Ligand Provides Highlights from Today’s Analyst Day Event

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Webcast available at

SAN DIEGO–(BUSINESS WIRE)–At an Analyst Day event held today in New York City, Ligand
Pharmaceuticals Incorporated (NASDAQ: LGND)
reviewed the recent
progress of its business and financial growth outlook. Management
provided additional details on its 2019 financial guidance and a
preliminary financial outlook for 2020, discussed its technology
platforms, including the opportunity and importance of its OmniAb
technology platform.

Highlights of the event’s presentations include the following:

Business model and growth drivers:

  • Management provided an overview of Ligand’s business model and
    diversification of its portfolio. Ligand leverages its diversification
    with Shots on Goal, which are programs fully-funded by partners and
    backed by Ligand’s patents, know-how and/or data. These Shots on Goal
    provide economics to Ligand on program success without the associated
  • Ligand has increased its Shots-on-Goal portfolio to more than 200
    programs, with four technology platforms and more than $3.5 billion in
    potential contract payments from partners. Ligand has more than 1,200
    patents issued worldwide and more than $1.4 billion in cash currently
    on its balance sheet.

    • Today’s presentation included slides that breakout the $3.5
      billion in potential contract payments by technology, by product
      stage of development and by partner. The presentation also
      included an analysis of the over 200 Shots on Goal by technology,
      by stage of development and by type of partner.
  • Ligand expects its revenue and diluted EPS to grow at a compound
    annual growth rate (CAGR) in the mid-teens percentages for the next
    five to 10 years.
  • Ligand has 112 employees, including 45 with a Ph.D. degree and 88 in
    R&D, with an average tenure at the company of 10 years. These
    employees work from facilities in San Diego and Emeryville,
    California, Lawrence, Kansas and Cambridge, England.
  • Major assets reviewed at the Analyst Day event include VK-2809 (Viking
    Therapeutics), ZULRESSO (Sage Therapeutics), Sparsentan
    (Retrophin), Captisol-enabled-Iohexol (internal), RVT-1502 (Metavant)
    and expanded use for the marketed drug Kyprolis® (Amgen and
    Ono Pharmaceuticals), which uses Ligand’s Captisol technology in its
  • Management outlined Ligand’s “RPT” (Revenue, Pipeline, Technology)
    foundation of value, and highlighted 2016 to 2020 projected CAGRs of
    30% for royalties (excluding royalties from Promacta), 7% for material
    sales and 17% for contract payments.

OmniAb technology:

  • OmniAb is a best-in-class technology and is Ligand’s most valuable
    business unit, with a current estimated standalone valuation estimated
    as $2 billion to $2.5 billion based on various internal analyses.

    • OmniAb currently includes four animal platforms and three species,
      with an expected launch in 2019 of OmniClic, a common
      light chain OmniChicken for the discovery of bispecific antibodies.
  • Ligand estimates that more than 400 antibody campaigns have been
    initiated by OmniAb partners, and that its partners will spend
    approximately $500 million over the next 12 months advancing
    OmniAb-based programs.
  • Today there are 12 OmniAb programs in the clinic, and Ligand projects
    there will be more than 30 programs using OmniAb-discovered antibodies
    in the clinic by 2021.

    • By 2030, Ligand projects that more than 1,000 OmniAb campaigns
      will have been initiated and 25 to 35 OmniAb products on the
    • Based on current market sizes and royalty rates, Ligand projects
      potential for between $500 million and $1 billion in annual OmniAb
      royalties in 2030.
  • The likelihood of approval at Phase 1 for antibody drugs is
    approximately 11.5%, compared with approximately 6.2% for
    small-molecule drugs based on historical data, and that the selling
    antibodies currently on the market have more than $4 billion in annual

    • By 2024, antibody drugs are expected to represent 12 of the Top 20
      best-selling drugs (up from seven of the Top 20 in 2017), with
      antibody drug sales exceeding $94 billion (up from $57.4 billion
      in 2017).
  • Ligand disclosed at the Analyst Day event an internal OmniChicken
    antibody program that was initiated in mid-2018, and currently
    includes five immuno-oncology targets. Ligand intends to initiate
    partnering discussions for these targets in the second half of 2019.

