On November 7, 2024 Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) reported financial results for the three and nine months ended September 30, 2024, and provided an operating forecast and business update (Press release, Ligand, NOV 7, 2024, View Source [SID1234647934]). Ligand management will host a conference call and webcast today at 8:30 a.m. Eastern Time to discuss this announcement and answer questions.

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"We just had one of the best quarters of performance in the history of Ligand. This success is due to the ongoing strength of our growing portfolio of commercial-stage programs, and we are pleased to announce an increase in guidance for the second time this year," said Todd Davis, CEO of Ligand. "This quarter, we had several key portfolio events, including the successful commercial launches of Ohtuvayre and CAPVAXIVE as well as the full FDA approval of FILSPARI. We believe each of these products, along with our recently acquired QARZIBA, will be key drivers of revenue growth for Ligand in the coming years."

Third Quarter 2024 Financial Results

Total revenues and other income for the third quarter of 2024 were $51.8 million, compared with $32.9 million for the same period in 2023, with the 58% increase primarily due to an increase in royalty revenue and milestone payments earned upon the commercial launch of Verona Pharma plc’s (Nasdaq: VRNA) Ohtuvayre. Royalties for the third quarter of 2024 were $31.7 million, compared with $23.9 million for the same period in 2023, with the 33% increase primarily attributable to royalties earned on Ligand’s recently acquired product, QARZIBA, and an increase in sales of Travere Therapeutics’ (Nasdaq: TVTX) FILSPARI. Captisol sales were $6.3 million for the third quarter of 2024, compared with $8.6 million for the same period in 2023, with the change due to timing of customer orders. Contract revenue and other income was $13.8 million for the third quarter of 2024, compared with $0.4 million for the same period in 2023, with the increase driven by the $13.5 million milestone payment earned upon the commercial launch of Ohtuvayre.

Cost of Captisol was $2.4 million for the third quarter of 2024, compared with $3.5 million for the same period in 2023, with the change due to timing of customer orders of Captisol sales. Amortization of intangibles was $8.3 million for the third quarter of 2024, compared with $8.2 million for the same period in 2023. Research and development expenses were $5.7 million for the third quarter of 2024, compared with $5.5 million for the same period in 2023. General and administrative expenses were $24.5 million for the third quarter of 2024, compared with $14.7 million for the same period in 2023, with the increase primarily attributable to higher stock-based compensation driven primarily by a one-time non-cash stock award modification charge tied to the departure of Ligand’s former COO and operating costs associated with incubating the Pelthos Therapeutics business.
GAAP net loss from continuing operations was $7.2 million, or $0.39 net loss per share for the third quarter of 2024, compared with $10.3 million, or $0.59 net loss per share, for the same period in 2023. GAAP net loss from continuing operations for the third quarter of 2024 included $15.3 million loss from non-cash fair value adjustments on the company’s Agenus Inc. (Nasdaq: AGEN) derivative assets. Core adjusted net income from continuing operations for the third quarter of 2024 was $35.3 million, or $1.84 per diluted share, compared to $18.0 million, or $1.02 per diluted share, for the same period in 2023. We did not sell any shares of Viking Therapeutics (Nasdaq: VKTX) common stock in the third quarter of 2024 or 2023. The increase in core adjusted net income was driven primarily by the 58% increase in revenue. The definition of core adjusted net income (loss) is adjusted net income plus the after-tax impact from the realized gain from the sale of Viking Therapeutics common stock. See the table below for a reconciliation of net loss from continuing operations to core adjusted net income from continuing operations.
As of September 30, 2024, Ligand had cash, cash equivalents and short-term investments of $219.6 million which includes $63.3 million in Viking Therapeutics common stock. Ligand issued 334,325 shares under the company’s At-the-Market (ATM) equity offering program at a weighted average share price of $104.70 for gross proceeds of $35 million during the third quarter of 2024. Ligand may continue to issue shares of our common stock having an aggregate offering price of up to $65 million from time to time under terms of the ATM program.
Year-to-Date Financial Results
Total revenues and other income for the nine months ended September 30, 2024 were $124.3 million, compared with $103.2 million for the same period in 2023. Royalties for the nine months ended September 30, 2024 were $74.0 million, compared with $62.5 million for the same period in 2023, with the increase primarily attributable to royalties earned on QARZIBA and an increase in sales of Travere Therapeutics’ FILSPARI. Captisol sales were $23.0 million for the nine months ended September 30, 2024, compared with $24.5 million for the same period in 2023, with the change due to the timing of customer orders. Contract revenue and other income was $27.4 million for the nine months ended September 30, 2024, compared with $16.3 million for the same period in 2023, with the increase driven by milestone payments of $19.2 million earned from Verona Pharma upon the approval and commercial launch of Ohtuvayre.

