Ligand Pharmaceuticals Incorporated · NASDAQ:LGND
Ligand Pharmaceuticals — Investor Day (December 2023)
49 slides from Ligand Pharmaceuticals's investor day presentation, Dec 12, 2023
Slide 1: 2023 Investor Day
DECEMBER 12, 2023 2023 Investor Day
Slide 2: Agenda
Agenda 10:30 am – 12:00 pm ET (7:30 am – 9:00 am PT) LIGAND STRATEGY Todd Davis Business Overview, Strategy, & 2023 Accomplishments CEO FINANCIAL UPDATE Tavo Espinoza Financial Review and Growth Expectations CFO DEAL EVALUATION Lauren Hay Investment Criteria & Diligence Approach VP, Strategic Planni
Slide 3: Safe Harbor Statement & Disclaimers
Safe Harbor Statement & Disclaimers The following presentation contains forward-looking statements by Ligand and its partners that involve risks and uncertainties and reflect Ligand’s and it’s partners’ judgment as of the date of this presentation. Words such as “plans,” “believes,” “expects,” “proj
Slide 4: Ligand Strategy
Ligand Strategy Business Overview, Strategy, & 2023 Accomplishments
Slide 5: Ligand Today
Ligand Today Biopharmaceutical royalty aggregator, focused on investing in highly differentiated late-clinical stage assets and operating royalty-generating platform technologies Current Revenue Generating Royalties 8 major commercial-stage royalty streams Royalty Pipeline Over 75 additional active
Slide 6: Ligand 2022 vs. 2023 Comparison
Ligand 2022 vs. 2023 Comparison During the past year, Ligand has dramatically restructured its business to focus on lean infrastructure, high-margin businesses 2022 2023 Royalty Revenue1 $73 million $82 to 84 million Cash Operating Expenses ~$92 million Below $40 million Adjusted EPS2 $2.44 $3.75 –
Slide 7: Company Strategic Evolution
Company Strategic Evolution 2022 – 2023 2011 – 2022 Streamlined op-ex; Royalty aggregation through M&A, project 2007 – 2010 Technology finance, royalty platforms & monetization, & tech licensing: Cydex platforms 1987 – 2006 Refocus to selective (Captisol), OmniAb, M&A to build Pelican royalty-genera
Slide 8: Ligand Strategic Differentiation
Ligand Strategic Differentiation STRONG FINANCIALS High margin / high growth strategy with lean operations Favorable P&L – Low operating expense, high profit per employee Creating predictable and diversified growth ADVANTAGEOUS STRATEGY High Demand: Inefficient market with practically inexhaustible
Slide 9: Unique Market Positioning Strategy
Unique Market Positioning Strategy Higher RISK Venture Capital Ligand Position High Demand, Low Supply of Capital Lower Preclinical Phase 1 Phase 2 Phase 3 Commercial 12 Years 7-9 Years 5 Years 2-3 Years 0 Years TIME TO MARKET Ligand is strategically positioned as a biopharma investment and technolo
Slide 10: Ability To Scale Business Model
Ability To Scale Business Model ~$20B Commercial Funds Moderate Demand, DEVELOPMENT CAPITAL CURRENT BIOPHARMA ~ Large Supply of Capital 10 Firms, $35B Deployed in ESTIMATED the Last 10 Years Supply of Capital Ligand Position Estimated High Demand, Low Supply of Capital $0 Phase 2 Phase 3 Commercial
Slide 11: Definition & Benefits of Royalty Investing
Definition & Benefits of Royalty Investing What are biopharmaceutical royalties? A royalty is a Royalties are Royalty cash flows can Royalty acquisition percentage of top- non-dilutable be protected in requires minimal line pharmaceutical bankruptcy corporate net revenue infrastructure Royalty inves
Slide 12: Investment Tactics & Methods
Investment Tactics & Methods Ligand utilizes multiple investment approaches to add late-stage programs to the portfolio Royalty Monetization M&A Project Finance Platforms Acquire existing royalty Identify companies with Fund late-stage clinical Focus on infrastructure- contracts attractive royalty t
Slide 13: Attractive Business Model
