Ligand Pharmaceuticals Incorporated · NASDAQ:LGND
Ligand Pharmaceuticals — Merger or Acquisition (December 2015)
27 slides from Ligand Pharmaceuticals's merger presentation, Dec 18, 2015
Slide 1: OMT, Inc. Acquisition Conference Call December 17, 2015
OMT, Inc. Acquisition Conference Call December 17, 2015 NASDAQ: LGND
Slide 2: Forward-looking statements
2 The following presentation contains forward-looking statements regarding Ligand’s prospects, plans and strategies, drug development programs and collaborations. Forward-looking statements include the expected completion of the acquisition of OMT and the timing thereof, the benefits of the acquisit
Slide 3: Agenda
Agenda 1) Acquisition Highlights and Value Drivers John Higgins, CEO 2) OMT – Company Overview and Technology Platform Matt Foehr, COO 3) Financial Outlook and Upcoming Events Matt Korenberg, CFO 3
Slide 4: Acquisition Highlights and Value Drivers
Acquisition Highlights and Value Drivers
Slide 5: OMT – Open Monoclonal Technology, Inc.
OMT – Open Monoclonal Technology, Inc. • Leader in genetically engineered transgenic animals for human antibody discovery — Founded in 2008 by Roland Buelow, PhD, a world-renowned antibody scientist — Financed by Essex Woodlands — Business based on transgenic animal platform licensing to biopharma g
Slide 6: OMT Opportunity
OMT Opportunity • Proven Business Model — Profitable, cash-flow positive company — Potentially highly lucrative portfolio of licenses — Strong science and technology to drive future deal making • Excellent Strategic Fit — Technology licensing business similar to Captisol model — A few employees and
Slide 7: Major Value Drivers for OMT Acquisition
7 Major Value Drivers for OMT Acquisition • Financial Contribution — Projected to be accretive to revenues and adjusted EPS — Potential for significant financial contribution to Ligand through future royalties — A strong platform for Ligand to seek new licenses and partnerships • Portfolio Expansion
Slide 8: Antibody Prescription Medicines 2014 Global Sales
Antibody Prescription Medicines 2014 Global Sales 8 Confidential Drug Therapeutic Area 2014 sales ($ billions) Drug Therapeutic Area 2014 sales ($ billions) Humira Autoimmune $12.9 Humira Autoimmune $12.9 Sovaldi/Harvoni Hepatitis C $10.3 Remicade Autoimmune $9.8 Remicade Autoimmune $9.8 MabThera/Ri
Slide 9: Antibodies in Clinical Development
0 100 200 300 400 500 2008 2015 150 A n ti b o d ies in c lin ic al d ev el o p me n t 468 • Antibodies are a promising and rapidly growing category of therapeutic research • Number of antibodies in clinical development has tripled since 2008 Antibodies in Clinical Development 9 Sources: Nelson et a
Slide 10: Antibodies in Clinical Development
Phase 1 45% Phase 2 44% Phase 3 11% Antibodies in Clinical Development 10 Source: Reichert Biotechnology Consulting LLC, 2015. Non-Cancer 49.6% Cancer 50.4% Stage of Development Cancer vs. Non-Cancer Indications 468 antibodies in Clinical Trials
Slide 11: OMT Overview and Technology Platform
OMT Overview and Technology Platform
Slide 12: OmniAb Antibody Platforms
OmniAb Antibody Platforms • Key advantages: — Human antibodies have reduced immunogenicity — Using transgenic rodents avoids the need for genetic engineering to “humanize” antibodies and accelerates antibody discovery — Broad diversity of high-quality antibodies • OMT’s genetically engineered novel,
Slide 13: OmniAb Facilitates Rapid Antibody Discovery
OmniAb Facilitates Rapid Antibody Discovery • Groundbreaking research by OMT led to Science publication, creating scientific community visibility for the antibody generation technology • OmniAb underlying technologies : An industry leading patented, validated human antibody rat 2nd species with diff
Slide 14: The OMT Licensing and Partnering Model
The OMT Licensing and Partnering Model • OMT enters into Platform License Agreements with partners/licensees that provide access to the OmniAb platform (OmniRat, OmniMouse and/or OmniFlic) for use in identifying antibodies for development ‒ Generates revenue from upfront payments, annual maintenance
