Raises 2020 Financial Guidance
Conference Call with Slides Begins at 4:30
p.m. Eastern Time Today
Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today
reported financial results for the three months ended March 31,
2020 and provided an operating forecast and program updates. Ligand
management will host a conference call with slides today beginning
at 4:30 p.m. Eastern time to discuss this announcement and answer
questions.
“Our first quarter financial results feature strong sales of
Captisol to partners evaluating remdesivir in multiple clinical
trials and scaling-up for potential treatment courses for COVID-19.
We continue to meet Captisol requirements to support these trials
as well as manufacturing scale-up, and are proud to play a role in
developing potential treatments to address the pandemic both with
Captisol and with various OmniAb® and Vernalis-derived product
candidates,” said John Higgins, Chief Executive Officer of Ligand.
“We recently closed a strategic acquisition, and throughout the
first quarter we added a number of Shots on Goal with new
agreements for various technologies, in particular our OmniAb
platform. Overall, our business is performing very well, especially
given the difficult business environment due to the pandemic. As
such, we are pleased to be raising our 2020 financial
guidance.”
COVID-19 Impact
As the COVID-19 pandemic continues to evolve, our primary
concern remains the health and safety of our employees and partners
globally, while we continue to take actions to help address the
pandemic.
We are supporting our employees through a range of programs,
have enabled working from home and staggered operations in our labs
and other critical work spaces. Importantly, Ligand is committed
that there will be no COVID-19 related layoffs. Our corporate
structure is spread across five sites in the U.S. and England,
which positions us well to operate effectively in the current
remote working environment. The Ligand team is ready to support a
return to full operations with appropriate social distancing
measures in place, following the lifting of shelter-in-place
restrictions.
We have a very strong balance sheet, and we anticipate no
material operational impacts for the rest of the year due to
COVID-19. During the first quarter, COVID-19 did not have a
material negative impact on our underlying business, financial
condition, cash collections or liquidity. During the first quarter
we reduced our outstanding convertible debt by approximately
one-third given the favorable pricing on the bonds and the lower
interest rate environment.
Our partnership with Gilead Sciences for remdesivir resulted in
an increase in sales of Captisol to supply the scale up and
manufacturing of that medicine as the first new treatment for
COVID-19 available under an Emergency Use Authorization. We do not
anticipate supply chain disruption for Captisol production at this
time given inventory levels, risk management measures and
operations at multiple sites throughout the world. We believe we
are well positioned to meet Captisol requirements and are planning
to make further capital investments in plant and operational
capacity.
We have a large portfolio of more than 200 programs fully funded
by more than 125 different pharmaceutical and biotechnology
companies. We recently surveyed all our partners and found that the
majority of them are generally in a relatively strong capital and
operating condition with limited expected long-term impact on our
partnered programs. Looking ahead to the remainder of the year and
after thoroughly analyzing our business, we anticipate royalty and
contract revenue will be lower than originally forecasted. We
believe that patient access to certain medicines around the world
will be disrupted over several months, which may decrease revenue
for products from which we earn royalties. In addition, we
anticipate that some partners will delay trial initiations or
experience a slowdown in patient enrollment. These delays and
slowdowns will likely reduce milestone payments for contract
revenue due to Ligand. In addition, some smaller partners may face
cash constraints or difficulty raising new capital, which could
impact their ability to make payments to Ligand. Nonetheless, as
the economy begins to reopen we expect our partners will resume
important clinical and regulatory work on a wide array of partnered
programs. Additionally, to date the increase in sales of Captisol
has more than offset our projected decline in royalty and contract
revenues. While the mix of revenue will be different than our
original outlook, we anticipate total revenue and earnings to be
higher in 2020 compared to our previous guidance.
Ligand has multiple programs relating to potential treatments
for COVID-19. One is with Gilead for remdesivir, a nucleotide
analogue issued an Emergency Use Authorization by the U.S. Food and
Drug Administration on May 1, 2020. We also have two OmniAb
partners with antibody programs in discovery stage, and a heat
shock protein program that was added to our R&D programs when
we acquired Vernalis.
