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The following presentation contains forward-looking statements regarding Ligand’s prospects, plans and strategies, drug development programs and collaborations. Forward-looking statements include financial projections, expectations regarding research and development programs, and other statements including words such as “will,“ “should,” “could,” “plan,” etc. Actual events or results may differ from Ligand’s expectations. For example, drug development program benefits may not be realized and there can be no assurance that Ligand will achieve its guidance in 2015 or thereafter or that third party research summarized herein is correct or complete. The forward-looking statements made in the presentation are subject to several risk factors, including, statements regarding intent, belief, or current expectations of Ligand, its internal and partnered programs, including Promacta™, Kyprolis®, and Duavee™, Ligand’s reliance on collaborative partners for milestone and royalty payments, royalty and other revenue projections based on third party research, regulatory hurdles facing Ligand's and partners’ product candidates, uncertainty regarding Ligand's and partners’ product development costs, the possibility that Ligand's and partners’ drug candidates might not be proved to be safe and efficacious and commercial performance of Ligand's and/or its partners’ products, risks related to Ligand’s internal controls, its compliance with regulations, accounting principles and public disclosure, and other risks and uncertainties described in its public filings with the Securities and Exchange Commission, available at www.sec.gov. Additional risks may apply to forward-looking statements made in this presentation. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our good faith beliefs (or those of the indicated third parties) and speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Ligand undertakes no obligation to revise or update this presentation to reflect events or circumstances or update third party research numbers after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Our trademarks, trade names and service marks referenced herein include Ligand and Captisol. Each other trademark, trade name or service mark appearing in this presentation belongs to its owner. The process for reconciliation between non-GAAP financial numbers presented on slide 10, and the corresponding GAAP figures is explained in the footnotes on that slide and a full reconciliation can be found in our earnings press release dated, May 11, 2015.
Safe Harbor Statement
3
Ligand: 2015 and Beyond
• Ligand is a high-growth company with economic rights to some of the world’s most important medicines
• Largest portfolio ever and projected to continue to drive the business significantly
• Cutting-edge innovations with Captisol and LTP technology are making major drugs possible
• Well positioned for strong revenue and profitability growth
4
Recent Events are Transforming Ligand
Date Program Event
December ’14 Duavive EU approval
December ’14 Promacta sNDA submission - Pediatric ITP
December ’14 CE-Melphalan NDA submission
January ‘15 Delafloxacin Phase 3 study - Positive interim results
January ’15 Sparsentan Orphan drug designation - Focal Segmental Glomerulosclerosis
January ’15 Kyprolis US and EU submissions - Relapsed Multiple Myeloma
February ’15 Lasofoxifene Sermonix licensing agreement
February ’15 Promacta EU submission - Pediatric ITP
March ’15 Kyprolis Phase 3 ENDEAVOR study - Positive results
March ’15 Promacta Promacta acquisition closed (GSK to Novartis)
March ’15 Kyprolis Priority FDA review – Relapsed Multiple Myeloma
April ‘15 SAGE-547 Phase 1/2 completion; Phase 3 trial initiated
April ’15 IRAK-4 Positive preclinical data presented
May ’15 Multiple Selexis 15+ program portfolio acquisition
0
2
4
6
8
2008 2015
5
Fully
-Fu
nd
ed P
rogr
ams
(“Sh
ots
-on
-Go
al”)
Ligand’s Portfolio Continues to Grow
120 +
0
20
40
60
80
100
120
2008 2015
9
Ligand’s Achievement: Portfolio Expansion
Partners’ Achievement: Products Generating Revenue for LGND
Excellent record as drug researcher, innovator and licensor
