Ligand Pharmaceuticals Incorporated · NASDAQ:LGND
Ligand Pharmaceuticals — Investor Day (November 2014)
92 slides from Ligand Pharmaceuticals's investor day presentation, Nov 18, 2014
Slide 1: 2015 and Beyond Analyst Day
2015 and Beyond Analyst Day New York - November 18, 2014 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 financial projections, expectations regarding research and development programs, and other statements
Slide 3: Agenda
3 Agenda 1) Business Overview John Higgins, President & CEO 2) Portfolio Highlights • Major Partnered Programs • Commercial Programs • Glucagon Matt Foehr, Chief Operating Officer 3) Captisol • Highlights and Information about this Growing Franchise JD Pipkin, VP, New Product Development Vince Antle
Slide 4: Ligand: 2015 and Beyond
4 Ligand: 2015 and Beyond • Ligand has transformed into a high-growth company with economic rights to some of the world’s most important medicines • “Shots-on-Goal” business model is stronger than ever and projected to continue to drive the business significantly • Cutting-edge innovations with Capt
Slide 5: Ligand Fast Facts
Ligand Fast Facts 5 Portfolio Size Blockbusters Catalysts Outlook Over 100 fully funded programs Currently 2: Promacta and Kyprolis 6 major programs highlighted Over 20 revenue-generating products by 2020 Financials Revenue Profits Cash flow > 30% annualized three year growth projected >
Slide 6: Shots-on-Goal Business Model
6 • Ligand focused on building a large portfolio of fully-funded programs • Two primary business objectives: — Drive R&D to earliest inflection point for partnering — Acquire assets efficiently to further build portfolio • The Goal: Above average returns, below average risk — Economic rights to majo
Slide 7: Ligand's Business Continues to Thrive
0 2 4 6 8 2008 2014 7 Fully-Funded Programs (“Shots-on-Goal”) Ligand’s Business Continues to Thrive 100 + 0 20 40 60 80 100 2008 2014 9 Ligand’s Achievement: Portfolio Expansion Partners’ Achievement: Products Generating Revenue for LGND Excellent record as drug researcher, innovator and licensor Ou
Slide 8: Commercial programs projected by 2020
8 20 by 2020 • Over 20 commercial programs projected to be generating revenue for Ligand by the end of this decade • Programs expected to come from existing portfolio; no new deals required to drive that expansion 2008 2014 2020 Projected 1 7 > 20
Slide 9: Different Partners, Diverse Portfolio
9 62 Different Partners Select Big Pharma Select Biotech Select Spec Pharma Select Generic Diverse Portfolio Among Drug Companies Biotech, 43% Big Pharma, 34% Generic, 14% Spec Pharma, 9%
Slide 10: The Shots-on-Goal Portfolio is Advancing
10 • Portfolio remains diversified across development stages • 62 different partners • Over 70% of programs in clinical development or later The “Shots-on-Goal” Portfolio is Advancing Over 100 Partnered Programs >27 >41 15 9 7 Phase 3/NDA Marketed Phase 2 Phase 1 Preclinical
Slide 11: Fully-funded Partnerships Driving Growth
• We estimate our partners will spend over $1.1 billion in 2015 on R&D to advance our programs: — 13 Phase 3 trials — 38 Phase 2 trials — 58 Phase 1 trials — 2 Phase 4 trials — 14 preclinical programs — Manufacturing scale-up — Regulatory filing fees Fully-funded Partnerships Driving Growth 11
Slide 12: Portfolio is Balanced by Indications
Others 3% Metabolic 8% Infectious 9% Inflammation 14% Oncology 41% Cardiology 4% Blood 8% Ophthalmology 4% CNS 9% Portfolio is Balanced by Indications Distribution among essentially all major disease categories 12
Slide 13: Ligand's Virtual Operations
13 Ligand’s Virtual Operations 19-person internal team focuses on: • Drug research and development • Licensing, acquiring and integrating assets/companies • Collaboration management and customer service Supported By: Chemistry Scale-up Manufacturing Contract Services
Slide 14: Ligand's R&D Model
14 • Drive R&D to earliest inflection point for partnering • Focus on developing strong inventions and data, generating patents then partnering ― Leverage ripening science and changing medical landscape • Deals generally structured to maximize back-end economics Ligand’s R&D Model
Slide 15: R&D: Ligand's Productivity over Past Year
Potential Launch 15 R&D: Ligand’s Productivity over Past Year • 12 presentations at medical or scientific conferences • Completed clinical trial and one currently in progress • 2 new R&D collaborations with Omthera and TG Therapeutics • Developed novel LTP Technology Platform • Major IP expansion ov