First Quarter 2020 Financial Results
Total revenues for the first quarter of 2020 were $33.2 million,
compared with $43.5 million for the same period in 2019. Royalties
for the first quarter of 2020 were $6.6 million and primarily
consisted of royalties from Kyprolis® and EVOMELA®. Royalties for
the first quarter of 2019 were $19.5 million and included $14.2
million in royalties from Promacta®; Ligand sold its Promacta
license to Royalty Pharma as of March 6, 2019. Captisol sales were
$21.1 million for the first quarter of 2020, compared with $9.0
million for the same period in 2019, primarily reflecting higher
sales of Captisol for remdesivir. Effective this quarter, Ligand is
presenting service revenue as a separate line item. Service revenue
includes revenue generated from our Vernalis, Icagen and
OmniChicken businesses as we collaborate with partners on early
stage discovery and development work, and was $3.4 million for the
first quarter of 2020, compared with $3.9 million for the same
period in 2019. Contract revenue was $2.1 million for the first
quarter of 2020, compared with $11.1 million for the same period in
2019, with the change driven by the timing of partner events.
Cost of Captisol was $4.7 million for the first quarter of 2020,
compared with $3.9 million for the same period in 2019.
Amortization of intangibles was $3.5 million for the first quarter
of both 2020 and 2019. Research and development expense was $11.9
million for the first quarter of 2020, compared with $11.3 million
for the same period of 2019. General and administrative expense was
$9.3 million for the first quarter of 2020, compared with $11.1
million for the same period in 2019, with the decrease primarily
attributable to lower legal expenses.
Net loss for the first quarter of 2020 was $(24.1) million, or
$(1.46) per diluted share, compared with net income of $666.3
million, or $31.32 per diluted share, for the same period in 2019.
The net loss for the first quarter of 2020 includes a non-cash
change in the value of Ligand’s investments of $(25.5) million,
while net income for the first quarter of 2019 includes a $17.3
million net non-cash gain from the value of Ligand’s investments as
well as a $640.3 million gain, net of taxes, from the sale of the
Promacta license. Adjusted net income for the first quarter of 2020
was $15.3 million, or $0.89 per diluted share, compared with $24.7
million, or $1.16 per diluted share, for the same period in 2019.
Please see the table below for a reconciliation of net
income/(loss) to adjusted net income.
As of March 31, 2020, Ligand had cash, cash equivalents and
short-term investments of $738.8 million. During the first quarter
of 2020, Ligand repurchased $234 million in principal amount of its
convertibles notes at a price of $203 million, and repurchased
878,525 common shares for $73.3 million.
2020 Financial Guidance
Ligand is raising its 2020 financial guidance. Ligand now
expects 2020 total revenues to be approximately $140 million and
diluted EPS to be $3.65, up from previous guidance for total
revenues of approximately $133 million and diluted EPS of $3.62.
This increase reflects Ligand’s revised view on the business
incorporating an estimated impact from COVID-19. The revised
estimate of approximately $140 million in total revenues includes
higher sales of Captisol, partially offset by reductions in
royalties and contract revenue.
First Quarter 2020 and Recent Business Highlights
Kyprolis® (carfilzomib), an Amgen Product Utilizing
Captisol
- Amgen reported first quarter Kyprolis® sales of $280
million. Ono Pharmaceutical Co. will report first quarter Kyprolis
sales in Japan on May 11, 2020.
OmniAb® Platform Updates
- There are now more than 80 OmniAb-related Shots on Goal in
Ligand’s partnered portfolio, representing over 40% of the Ligand
pipeline.
- OmniAb partners have filed or been issued more than 30 U.S. and
international patent applications or patents, claiming
OmniAb-derived antibodies as the primary invention.
- The number of active or recently completed clinical trials that
include an OmniAb-derived antibody reached 43, with new clinical
trial starts in Q1 that included:
- two new Phase 1/1b trials;
- three new Phase 2 trials; and
- two new Phase 3 trials.