Our partners are doing their job getting new products to the market
1
7
Co
mm
erc
ial P
rod
uct
s G
ener
atin
g R
even
ue
for
Liga
nd
• In last several years, Ligand has deployed capital in the following ways
— Company acquisitions
— Royalty acquisitions
— Share buybacks
— Investment in a private company that has completed its IPO
— Invested in development of new technology platforms
• Investors have come to expect not any one specific type of deal from Ligand, but instead for us to take advantage of our market knowledge and the experience we gain from our vast roster of partners to find opportunities to invest and create value from the biopharma industry
• We will continue to explore original opportunities that our programs and the markets present us
Diverse Capital Allocation Building Asset Base and Increasing Returns for Investors
6
Technology and Novel R&D Drive Deal Making
Potential Launch
7
Our Platform Technologies
Our Novel R&D
LTP Technology™
Glucagon Receptor Antagonist Program for Diabetes Phase 1
Positive Phase 1a data showing robust effects after single dose Phase 1b study expected to complete in coming weeks
Change in fasting glucose(24 hr post dose)
Place
bo
2 mg
10 m
g
40 m
g
120 mg
240 mg
480 mg
-15
-10
-5
0
5
10
MeanSEM
F
astin
g G
luco
se (
mg
/dL
)
Change in fasting glucosediabetic subjects(24 hr post dose)
Place
bo
40 m
g
-80
-60
-40
-20
0
20
MeanSEM
F
astin
g G
luco
se (
mg
/dL
)
Solving solubility and stability challenges
Designed to selectively deliver broad range of pharmaceutical agents to the liver
Oral GCSF Preclinical Leveraging our technology and heritage in small molecule discovery
Biotech44%
Big Pharma29% Generic
18%
Spec Pharma10%
8
Over 70 Partners
Select Big Pharma
Select Biotech
Select Spec Pharma
Select Generic
Diverse Portfolio Among Drug Companies
• Continued strong financial performance
• Business model provides tremendous earnings leverage
— Growing total revenues
— Flat cash operating costs
— Significant estate of tax assets
• Accelerating revenue and earnings growth going forward
Financial Overview
9
Quarterly Results
10
Q1 Reported
Q2 Outlook
2015 Full Year Outlook
Revenue $14.6M $17.0M - $17.5M
$81.0M - $83.0M
Adjusted EPS $0.33
$0.37 - $0.40
$2.14 - $2.18
• Strong growth in quarterly Royalty Revenue. Increase of 31% Q1 2015 over Q1 2014
• Strong growth in operating cash generation Q1 2015 over Q1 2014
Note: Adjusted EPS excludes changes in contingent liabilities, mark-to-market adjustment for amounts owed to licensors, non-cash stock-based compensation expense and non-cash debt related costs.
Accelerating Projected Revenue Growth
$0
$30
$60
$90
$120
$150
2011 2012 2013 2014 2015 2016 2017
• Growth due to:
– New products launched
– Growth in existing brands
– Higher royalties
11
$ m
illio
ns
• Oral medicine that boosts platelets. Ligand owed royalties
• Long patent protection, Orange Book patent expiration in 2027
• Blockbuster commercial potential (>$1 billion) due to growing and large list of potential therapeutic indications
ITP HCV ORT Idiopathic
Thrombocytopenia
Thrombocytopenia Induced by Hepatitis C
Oncology Related
Thrombocytopenia
13
Promacta®: Blockbuster Commercial Potential
Aplastic Anemia
95 Countries
Recently filed in the EU Recent Pediatric ITP filings
53 Countries
Global filing and launch investment
Major clinical investment ongoing: MDS, AML, CLL, CIT,
others
AA Currently Approved Indications
Ongoing Development New Markets
3 Countries
70
85
GSK Novartis
1,300
8,000
GSK Novartis
$2.0
$11.7
GSK Novartis
GSK and Novartis: Business Unit Profiles1
Novartis has a superior oncology business, ~6 times larger than GSK’s; Promacta® transitioned to Novartis on March 1st
Oncology Employees Countries with Presence 2014 Oncology Revenue ($B)
1 GSK and Novartis company disclosures relating to revenue and business unit structures; GSK.com, Novartis.com
14
15
• Leading 3rd-line treatment for multiple myeloma (MM) in the US
— Viewed as best-in-class proteosome inhibitor
— 25% year-over-year growth in 2014
Kyprolis®
• Royalty rates of 1.5% to 3.0%
ASPIRE Phase 3 Data
Dr. Keith Stewart The Mayo Clinic
“We are observing an unprecedented duration of remission, without additional toxicity, in relapsed and heavily pretreated patients.”