Cost of Captisol was $8.2 million for the nine months ended September 30, 2024, compared with $8.9 million for the same period in 2023, with the change due to the timing of customer orders. Amortization of intangibles was $24.7 million for the nine months ended September 30, 2024, compared with $25.3 million for the same period in 2023. Research and development expenses were $17.0 million for the nine months ended September 30, 2024, compared with $19.0 million for the same period in 2023, with the decrease primarily attributable to lower employee related expenses and lab supplies resulting from the Pelican spin-off in September 2023. The decrease was partially offset by additional costs associated with incubating the Pelthos business. For the nine months ended September 30, 2024, general and administrative expenses were $53.0 million, compared to $36.8 million for the same period in 2023. This increase was primarily driven by higher stock-based compensation expenses related to new hire stock awards for business development and investment team members. Additionally, a one-time, non-cash stock award modification expense related to the departure of Ligand’s former COO and costs associated with incubating the Pelthos business contributed to the increase.

GAAP net income from continuing operations was $27.1 million, or $1.46 per diluted share for the nine months ended September 30, 2024, compared with $35.6 million, or $2.00 per diluted share, for the same period in 2023. The decrease in GAAP net income from continuing operations from the prior year period is due primarily to the impairment of the financial royalty asset related to Takeda Pharmaceuticals’ (NYSE:TAK) soticlestat and the decrease in investments in Primrose Bio in connection with the equity funding received by Primrose Bio in June and July 2024. Adjusted net income from continuing operations for the nine months ended September 30, 2024 was $130.8 million, or $7.04 per diluted share, compared to $83.0 million, or $4.71 per diluted share, for the same period in 2023. Excluding the impact of gains from sales of Viking Therapeutics stock, core adjusted net income from continuing operations for the nine months ended September 30, 2024 was $83.0 million, or $4.46 per diluted share, compared with $53.0 million, or $3.01 per diluted share, for the same period in 2023. The increase in core adjusted net income is primarily driven by the increase in revenue. See the table below for a reconciliation of net income from continuing operations to core adjusted net income from continuing operations.

2024 Financial Guidance
Ligand is increasing its 2024 full year financial guidance previously outlined in July. The company now expects total revenue of $160 million to $165 million (previously $140 million to $157 million) and is raising core adjusted earnings per diluted share to $5.50 to $5.70 (previously $5.00 to $5.50).
Royalties are expected to be $105 million to $108 million (previously $100 million to $105 million), sales of Captisol of $27 million to $29 million (previously $25 million to $27 million) and contract revenue of $28 million (previously $15 million to $25 million). This guidance excludes the $60 million realized gain from short-term investments on the sale of Viking Therapeutics stock.Adjusted Financial Measures
Ligand 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, amortization of financial royalty 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, Pelthos operating loss, impairment of financial royalty assets, loss from equity method investment in Primrose Bio, income tax effect of adjusted reconciling items and others that are listed in the itemized reconciliations between GAAP and adjusted financial measures included at the end of this press release. A reconciliation of forward-looking non-GAAP core adjusted earnings per diluted share to the most directly comparable GAAP measures is not available without unreasonable effort, as certain items cannot be reasonably predicted because of their high variability, complexity and low visibility. Specifically, non-cash adjustments that could be made for changes in contingent liabilities, changes in the market value of its investments in public companies, share-based compensation expense and the effects of any discrete income tax items, directly impact the calculations of our core adjusted earnings per diluted share, which we expect to have a significant impact on our future GAAP financial results.