- Two COVID-19 antibody programs are being pursued by Ligand
partners. One is a multinational Big Pharma partner that has
initiated a program using OmniChicken®, and the other is focused on
antibodies derived from OmniRat®.
- Immunovant announced positive results from its Phase 2a
proof-of-concept study of OmniAb-derived IMVT-1401 in thyroid eye
disease. IMVT-1401 is a novel investigational anti-FcRn antibody
delivered by subcutaneous injection. The results showed a 65% mean
reduction in total IgG observed from baseline to end of treatment,
with a pharmacodynamic response nearly identical to modeled
predictions for the dosing regimen tested in the trial. IMVT-1401
was generally well-tolerated.
- Janssen initiated a Phase 1b trial of OmniAb-derived
teclistamab (also known as JNJ-64007957) in combination with
subcutaneous daratumumab in patients with multiple myeloma to
identify a Phase 2 dose regimen and assess safety of the
combination.
- Gloria Biosciences submitted an application for marketing
approval in China for OmniAb-derived zimberelimab for the treatment
of classical Hodgkin lymphoma, marking multiple OmniAb drug
applications filed seeking approval.
- Arcus Biosciences and Taiho Pharmaceutical announced Taiho’s
exercise of its option for an exclusive license to zimberelimab
(also known as AB122) for Japan and other Asian countries,
excluding China.
- Ligand entered into an OmniAb Platform agreement with Pandion
Therapeutics, and Pandion subsequently closed an $80 million
financing and announced that proceeds will support the advancement
of their pipeline of modular proteins and bi-functional antibodies
for the treatment of autoimmune diseases.
- CStone Pharmaceuticals and Blueprint Medicines initiated a
Phase 1b/2 clinical trial of fisogatinib in combination with
OmniAb-derived CS1001 for patients with hepatocellular carcinoma.
CStone also announced that the first patient was dosed in the
global proof-of-concept study of OmniAb-derived CS1001 in
combination with Bayer's regorafenib in patients with advanced
solid tumors.
- Harbour BioMed raised $75 million to fund the clinical
development of an OmniAb-derived anti-FcRn antibody batoclimab,
among other uses. Harbour also announced first patient dosing of
Phase 1b/2a study of batoclimab for treating neuromyelitis optica
spectrum disorder.
- OmniAb partner GenMab highlighted DuoBody-PD-L1x4-1BB (GEN1046)
at the J.P. Morgan investor conference in January; the GEN1046
anti-PD-L1 is derived from OmniRat.
Captisol® Business Update
- Ligand’s Captisol is a patented ultra-high pure form of
sulfobutylether beta-cyclodextrin (SBECD) that is built upon drug
master files maintained in multiple countries and has an extensive
safety record for use in intravenous, inhaled, subcutaneous, oral,
and ophthalmic formulations, among others. Ligand is the sole
supplier of Captisol globally.
- Ligand announced that it is supplying Captisol to partners for
remdesivir in clinical trials and for manufacturing scale-up as a
treatment for COVID-19.
- On May 1, 2020 remdesivir was the first new treatment for
COVID-19 to be issued an Emergency Use Authorization. Gilead
announced that it intends to donate 1.5 million doses of
remdesivir. Gilead has also stated that it is expanding
manufacturing to increase product supply to over 1 million
treatment courses by December 2020 ahead of potential increased
demand.
- On April 29, 2020 Gilead announced topline results from the
open-label, Phase 3 SIMPLE trial evaluating 5-day and 10-day dosing
durations of the investigational antiviral remdesivir in
hospitalized patients with severe manifestations of COVID-19
disease. The study demonstrated that patients receiving a 5-day
treatment course of remdesivir achieved similar improvement in
clinical status compared with those taking a 10-day treatment
course. The study demonstrated the potential for some patients to
be treated with a 5-day regimen, which could significantly expand
the number of patients who could be treated with Gilead’s current
supply of remdesivir. The study results complement positive data
from a placebo-controlled Phase 3 study of remdesivir conducted by
the National Institute for Allergy and Infectious Diseases also
reported on April 29, 2020, and may help to determine the optimal
duration of treatment with remdesivir.