Slide 15: OMT Partners/Licensees
OMT Partners/Licensees 16 Partnerships and Licensees with Potential to Grow • Impressive and growing roster of currently active partners/licensees validates the utility of the technology. Disclosed partners/licensees include: 15 • Ligand projects up to three antibodies from the OMT platform will be
Slide 16: OMT is a Leader in a Highly-Specialized Antibody Landscape
OMT is a Leader in a Highly-Specialized Antibody Landscape 16 • OMT’S platform meets seven important standards 1) Fully Human 5) Bispecific format 2) Eukaryotic System 6) Open platform 3) Transgenic Mouse 7) Optimized Ab production 4) Transgenic Rat • Only antibody discovery platform that provides a
Slide 17: Partner Commentary on OmniAb Technology
Partner Commentary on OmniAb Technology • Time savings: — “We are getting high-affinity antibodies in a rapid period of time … this improves our cycle times for antibody discovery substantially” — “For us, this saves significant time as we do not need to humanize” • Productivity/efficiency of animal
Slide 18: Partner Commentary on OmniAb Technology
• Freedom to operate: — “Freedom to operate was very clear to us, because OMT has a rat” — “Having a rat and a mouse available was a big selling point for us” • As compared to competition or other technologies: — “We ran OmniRat head-to-head versus phage display and OmniRat won … the OmniRat will be
Slide 19: Major Expansion of Licensing Opportunities Furthering Technology Diversification
Major Expansion of Licensing Opportunities Furthering Technology Diversification Solving solubility and stability challenges predominantly for small molecules Allows for higher and more stable expression of recombinant proteins SUREtechnology Platform™ Proven, unrestricted Fully Human Antibody techn
Slide 20: Underlying IP Diversification and Expansion
Underlying IP Diversification and Expansion Addition of OmniAb Broadens and Extends Portfolio Pioneering platform patent to 2023 in all major countries (except China) Proprietary vector patent to 2026 in all major countries SUREtechnology Platform™ Multiple patent families provide broad global cover
Slide 21: Expansion of Partner Base
Biotech 52% Big Pharma 19% Generic 11% Spec Pharma 18% > 83 Partners Proforma Partner Portfolio Expansion of Partner Base Biotech 44% Big Pharma 28% Generic 16% Spec Pharma 10% > 74 Partners Current Ligand Pro Forma 21
Slide 22: Financial Outlook and Upcoming Events
Financial Outlook and Upcoming Events
Slide 23: Primary Acquisition Terms
Primary Acquisition Terms • $178 million purchase price — $92.6 million cash from existing cash reserves — $85.4 million paid in Ligand common stock, ~780,000 shares • Stock collar creates upper and lower bounds for the number of shares to be delivered to OMT • Projected to close in January 2016 23
Slide 24: Projected Financial Impact
• Revenue — Near-term revenue consists of annual access fees and milestones from existing contracts — Adds $6 million in 2016 and $12 million in 2017 — Adds 7% - 10% annually for the next decade — Initial products potentially launch in 2026 providing possibility for substantial new royalty streams i
Slide 25: Projected Financial Impact, continued
• Guidance — 2016 pro forma revenues between $113 million and $117 million, adjusted EPS in the range of $3.33 to $3.38 — 2017 pro forma revenues expected to exceed $158 million, adjusted EPS expected to exceed $4.95 • OMT non-cash amortization expense estimates are expected to be determined in the
Slide 26: Upcoming Investor Events
Upcoming Investor Events Event Location Date CJS New Ideas Conference New York January 13, 2016 Year-End Earnings Call Conference Call February – TBD Deutsche Bank Pharma One-on-One Day Denver March 3, 2016 Annual Roth Conference Dana Point, CA March 13-16, 2016 26
Slide 27: OMT, Inc. Acquisition Conference Call December 17, 2015
OMT, Inc. Acquisition Conference Call December 17, 2015 NASDAQ: LGND
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