Third Quarter 2024 and Corporate Highlights
Portfolio Updates
FILSPARI
On September 5, Travere Therapeutics announced it received full FDA approval for FILSPARI for the treatment of IgA Nephropathy (IgAN) in adults. The FDA decision expands patient access to the first and only non-immunosuppressive therapy approved for the treatment of this rare progressive kidney disease.
On October 17, Travere Therapeutics and CSL Vifor announced that Swissmedic granted temporary marketing authorization for FILSPARI for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g). The Swissmedic approval was supported by results from the pivotal Phase 3 PROTECT Study of FILSPARI in IgA nephropathy (IgAN) and follows full marketing approval by the U.S. Food and Drug Administration in September 2024 and conditional marketing authorization by the European Medicines Agency in April 2024.
On October 26, Travere Therapeutics presented new data further demonstrating the clinical benefit of FILSPARI in IgAN and reinforcing its potential in focal segmental glomerulosclerosis (FSGS) at the American Society of Nephrology Kidney Week 2024. Presentations included new data from the SPARTAN Study which showed that nearly 60% of patients with IgAN achieved complete remission when using FILSPARI as a first-line treatment. In addition, presentations took place on the SPARTACUS Study, PROTECT open-label extension, and real-world evidence highlighting the initial safety and efficacy data of FILSPARI in IgAN in combination treatment with a SGLT2 inhibitor. A late-breaking presentation demonstrated sparsentan delivered rapid and sustained proteinuria reduction and long-term kidney health benefits in a subset of patients with genetic, often treatment resistant, FSGS.
Ohtuvayre
On November 4, Verona Pharma provided an update on the commercial launch of Ohtuvayre in the U.S. reporting net sales of $5.6 million and October net sales that exceeded total third quarter sales. Additionally, through October Verona Pharma reported more than 2,200 unique prescribers and more than 5,000 prescriptions were filled across a broad COPD population.

In September, Verona’s Pharma development partner in Greater China, Nuance Pharma (private), completed enrollment in its pivotal Phase 3 clinical trial evaluating Ohtuvayre for the maintenance treatment of COPD in China. Results from the trial are expected in 2025.
Other Programs
On October 23, Merck (NYSE: MRK) announced that the U.S. Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP) voted to update the adult age-based pneumococcal vaccination guidelines and has recommended CAPVAXIVE (Pneumococcal 21-valent Conjugate Vaccine) for pneumococcal vaccination in adults 50 years of age and older. Additionally, ACIP shared clinical decision-making has also recommended a supplemental dose of CAPVAXIVE for adults 65 years of age and older who have completed their vaccine series with both PCV13 (pneumococcal 13-valent conjugate vaccine) and PPSV23 (pneumococcal 23-valent polysaccharide vaccine).
On October 9, Viking Therapeutics announced positive data from the company’s Phase 1b clinical trial of VK0214, a novel small molecule agonist of the thyroid hormone receptor beta (TRβ), in patients with X-linked adrenoleukodystrophy. Results from this study showed VK0214 to be safe and well-tolerated following once-daily dosing over the 28-day study period. In addition, significant reductions were observed in plasma levels of very long-chain fatty acids (VLCFAs) and other lipids, as compared to placebo. Ligand is entitled to a 3.5-7.5% royalty on future net sales of VK0214, as well as clinical, regulatory, and commercial milestones.
On July 1, Palvella Therapeutics (private) initiated SELVA, a 24-week, pivotal Phase 3, single-arm, baseline-controlled clinical trial of QTORIN rapamycin for the treatment of microcystic lymphatic malformations (MLM). The study’s primary and key secondary endpoints are clinician-reported outcomes and the study will enroll 40 subjects at leading vascular anomaly centers across the U.S.

Conference Call and Webcast
Ligand management will host a conference call today beginning at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss this announcement and answer questions. To participate via telephone, please dial (888) 596-4144 using the conference ID 8755336. Callers outside the U.S. may dial +1(646) 968-2525. To participate via live or replay webcast, a link is available at View Source