- Ligand’s Captisol network is served by manufacturing plants in
two European countries and five distribution facilities around the
globe, all of which remain fully operational. Ligand has
substantial capacity to supply Captisol manufactured according to
cGMP and its focus is to ensure sufficient supply to meet all
existing and future partner needs, and to supply Gilead. Ligand is
also evaluating plans with its supply partners to further increase
capacity by bringing additional sites online, if needed.
- During the first quarter, Ligand entered into Captisol clinical
use agreements with Double-Crane Pharmaceuticals and OnKure
Therapeutics.
Vernalis Business Update
- Ligand entered into an exclusive worldwide license agreement
with Neuritek Therapeutics to develop and commercialize V158866, a
novel oral, selective fatty acid amide hydrolase inhibitor that was
discovered using the Vernalis Design Platform. Neuritek plans to
develop V158866 for post-traumatic stress disorder and other CNS
diseases. Under the terms of the agreement, Ligand will receive an
upfront license fee and is eligible to receive over $240 million in
milestones and tiered royalties on net sales six to eight percent.
On March 31, 2020 Neuritek announced it had secured approximately
$27 million in a capital commitment from GEM Global Yield LLC
SCS.
- Third-party academic drug analyses suggest a potential role for
heat shock protein 90 (Hsp90) inhibitors in treating COVID-19
infection. Based on these studies, Ligand is evaluating potential
collaborations or partnerships relating to intravenous luminespib
(AUY-922) as a potential treatment for patients with COVID-19.
Luminespib is a Phase 2-ready Hsp90 inhibitor, previously
investigated in clinical trials for cancer.
Additional Pipeline and Partner Developments
- Retrophin announced that the first 190 patients have been
enrolled in its pivotal Phase 3 DUPLEX Study evaluating the safety
and efficacy of sparsentan in focal segmental
glomerulosclerosis.
- Nucorion Pharmaceuticals initiated a Phase 1 clinical trial of
NCO-48 Fumarate (NCO-1010), an oral prodrug of the nucleotide
tenofovir utilizing Ligand’s LTP Platform™ technology for the
potential treatment of hepatitis B. The first-in-human,
double-blind, placebo-controlled, randomized, ascending single oral
dose study will evaluate the safety and tolerability of NCO-48
Fumarate in healthy subjects. Topline results are expected in
August 2020.
- Palvella Therapeutics announced the completion of enrollment in
its seamless Phase 2/3 VALO Study of PTX-022 (QTORIN™ 3.9%
rapamycin anhydrous gel) for the treatment of adults with
pachyonchia congenita.
- Verona Pharma reported positive topline data in its 4-week
Phase 2b COPD study with nebulized ensifentrine on top of
tiotropium therapy, and also reported positive efficacy and safety
data with a single dose of the pressurized metered-dose inhaler
(pMDI) formulation of ensifentrine in a Phase 2 COPD study.
Ensifentrine has demonstrated statistically significant and
clinically meaningful improvements in lung function in Phase 2
studies in COPD patients when delivered via all three widely used
inhaled formulations: nebulizer, DPI and pMDI.
- Corvus Pharmaceuticals presented clinical data from its Phase
1b/2 trial of ciforadenant at the 2020 American Society of Clinical
Oncology’s Genitourinary Cancers Symposium.
- Ligand regained global rights to its novel glucagon receptor
antagonist (formerly known as LGD-6972 and RVT-1502) from Metavant
Sciences.
Business Development and Corporate Highlights
- Following the close of the first quarter, Ligand completed its
acquisition of the core assets of Icagen, Inc.’s North Carolina
operations, including partnered programs, proprietary ion channel
screening and assay platforms, x-ray fluorescence capabilities,
custom screening technologies and novel unpartnered
preclinical-stage molecules for $15 million in cash.