• Amgen has submitted US and EU applications for relapsed MM
— Granted priority FDA review; July 26, 2015 PDUFA date — Also granted EU Accelerated Assessment
• Major investment by Amgen focused on further expansion of the label
— Front-Line MM: Phase 3 (CLARION) — Small-cell Lung Cancer: Phase 2
16
• Recent data and events have continued to demonstrate the significant potential of Kyprolis
Kyprolis®
• APSIRE Phase 3 trial demonstrated an unprecedented PFS (26.3 months) in relapsed MM
• ENDEAVOR Phase 3 trial demonstrated a DOUBLING of median PFS over Velcade® (18.7 vs. 9.4 months) in relapsed MM
• Significant unmet needs remain in MM, and the market is expected to double to over $13 billion by 2020
Reference AMGN March 2, 2015 corporate presentation
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar
17
DUAVEE™
Source: Bloomberg/Symphony Health
• Product for post-menopausal hot flashes and osteoporosis
• Direct-to-consumer campaign launched in September
• US prescriptions over 12,200 per month in March, a 26% increase over prior month
• EU approved in December, premium pricing expected to be finalized in Q2 2015
• Ligand is owed royalties in the range of 0.5%-2.5%
US Monthly Prescriptions
Lig
and
Nex
ero
ne
Rev
enu
e (U
SD,
tho
usa
nd
s)
2011
Nexterone: Royalty Revenue
$0
$20
$40
$60
$80
$100
$120
$140
$160
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2012 2013
• Captisol-enabled product for treatment of ventricular fibrillation
• Shown consistent growth over recent quarters
• Quarterly royalties to Ligand up over 70% Q1 2015 vs Q1 2014
• Baxter is dedicated to the brand and is pursuing expansion
18
2014
20
15
$ m
illio
ns
Merck reported quarterly reports 19
2011
$0
$20
$40
$60
$80
$100
$120
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2012 2013 2014 2010
Noxafil: Total Quarterly Revenue
• Captisol-enabled IV form of a super-potent anti-fungal
• Launch of IV form appearing to reinvigorate growth for the brand
US: March 2014
EU: September 2014
Canada: November 2014
• LTM revenues up 38% ($120 million) over prior 12 months
20
15
• Certain portfolio assets stand above others, having the potential to add significantly to Ligand’s top and bottom line
• They do so as a result of a mixture of factors, including:
— Market size or therapy area addressed
— Upcoming potential milestone events
— Royalty rate or specifics of deal economics
• Major news catalysts expected over the next 6 to 24 months
• More potential programs could move into the Big Six
The Big Six: Major Pipeline Assets
21
Partner
Program (Therapy Area)
Stage
Royalty Rate
Potential Launch
Potential 2015 Events
CE- Melphalan (Oncology)
NDA
20% 2015 Approval
Delafloxacin IV (Infection)
Phase 3 Undisclosed 2016 Phase 3 data
SAGE-547 (Neurology)
Phase 2 Undisclosed 2017 Pivotal Initiation
Sparsentan (FSGS - Kidney Disease)
Phase 2 9% 2017 Enrollment Completion
MK-8931 (Alzheimer’s Disease)
Phase 3 Undisclosed 2018 Updates
IRAK-4 (Oncology)
Preclinical 6.0-9.5% 2019 Clinical Start
22
The Big Six: Major Pipeline Assets
VKTX: Company Overview
24
• San Diego-based biotech, developing novel, first-in-class or best-in-class drugs for metabolic disorders
— Leading clinical-stage programs with preliminary efficacy signals in humans
SARM VK5211:Non-steroidal selective androgen receptor modulator
Entering Phase 2 Development for Hip Fracture
Data Expected 2Q 2016
TR-β VK0214, VK2809: Novel,
Selective thyroid receptor-β Agonists
Strong scientific rationale for application in X-ALD with potential
Human POC data in 1H 2016
Additional opportunities in NASH and cholesterolemia
• Three additional programs also partnered with Ligand, targeting diabetes, anemia, lipid disorders
VKTX: Investment Overview
25
• Initial single-program partnership with Ligand in 2012
• Partnership expanded to five programs in 2014
• Viking IPO closed May 5, 2015
— Ligand received ~3.4M shares of stock as an equity milestone for license programs
— Ligand purchased an additional ~1.1M shares in offering
• Benefits to Ligand
— Potential to receive significant future royalties through 5 additional Shots-on-Goal
