- Note I am recording these notes here for archival purposes- they do not purport to be accurate as of today 6/17/11. I will work the important details in to the LGND research page as I have time to complete it.
- Here is the PR announcing the acquisition of Cydex by Ligand $LGND.
- Here is the (very detailed) 8-k SEC filing related to the merger.
- My complete notes from the conference call are after the jump:
- $20m senior secured loan was taken from Oxford to finance a portion of the purchase - no specific assets or IP as collateral
- $30m pre-merger January 2011 cash balance + $20m loan - $31m upfront to Cydex = ~$19m cash on hand.
- Captisol technology may be applied to some of the internal early stage LGND programs, such as SARMs and topical formulation efforts for JAK3 program
- No change to the number of outstanding LGND shares as result of merger
- CVRs issued to Cydex holders and detailed in 8k filing (see link above). 1) cash based on milestones received from Onyx Pharma $ONXX related to carfilomib NDA filing and FDA approval 2) portion of cahs upfront for potential licensing deal for captisol-enabled IV clopidogrel (Plavix), and 3) 6 yr revenue sharing - a portion of Cydex revenues above certain thresholds.
- Cydex had 14 employees, 9 will remain with LGND in administration and scientific roles. Low cost lease (Kansas)
- Cydex has 5 approved drugs, 4 of which are currently paying royalties.
- Later in 2011 LGND will have 7 royalty bearing drugs and 50 fully-funded partner programs
- Goals of reformulation with captisol: improve safety, efficacy, convenience, and/or patent life depending on the drug candidate
- Rob McKay - business development exec and now does some investor relations (IR) as well, has been working on this deal for 6 months
- Captisol drug master file (DMF) is one the more valuable pieces of the Cydex business. This is used by partners to aid in their FDA applications
- Room for growth in manufacturing agreement
- Cydex has >20 ongoing limited clinical use agreements (covering development thru phase 1 trials)
- Cydex has >10 active license and supply agreement for drug in phase 2 and beyond (including ONXX carfilzomib at NDA stage)
- Many/most of these collaborations are not in the public domain (exception is Onyx)- this is a challenge for LGND, which has a focus and history of transparency
- Carfilzomib licensed for Japanese rights in September 2010 for a "stunning" price
- Nexterone was approved 4q2010, plan launch 1q2011
- Cydex deals include addtional, undisclosed large pharma late stage programs - for these, captisol material sales alone are a significant revenue source
- Cydex had revenues of $23m in 2010, roughly 1/3 each royalties, collaboration revenues, milestones/license fees
- LGND did receive $4.5m tax refund in January 2011
- LGND combined 2011 guidance (not quite full yr contribution of Cydex business): $22-24m in revenues, $16-18m in expenses.
- $9-10m rev from legacy LGND businesses, $13-14m from Cydex
- Of total, ~50% material sales (COGS = 35%), 30% royalties, 15% license fees, etc
- This comes out to about $12m material sales, includes $1m projected 2011 Cydex royalties, $1.5m os misc revenue
- Guidance for Clopidogrel licensing deal 1q2011, SARM phase 1 data 2q2011
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