Captisol-enabled Iohexol:

  • Ligand has a history of creating value by investing in internal R&D to
    drive partnering events with upsized licensing terms. Investments in
    R&D have created some of the company’s most valuable licenses.
  • In addition to the OmniChicken program discussed above, at today’s
    event Ligand reviewed its CE-Iohexol program, which follows past
    success with Captisol-enabled melphalan (now EVOMELA®).
    Ligand spent approximately $2 million on EVOMELA R&D and to date has
    received 10 times the cash return on that investment having received
    over $21 million in cash payments. Ligand holds an ongoing 20% royalty
    on net sales of EVOMELA, and worldwide sales are projected to grow.
  • CE-Iohexol is designed to reduce acute kidney injury (AKI) during
    medical interventions, including imaging procedures using iodinated
    contrast agent administration. This program was established in 2018
    and a Phase 1 clinical trial is currenting launching, with data
    expected in the second half of 2019.

    • More than 30 million imaging procedures are performed each year in
      the U.S. AKI is a continuing issue with broad medical visibility.
      Currently no products are approved to prevent or treat AKI in this

Financial overview and outlook, and investment philosophy:

  • Management highlighted Ligand’s history of strong revenue growth and
    its expectations for continued growth in the near- and long-term.
    Revenue growth has contributed to significant cash flow and per-share
  • Ligand affirmed 2019 guidance for total revenue of approximately $118
    million ($48 million from royalties, $27 million from materials sales
    and $43 million from contract payments), gross margin of more than
    92%, total cash expenses of $48 million to $52 million, EBITDA margin
    of approximately 50%, a tax rate of 21% to 23%, and adjusted diluted
    EPS of more than $32.25, including a one-time gain on the sale of the
    Promacta® royalty of $29.05 per share and $3.20 per share
    from operations.
  • The company provided a preliminary outlook for 2020 financials, noting
    that formal 2020 guidance will be given after trends from 2019 are
    confirmed. To assist analysts and investors understand how the company
    is analyzing the range of potential 2020 guidance, management made the
    following commentary:

    • Royalties follow sales trends of underlying products, and
      consensus estimates for sales trends will guide management in
      firming expectations for 2020. Currently Ligand believes potential
      royalty revenue growth for 2020 could be in the range of 35% to
      50% over 2019.
    • Material sales are driven by partner orders of Captisol for use in
      commercial activities and clinical trials. Once 2019 orders are
      known, the company will be able to estimate 2020 material sales.
      Currently the company expects 2020 material sales to grow 5% to
      10% over 2019.
    • Milestone and license revenues are driven by partner annual fees,
      preclinical and clinical trial progress, NDA-related filings,
      collaboration revenue and other partner events, and the timing of
      such events fluctuates based on the progress of Ligand’s partners
      in developing their programs. The company will be able to more
      accurately estimate 2020 milestones closer to 2020; however,
      currently the company expects 2020 milestone and license revenues
      to exceed those of 2019, with the potential for at least $50
      million of contract payments in 2020.
  • Management noted that 2020 corporate gross margin is expected to be in
    the range of 92% to 94%, that the company’s cash operating expense
    structure is expected to be approximately $50 million, in line with
    expectations for 2019, and that EBITDA margin is expected to be
    approximately 57.5%. These items combined with a share count of 21.5
    million equates to adjusted diluted EPS of at least $4.00.
  • Management provided an overview of some of the key financial metrics
    for Ligand over a five-year outlook. Specifically, management expects
    a revenue CAGR exceeding 15%, cash operating expenses to remain at
    approximately $50 million with increases to account for inflation, and
    EBITDA margin to expand from 50% in 2019 to over 75%, with 5% to 10%
    annual increases.
  • Management discussed Ligand’s investment philosophy. Ligand has
    focused its external investments on corporate M&A, royalty investments
    and purchases, and company formation and seed investments. Ligand has
    focused its internal investments on its R&D programs and returning
    cash to shareholders through share repurchases.
  • Ligand provided a summary of its merger and acquisition history.
    Ligand has made 16 acquisitions and investments over the past 11
    years. Having spent $445 million on these transactions, Ligand has
    already received more than $500 million as a return on these
    investments. After receiving more than its cash back, Ligand is now
    positioned to realize significant gains from its 200+ Shots on Goal,
    its portfolio of $3.5 billion of potential contract payments and its
    three major technology platforms for new licensing transactions.