- Ligand announced the launch of its Environmental, Social and
Corporate Responsibility Governance section of its corporate
website. Please visit this link for current disclosures.
Adjusted Financial Measures
The Company reports adjusted net income and 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 its equity investments in public companies, excess tax
benefit from share-based compensation, gain on the sale of Promacta
and others that are listed in the itemized reconciliations between
GAAP and adjusted financial measures included at the end of this
press release. However, other than with respect to total revenues,
the Company only provides financial 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
its investments in public companies, stock-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.
Conference Call
Ligand management will host a conference call with slides today
beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to
discuss this announcement and answer questions. To participate via
telephone, please dial (833) 325-0071 from the U.S. or (720)
405-1612 from outside the U.S., using the conference ID 5190682. To
participate via live or replay webcast, a link is available at
www.ligand.com. Slides to accompany the conference call are
available here.
About Ligand Pharmaceuticals
Ligand is a revenue-generating 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
OmniAb® technology platform is a patent-protected transgenic animal
platform used in the discovery of fully human mono- and bispecific
therapeutic antibodies. The Captisol platform technology is a
patent-protected, chemically modified cyclodextrin with a structure
designed to optimize the solubility and stability of drugs. The
Vernalis Design Platform (VDP) integrates protein structure
determination and engineering, fragment screening and molecular
modeling, with medicinal chemistry, to help enable success in novel
drug discovery programs against highly-challenging targets. Ab
Initio™ technology and services for the design and preparation of
customized antigens enable the successful discovery of therapeutic
antibodies against difficult-to-access cellular targets. Ligand has
established multiple alliances, licenses and other business
relationships with the world’s leading pharmaceutical companies
including Amgen, Merck, Pfizer, Sanofi, Janssen, Takeda, Gilead
Sciences and Baxter International. For more information, please
visit www.ligand.com.
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 ability to supply Captisol to Gilead and other
partners; the potential opportunities for Ligand and its partners
related to development of COVID-19 treatments; the impacts that the
COVID-19 pandemic will have on Ligand and its partners; Ligand’s
belief that recent events in its partnered programs will enhance
value; whether Ligand’s pipeline will provide a source of growth
and future diversified cash flow; the potential entry into new
license or partnering agreements; the timing of the initiation or
completion of preclinical studies and clinical trials by Ligand and
its partners; the timing of product launches by Ligand or its
partners; and guidance regarding the full-year 2020 financial
results. Actual events or results may differ from Ligand's
expectations due to risks and uncertainties inherent in Ligand’s
business, including, without limitation: Ligand may not receive
expected revenue from royalties, Captisol sales, contract and
service revenue; the COVID-19 pandemic has disrupted Ligand’s and
its partners’ business, including delaying manufacturing,
pre-clinical studies and clinical trials and product sales, and
impairing global economic activity, all of which could materially
and adversely impact Ligand’s results of operations and financial
condition; Ligand and its partners may not be able to timely or
successfully advance any product(s) in its internal or partnered
pipeline; Ligand may not achieve its guidance for 2020; development
of product candidates by Ligand partners may not be successful, and
may not results in increases in Captisol sales; remdesivir may be
later shown to not be effective or safe for the treatment of
COVID-19 and/or the FDA may revise or revoke its emergency use
authorization for remdesivir for the treatment of COVID-19 in
patients hospitalized with severe disease if the FDA determines
that authorization no longer meets the statutory criteria for
issuance; Ligand may not be able to create future revenues and cash
flows by developing innovative therapeutics; results of any
clinical study may not be timely, favorable or confirmed by later
studies; products under development by Ligand or its partners may
not receive regulatory approval; there may not be a market for the
product(s) even if successfully developed and approved; Amgen,
Acrotech Biopharma, Sage Therapeutics or other Ligand partners, may
not execute on their sales and marketing plans for marketed
products for which Ligand has an economic interest; Ligand or its
partners may not be able to protect their intellectual property and
patents covering certain products and technologies may be
challenged or invalidated; Ligand's partners may terminate any of
its agreements or development or commercialization of any of its
products; 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; 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; unexpected adverse side
effects or inadequate therapeutic efficacy of Ligand's product(s)
could delay or prevent regulatory approval or commercialization;
Ligand may not be able to successfully implement its strategic
growth plan and continue the development of its proprietary
programs; and ongoing or future litigation could expose Ligand to
significant liabilities and have a material adverse effect on the
company. 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,
including the possibility of additional contract revenue we may
receive. This caution is made under the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.
