- Ligand released 2q2011 earnings on 8/8/2011 - click here for press release.
- Click here for complete LGND research page with details on its >60 programs.
- Check the Upcoming Events page for recent and upcoming webcast presentations by LGND.
- My completes notes from the webcast are below:
CEO intro:
- For 4 years we have been saying that promacta is the singular reason to invest in LGND...GSK is doing a superb job advancing this drug to commercialization for big indications.
- 2 weeks ago they announced postive data from 1st phase 3 trial. 2nd trial is completing this month (August)
- GSK CEO said the drug is allowing patients to use interferon (IFN) longer, which is going to make Promacta a great product
- Promacta sales also spiked 47% quarter over quarter
- We remain on track for cash flow positive by ye2011
- 2q2011: new deal with MDCO
- 2q2011: MRK captisol program for clinical and commercial supply.
- We are working on a number of additional partnerships right now
- Integration of captisol into LGND internal assets is going very well...improve efficiency and provide more shots on goal.
- ONXX carfilzomib NDA submission in progress (no date given)
- BAX launch of nexterone. We were surprised and pleased with size of acquisition as it is reflection of the value of the asset
- Wer have increased resources devoted to PEG free melphalan product. Full data from phase 2a trial will be available in 4q2011. We will then move swiftly into pivotal trial. This asset could take to NDA/approval alone [But didn't say to commercialization alone this time]
- $7.5m 2q2011 revenue higher due to Promacta sales growth and capitsol sales in the last quarter
- PFE returned Fablyn rights to LGND, led to noncash revenue recognition.
- 2h2011 expect mix to include more clinical vs commerical captisol, which will increase margins somewhat
- "other income" line on balance sheet will vary quarter to quarter as we vary the valuation of CVRs from acquisitions
- For 2011 we continue to expect $22-24m in revenues, now estimate $23-24m expenses (mostly due to noncash stock based comp). Average gross margin for captisol to be 60% (lower than original guidance at cydex buyout)
Question and Answer session:
1) Dissemination of ENABLE GSK data? LGND mangement knowledge is limited to topline data released so far. The second phase 3 ENABLE2 trial, accoridng to clinicaltrials.gov estimated to complete in August. Likely data release could be a Liver meeting in 1st week November (Click here for info on AASLD - no abstract found by searching for eltrombopag on 9/2/11. General deadline was June 1, late breaking deadline was August 5, so this forum seems impossible if GSK wants to present both studies together), or Hematology conference in 1st week of December (Click here for info on ASH meeting - general abstract submission has closed, acceptance decisions coming late September. late-breaking abstracts can be submitted October 24-31, so I would predict this is where the data will be released). Any Ligand disclosure will be after GSK...we as management are as eager to see the dataset as investors are.
Comment on Promacta pricing? We defer such questions to GSK, We do not have current info or make input on pricing and reimbusement environment. At launch, the list cost for the ITP indication was $46k per year, but drug may not be used for a full year, reducing per patient value of therapy. We have no visibility on pricing for the HCV market. Also there are 17-18 studies or so ongoing for other major indications
Business development update for SARM, diabetes, and JAK3 assets? Expanding our portfolio of partnered assets is part of our strategy. We are actively talking to partners on all 3 of these programs now. For SARM we expect to advance dialogues later this summer and into the fall. Diabetes early stage ...one-off or basket partnership being considered. For JAK, interest has been shown in topical or opthalmic indications. IRAK4 asset mentioned too. "Stay tuned."
What countries are drivng ROW Promacta growth? The first 6-8 quarters sales were predominantly US, and had big competition from AMGN drug. Now expanding in Europe, Jpana, South America. Promacta is now marketed as a worldwide brand, even in niche market.
2) Are the "material sales" and "cost of goods sold (COGS)" lines on income statement both solely captisol? Yes. 1h2011 expenses $15m - $2.9m COGS = $10-11m R&D plus G&A. For 2h2011, revenue similar to first half of $11.3m, maybe trending a little higher
3) What is the markup on captisol? (Analyst was asking re carflizomib). We will supply captisol to and get royalties from ONXX. Analyst reports are very excited about slaes potential of $1-2b for this drug in multiple myeloma. Royalty rates not disclosed, but are lower than promacta (which started at 5%). But promacta is really "a step above" in terms of revenue to LGND compared to carfilzomib. Markup is confidential and varies deal to deal, won't provide details. Different customers have different economic priorities...royalities vs supply costs.
4) If deferred revenue was one time event and cash burn in second quarter was $3.4m, and breakeven will be reached in fourth quarter, so cash burn for 2h will be close to breakeven? Yes.
Conclusions:
1) Dissemination of ENABLE GSK data? LGND mangement knowledge is limited to topline data released so far. The second phase 3 ENABLE2 trial, accoridng to clinicaltrials.gov estimated to complete in August. Likely data release could be a Liver meeting in 1st week November (Click here for info on AASLD - no abstract found by searching for eltrombopag on 9/2/11. General deadline was June 1, late breaking deadline was August 5, so this forum seems impossible if GSK wants to present both studies together), or Hematology conference in 1st week of December (Click here for info on ASH meeting - general abstract submission has closed, acceptance decisions coming late September. late-breaking abstracts can be submitted October 24-31, so I would predict this is where the data will be released). Any Ligand disclosure will be after GSK...we as management are as eager to see the dataset as investors are.
Comment on Promacta pricing? We defer such questions to GSK, We do not have current info or make input on pricing and reimbusement environment. At launch, the list cost for the ITP indication was $46k per year, but drug may not be used for a full year, reducing per patient value of therapy. We have no visibility on pricing for the HCV market. Also there are 17-18 studies or so ongoing for other major indications
Business development update for SARM, diabetes, and JAK3 assets? Expanding our portfolio of partnered assets is part of our strategy. We are actively talking to partners on all 3 of these programs now. For SARM we expect to advance dialogues later this summer and into the fall. Diabetes early stage ...one-off or basket partnership being considered. For JAK, interest has been shown in topical or opthalmic indications. IRAK4 asset mentioned too. "Stay tuned."
What countries are drivng ROW Promacta growth? The first 6-8 quarters sales were predominantly US, and had big competition from AMGN drug. Now expanding in Europe, Jpana, South America. Promacta is now marketed as a worldwide brand, even in niche market.
2) Are the "material sales" and "cost of goods sold (COGS)" lines on income statement both solely captisol? Yes. 1h2011 expenses $15m - $2.9m COGS = $10-11m R&D plus G&A. For 2h2011, revenue similar to first half of $11.3m, maybe trending a little higher
3) What is the markup on captisol? (Analyst was asking re carflizomib). We will supply captisol to and get royalties from ONXX. Analyst reports are very excited about slaes potential of $1-2b for this drug in multiple myeloma. Royalty rates not disclosed, but are lower than promacta (which started at 5%). But promacta is really "a step above" in terms of revenue to LGND compared to carfilzomib. Markup is confidential and varies deal to deal, won't provide details. Different customers have different economic priorities...royalities vs supply costs.
4) If deferred revenue was one time event and cash burn in second quarter was $3.4m, and breakeven will be reached in fourth quarter, so cash burn for 2h will be close to breakeven? Yes.
Conclusions:
- Upcoming presentation at Steifel Nicholas 9/9/11 and Oppenheimer in December (Click for info)
- GSK, ONXX, and other potential pipeline updates coming,
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