Jazz Pharmaceuticals to Acquire GW Pharmaceuticals plc, Creating an Innovative, High-Growth, Global Biopharma Leader

On February 3, 2021 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) and GW Pharmaceuticals plc (Nasdaq: GWPH) reported the companies have entered into a definitive agreement for Jazz to acquire GW for $220.00 per American Depositary Share (ADS), in the form of $200.00 in cash and $20.00 in Jazz ordinary shares, for a total consideration of $7.2 billion, or $6.7 billion net of GW cash (Press release, GW Pharmaceuticals, FEB 3, 2021, View Source [SID1234574552]). The transaction, which has been unanimously approved by the Boards of Directors of both companies, is expected to close in the second quarter of 2021.

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Upon close of the transaction, the combined company will be a leader in neuroscience with a global commercial and operational footprint well positioned to maximize the value of its diversified portfolio.

GW is a global leader in discovering, developing, manufacturing and commercializing novel, regulatory approved therapeutics from its proprietary cannabinoid product platform to address a broad range of diseases. The company’s lead product, Epidiolex (cannabidiol) oral solution, is approved in patients one- year and older for the treatment of seizures associated with Lennox-Gastaut Syndrome (LGS), Dravet Syndrome and Tuberous Sclerosis Complex (TSC), all of which are rare diseases characterized by severe early-onset epilepsy. Epidiolex was the first plant-derived cannabinoid medicine ever approved by the U.S. Food and Drug Administration (FDA). This product has also been approved, under the tradename Epidyolex, by the European Medicines Agency (EMA) in patients two years of age and older for the adjunctive treatment of seizures associated with LGS and Dravet syndrome in conjunction with clobazam and is under EMA review for the treatment of seizures associated with TSC. In addition to the approved indications for Epidiolex, there are considerable opportunities to pursue other indications within the epilepsy field, including other treatment-resistant epilepsies where significant unmet needs of patients exist.

Beyond Epidiolex, GW has a scientific platform and deep innovative pipeline of cannabinoid product candidates, as well as highly specialized manufacturing expertise, developed over two decades of pioneering and building leadership in cannabinoid science. This pipeline includes nabiximols, for which the company is in Phase 3 trials to seek FDA approval for treatment of spasticity associated with multiple sclerosis and spinal cord injury, as well as earlier-stage cannabinoid product candidates for autism and schizophrenia.

"Jazz is proud of our leadership position in sleep medicines and rapidly growing oncology business. We are excited to add GW’s industry-leading cannabinoid platform, innovative pipeline and products, which will strengthen and broaden our neuroscience portfolio, further diversify our revenue and drive sustainable, long-term value creation opportunities," said Bruce Cozadd, chairman and CEO of Jazz Pharmaceuticals. "We are joining two teams that share a passion for, and track record of, developing differentiated therapies that advance science and transform the lives of patients. This will help facilitate a successful integration and bring added capabilities to Jazz. Given the strength of our balance sheet and the meaningful financial drivers of the transaction, we are confident in the value we can deliver to both companies’ shareholders and patients. We look forward to welcoming the GW team to Jazz to build an even stronger company."

"Over the last two decades, GW has built an unparalleled global leadership position in cannabinoid science, including the successful launch of Epidiolex, a breakthrough product within the field of epilepsy, and a diverse and robust neuroscience pipeline. We believe that Jazz is an ideal growth partner that is committed to supporting our commercial efforts, as well as ongoing clinical and research programs," said Justin Gover, CEO of GW Pharmaceuticals. "We have a shared vision of developing and commercializing innovative medicines that address significant unmet needs in neuroscience and an approach of putting patients first. Together, we will have an opportunity to reach and impact more patients through a broader portfolio of neuroscience-focused therapies than ever before."

Creates an Innovative, High-Growth, Global Biopharma Leader with Financial Strength

Adding a Third High-Growth Commercial Franchise: The transaction enhances product diversification through the addition of a third high-growth commercial franchise for critical unmet patient needs within: 1) sleep disorders, 2) oncology, and 3) epilepsies. Specifically, the acquisition will expand Jazz’s growing neuroscience business by adding Epidiolex, a global, high-growth childhood-onset epilepsy franchise with near-term blockbuster potential.

GW has rapidly scaled Epidiolex, achieving approximately $510 million in annual sales within two years of launch and broad access to date, with more than 97% of U.S. lives covered1. Epidiolex addresses significant unmet needs in the field of epilepsy and offers the potential for a substantial improvement in outcomes for patients who were previously drug resistant. The combined company will create a neuroscience leader with a global franchise and complementary therapeutic expertise, to maximize the value of XywavTM (calcium, magnesium, potassium, and sodium oxybates) oral solution, Epidiolex, and other neuroscience products.

