On April 6, 2020 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported a general corporate update, as follows (Press release, Ligand, APR 6, 2020, View Source [SID1234556148]):
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"As the business environment has evolved in response to the pandemic, Ligand has remained sharp with our operations and our partners have been highly productive over the past few weeks," said John Higgins, Chief Executive Officer of Ligand Pharmaceuticals. "Last week we completed an acquisition, we just signed a deal for a novel FAAH inhibitor out of our Vernalis unit, two partners recently closed important financings and over the past month partners have begun additional COVID-19 initiatives. Our OmniAb business is advancing with a recent NDA filing in China and positive Phase 2a data just announced. Notably, we are working to ensure our Captisol production meets the needs of our global partners. Finally, despite the volatile capital markets, we have used cash during the first quarter to buy back nearly a third of our outstanding convertible bonds at what we believe were attractive valuations."
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OmniAb Business Update
Ligand’s partners are actively progressing two OmniAb antibody discovery programs for the potential treatment of COVID-19. One multinational big pharma partner has initiated a program using OmniChicken and another partner is focused on antibodies derived from OmniRat.
Gloria Biosciences submitted an application for marketing approval to the Chinese National Medicines Products Administration for OmniAb-derived zimberelimab for the treatment of classical Hodgkin lymphoma.
Immunovant announced positive results from its ongoing 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.
Ligand’s partner Pandion Therapeutics closed an $80 million financing on March 31, 2020 and announced that proceeds will support the advancement of their pipeline of modular proteins and bi-functional antibodies for the treatment of autoimmune diseases. Ligand entered into an OmniAb Platform agreement with Pandion in January 2020.
Captisol Business Update
During the first quarter Ligand announced it is supplying Captisol to partners evaluating remdesivir in clinical trials as a potential treatment for COVID-19. Ligand continues to meet Captisol requirements to support remdesivir clinical trials and manufacturing scale-up. Our partner Gilead Sciences announced that it has accelerated manufacturing timelines to increase the supply of the drug before knowing whether remdesivir is safe and effective in patients with COVID-19. Multiple clinical trials for remdesivir are underway, involving thousands of patients with COVID-19 across the world. Public information indicates initial clinical trial data will be available over the next several weeks.
Ligand’s Captisol technology has applicability in a broad array of therapeutic indications. Captisol is used in approved treatments such as Amgen’s Kyprolis and Acrotech/CASI’s Evomela to treat patients with multiple myeloma, a life-threatening cancer, and is utilized in Sage Therapeutics’ Zulresso, which was recently approved by the FDA for mothers suffering from post-partum depression.
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 our focus is to ensure sufficient supply to meet all existing and future partner needs, and to supply Gilead should remdesivir be demonstrated to be safe and effective to treat COVID-19. Ligand is also evaluating plans with its supply partner to further increase capacity by bringing additional sites online if needed.
Vernalis Business Update
Ligand recently entered into an exclusive worldwide license agreement with Neuritek Therapeutics to develop and commercialize V158866, a novel, oral, selective fatty acid amide hydrolase (FAAH) inhibitor that was discovered using the Vernalis Design Platform (VDP). 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 a financing-related milestone, development and commercialization milestones and tiered royalties on net sales in the mid-to-high single digits. On March 31, 2020, Neuritek announced it had secured approximately $27 million in a capital commitment from the GEM group, GEM Global Yield LLC SCS.
Recent 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, we are 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.
Acquisition Update
On April 1, 2020 Ligand closed its acquisition of the core assets of Icagen’s North Carolina operations, including two significant partnered programs, proprietary ion channel screening and assay platforms, x-ray fluorescence capabilities, custom screening technologies and six preclinical-stage internal programs applicable to a range of indications including diabetes, Parkinson’s disease, pain and others. The two partnered programs are a collaboration with Roche to develop and commercialize therapies for neurological diseases, which includes research funding, up to $274 million in potential milestone payments and tiered royalties on net sales, and a collaboration with the Cystic Fibrosis Foundation (CFF) Collaboration to discover therapeutics to treat patients with cystic fibrosis caused by specific genetic mutations. The CFF collaboration allows for up to $11 million in research funding, up to $59 million in milestone payments and tiered royalties on net sales.
Capital Deployment and Strategy Update
Ligand estimates that, as of March 31, 2020, its cash and cash equivalents were approximately $735 million and outstanding convertible debt was approximately $516 million. First quarter estimated cash and cash equivalents is lower compared to the end of 2019, primarily because over the past several weeks Ligand repurchased $234 million in principal amount of its convertibles notes at a price of $203 million, and repurchased 473,000 common shares for $37 million. These estimated amounts are preliminary and are subject to completion of financial and quarterly closing procedures.
We have a successful track record of acquiring innovative companies and subsequently growing revenue, increasing our partnered portfolio, and leveraging technology and customer synergies. Given our significant financial resources and talented operating team, we believe we are well positioned to pursue acquisitions and new opportunities to expand our business.
First Quarter 2020 Earnings Conference Call
Ligand announced plans to report first quarter 2020 financial results and hold an earnings conference call on May 6, 2020 after market close. Details about the conference call will be announced approximately two weeks in advance.