Other Disclaimers and Trademarks
The information in this press release regarding certain
third-party products and programs, including Kyprolis, an Amgen
product, EVOMELA, an Acrotech Biopharma product, and ZULRESSO, a
Sage Therapeutics product, comes from information publicly released
by the owners of such products and programs. Ligand is not
responsible for, and has no role in, the development of such
products or programs.
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
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except
per share amounts)
Three Months Ended March
31,
2020
2019
Revenues:
Royalties
$
6,565
$
19,538
Captisol
21,109
8,959
Service revenue
3,357
3,883
Contract revenue
2,130
11,104
Total revenues
33,161
43,484
Operating costs and expenses:
Cost of Captisol
4,683
3,858
Amortization of intangibles
3,535
3,503
Research and development
11,891
11,289
General and administrative
9,264
11,088
Total operating costs and expenses
29,373
29,738
Gain from sale of Promacta license
—
812,797
Income from operations
3,788
826,543
Gain (loss) from Viking
(25,457
)
17,293
Interest expense, net
(3,818
)
(2,997
)
Other expense, net
(4,928
)
1,874
Total other income (loss), net
(34,203
)
16,170
Income (loss) before income taxes
(30,415
)
842,713
Income tax benefit (expense)
6,284
(176,376
)
Net income (loss):
$
(24,131
)
$
666,337
Basic net income (loss) per share
$
(1.46
)
$
32.59
Shares used in basic per share
calculation
16,529
20,447
Diluted net income (loss) per share
$
(1.46
)
$
31.32
Shares used in diluted per share
calculations
16,529
21,277
LIGAND PHARMACEUTICALS
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited, in thousands)
March 31, 2020
December 31, 2019
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments
$
738,811
$
1,011,532
Investment in Viking
32,879
58,335
Accounts receivable, net
39,506
30,387
Inventory
7,320
7,296
Income taxes receivable
7,271
11,361
Other current assets
4,940
4,734
Total current assets
830,727
1,123,645
Deferred income taxes, net
26,358
25,608
Goodwill and other identifiable intangible
assets, net
300,861
305,677
Commercial license and other economic
rights, net
10,381
20,090
Other assets
17,590
19,895
Total assets
$
1,185,917
$
1,494,915
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
15,213
$
12,256
Current contingent liabilities
871
2,607
Deferred revenue
4,354
2,139
Total current liabilities
20,438
17,002
2023 convertible senior notes, net
444,432
638,959
Long-term contingent liabilities
5,811
6,335
Deferred income taxes, net
21,769
32,937
Other long-term liabilities
31,571
32,450
Total liabilities
524,021
727,683
Total stockholders' equity
661,896
767,232
Total liabilities and stockholders'
equity
$
1,185,917
$
1,494,915
LIGAND PHARMACEUTICALS
INCORPORATED
ADJUSTED FINANCIAL
MEASURES
(Unaudited, in thousands, except
per share amounts)
Three months ended March
31,
2020
2019
Net income (loss)
$
(24,131
)
$
666,337
Share-based compensation expense
5,653
5,347
Non-cash interest expense(1)
7,203
7,449
Amortization related to acquisitions and
intangible assets
3,535
3,503
Amortization of commercial license and
other economic rights(2)
3,730
2,437
Change in contingent liabilities(3)
(367
)
1,388
Acquisition and integrations costs(4)
—
311
Loss (gain) from Viking
25,457
(17,293
)
Unrealized (gain) loss in equity
securities(5)
4,234
(2,257
)
Other
258
(854
)
Income tax effect of adjusted reconciling
items above
(9,411
)
(7
)
Excess tax benefit from share-based
compensation(6)
(886
)
(1,371
)
15,275
664,990
Gain from sale of Promacta license, net of