Robust Combined Pipeline in Neuroscience and Oncology to Drive Sustainable Growth: GW’s novel cannabinoid platform will expand and diversify Jazz’s growing neuroscience pipeline. The collective Jazz and GW teams will bring highly complementary expertise to a pro-forma pipeline of 19 clinical development programs across neuroscience and oncology, including in sleep, epilepsy, movement disorders, psychiatry, hematology and solid tumors. Following the close of the transaction, the combined portfolio will include highly differentiated assets addressing significant unmet patient needs, which, when combined with complementary commercial models, accelerates Jazz’s growth strategy.

Shared Culture and Exceptional Talent Will Advance Mission to Transform the Lives of Patients: Jazz and GW are focused on developing life-changing medicines for people with serious diseases, often with limited or no treatment options. Jazz’s and GW’s global teams possess unique talents and expertise and have proven capability to develop and launch differentiated therapies to support often-overlooked patient populations. Both companies are guided by shared values that include integrity, collaboration, passion, innovation and pursuit of excellence, and have cultures where diversity, equity and inclusion are a priority. The transaction brings together two companies with a significant presence in the United Kingdom, which is expected to remain an important part of the combined enterprise.

Expected to Deliver Substantial Shareholder Value: The combination is expected to provide accelerated double-digit top-line revenue growth and to be accretive in the first full year of combined operations and substantially accretive thereafter. Jazz’s strong cash flow profile provides the capability to rapidly deleverage to a target net leverage of less than 3.5x by the end of 2022.

1 GW financials based on preliminary unaudited financial information. Patient population as of January 12, 2021.

Transaction Terms

Under the terms of the agreement, holders of GW ADSs, which each represent 12 GW ordinary shares, will be entitled to receive $220.00 for each GW ADS, of which $200.00 will be paid in cash and $20.00 in Jazz ordinary shares. This represents a premium of approximately 50 percent over GW’s closing stock price on February 2, 2021, of $146.25 and 60 percent over GW’s 30-day volume weighted average price of $137.17.

The number of Jazz ordinary shares to be issued to the holders of GW ADSs will be based on the volume-weighted average price of Jazz’s ordinary shares over a 15 trading day period preceding the closing date of the transaction, subject to limitations on the maximum and minimum number of Jazz ordinary shares issuable per GW ADS based on a price range of $139.72 to $170.76 per Jazz ordinary share. Holders of GW ordinary shares that are not in ADS form will be entitled to receive the foregoing consideration divided by 12 per ordinary share.

The cash portion of the transaction consideration is expected to be funded through a combination of cash on hand and debt financing. Jazz has obtained fully committed debt financing from BofA Securities and J.P. Morgan Securities LLC. The financing includes a meaningful portion of pre-payable debt, in line with Jazz’s commitment to rapid deleveraging.

Closing Conditions

The transaction has been unanimously approved by the Boards of Directors of both companies, and is subject to the approval of GW shareholders, sanction by the High Court of Justice of England and Wales and other customary closing conditions, including regulatory approvals. Subject to the satisfaction or waiver of the closing conditions, the transaction is expected to close in the second quarter of 2021.

Conference Call Details

The two companies will host a conference call today at 8:30 AM ET to discuss this transaction. The live webcast may be accessed from the Investors section of the companies’ websites at www.jazzpharmaceuticals.com and www.gwpharm.com. Please connect prior to the start of the conference call to ensure adequate time for any software downloads that may be necessary. Investors may participate in the conference call by dialing (855) 353-7924 in the U.S., or (503) 343-6056 outside the U.S., and entering passcode 5591214.

A replay of the conference call will be available through February 10, 2021, by dialing (855) 859-2056 in the U.S., or (404) 537-3406 outside the U.S., and entering passcode 5591214. An archived version of the webcast will be available for at least one week in the Investors section of the companies’ websites at www.jazzpharmaceuticals.com or www.gwpharm.com.

Advisors

Evercore and Guggenheim are serving as lead financial advisors to Jazz Pharmaceuticals, and Evercore is acting as debt advisor. Jazz Pharmaceuticals also received financial advice from BofA Securities and J.P. Morgan Securities LLC. Wachtell, Lipton, Rosen & Katz, Macfarlanes LLP and Arthur Cox LLP are serving as legal advisors.

Goldman Sachs & Co. LLC and Centerview Partners LLC are serving as financial advisors to GW Pharmaceuticals plc and Cravath, Swaine & Moore LLP and Slaughter and May are serving as legal advisors.