Attractive Business Model LIGAND TRADITIONAL BIOTECH COMPANY ✓ Small infrastructure × Large infrastructure ✓ Broad therapeutic focus × Narrow therapeutic focus ✓ Limited exposure to single asset PTRS × High exposure to single asset PTRS 13 PTRS: Probability of technical and regulatory success
Slide 14: Corporate Execution
Corporate Execution INCREASED INVESTMENT ACTIVITY • Hundreds of deals reviewed and 5 investments closed STRENGTHENED TEAM • Hired experienced investment professionals • Opened a Boston office STREAMLINED OPERATIONS • Spun-out OmniAb and Pelican subsidiaries 14
Slide 15: Looking Ahead: 5-Year Royalty Revenue Outlook
Looking Ahead: 5-Year Royalty Revenue Outlook Current portfolio of commercial and late-stage programs + new deals drive growth • Royalty revenue growth could exceed a $250 Ligand Royalty Revenue Projected Trend 20% CAGR (in millions) • Existing commercial programs and late- $200 stage pipeline (“Pha
Slide 16: Financial Update
Financial Update Financial Review and Growth Expectations
Slide 17: Ligand Has Come a Long Way Since Investor Day 2022
Ligand Has Come a Long Way Since Investor Day 2022 Completed spinoffs of OmniAb and Pelican, resulting in: ✓ Streamlined business model focused primarily on current and future royalty generating assets ✓ Cost efficient business with positive cash flows and line of sight to growing royalty revenue st
Slide 18: Looking Back, We Are Where We Want to Be
Looking Back, We Are Where We Want to Be In December of 2022, we told you we planned to focus on getting back to growing our royalty assets while leveraging a lean corporate cost structure Decreased cash operating expenses while at the same time bolstering our deal making capabilities with the openi
Slide 19: 2023 Financial Headlines
2023 Financial Headlines Revenue Cash & Investments $126M - 129M $191M Royalty revenue growth of 14% as of September 30, 2023 Debt Free Core Adjusted Diluted EPS $3.75 - 3.90 Convertible notes paid off in May 2023 57% growth over 2022* $75M revolving credit facility in place 19 • Growth % based on m
Slide 20: 2024 Financial Guidance Preview
2024 Financial Guidance Preview Royalty Revenue Total Revenue $90M - 95M $130M - 142M Royalty revenue growth of 11% over 2023 Captisol Revenue $25M – 27M Core Adjusted Diluted EPS* $4.25 - 4.75 Contract Revenue 18% growth over 2023 $15M - 20M 20 * Growth % based on mid-point of range; excludes the i
Slide 21: Looking Ahead: 5-Year Royalty Revenue Outlook
Looking Ahead: 5-Year Royalty Revenue Outlook Current portfolio of commercial and late-stage programs + new deals drive growth • Today’s commercial programs are $250 expected to drive royalty revenue growth Ligand Royalty Revenue Potential until 2027, when Kyprolis generics enter (in millions) 6% th
Slide 22: Looking Ahead: 2024 & Beyond
Looking Ahead: 2024 & Beyond 2022-2028 2022 Actuals 2023 Guidance 2024 Preview 2028 Outlook CAGR Royalty Revenue $73M $82M - 84M $90M - 95M $235M 22% Captisol Sales $23M $27 - 28M $25 - 27M $30M 5% Contract Revenue $28M $17M $15-20M $25M - Total Core Revenue* $124M $126M - 129M $130M - 142M $290M 15
Slide 23: Our Key Value Drivers Are Expected to Grow Meaningfully
Our Key Value Drivers Are Expected to Grow Meaningfully ✓ Royalty revenue could exceed $230 million by 2028 ✓ EBITDA* margin could exceed 80% by 2028 ✓ Adjusted EPS could exceed $10 by 2028 ✓ Growing free cash flow expected, >$1 billion in deployable capital between 2024 and 2030 23 *EBITDA excludes
Slide 24: Additional Sources of Capital to Deploy
Additional Sources of Capital to Deploy Guidance assumes existing liquidity and free cash flow used to acquire new royalty assets. Upside potential can come from deployment of capital from other sources not included in forecast • Future sales of Captisol for COVID-19 • Viking Therapeutics stock – 2.
