Ligand $LGND 1q2011 earnings conference call notes 5/10/2011

• Ligand is focused on assembling a large portfolio of high quality pharmaceutical assets... "many shots on goal"
  
• Also have strong inernal drug discovery and early development capabilities
• Cydex acquisition was tranformational for LGND, gives them drug formulation platform for new partnerships
• ONXX full NDA for carfilzomib expected within a few months. royalties plus income from supplying Captisol raw material
• Cydex partner Prism to be acquired by Baxter for drug Nesterone...BAX is a leading hospital supply company. This product will also deliver royalties and material sales. LGND believes that baxter will drive considerably higher sales than Prism would have as a small company
• final weeks of p1 sarm trial for muscle wasting....data coming soon- poster accepted for presentation at ENDO 2011 meeting in boston june 4-7
• promacta 1q11 sales more than doubled y/y ($19m vs $9m 1q10). commerically the product is "in its infancy" first 2 yrs was only approved for short term use in ITP, now approved for chronic use.
• expect Promacta p3 HCV trials to be concluded over next few months
• new COO- he will oversee cydex and r&d efforts (but he was not a Cydex employee, as I first thought)
• rev $3.9m in 1q11. royalties up slightly. promacta up, avinza down
• r&d down $5.4m from 2010- shutdown NJ facility that was used to service collaborations that have ended
• Line item that shows + or - adjustments "other expense income" for MBRX CVRs...mark to market each qtr
• Recorded income tax benefit $13m related to cydex acq...this accounting issue is what made the 1q2011 results show net profit...
• 3/31 cash balance $17.9m
• expect royalty sales to inc quarterly. timing of material sales can be lumpy and vary by qtr
• 1q11 expsenses included ~ $1m transaction related expenses for cydex acquisition
• Forecast $22-24m rev 2011. 1/2 material sales, 1/3 royalties, rest license/milestones
• Forecast 2011 expenses of $18-20m includes $2m noncash amortization expense related to cydex
• Forecast 65% gross margin, cash flow positive by ye2011
• New COO comments- he big believer in business model. platform technology allows scalable business model. lean and efficient w/ very selectively chosen group of employees
• exisitng cydex deals are "high quality" lots of potential. working on and hope for new deals soon
• Basis for Cydex acquisition: 1) accelerate financial growth 2) expand portfolio 3) enter drug reformulation segment
• LGND will on june 23 hold analyst and investor day in NYC, to take place after market hours
• Announcement coming 5/11 of new corporate twiiter newsfeed- will announce many developments by partners that often don't warrant a PR by LGND
• q&a session-
• Timing on GSK data release? Studies completed enrollment late 2009 early 2010. Studies involve 13 months of treatment and 6 months followup- so should be done by july/august 2011 range...uncertain timing and venue of data release. Studies involved 200 WW ctrs, 1500 pts. [Note that GSK has a policy of only announcing clinical trial data via scientific conferences or publications...see below for potential meetings for this]
•  Promacta expansion- Japan launched 1q2011, EU countries still coming online, full approval came late 1q2011
  
• Conbriza/Viviant update?  LGND received first royalties in 1q11 ...launching in 1-2 EU countries per month. 
• Aprela/Fablyn is combo SERM/premarin...hope for PFE NDA by ye11 but don't know
• Potential for Carfilzomib rapid approval and/or orphan designation? They have the sense that carfilzomib could be superior to velcade in MM. defer specific questions to ONXX. Proud to be part of this asset by supplying captisol
• Why more Nesterone sales by Baxter vs Prism? Prism was private company with small team focusing just on US market. Baxter has a huge international marketing team and greater capital resources. Expect buyout close next few weeks-- $170m plus earnouts. Bax CEO said product could do $150-200m per year in sales. LGND gets royalties and material sales
• TRbeta and glucagon program status? These were both inherited from MBRX, are "important programs" and are investing money in them. However, each is "on a longer development track than expected at time of acquisition"..Glucagon program needs more animal work before IND filing (earliest filing would be 2h2012)... TRbeta- MBRX had lead class of molecules, but found others that will be better clinical candidates...deciding path forward now (sounds like this program is further from IND than glucagon)
• Change in HCV landscape due to 2 oral approvals likely coming soon?...effect on thrombocytopenia mkt? Promacta is targeting the sickest 10% of US HCV pts (100's of thousands of potential pts). These pts have liver disease and thrombocytopenia- this market will not change w/ new approvals.  These pts need to be treated for thrombocytopenia before they can be treated at all for HCV w/ whatever is the SOC. Neither telaprevir nor boceprevir oral drugs reduce thrombocytopenia over SOC...in fact both increased this condition
• Nplate (romiplostim drug for ITP from AMGN) did $65m sales 1q11 vs $19m for promacta...why and will this persist? Both drugs launched end 2008. Promacta growth rate is currently better. AMGN drug is injectable and has favorable reimbursement profile vs Promacta. But these issues are different outside US and outside ITP indication (AMGN is not develooing for hepC)
• in LGND's estiamte, could have HCV data by ASH (December) or maybe Liver conference (November), but don't know. 
• Update on promacta backup?- not much to say. dont think GSK would go after ITP with this drug. If promacta is successful and GSK can ramp up sales, can leverage LGND p2 data and take into other cancer indications, make use longer patent life.
• SARM poster will include single ascending dose and multiday ascending dose. preliminary data. Company is compiling data now. Great IP and animal pharmacology. No comment on what the data will include.
• 60% rev's for 2011 cydex. 1q2011 results included $1.5m rev cydex
• Revenue guidance excludes any new deal revenue.  SARM or other deals would add revenue
• r&d and sga expenses will taper off a bit 2h2011