New glycomics research investments from GlycoNet to facilitate a resilient recovery for Canada

On February 3, 2021 The Canadian Glycomics Network (GlycoNet) reported $1.3 million in funding to 11 glycomics research projects (Press release, GlycoNet, FEB 3, 2021, View Source;utm_medium=rss&utm_campaign=new-glycomics-research-investments-from-glyconet-to-facilitate-a-resilient-recovery-for-canada [SID1234574551]). The investment is being leveraged through GlycoNet’s four funding streams—Collaborative Team, Strategic Initiative, Translational, and Clinical Partnerships—which aim to foster health innovations by gaining more understanding of the role of sugars in health and diseases. Industry collaborators, health foundations, and business partners are also co-investing $2.6 million for nearly $4 million in total funding towards areas of cancer, chronic diseases, infectious diseases, and neurodegenerative diseases.

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Part of this funding will support the development of an AAV9 gene therapy that is currently being developed by Dr. Jagdeep Walia from Queen’s University, in collaboration with Taysha Gene Therapies. Walia and his research team will conduct preclinical studies to test the safety and efficacy of the gene therapy when delivered intrathecally, with the intent of treating children with GM2A deficiency in clinical studies in the future.

Today’s announcement also includes funding for a team of researchers at the University of British Columbia (UBC) to develop enzymatic tools that will convert A and B type blood to the universal donor O type blood. The UBC researchers, led by Dr. Stephen Withers, will collaborate with the Canadian Blood Services and ABOzymes Biomedical to fully assess the efficacy of the enzymes, as well as the safety and compatibility of the converted blood. This project will help Canada build a strong foundation of sustainable national blood supplies and develop life-saving protocols for those who need blood transfusion in emergency situations.

Further, this funding will support the pilot project by McGill researcher, Dr. Donald Sheppard, and University of Alberta researcher, Dr. Todd Lowary to transform biomedicine for personalized antifungal therapies. In collaboration with Atara Biotherapeutics and Dr. Michel Sadelain, Director of the Center for Cell Engineering at Memorial Sloan Kettering Cancer Center, the research team will employ CAR T-cells technology to develop tools to treat invasive fungal infections that cause chronic lung diseases in patients undergoing chemotherapy and transplantation.

"As we navigate post-pandemic economic and social recovery, investments in science and innovations are essential to bring resilience and prosperity to our communities," said Dr. Warren Wakarchuk, Scientific Director of GlycoNet. "GlycoNet is proud to work with industry partners and cross-sectoral collaborators to drive glycomics research that will bring game-changing solutions to the future of Canadian healthcare and bioeconomy."

Glycomics research collaborations help Canada harness the potential of bio-innovations to build more self-reliant, sustainable, and prosperous communities. Through mobilizing knowledge and expertise in the study of carbohydrates, along with targeted investments to form strategic alliance among academic institutions, industry, and business partners, this funding will enable researchers to create homegrown solutions to power Canada to adapt to complex health challenges and build a resilient bioeconomy.

Quotes
"As we navigate post-pandemic economic and social recovery, investments in science and innovations are essential to bring resilience and prosperity to our communities. GlycoNet is proud to work with industry partners and cross-sectoral collaborators to drive glycomics research that will bring game-changing solutions to the future of Canadian healthcare and bioeconomy." – Warren Wakarchuk, Scientific Director, GlycoNet

"Many countries in the world have an imbalance between the ABO groups of those donating blood and the ABO groups of transfused blood. This is primarily because of an increased use of O blood when the blood group of the patient is not known. This can lead to blood shortages of group O blood. The technology developed by Dr. Withers allows for a possible solution to this problem by converting group A blood to group O to rebalance blood centre inventories." – Dr. Dana Devine, Chief Scientist, Canadian Blood Services

Quick Facts
Today’s announcement is for $1.3 million in funding for glycomics research and an additional $2.6 million in co-funding from research partners and industry collaborators across Canada.
This funding will support four new projects within GlycoNet’s Collaborative Team Grant, one Clinical Partnership Grant, five Strategic Initiatives Grant, and one Translational Grant.
Since 2015, GlycoNet has leveraged $24.2 million from the federal NCE program into a total investment of $49.7 million in R&D, supported the training of over 450 highly qualified personnel and spun-out five new Canadian companies.

Moleculin Announces Pricing Of $67.8 Million Underwritten Public Offering

On February 3, 2021 Moleculin Biotech, Inc., (Nasdaq: MBRX) ("Moleculin" or the "Company"), a clinical stage pharmaceutical company with a broad portfolio of drug candidates targeting highly resistant tumors and viruses, reported the pricing of an underwritten public offering of an aggregate of 14,273,684 shares of common stock at a public offering price of $4.75 per share (Press release, Moleculin, FEB 3, 2021, View Source [SID1234574550]). Moleculin has granted the underwriters a 30-day option to purchase up to an additional 2,141,052 shares of common stock offered in the public offering. The offering is expected to close on or about February 5, 2021, subject to customary closing conditions.