— Equity stake in promising growth biotech
• May 2015 acquired royalty rights to over 15 biotech programs
• Selexis technology increases yields for biologic manufacturing
• Royalty assets an excellent fit with Ligand’s business model
• Expands Ligand’s royalty portfolio further into novel biologics and biosimilars
• $4.0 million acquisition price
• Potential for more than $20 million in milestones and an estimated over $40 million in peak annual royalties from these assets
27
Selexis Acquisition: Highlights
Novel Biologics:
• Partners pursuing monoclonal antibodies for large market opportunities in oncology, inflammatory and rare inherited diseases:
― Inflammatory disease targets include rheumatoid arthritis, Crohn’s disease and multiple sclerosis
― Cancer targets include lung, colorectal, breast, gastric and non-hodgkin lymphoma
― Rare inherited disease targets include epidermolysis bullosa and Gaucher’s disease
28
Selexis Acquisition: Portfolio Summary
55%
45%
Novel Biologics Biosimilars
― Humira
― Avastin
― Aranesp
― Cerezyme
― Rituxan
― Herceptin
Biosimilars:
• Biosimilars market projected to potentially exceed $35 billion worldwide in 2020
• Biosimilars for blockbuster novel biologics in the acquired Selexis portfolio include:
Source: Allied Market Research “Global biosimilars/follow-on-biologics market (types, applications and geography) - Size, Share, Global Trends, Company Profiles, Demand, Insights, Analysis, Research, Report, Opportunities, Segmentation and Forecast, 2013 - 2020”, July 2014
• Novel, highly potent, oral GCGR antagonist for treatment of type 2 diabetes completed Phase 1a trial in mid-2014, and Phase 1b trial initiated late last year
— One of Ligand’s most promising un-partnered assets
— Potential best-in-class properties
• Diabetes market is expected to double to $60 billion by 20201
— Combo therapy highly prevalent and necessary to optimize management of disease
— Creates significant opportunity for novel treatment mechanisms
30
Novel R&D: Glucagon Receptor Antagonist LGD-6972 for Diabetes
1 Brinson Patrick report 12/3/12; SunTrust report 6/25/13
Existing Class
Product Profile GCGR Advantage
DPP-IV Inhibitors
Modest reduction of plasma glucose Higher glucose
reduction
GLP-1 Agonists
Only available as injectables Oral
SGLT-2 Inhibitors
Contraindicated for renally impaired patients Spares kidney
• Product profile and recent clinical data suggest significant market advantages for a safe, highly potent, oral GCGR antagonist as compared to existing classes of new mechanisms
31
Novel R&D: Glucagon Receptor Antagonist Advantages of Potent GCGR Antagonist
Novel R&D: Glucagon Receptor Antagonist Positive Phase 1a Clinical Data for LGD-6972
32
Change in fasting glucose(24 hr post dose)
Place
bo
2 mg
10 m
g
40 m
g
120 mg
240 mg
480 mg
-15
-10
-5
0
5
10
MeanSEM
F
astin
g G
luco
se (
mg
/dL
)
Change in fasting glucosediabetic subjects(24 hr post dose)
Place
bo
40 m
g
-80
-60
-40
-20
0
20
MeanSEM
F
astin
g G
luco
se (
mg
/dL
)
• Positive clinical data presented in 2014
• Excellent safety profile
• Dose-dependent decreases in fasting plasma glucose in normals
• Robust decreases in glucose in type 2 diabetics after just a single dose
• Recent scientific ripening of the field, glucagon receptor antagonism widely seen as one of the most promising novel approaches to treatment of diabetes
• Multi-dose trial currently in progress, data expected in coming weeks
33
Potential Upcoming Events
Target Date Program Event
Q2’15 Duavive EU product pricing/launch
Q2’15 LGD-6972 Phase 1b results
7/26/15 Kyprolis Multiple Myeloma sNDA PDUFA date
2H’15 Promacta Pediatric ITP NDA and MAA approvals
2H’15 Kyprolis Relapsed multiple myeloma NDA and MAA approvals
2H’15 NS-2 Phase 2 trial initiation
2H’15 Delafloxacin NDA Submission
Q4’15 Promacta Severe Aplastic Anemia MAA approval
Q4’15 CE-Melphalan NDA approval
Q4’15 Carbella NDA approval
Q4’15 Topiramate Phase 2 trial initiation
Q4’15 IRAK-4 Phase 1 trial initiation
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