Partner presentations:

  • Edward van den Brink, Ph.D., Associate Director, Global Antibody
    Discovery of GenMab B.V. (GEN.CO), gave an overview of GenMab’s
    experience and success in using the OmniAb platform’s OmniRat
    technology. GenMab reports high success rates in using OmniRat for 38
    proprietary antibody targets, with 98% sequence homology with rat
    orthologue and more than 80% of animals develop an antigen-specific
    titer. He also highlighted Ligand’s continuous innovation of the
    OmniAb platform as a value-driver for the platform. The anti-PD-L1 arm
    of GenMab’s Duobody program is OmniRat-derived.
  • Brian Lian, Ph.D., CEO of Viking Therapeutics (NASDAQ: VKTX), gave an
    overview of VK5211 and VK2809, two Ligand-partnered Phase 2 programs
    supported by encouraging clinical data. The VK2809 program for NASH is
    a novel, selective thyroid receptor-b agonist with Phase 2 results
    that demonstrate significant reduction in liver fat content and
    lipids. Viking plans to initiate a Phase 2b clinical trial in
    biopsy-confirmed NASH in 2019.
  • Wes Kaupinen, CEO of Palvella Therapeutics, gave an overview of
    PTX-022 (QTORINTM rapamycin formulation), which is positioned to be
    the first and only therapy to address the root cause of pachyonchia
    congenita (PC), a serious, chronically debilitating, lifelong
    monogenic disease. He also commented on the near-term potential to
    expand PTX-022 beyond PC into other areas of unmet medical need. Mr.
    Kaupinen described an attractive market opportunity in PC, a rare
    disease state with an estimated annual U.S. revenue opportunity
    exceeding $300 million. PTX-022 has garnered FDA support including
    Fast Track and orphan drug designations. Palvella has initiated a
    Pivotal Phase 2/3 study with data readout targeted for the second
    quarter of 2020.
  • Jan-Anders Karlsson, Ph.D., CEO of Verona Pharma plc (NASDAQ:VRNA),
    gave an overview of Verona’s novel first-in-class product candidate
    ensifentrine (RPL554) for the treatment of respiratory diseases.
    Ensifentrine’s has a legacy linked to the Vernalis Design Platform.
    Verona sees an opportunity for ensifentrine in 40% of U.S. COPD
    patients who are symptomatic despite current treatment. Verona has
    announced positive interim Phase 2 data with ensifentrine dry powder
    inhaler formulation in COPD with dose-dependent, significant and
    clinically meaningful bronchodilator response. Verona sees potential
    for multiple value-creating inflection points with Phase 2 readouts in
    2019 as they prepare for Phase 3 trials.

A webcast of the Analyst Day presentations can be accessed at
for the next 90 days. A copy of the company’s presentation will be filed
with the Securities and Exchange Commission today.

Adjusted Financial Measures

The company reports adjusted net income per diluted share in addition
to, and not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP. The company’s financial measures
under GAAP include share-based compensation expense, amortization of
debt-related costs, amortization related to acquisitions and intangible
assets, changes in contingent liabilities, mark-to-market adjustments
for amounts relating to our equity investments in Viking Therapeutics
and Retrophin, acquisition and integration costs, unissued shares
relating to the Senior Convertible Notes and others that are listed in
the itemized reconciliations between GAAP and adjusted financial
measures included in our earnings release for the 2018 fiscal year.
However, other than with respect to total revenues, the company only
provides guidance on an adjusted basis and does not provide
reconciliations of such forward-looking adjusted measures to GAAP due to
the inherent difficulty in forecasting and quantifying certain amounts
that are necessary for such reconciliation, including adjustments that
could be made for changes in contingent liabilities, changes in the
market value of our investments in Viking Therapeutics and Retrophin,
share-based compensation expense and effects of any discrete income tax
items. Management has excluded the effects of these items in its
adjusted measures to assist investors in analyzing and assessing the
company’s past and future core operating performance. Additionally,
adjusted earnings per diluted share is a key component of the financial
metrics utilized by the company’s board of directors to measure, in
part, management’s performance and determine significant elements of
management’s compensation.