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Moleculin Biotech, Inc. is a clinical stage pharmaceutical company focused on the development of a broad portfolio of oncology drug candidates for the treatment of highly resistant tumors. (PRNewsfoto/Moleculin Biotech, Inc.)

The gross proceeds of the offering are expected to be $67.8 million, prior to deducting the underwriting discount and other estimated offering expenses but excluding any exercise of the underwriters’ option. The Company intends to use the net proceeds of the offering to fund its planned clinical trials, preclinical programs, for other research and development activities and for general corporate purposes.

Oppenheimer & Co. Inc. is acting as the sole book-running manager for the offering and Roth Capital Partners, LLC is acting as the co-manager for the offering. Maxim Group LLC is acting as financial advisor to the Company.

The securities described above are being offered by the Company pursuant to a shelf registration statement on Form S-3 (No. 333-235686) originally filed December 23, 2019 with the Securities and Exchange Commission (SEC) and declared effective by the SEC on April 9, 2020. A final prospectus supplement and the accompanying prospectus relating to and describing the terms of the offering will be filed with the SEC and will be available on the SEC’s website at View Source Copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, from Oppenheimer & Co. Inc., Attention: Syndicate Prospectus Department, 85 Broad Street, 26th Floor, New York, New York 10004, by telephone at (212) 667-8055, or by email at [email protected].

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

CytomX Therapeutics Announces Full Exercise of Underwriters’ Option to Purchase Additional Shares

On February 3, 2021 CytomX Therapeutics, Inc. (Nasdaq:CTMX), a clinical-stage, oncology-focused biopharmaceutical company with a vision of transforming lives with safer, more effective therapies, reported that it has issued and sold an additional 2,142,857 shares of common stock, pursuant to the exercise in full of the underwriters’ option to purchase additional shares in connection with CytomX’s previously announced underwritten public offering of common stock (Press release, CytomX Therapeutics, FEB 3, 2021, View Source [SID1234574548]). Including the shares sold pursuant to the underwriters’ option to purchase additional shares, CytomX issued and sold a total of 16,428,571 shares of common stock at a price to the public of $7.00 per share in the offering, resulting in net proceeds to CytomX of approximately $107.7 million, after deducting underwriting discounts and commissions and estimated offering expenses. All shares in the offering were sold by CytomX.

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J.P. Morgan Securities LLC, Cowen and Company, LLC and Piper Sandler acted as joint bookrunning managers for the offering.

The securities described above were offered pursuant to a registration statement that was filed with the Securities and Exchange Commission ("SEC") on November 6, 2018, amended on February 6, 2019, and was declared effective on February 11, 2019. The final prospectus supplement relating to and describing the terms of the offering was filed with the SEC on January 21, 2021 and is available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to these securities may also be obtained for free from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: 1-866-803-9204, or by emailing at [email protected]; Cowen and Company, LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, via telephone: +1 (833) 297-2926, or via email: [email protected]; and Piper Sandler & Co., Attention: Prospectus Department, 800 Nicollet Mall, J12S03, Minneapolis, MN 55402, or by telephone at 800-747-3924, or by email at [email protected].

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification of these securities under the securities laws of any such state or jurisdiction.

Ligand Reports Fourth Quarter and Full Year 2020 Financial Results

On February 3, 2021 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported financial results for the three and 12 months ended December 31, 2020 and provided an operating forecast and program updates (Press release, Ligand, FEB 3, 2021, View Source [SID1234574536]). Ligand management will host a conference call today beginning at 8:30 a.m. Eastern time to discuss this announcement and answer questions.

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"2020 was a stellar year for Ligand, and we are well positioned for an even better 2021. I am extremely proud of how well the team has met both our opportunities and the challenges. Ligand played a vital role in helping serve global human health and delivered to investors a more diversified company with a substantially expanded growth outlook," said John Higgins, Chief Executive Officer of Ligand. "Ligand’s partners reported numerous major late-stage product advancements. Our M&A work was prolific as we mounted our most active year of acquisitions in the history of Ligand, further expanding our OmniAb platform and acquiring two major new platform technologies. We answered the call to significantly expand production of Captisol to meet the immense demands of Gilead to manufacture Veklury, the FDA-approved antiviral treatment for COVID-19."