Slide 16: Technology and Novel R&D Drive Deal Making
Technology and Novel R&D Drive Deal Making Potential Launch 16 Oral Lasofoxifene for Low-T Clinical Significant clinical database leveraged for potential new use Our Platform Technologies Our Novel R&D LTP Technology™ Glucagon Receptor Antagonist Program for Diabetes Phase 1 Positive Phase 1 data sh
Slide 17: Accelerating Projected Revenue Growth
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 17 $ m ill io n s
Slide 18: Revenue Outlook for Two Blockbusters
18 $ bi lli o n s $ bi lli o n s High Low Average Sales figures converted from GBP to USD Conversion rate = 1.68 9 GSK/NOVN covering analysts reports as of 10/24/14 $0.0 $0.2 $0.4 $0.6 $0.8 2015 2016 2017 2018 2019 2020 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 2015 2016 2017 2018 2019 2020 17 AMGN covering ana
Slide 19: Projected Total Underlying Revenue
19 Projected Total Underlying Revenue upon which Ligand’s Royalties are Based $ B ill ion s $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 2014 2015 2016 2017 • Total underlying product revenue for Ligand’s programs projected to exceed $2.7 billion in 2017 • Ligand earns a blended average royalty of between 3%
Slide 20: Historical and Projected Operating Expenses
20 Historical and Projected Operating Expenses $0 $10 $20 $30 $40 $50 2011 2012 2013 2014 2015 2016 2017 Cash Operating Expenses Actual Outlook Est. • Operating expenses flat past four years • Expense levels projected to remain similar next few years $ M ill ion s
Slide 21: Cash-Generating Power Becoming Clear
21 Ligand’s Cash-Generating Power Becoming Increasingly Clear $0 $30 $60 $90 $120 $150 2011 2012 2013 2014 2015 2016 2017 Revenue Cash Expenses Actual Outlook Est. • Strong revenue growth • Operating expense levels projected to remain similar the next few years • Significant increase in cash-flow pr
Slide 22: Accelerating Projected Non-GAAP EPS Growth
Accelerating Projected Non-GAAP EPS Growth $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 2011 2012 2013 2014 2015 2016 2017 • Growth due to: – Higher revenues – High gross margins – Low and flat expenses – Lean share count 22
Slide 23: Cash and Profit Margins Expanding
Cash and Profit Margins Expanding 23 Actual 2013 Forecast 2014 Projected 2015 Gross Margin 88% 85% 85% Adjusted Cash- Flow Margin* 48% 52% 60% Adjusted Profit Margin* 43% 50% 55% • Gross margin expected to be consistent • Adjusted cash-flow and profit margins projected to grow *Adjusted to exclude n
Slide 24: Exceptional EPS Leverage
Exceptional EPS Leverage Due to High Operating Margins and Low Share Count 24 Share Count Hypothetical Royalty Revenue for $1.00 Pretax EPS Product Sales for $1.00 Pretax EPS* Pfizer 6.3 billion $6.3 billion $12.6 billion Celgene 800 million $800 million $1.6 billion Jazz 60 million $60 million $120
Slide 25: Distribution of Fully Funded Programs
Distribution of over 100 Fully Funded Programs 25 > $30 million < $10 million $10 million - $30 million Estimated Annual Peak Revenue Potential to Ligand 30% 20% 50%
Slide 26: The Big Six: Major Pipeline Assets
Partner Program (Therapy Area) Stage Royalty Rate Potential Launch Peak Potential Revenue Range to Ligand CE- Melphalan (Oncology) NDA In range of 15-25% 2015 > $30 M Delafloxacin IV (Infection) Phase 3 Undisclosed 2016 > $40 M MK-8931 (Alzheimer’s Disease) Phase 3 Undisclosed 2018 > $100 M Sparsent
Slide 27: Three-Year Financial Outlook
27 • High annual revenue growth projected for next three years — 2015: $81 - $83 million — 2016: > $107 million — 2017: > $146 million • Low annual cash expenses of approximately $20 to $22 million per year • Strong earnings per share growth projected next three years — 2015: $2.14 - $2.18 — 2016: >
Slide 28: Major Pipeline Programs
Major Pipeline Programs Matt Foehr
Slide 29: The Big Six: Major Pipeline Assets
• Certain portfolio assets stand above others • 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 The Big Six: Major Pipeline Assets 29
Slide 30: The Big Six: Major Pipeline Assets
Partner Program (Therapy Area) Stage Royalty Rate Potential Launch Peak Potential Revenue Range to Ligand CE- Melphalan (Oncology) NDA In range of 15-25% 2015 > $30 M Delafloxacin IV (Infection) Phase 3 Undisclosed 2016 > $40 M MK-8931 (Alzheimer’s Disease) Phase 3 Undisclosed 2018 > $100 M Sparsent
Slide 31: Spectrum: Captisol-enabled Melphalan Opportunity
