligand's 2015 revenues will be at the levels or be broken
down as currently anticipated, that Ligand will be able to create future
revenues and cash flows by developing innovative therapeutics, that
results of any clinical study will be timely, favorable or confirmed by
later studies, that products under development by Ligand or its partners
will receive regulatory approval, that there will be a market for the
product(s) if successfully developed and approved, or that Ligand's
partners will not terminate any of its agreements or development or
commercialization of any of its products. Further, Ligand may not
generate expected revenues under its existing license agreements and may
experience significant costs as the result of potential delays under its
supply agreements. Also, Ligand and its partners may experience delays
in the commencement, enrollment, completion or analysis of clinical
testing for its product candidates, or significant issues regarding the
adequacy of its clinical trial designs or the execution of its clinical
trials, which could result in increased costs and delays, or limit
Ligand's ability to obtain regulatory approval. Further, unexpected
adverse side effects or inadequate therapeutic efficacy of Ligand's
product(s) could delay or prevent regulatory approval or
commercialization. In addition, Ligand may not be able to successfully
implement its strategic growth plan and continue the development of its
proprietary programs. The failure to meet expectations with respect to
any of the foregoing matters may reduce Ligand's stock price. Additional
information concerning these and other risk factors affecting Ligand can
be found in prior press releases available at www.ligand.com
as well as in Ligand's public periodic filings with the Securities and
Exchange Commission available at www.sec.gov.
Ligand disclaims any intent or obligation to update these
forward-looking statements beyond the date of this release. This caution
is made under the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.
|
|
|
LIGAND PHARMACEUTICALS, INCORPORATED
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited, in thousands, except per-share data)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2015
|
|
2014
|
|
Revenues:
|
|
|
|
|
|
Royalties
|
|
$
|
10,287
|
|
|
$
|
7,850
|
|
|
Material sales
|
|
|
3,729
|
|
|
|
5,715
|
|
|
Collaborative research and development and other revenues
|
|
|
586
|
|
|
|
2,393
|
|
|
Total revenues
|
|
|
14,602
|
|
|
|
15,958
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
Cost of goods sold
|
|
|
1,074
|
|
|
|
2,451
|
|
|
Research and development
|
|
|
3,962
|
|
|
|
3,131
|
|
|
General and administrative
|
|
|
5,994
|
|
|
|
5,072
|
|
|
Non-continuing expenses
|
|
|
223
|
|
|
|
204
|
|
|
Total operating costs and expenses
|
|
|
11,253
|
|
|
|
10,858
|
|
|
Gain from operations
|
|
|
3,349
|
|
|
|
5,100
|
|
|
Other expense, net
|
|
|
(3,420
|
)
|
|
|
(1,002
|
)
|
|
Increase in contingent liabilities
|
|
|
(3
|
)
|
|
|
(1,948
|
)
|
|
Income tax expense
|
|
|
(15
|
)
|
|
|
(53
|
)
|
|
Net income (loss) including noncontrolling interests
|
|
$
|
(89
|
)
|
|
$
|
2,097
|
|
|
Less: Net loss attributable to noncontrolling interests
|
|
|
(843
|
)
|
|
|
—
|
|
|
Net income
|
|
$
|
754
|
|
|
$
|
2,097