"Our business model is focused on astute investments and industry-leading life sciences technology. Our execution resulted in outstanding fourth quarter and full year financial performance," Higgins continued. "In addition, we are very pleased with the recent increased visibility and valuations within the investment community for antibody drug-discovery technologies. We are proud of OmniAb’s role as a leading, best-in-class multi-species antibody platform with more partners, a growing roster of late-stage clinical trials and a significant number of potential regulatory approvals over the next five years. The market developments validate the upside potential for Ligand given the progress and technology stack within our OmniAb business."

Fourth Quarter 2020 Financial Results
Total revenues for the fourth quarter of 2020 were $70.0 million, compared with $27.0 million for the same period in 2019. Royalties for the fourth quarter of 2020 were $11.0 million, compared with $11.0 million for the same period in 2019. Royalties for the fourth quarter of 2020 were impacted by the ongoing COVID-19 pandemic; royalties for both the 2020 and 2019 quarters primarily consisted of royalties from Kyprolis and EVOMELA. Captisol sales were $41.0 million for the fourth quarter of 2020, compared with $7.1 million for the same period in 2019, primarily reflecting higher sales of Captisol for use with Veklury. Contract revenue was $18.0 million for the fourth quarter of 2020, compared with $8.8 million for the same period in 2019, primarily driven by the timing of partner events.

Cost of Captisol was $11.7 million for the fourth quarter of 2020, compared with $1.9 million for the same period in 2019, with the increase primarily attributable to higher sales of Captisol. Amortization of intangibles was $12.2 million, compared with $6.3 million for the same period in 2019, with the increase attributable to the Icagen acquisition in April 2020 and Pfenex acquisition in October 2020. Research and development expense was $21.9 million, compared with $18.7 million for the same period of 2019, with the increase due to additional expenses from the acquisitions of Icagen and Pfenex in 2020, partially offset by non-cash amortization of the upfront investments in the Palvella and Novan programs in 2019. General and administrative expense was $30.1 million, compared with $10.3 million for the same period in 2019, with the increase primarily attributable to additional expenses from Icagen and Pfenex and other acquisition-related expenses.

On December 2, 2020, Ligand completed the sale of Vernalis Business operations to HitGen, Inc., a publicly traded company incorporated in China for $26.7 million in cash. The sale resulted in a gain of $17.1 million for the fourth quarter of 2020.

Net income for the fourth quarter of 2020 was $5.8 million, or $0.35 per diluted share, compared with net loss of $(7.4) million, or $(0.43) per share, for the same period in 2019. The net income (loss) for the fourth quarter of 2020 and 2019 was impacted by a non-cash gain of $0.07 million and $9.4 million, respectively, from the value of Ligand’s short-term investments. Adjusted net income for the fourth quarter of 2020 was $27.1 million, or $1.62 per diluted share, compared with adjusted net income of $12.9 million, or $0.71 per diluted share, for the same period in 2019. See the table below for a reconciliation of net income (loss) to adjusted net income.

As of December 31, 2020, Ligand had cash, cash equivalents and short-term investments of approximately $411 million. During the fourth quarter of 2020 Ligand deployed $24 million for bond and share repurchases.

Full Year 2020 Financial Results
Total revenues for 2020 were $186.4 million, compared with $120.3 million for 2019. Royalties in 2020 were $33.8 million, compared with $47.0 million for 2019. Royalties for 2020 were impacted by the ongoing COVID-19 pandemic and primarily consisted of royalties from Kyprolis and EVOMELA. Royalties for 2019 primarily consisted of royalties from Kyprolis and EVOMELA and include partial-year contribution from Promacta through March 6, 2019. Captisol sales for 2020 were $110.0 million, compared with $31.5 million for 2019, primarily reflecting higher sales of Captisol for use with Veklury. Contract revenue for 2020 was $42.7 million, compared with $41.8 million for 2019.

Cost of Captisol was $30.4 million for 2020, compared with $11.3 million for 2019, with the increase due primarily to higher sales of Captisol. Amortization of intangibles was $23.4 million for 2020, compared with $16.9 million for 2019, with the increase attributable to the Icagen and Pfenex acquisitions. Research and development expense was $59.4 million for 2020, compared with $55.9 million for 2019. General and administrative expense was $64.4 million for 2020, compared with $41.9 million for 2019, with the increase due to costs associated with recent acquisitions and non-cash share-based compensation expense.

Net loss for 2020 was $(3.0) million, or $(0.18) per share, compared with net income of $629.3 million, or $31.85 per diluted share, for 2019. Net income for 2019 was impacted by an after-tax gain of approximately $642.6 million on the sale of Ligand’s Promacta license to Royalty Pharma. Adjusted net income for 2020 was $76.5 million, or $4.55 per diluted share, compared with adjusted net income of $61.0 million, or $3.09 per diluted share, for 2019. See the table below for a reconciliation of net income (loss) to adjusted net income.