• Captisol-enabled formulation of chemotherapy drug used for stem cell transplant conditioning in multiple myeloma • Partnership signed with Spectrum Pharmaceuticals in 2013 ― Royalty in range of 15-25% of potential net sales ― Over $50 M in potential milestones • Successful pivotal trial data annou
Slide 32: Melinta Therapeutics: Delafloxacin IV
Opportunity Late-stage clinical asset targeted at large market with evolving and unmet medical needs • Recently completed Phase 3 study of acute bacterial skin and skin structure infections (ABSSI) caused by MRSA ― Multicenter 660 patient trial • Delafloxacin has consistently demonstrated a favorabl
Slide 33: Merck: MK-8931
Merck: MK-8931 • MK-8931 is an oral beta-secretase (BACE1) inhibitor, for potential treatment of Alzheimer's disease (AD) • Two Phase 3 trials underway to assess the safety and efficacy of MK-8931 in patients with mild-to- moderate AD • Merck has the leading position in the BACE- inhibition field, w
Slide 34: Retrophin: Sparsentan
Opportunity Near-term value and long-term upside via well-timed and creative licensing deal • Dual-acting endothelin receptor antagonist and angiotensin receptor blocker being developed for Focal Segmental Glomerulosclerosis (FSGS) • Leveraging significant previous development in hypertension, Retro
Slide 35: SAGE Therapeutics: SAGE-547
• Sage’s lead program in Super-Refractory Status Epilepticus (SRSE), an acute, Orphan disease 35 SAGE Therapeutics: SAGE-547 • Positive top-line Phase 1/2 data reported last week — Overall response rate of 73% with no drug-related SAEs • Orphan Designation granted in April 2014 • Fast Track Designat
Slide 36: TG Therapeutics: IRAK-4
Opportunity Pre-clinical asset partnership that positions asset for upside associated with potential treatment synergies • Ligand had been developing orally-bioavailable inhibitors of Interleukin-1 Receptor Associated Kinase-4 to preclinical proof-of-concept stage ― Significant needs in oncology and
Slide 37: The Big Six: Major Potential Events
Program Year (Therapy Area) 2015 2016 2017 CE- Melphalan (Oncology) Approval Launch Delafloxacin IV (Infection) Phase 3 Data Approval/Launch MK-8931 (Alzheimer’s Disease) Phase 3 Data Sparsentan (FSGS - Kidney Disease) Enrollment Completion Phase 2 (Potentially Pivotal) Data SAGE-547 (Neurology) Piv
Slide 38: Hallmarks of The Big Six
• Unique, cutting-edge science • Major news catalysts over the next 6 to 24 months • Each has the potential to add significantly to Ligand’s top and bottom line • More potential programs could move into the Big Six Hallmarks of The Big Six 38
Slide 39: Major Commercial Assets
Major Commercial Assets Ligand
Slide 40: Promacta
Promacta® Ligand
Slide 41: Promacta
41 • Oral medicine that boosts platelets to treat thrombocytopenia • Currently marketed by GSK, to transition to Novartis in 2015 • Long patent protection, Orange Book patent expiration in 2027 • Potential for major label expansion — Over 25 active clinical trials — Recent/upcoming data and events i
Slide 42: Promacta: Pillars of Future Growth
• Similar to anemia and neutropenia, thrombocytopenia is made up of a number of “sub-markets” in which medical need is real, life-threatening and unmet • Four different areas create this growth opportunity: ITP HCV ORT Idiopathic Thrombocytopenia Thrombocytopenia Induced by Hepatitis C Oncology Rela
Slide 43: Promacta: ITP
43 • Steroids, platelet transfusion, splenectomy all create significant treatment challenges • Pediatrics account for half of new diagnoses per year • Initially launched for ITP indication in 2009, now marketed in 95 countries • Continued market share growth quarterly Promacta®: ITP • Idiopathic Thr
Slide 44: Promacta: Thrombocytopenia in Hepatitis C
44 — End-stage Hepatitis C patients are cirrhotic → liver so diseased it produces low platelets and supportive care necessary to reduce bleeding risks — While US poised for approval of new drugs, other markets are years behind and treatment approach may evolve differently • If only 0.01% of global H
Slide 45: Promacta: Aplastic Anemia
• Serious, rare disease where bone marrow does not produce enough new cells - patients have low red cell, white cells and platelets • ~7,000 new cases of AA diagnosed each year1 • Indication first launched in the US in 2014, now filed in the EU 45 Promacta®: Aplastic Anemia 1American Cancer Society,
Slide 46: Promacta: Regional Quarterly Revenue
$ m ill ion s GSK reported quarterly sales. Figures converted from GBP to USD 46 2011 Promacta®: Regional Quarterly Revenue $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3 ROW EU US 2012 2013 2014 ROW 22% EU 39% US 40% TOTAL 34% Expected strong growth of LGND royalties — New t