Slide 25: Deal Evaluation
Deal Evaluation Investment Criteria & Diligence Approach
Slide 26: Ligand Investment Criteria
Ligand Investment Criteria Clinical Differentiation Structural Alignment Data supports ability to Competent counterparty address high unmet need with structural alignment and strong safety profile to Ligand Time to Cash Flow Exclusivity Risk-Reward No more than a few Favorable market Superior risk-
Slide 27: Diligence Process Overview
Diligence Process Overview WEEKS TO MONTHS 1-2 WEEKS 2 MONTHS 1 WEEK Term Full Final Prospecting Sheet Diligence Approval • Gain broader Ligand • Deal team creates • Deal team conducts • A thorough assessment team input on whether investment memo with extensive diligence of opportunities and investm
Slide 28: Ligand Diligence Process
Ligand Diligence Process ✓ Ligand’s scientific expertise is supplemented with therapeutic area-specific consultant input on PTRS Clinical & ✓ KOLs are interviewed to understand the treatment paradigm, product selection drivers, competitive Regulatory landscape, unmet needs, and asset opportunity ✓ L
Slide 29: Select Dealbreaker Examples
Select Dealbreaker Examples Time To Clinical Intellectual Competitive Risk-Reward Cash Flow Differentiation Property Landscape Opportunity A high-profile A cardiovascular A promising An upcoming A potentially oncology asset had dermatology drug competitive patent paradigm-shifting therapeutic was ~6
Slide 30: Investment Activity
Investment Activity Recent Transactions & Deal Pipeline
Slide 31: Ligand Sourcing Strengths
Ligand Sourcing Strengths • Seasoned investment team with decades of experience • Robust outbound efforts driven by focused investment criteria • Relationships with multiple potential royalty sellers • Structural flexibility to participate across the capital structure • Nimble organization and abili
Slide 32: 2023 Investment Activity
2023 Investment Activity Leveraged team’s extensive experience across 300+ Investments therapeutic categories and technologies to facilitate Reviewed quick kills and focus on highest value opportunities Initiated in-depth research and engaged external consultants to rapidly identify and 45 CDAs Sign
Slide 33: Ovid Soticlestat Investment Profile
Ovid Soticlestat Investment Profile Counterparty Ovid Asset Soticlestat Dravet Syndrome (Phase 3) Indication & Phase Lennox Gastaut Syndrome (Phase 3) Marketer Takeda Deal Type Royalty Monetization Deal Size $30M Novel, innovative mechanism of action Clean safety profile & ability to be combined wit
Slide 34: Tolerance Tzield Investment Profile
Tolerance Tzield Investment Profile Counterparty Tolerance Therapeutics Asset Tzield (teplizumab) Stage 2 type-1 diabetes (Approved) Indication & Phase Stage 3 type-1 diabetes (Phase 3) Marketer Sanofi Deal Type M&A, Royalty Monetization Deal Size $20M First disease-modifying treatment approved to t
Slide 35: 2024 Investment Outlook
2024 Investment Outlook INVESTMENT PIPELINE 2024 OUTLOOK Ligand’s Q4 pipeline has over Ligand is well positioned and 20 actionable opportunities resourced to close multiple representing in excess of $1B investments in 2024, of potential investments depending on the size and quality of the opportunit
Slide 36: Portfolio Update
Portfolio Update Commercial Portfolio, Pipeline Progress, & Operational Updates
Slide 37: Key Partnered Commercial Programs
Key Partnered Commercial Programs Marketer Program Therapeutic Area Royalty Rate 2023 Updates Outlook On track to exceed $1.4B in global Volume growth continuing to drive sales Kyprolis® Oncology 1.5% to 3% sales higher Kidney FDA Approval Launched in February 2023; Potential FILSPARI 9% Disease (Fe