2021 Financial Guidance
Ligand is raising its 2021 financial guidance. Ligand now expects total revenues to be approximately $291 million and adjusted diluted EPS to be approximately $6.15, up from previous guidance for total revenues of approximately $285 million and adjusted diluted EPS of approximately $6.00. This updated guidance reflects yesterday’s announcement by Travere Therapeutics of positive pivotal Phase 3 data and potential NDA filing in 2021 for sparsentan, with a milestone payment due to Ligand upon NDA submission.

Fourth Quarter 2020 and Recent Business Highlights

OmniAb Platform Updates
OmniAb is Ligand’s industry-leading, AI and BI (Biological Intelligence) powered multi-species antibody platform for the discovery of mono- and bi-specific therapeutic human antibodies. 2020 was a year of major investment with the acquisition and development of multiple technologies that enhance the offering for OmniAb partners, including the addition of antigen-generation services as well as deep-sequence analysis of functional antibody repertoires. As of December 31, 2020, 13 different OmniAb-derived antibodies have been involved in approximately 44 active or completed clinical trials. During the fourth quarter new clinical programs were initiated by Johnson & Johnson and Merck KGaA, among others. Progress by multiple OmniAb partners during the fourth quarter resulted in $4.5 million in milestone payments being earned by Ligand. Ligand expects the first regulatory approvals for OmniAb-derived antibodies in 2021, with potential for as many as 10 approvals by 2025.

CStone Pharmaceuticals announced an agreement to out-license ex-Greater China rights for sugemalimab (CStone licensed worldwide rights from WuXi) and CS1003 (anti-PD-1) to EQRx. Under the terms of the agreement, CStone received an upfront payment of $150 million and is eligible to receive up to $1.15 billion in milestone payments for both drugs as well as separate tiered royalties. EQRx obtained exclusive rights to lead development and commercialization worldwide, excluding certain territories in Asia. In October 2020, CStone also entered into a major partnership with Pfizer for the commercialization of sugemalimab in greater China. As part of the partnership, Pfizer invested $200 million in CStone shares, and CStone is eligible to receive up to $280 million in milestone payments and additional royalties.

CStone announced that China’s National Medical Products Administration accepted CStone’s New Drug Application for sugemalimab combined with chemotherapy for the first-line treatment of advanced squamous and non-squamous non-small cell lung cancer (NSCLC). CStone previously announced updated results from two clinical studies of sugemalimab at the 2020 Chinese Society of Clinical Oncology Annual Meeting and announced that sugemalimab met the primary endpoint as first-line treatment in stage IV squamous and non-squamous NSCLC. CStone also announced that positive clinical data based on a pre-planned interim analysis of the GEMSTONE-302 Phase 3 study were disclosed in an oral presentation at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Asia Virtual Congress. The results showed sugemalimab plus chemotherapy as first-line treatment for advanced NSCLC demonstrated statistically significant and clinically meaningful benefit in Progression Free Survival (PFS) with a well-tolerated safety profile compared to chemotherapy across PD-L1 expression levels and histologies (Investigator-assessed median PFS: 7.9 vs. 4.9 months, hazard ratio (HR) = 0.50 (95% CI: 0.39, 0.64), p<0.0001).

Janssen presented safety and response data of the teclistamab (anti-BCMA x CD3 T cell redirecting bispecific antibody) Phase 1 trial for relapsed/refractory multiple myeloma at the 2020 American Society for Hematology (ASH) (Free ASH Whitepaper) conference. Teclistamab showed a manageable safety profile with deep and durable responses with both intravenous and subcutaneous (SC) administration. The SC formulation was chosen to advance to the Phase 2 study.

Harbour BioMed raised $221 million in an IPO on the Hong Kong stock exchange that will support clinical development of OmniAb-derived batoclimab (also referred to as HMB9161/HL161/IMVT-1401), a novel, fully human anti-FcRn monoclonal antibody discovered by Hanall Biopharma. Harbour BioMed in-licensed China rights from Hanall Biopharma for batoclimab and is conducting Phase 2 clinical trials in immune thrombocytopenia (ITP), in Graves’ ophthalmopathy and in myasthenia gravis. Harbour BioMed also announced that batoclimab received China CDE Breakthrough Therapy Designation for the treatment of adult patients with myasthenia gravis.

Aptevo announced two complete remissions in the ongoing APVO436 Phase 1/1b clinical trial for the treatment of acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). Preliminary data indicating that OmniAb-derived APVO436 was well tolerated with a manageable safety profile were presented at the 2020 ASH (Free ASH Whitepaper) conference.