Slide 47: Promacta in MDS, AML and CLL
Myelodysplastic Syndromes (MDS) Acute Myeloid Leukemia (AML) Chronic Lymphocytic Leukemia (CLL) Cancers of the Blood Severe cytopenia, patients need frequent transfusions Fast-progressing cancer of the blood Slow-progressing cancer Excess bleeding results in major complications or death for nearly 2
Slide 48: Promacta Projections: GSK/NVS Analysts
$0 $100 $200 $300 $400 $500 $600 $700 $800 2015 2016 2017 2018 2019 2020 48 Promacta® Projections: GSK/NVS Analysts Annual Revenue Projections $ mi lli on s High Low Average Sales figures converted from GBP to USD Conversion rate : £1 = $1.68 9 GSK/NOVN covering analysts reporting as of 10/24/14
Slide 49: GSK and Novartis: Business Unit Profiles
GSK and Novartis: Business Unit Profiles1 Novartis has a premier oncology business, much larger than GSK’s; Promacta® expected to become part of Novartis in 2015 Number of Oncology Employees Countries with Unit Presence 1,300 70 8,000 85 Oncology Sales Force(s) Heme-Onc Oncology NMEs in Development
Slide 50: Kyprolis
Kyprolis®
Slide 51: Kyprolis
51 • 3rd-line treatment for multiple myeloma (MM) in the US • Amgen announced plans for global regulatory filings following outcomes of ASPIRE and FOCUS trials Kyprolis® • ASPIRE Phase 3 trial in relapsed MM met its primary endpoint and helped patients live 8.7 months longer • Major investment by Am
Slide 52: Kyprolis Projections: AMGN Analysts
$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 2015 2016 2017 2018 2019 2020 52 Kyprolis® Projections: AMGN Analysts Annual Revenue Projections $ bi lli on s High Low Average 17 AMGN covering analysts reporting as of 10/28/14
Slide 53: Duavee
Duavee™
Slide 54: Duavee
54 • Combo of Bazedoxifene (SERM) and Premarin®, partnered globally with Pfizer • For treatment of moderate-to-severe vasomotor symptoms (hot flashes) associated with menopause and the prevention of postmenopausal osteoporosis • US launched in 2014, European action expected prior to year-end • Ligan
Slide 55: Duavee market opportunity
55 • Hormone replacement therapy was once a $4 billion category • Number of women in the US with postmenopausal symptoms expected to exceed 50 million by 20201,2 • Significant market expansion potential as 7 out of 10 postmenopausal women are untreated, and most women (62%) have not even had discuss
Slide 56: Tune In To Menopause campaign
56 • Tune In To Menopause™ campaign features award-winning actress Kim Cattrall of Sex and the City DUAVEE™
Slide 57: DUAVEE: U.S. Monthly Prescriptions
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Jan Feb Mar Apr May Jun Jul Aug Sept Oct 57 DUAVEE™: U.S. Monthly Prescriptions Source: Bloomberg/Symphony Health • Significant prescription growth since launch • Tune In to Menopause™ campaign launched in September
Slide 58: Novel R&D: Glucagon Receptor Antagonist
Novel R&D: Glucagon Receptor Antagonist
Slide 59: Glucagon Receptor Antagonist LGD-6972 for Diabetes
• Novel, highly potent, oral GCGR antagonist for treatment of type 2 diabetes completed first Phase 1 trial in June, second trial recently initiated — One of Ligand’s most promising un-partnered assets with potential best-in-class properties • Diabetes market is expected to double to $60 billion by
Slide 60: Advantages of Potent GCGR Antagonist
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 sugge
Slide 61: Positive Phase 1 Clinical Data for LGD-6972
Novel R&D: Glucagon Receptor Antagonist Positive Phase 1 Clinical Data for LGD-6972 61 Change in fasting glucose (24 hr post dose) Pl ac eb o 2 m g 10 m g 40 m g 12 0 m g 24 0 m g 48 0 m g -15 -10 -5 0 5 10 MeanSEM F as ti n g G lu co se ( m g /d L ) Change in fasting glucose diabetic subjects (2
Slide 62: Captisol
CAPTISOL
Slide 63: Leadership: JD Pipkin
Leadership JD Pipkin, PhD – VP, New Product Development 63 • Joined CyDex in 2001 ‒ Technical and product development assistance ‒ Formulation development ‒ New applications development (e.g., orals, topicals) ‒ CMC / Development Operations for internal programs • BA, MS and PhD (Univ. of Kansas) —
Slide 64: Leadership: Vince Antle
Leadership Vince Antle, PhD – VP, Technical Operations and Quality 64 • Joined CyDex in 2005 ‒ Operations, Quality Assurance, Distribution ‒ Technical/Process Development ‒ Management of contract manufacturing ‒ IP development ‒ Drug Master File Management • BA (Univ. of Minnesota), PhD - Med. Chem.