Slide 38: Key Partnered Pipeline Programs
Key Partnered Pipeline Programs Marketer Program Therapeutic Area Phase Royalty Rate 2023 Updates 2024 Catalysts Pediatric NDA Submission; FDA Approval Decision * Berdazimer Gel Infectious NDA N/A Ligand acquired assets (January PDUFA) Disease Low NDA Submission FDA Approval Decision Ensifentrine Re
Slide 39: Captisol Platform Technology
Captisol Platform Technology • Ligand owns and operates the Captisol technology platform with a lean operation team • Captisol’s recurring customer base generates material revenue, as well as royalty interests in partnered programs • Captisol addresses a consistent and enduring industry need: formul
Slide 40: Captisol Platform Technology
Captisol Platform Technology Captisol continues to enable product approvals for our partners • In 2024, Captisol has 5 possible new approvals 15 Approved Captisol Products MEKINIST CUMULATIVE CAPTISOL DEMAND • Possible 2024 approvals include drugs partnered with TOTAL PRODUCTS APPROVED DOCETAXEL Eis
Slide 41: Filspari Product Overview
Filspari Product Overview Rights to Filspari were acquired as part of the Pharmacopeia acquisition • FILSPARI (sparsentan) is an approved dual inhibitor of angiotensin and endothelin receptors for the treatment of rare kidney disease – Received accelerated approval in February 2023 for IgA nephropat
Slide 42: Filspari Market Opportunity
Filspari Market Opportunity • FILSPARI became commercially available for IgAN in US during the week of February 27, 2023 – 990 new patient start forms received since launch – Net product sales of $8M during Q3 2023, bringing the total to $14.5M since launch • Travere is collaborating with CSL Vifor
Slide 43: Ensifentrine Product Overview
Ensifentrine Product Overview Rights to Ensifentrine were acquired as part of the Vernalis acquisition • Ensifentrine is a Phase 3, first-in-class candidate for the maintenance treatment of chronic obstructive pulmonary disease (COPD) – Read out positive topline Phase 3 results in December 2022, sho
Slide 44: Ensifentrine Market Opportunity
Ensifentrine Market Opportunity Analyst Revenue Estimates ($M) (1) • Ensifentrine is potentially the first new class of drug $1,750 for COPD in decades $1,500 $1,250 • There is significant U.S. market opportunity for $1,000 $750 Ensifentrine at launch $500 $250 – COPD is currently estimated to be a
Slide 45: Berdazimer Gel Product Overview
Berdazimer Gel Product Overview Initial rights to Berdazimer Gel were acquired as part of a project financing in 2019 • Berdazimer Gel is an NDA stage topical treatment for molluscum – Novan announced positive efficacy results in a Phase 3 in 2022 for the treatment of molluscum and has a PDUFA date
Slide 46: Berdazimer Gel Market Opportunity
Berdazimer Gel Market Opportunity • Berdazimer Gel could be the first FDA-approved at- home treatment for molluscum – Addressable U.S. molluscum market is ~6 million patients • A sizable market opportunity exists for Berdazimer Gel – Molluscum primarily impacts pediatric patients Analyst Revenue Est
Slide 47: Closing Remarks
Closing Remarks LIGAND
Slide 48: We Are Excited About The Future
We Are Excited About The Future • 2023 kicked off a new chapter in the history of Ligand – Established growth portfolio provides a strong foundation to build upon – Lean corporate cost structure frees up more capital for deployment – Experienced investment team focused on acquiring high margin royal
Slide 49: Investor & Analyst Q&A
Investor & Analyst Q&A LIGAND
Ligand Pharmaceuticals — Investor Day (December 2023) on 6ix