Captisol Business Updates
Ligand entered more than 160 Captisol research use agreements and 13 clinical and/or commercial license agreements in 2020. This is the highest number of use agreements to be signed in a single year since the invention of Captisol.

Captisol is utilized in the formulation of Gilead Sciences’ Veklury (remdesivir). The product has been approved or authorized for temporary use as a treatment for COVID-19 in approximately 50 countries worldwide and is included in more than 40 ongoing interventional or observational clinical studies. Ligand is supplying Captisol to Gilead under a recently signed 10-year supply agreement. Ligand is also supplying Captisol to Gilead’s voluntary licensing generic partners who are manufacturing remdesivir for 127 other countries. Gilead has disclosed that they continue to study Veklury in specific populations, including pediatric patients, and in the outpatient setting, and anticipate sharing data from these trials in the first half of 2021.

Sedor Pharmaceuticals announced FDA approval of Captisol-enabled SESQUIENT (fosphenytoin sodium for injection) for the treatment of status epilepticus in adult and pediatric patients.

Ligand plans to initiate a potentially pivotal trial for Captisol-enabled Iohexol (CE-Iohexol) in the first quarter of 2021. CE-Iohexol is an iodine-based contrast agent for hospital-based imaging procedures.

Protein Expression Technology Platform Updates
The acquisition of Pfenex Inc. in October 2020 brought to Ligand a proprietary Pseudomonas fluorescens protein expression technology, as well as major collaborations with Jazz Pharmaceuticals, Merck, Serum Institute of India (SII) and Alvogen, each of which has potential to contribute meaningfully to Ligand’s royalty revenue. In November 2020 Merck submitted applications to the FDA and the European Medicines Agency (EMA) for licensure of V114, its investigational 15-valent pneumococcal conjugate vaccine that uses the protein expression technology. The applications include positive data from Phase 2 and Phase 3 clinical studies with V114. On January 12, 2021 the FDA accepted this filing, which triggered a milestone payment to Ligand of $1.5 million. In December 2020 Jazz Pharmaceuticals initiated the submission of a Biologics License Application to the FDA seeking market approval for JZP-458. JZP-458 is a recombinant Erwinia asparaginase produced in the expression platform that has resulted in a robust process showing manufacturing consistency and efficiency. In December 2020 SII announced the launch of PNEUMOSIL, India’s first fully indigenously developed pneumococcal vaccine. PNEUMOSIL is designed primarily to help fight against pneumococcal pneumonia among children, with an advantage of targeting the most prevalent serotypes of the bacterium causing serious illness in developing countries. PNEUMOSIL is WHO pre-qualified for its procurement by United Nations Agencies and GAVI, and was developed through a collaboration spanning over a decade among SII, PATH and The Bill and Melinda Gates Foundation.

Other Business Updates
On November 30, 2020 Travere Therapeutics (formerly Retrophin) announced completion of enrollment in the pivotal Phase 3 DUPLEX study of sparsentan in focal segmental glomerulosclerosis (FSGS). On February 2, 2021 Travere announced that sparsentan achieved its pre-specified interim FSGS partial remission of proteinuria endpoint (FPRE) in the DUPLEX study after 36 weeks of treatment. Sparsentan demonstrated a statistically significant response on FPRE compared with the active control, irbesartan (p=0.0094). Preliminary results from the interim analysis suggest that sparsentan has been generally well-tolerated and has shown a comparable safety profile to irbesartan. Based on the data from the interim analysis, Travere intends to pursue submissions for accelerated approval of sparsentan for FSGS in the second half of 2021. In January 2021 the FDA granted sparsentan Orphan Drug Designation for the treatment of IgA nephropathy. Topline efficacy data from the ongoing pivotal Phase 3 PROTECT Study in IgA nephropathy, and the 36-week interim proteinuria endpoint analysis, are anticipated in the third quarter of 2021.

In October 2020 Ligand completed the sale of its Vernalis research operations and internal programs to HitGen Inc. for $26.7 million in cash. Under the terms of the agreement, Ligand will retain economic rights on completed collaboration licenses as well as a share of the economic rights on current research collaboration contracts.

Ligand’s partner Palvella Therapeutics announced topline results of the Phase 2/3 VALO study for the treatment of pachyonychia congenita in December 2020. The Phase 3 portion of the study missed the primary endpoint, but statistically significant improvement in the primary endpoint was achieved in the open-label, Phase 2 portion. Palvella plans to share the results with the FDA in Q1 2021.