About Ligand Pharmaceuticals

Ligand is a biopharmaceutical company focused on developing or acquiring
technologies that help pharmaceutical companies discover and develop
medicines. Our business model creates value for stockholders by
providing a diversified portfolio of biotech and pharmaceutical product
revenue streams that are supported by an efficient and low corporate
cost structure. Our goal is to offer investors an opportunity to
participate in the promise of the biotech industry in a profitable,
diversified and lower-risk business than a typical biotech company. Our
business model is based on doing what we do best: drug discovery,
early-stage drug development, product reformulation and partnering. We
partner with other pharmaceutical companies to leverage what they do
best (late-stage development, regulatory management and
commercialization) to ultimately generate our revenue. Ligand’s Captisol®
platform technology is a patent-protected, chemically modified
cyclodextrin with a structure designed to optimize the solubility and
stability of drugs. OmniAb® is a patent-protected transgenic
animal platform used in the discovery of fully human mono-and bispecific
therapeutic antibodies. Ligand has established multiple alliances,
licenses and other business relationships with the world’s leading
pharmaceutical companies including Novartis, Amgen, Merck, Pfizer,
Celgene, Gilead, Janssen, Baxter International and Eli Lilly.

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: financial
projections, expectations regarding research and development programs,
potential uses of capital, including any potential dividend or share
repurchase program, and the timing of the initiation or compilation of
preclinical studies, clinical trials by Ligand and its partners,
Ligand’s belief regarding the diversified nature of its business,
Ligand’s future revenue and guidance regarding the financial results for
2019 and beyond. Actual events or results may differ from Ligand’s
expectations due to risks and uncertainties inherent in Ligand’s
business, including, without limitation: Ligand has wide discretion on
its use of capital and may choose not to engage in any share
repurchases, declare any dividends or pursue acquisitions or internal
develop programs; Ligand and its partners may not be able to timely or
successfully advance any product(s) in its internal or partnered
pipeline; drug development program benefits may not be realized; Ligand
may not achieve its guidance in 2019 or thereafter; third party research
summarized herein or in the Analyst Day presentation may not be correct
or complete; Kyprolis®, EVOMELA® and Zulresso™ may not perform as
expected; Ligand relies on collaborative partners for milestone and
royalty payments, royalties, materials revenue, contract payments and
other revenue projections; regulatory hurdles facing Ligand’s and its
partners’ product candidates; uncertainty regarding Ligand’s and its
partners’ product development costs; the possibility that Ligand’s and
its partners’ drug candidates might not be proved to be safe and
efficacious and uncertainty regarding the commercial performance of
Ligand’s and/or its partners’ products; the possibility that Ligand may
not be able to successfully implement its strategic growth plan and
continue the development of its proprietary programs; the possibility
that Ligand’s future investments might not yield value and might not
materialize as describe; and other risks and uncertainties described in
Ligand’s public filings with the Securities and Exchange Commission 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
as well as in Ligand’s public periodic filings with the Securities and
Exchange Commission available at
Ligand disclaims any intent or obligation to update these
forward-looking statements beyond the date of this release, including
the possibility of additional license fees and milestone revenues we may
receive. This caution is made under the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.

Information regarding partnered products and programs comes from
information publicly released by our partners. Information presented by
GenMab, Viking Therapeutics, Verona Pharma and Palvella Therapeutics are
the responsibility of each company, respectively. Ligand may be deemed
an affiliate of Viking Therapeutics because Ligand holds a substantial
amount of Viking securities and one of Ligand’s officers serves as a
director of Viking.


Ligand owns or has rights to trademarks and copyrights that it uses in
connection with the operation of its business including its corporate
name, logos and websites. Other trademarks and copyrights appearing in
this press release are the property of their respective owners. The
trademarks Ligand owns include Ligand®, Captisol® and OmniAb®. Solely
for convenience, some of the trademarks and copyrights referred to in
this press release are listed without the ®, © and ™ symbols, but Ligand
will assert, to the fullest extent under applicable law, its rights to
its trademarks and copyrights.


Ligand Pharmaceuticals Incorporated
Todd Pettingill

Bruce Voss

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