Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ligand Pharmaceuticals Inc (LGND, Financial) reported a 58% increase in total revenue for the second quarter, driven by milestone payments from recent product approvals.
- The company's royalty revenue grew by 11% over the same period in 2023, indicating a strong growth trajectory.
- Ligand Pharmaceuticals Inc (LGND) expanded its royalty portfolio to include 12 major commercial stage products, doubling the number from the beginning of 2023.
- The acquisition of Apeiron Biologics is expected to be highly accretive, adding $1 per share on an annualized basis.
- The company has a strong cash position with $230 million in cash and investments, and an additional $125 million available under a credit facility with Citibank.
Negative Points
- Ligand Pharmaceuticals Inc (LGND) reported a GAAP net loss of $51.9 million for the second quarter, primarily due to reductions in the carrying value of certain investments.
- The departure of President and COO Matt Korenberg may lead to transitional challenges within the company's leadership team.
- The company incurred a $26.5 million financial royalty impairment related to Takeda's Soticlestat due to disappointing Phase 3 results.
- Increased G&A expenses by $6.3 million, driven by investments in the Pelthos business and expansion of the business development team.
- The company's investment in Primrose Bio saw a decrease in value, contributing to a $32 million other expense in the quarter.
Q & A Highlights
Q: Can you provide an update on the Pelthos opportunity and the partnership discussions? Will you recover the upfront costs once the asset is spun off?
A: We have several ongoing discussions, including financing options similar to Viking Therapeutics and strategic licensing or merger opportunities. We are confident in successfully spinning out the asset and believe this approach will optimize its commercialization.
Q: How should we think about the growth of Qarziba and its impact on your royalty stream?
A: Qarziba is a growth asset for Recordati, contributing significantly to their oncology franchise's revenue growth. It continues to penetrate new territories, and we expect it to grow for the foreseeable future, which is why it was added to Ligand's portfolio.
Q: What is the outlook for H2 2024 regarding potential deals, and how much do you plan to invest?
A: We aim to invest about $200 million per year, focusing on diversification. Typically, we make commitments of $30 million to $40 million per asset. We expect to complete a couple more deals this year, depending on ongoing discussions.
Q: Regarding Ohtuvayre, when do you expect the $13.8 million milestone to be recognized?
A: The milestone is factored into our revenue forecast for the year. Verona plans to launch Ohtuvayre, likely in Q3 or Q4, which aligns with our expectations.
Q: Could you describe the research versus commercial mix for Captisol and your business development efforts?
A: The mix is heavily commercial, about 85%, with research use at 15%. We have a larger number of research customers but fewer commercial ones. We are conducting a strategic review to accelerate and expand the business, focusing on optimizing deal generation and monetizing existing assets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