On February 2, 2021 Verona Pharma announced ensifentrine delivered by a pressurized metered-dose inhaler (pMDI) met all of the primary and secondary lung function endpoints in the 7-day, Phase 2 clinical trial in patients with moderate-to-severe chronic obstructive pulmonary disease (COPD). The magnitude of improvement in lung function was dose-ordered and highly statistically significant at peak and over the 12-hour dosing interval compared with placebo, and supports twice-daily dosing of ensifentrine via pMDI for the treatment of COPD. Verona is evaluating nebulized ensifentrine in the pivotal Phase 3 ENHANCE-1 and 2 clinical trials for COPD maintenance treatment.

Ligand entered into a collaboration and license agreement with GlaxoSmithKline (GSK) to leverage Ligand’s unique ion channel expertise in small molecule therapeutics targeting transmembrane proteins. This collaboration will utilize the ion channel discovery technology to identify and develop inhibitors of a specific genetically validated molecular target relevant to neurological diseases. Ligand received an upfront payment of $7 million and is eligible for milestones of more than $150 million, and tiered royalties on net sales of any drug from the collaboration commercialized by GSK.

Ligand provides regular updates on individual partner events through its Twitter account, @Ligand_LGND.

Adjusted Financial Measures
The Company 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, 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, gain on the sale of Promacta and others that are listed in the itemized reconciliations between GAAP and adjusted financial measures included at the end of this press release. However, other than with respect to total revenues, the Company only provides financial guidance on an adjusted basis and does not provide reconciliations of such forward-looking adjusted measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for changes in contingent liabilities, changes in the market value of its investments in public companies, stock-based compensation expense and effects of any discrete income tax items. Management has excluded the effects of these items in its adjusted measures to assist investors in analyzing and assessing the Company’s past and future core operating performance. Additionally, adjusted earnings per diluted share is a key component of the financial metrics utilized by the Company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.

Conference Call
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 (833) 540-1167 from the U.S. or (929) 517-0358 from outside the U.S., using the conference ID 6081598. To participate via live or replay webcast, a link is available at www.ligand.com.

About OmniAb
The OmniAb antibody discovery platform provides Ligand’s biopharmaceutical industry partners access to the world’s most advanced antibody repertoires and screening technologies to enable unparalleled discovery of next-generation therapeutics. At the heart of the OmniAb platform is the Biological Intelligence (BI) of our proprietary transgenic animals, including OmniRat, OmniChicken and OmniMouse, each capable of generating high quality fully human antibodies that have been optimized naturally through in vivo affinity maturation. OmniFlic (transgenic rat) and OmniClic (transgenic chicken) address industry needs for bispecific antibody applications though a common light chain approach, and OmniTaur features unique structural attributes of cow antibodies for complex targets. OmniAb animals comprise the most diverse host systems available in the industry and they are optimally leveraged through AI-enhanced antigen design and immunization methods, paired with high-throughput microfluidic-based single B cell screening and deep computational analysis of next-generation sequencing datasets to identify fully human antibodies with superior performance and developability characteristics. The OmniAb suite of technologies and differentiating AI and BI features are combined to offer a highly efficient and customizable end-to-end solution for the growing antibody discovery needs of the global biopharmaceutical industry.

About Captisol
Captisol is a patent-protected, chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. Captisol was invented and initially developed by scientists in the laboratories of Dr. Valentino Stella, University Distinguished Professor at the University of Kansas’ Higuchi Biosciences Center for specific use in drug development and formulation. This unique technology has enabled several FDA-approved products, including Gilead’s VEKLURY, Amgen’s KYPROLIS, Baxter International’s NEXTERONE, Acrotech Biopharma L.L.C.’s and CASI Pharmaceuticals’ EVOMELA, Melinta Therapeutics’ BAXDELA and Sage Therapeutics’ ZULRESSO. There are many Captisol-enabled products currently in various stages of development. Ligand maintains a broad global patent portfolio for Captisol with more than 400 issued patents worldwide relating to the technology (including 40 in the U.S.) and with the latest expiration date in 2033. Other patent applications covering methods of making Captisol, if issued, extend to 2040.

About Protein Expression Technology Platform
The Protein Expression Technology is a robust, validated, cost-effective and scalable platform for recombinant protein production, and is especially well-suited for complex, large-scale protein production where traditional systems are not suitable. Multiple global manufacturers have demonstrated consistent success with the platform and the technology is currently out-licensed for numerous commercial and development-stage programs. The versatility of the platform has been demonstrated in the production of enzymes, peptides, antibody derivatives and engineered non-natural proteins. Partners seek the platform as it can contribute significant value to biopharmaceutical development programs by reducing development timelines and costs for manufacturing therapeutics and vaccines. Given pharmaceutical industry trends toward large molecules with increasing structural complexities, the Protein Expression Technology is well positioned to meet these growing needs as the most comprehensive broadly available protein production platform in the industry.