tax
—
(640,265
)
Adjusted net income
$
15,275
$
24,725
Diluted per-share amounts attributable
to common shareholders:
Net income (loss)
$
(1.46
)
$
31.32
Share-based compensation expense
0.34
0.25
Non-cash interest expense(1)
0.44
0.35
Amortization related to acquisitions and
intangible assets
0.21
0.16
Amortization of commercial license and
other economic rights(2)
0.23
0.11
Change in contingent liabilities(3)
(0.02
)
0.07
Acquisition and integrations costs(4)
—
0.01
Loss (gain) from Viking
1.54
(0.82
)
Unrealized (gain) loss in equity
securities(5)
0.26
(0.11
)
Other
0.01
(0.04
)
Income tax effect of adjusted reconciling
items above
(0.57
)
—
Excess tax benefit from share-based
compensation(6)
(0.05
)
(0.06
)
Adjustment for shares excluded due to
anti-dilution effect on GAAP net loss
(0.04
)
—
0.89
31.25
Gain from sale of Promacta license, net of
tax
—
(30.09
)
Adjusted net income
$
0.89
$
1.16
GAAP - Weighted average number of common
shares-diluted
16,529
21,277
Add: Shares excluded due to anti-dilutive
effect on GAAP net loss
611
—
Adjusted weighted average number of common
shares-diluted
17,140
21,277
(1) Amounts represent non-cash debt
related costs that are calculated in accordance with the
authoritative accounting guidance for convertible debt instruments
that may be settled in cash.
(2) For the three months ended March 31,
2020, the amounts represent the amortization of commercial license
and other economic rights to revenue and research and development
expenses in amounts of $1,222 and $2,508, respectively. For the
three months ended March 31, 2019, the amounts represent the
amortization of commercial license and other economic rights to
revenue and research and development expenses in the amounts of
$1,245 and $1,192, respectively.
(3) Amounts represent changes in fair
value of contingent consideration related to Crystal, CyDex and
Metabasis transactions.
(4) Amounts represent severance costs and
certain contract termination costs in connection with the
acquisition of Vernalis plc.
(5) Amounts represent mark to market
adjustments associated with our mutual funds and equity investments
in Retrophin, Seelos and Nucorion, net of amounts due to a third
party licensor.
(6) Excess tax benefits from share-based
compensation are recorded as a discrete item within the provision
for income taxes on the consolidated statement of operations as a
result of the adoption of an accounting pronouncement (ASU 2016-09)
on January 1, 2017. Prior to the adoption, the amount was
recognized in additional paid-in capital on the consolidated
statement of stockholders' equity.
LIGAND PHARMACEUTICALS
INCORPORATED
ADJUSTED FINANCIAL
MEASURES
(Unaudited, in thousands, except
per share amounts)
Three months ended
March 31, 2019
Consolidated revenue
$
43,484
Less: royalty revenue from Promacta
(14,193
)
Adjusted consolidated revenue
$
29,291
Adjusted net income
$
24,725
Less: royalty revenue from Promacta
(14,193
)
Add: tax effect of the royalty revenue
from Promacta
3,048
Adjusted net income excluding royalty
revenue from Promacta
$
13,580
Adjusted net income per diluted shares,
excluding royalty revenue from Promacta
$
0.64
GAAP - weighted average number of common
shares - diluted
21,277
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200506005818/en/
Ligand Pharmaceuticals Incorporated Patrick O'Brien Email:
investors@ligand.com Phone: (858) 550-7893 Twitter:
@Ligand_LGND
LHA Investor Relations Bruce Voss Email: bvoss@lhai.com Phone:
(310) 691-7100
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