|
|
|
|
|
|
|
|
|
Per-share net income:
|
|
|
|
|
|
Basic and diluted net income
|
|
$
|
0.04
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
Weighted average number of common shares-basic
|
|
|
19,611,881
|
|
|
|
20,600,683
|
|
|
Weighted average number of common shares-diluted
|
|
|
20,630,788
|
|
|
|
21,208,023
|
|
|
|
|
|
|
|
|
|
|
|
|
LIGAND PHARMACEUTICALS, INCORPORATED
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(Unaudited, in thousands)
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash, cash equivalents and short-term investments
|
|
$
|
177,225
|
|
|
$
|
167,336
|
|
|
Accounts receivable
|
|
|
7,423
|
|
|
|
12,634
|
|
|
Inventory
|
|
|
2,821
|
|
|
|
269
|
|
|
Other current assets
|
|
|
4,156
|
|
|
|
4,597
|
|
|
Current portion of co-promote termination asset
|
|
|
88
|
|
|
|
322
|
|
|
Total current assets
|
|
|
191,713
|
|
|
|
185,158
|
|
|
|
|
|
|
|
|
Restricted cash and investments
|
|
|
600
|
|
|
|
1,261
|
|
|
Property and equipment, net
|
|
|
440
|
|
|
|
486
|
|
|
Goodwill and other identifiable intangible assets
|
|
|
62,367
|
|
|
|
62,961
|
|
|
Commercial license rights
|
|
|
4,568
|
|
|
|
4,568
|
|
|
Other assets
|
|
|
3,535
|
|
|
|
3,595
|
|
|
Total assets
|
|
$
|
263,223
|
|
|
$
|
258,029
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
17,721
|
|
|
$
|
22,123
|
|
|
Current portion of co-promote termination liability
|
|
|
88
|
|
|
|
322
|
|
|
Current portion of note payable
|
|
|
348
|
|
|
|
334
|
|
|
Total current liabilities
|
|
|
18,157
|
|
|
|
22,779
|
|
|
|
|
|
|
|
|
Long-term portion of deferred revenue
|
|
|
2,085
|
|
|
|
2,085
|
|
|
Long-term debt, net
|
|
|
198,219
|
|
|
|
195,908
|
|
|
Other long-term liabilities
|
|
|
12,367
|
|
|
|
12,849
|
|
|
Total liabilities
|
|
|
230,828
|
|
|
|
233,621
|
|
|
Total Ligand Pharmaceuticals Inc. stockholders' equity
|
|
|
35,148
|
|
|
|
26,318
|
|
|
Noncontrolling interests
|
|
|
(2,753
|
)
|
|
|
(1,910
|
)
|
|
Total liabilities and stockholders' equity
|
|
$
|
263,223
|
|
|
$
|
258,029
|
|
|
|
|
|
|
|
|
|
|
|
|
LIGAND PHARMACEUTICALS INCORPORATED
|
|
ADJUSTED FINANCIAL MEASURES
|
|
(Unaudited, in thousands, except share data)
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
754
|
|
|
$
|
2,097
|
|
Increase in contingent liabilities
|
|
|
3
|
|
|
|
1,948
|
|
Mark-to-market adjustment for investments owed to licensors
|
|
|
699
|
|
|
|
1,233
|
|
Non-cash stock-based compensation expense
|
|
|
2,914
|
|
|
|
2,067
|
|
Non-cash debt related costs
|
|
|
2,509
|
|
|
|
—
|
|
Adjusted net income
|
|
$
|
6,879
|
|
|
$
|
7,345
|
|
Diluted per-share net income:
|
|
|
|
|
|
Net income
|
|
$
|
0.04
|
|
|
$
|
0.10
|
|
Increase in contingent liabilities
|
|
|
—
|
|
|
|
0.09
|
|
Mark-to-market adjustment for investments owed to licensors
|
|
|
0.03
|
|
|
|
0.06
|
|
Stock-based compensation expense
|
|
|
0.14
|
|
|
|
0.10
|
|
Non-cash debt related costs
|
|
|
0.12
|
|
|
|
—
|
|
Adjusted net income
|
|
$
|
0.33
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
Weighted average number of common shares-diluted
|
|
|
20,630,788
|
|
|
|
21,208,023
|
Ligand Pharmaceuticals Incorporated
Todd Pettingill, 858-550-7500
investors@ligand.com
or
LHA
Bruce
Voss, 310-691-7100
bvoss@lhai.com
Source: Ligand Pharmaceuticals Incorporated
Released May 11, 2015