Slide 65: Captisol
CAPTISOL
Slide 66: Platform Technology with Four Critical Components
Platform Technology with Four Critical Components Excipient Cyclodextrin designed to maximize safety and improve solubility, stability, bioavailability or lessen the volatility, irritation, smell or taste of drugs Supply & Technical Service Drug Master File Vast safety and clinical database with mor
Slide 67: Captisol: Insoluble compounds
CAPTISOL Having problems with your insoluble compounds?
Slide 68: Formulation Hierarchy for Poorly Water-Soluble Drugs
68 Adapted from Williams, et al., 2013. Pharmacological Reviews Conventional Enabling Solubilizing Strategies Formulation Hierarchy for Poorly Water-Soluble Drugs • Simple isotonic solutions • pH-adjusted solutions • Co-solvents (potentially bring toxicities) • Surfactants (potentially bring toxicit
Slide 69: Supply Chain Distribution Sites
Supply Chain Distribution Sites 69
Slide 70: Supply Chain Locations Worldwide
Supply Chain Locations Worldwide New Jersey, USA Cork, Ireland Loures, Portugal Macau, China Taizhou, China 70
Slide 71: Manufacturing
Manufacturing “Quality is more than a set of rules – it’s a state of mind” Quality Capacity Capability Innovation • Specialize in solving complex manufacturing problems • Clean inspection history • No FDA warning letters, regular audits • Utilizing patent-protected Captisol® process since 2004 • Hec
Slide 72: Quality & Purity
• Captisol® purity is crucial when a formulation uses 50 fold that of an active Quality & Purity Illustrative Proportional Quantity of Captisol-to-API 60 mg 3,000 mg Captisol API 72
Slide 73: Specifications Testing is Similar to an API
Specifications Testing is Similar to an API 73
Slide 74: Inbound Inquiries
Inbound Inquires 74 • Questions range formulation, analytical, scale-up, regulatory, safety, trouble-shooting and intellectual property Information Requests 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 2012 2013 Captisol.com Website Visits 0 100 200 300 400 500 600 700 2012
Slide 75: New Inbound Sample Requests
New Inbound Sample Requests 75 Same period (Jan -Oct) for all years 0 100 200 300 400 500 2010 2011 2012 2013 2014 • Inbound sample requests have more than doubled since acquisition of Captisol, and continue to increase Acquired Technology
Slide 76: Stage of Development, Routes of Administration, Visibility
Stage of Development Routes of Administration 76 Visibility
Slide 77: Enabled Pipeline Moving Beyond IV
73% 6% 11% 10% Ophthalmic Oral SubQ, IM, Nasal Intravenous Routes of Administration of Captisol® Partnerships -Enabled™ Pipeline Moving Beyond IV 77
Slide 78: Captisol
CAPTISOL
Slide 79: Financial Overview and Outlook
Financial Overview and Outlook Nishan de Silva
Slide 80: Projected Revenue Composition
$0 $20 $40 $60 $80 $100 $120 $140 $160 2013 2014 2015 2016 2017 License and other Material Sales Royalties Projected Revenue Composition $49 $64-$66 $81-$83 $ m ill io n s 80 >$146 >$107
Slide 81: 2015 – 2017 Revenue Buildup
2015 – 2017 Revenue Buildup • Royalty revenue: — Derived from sell-side research analysis, analyst projections and management estimates • Captisol sales: — Projected to be between $25 and $35 million per year • License/milestones: — Projected to be between $10 and $20 million per year based on poten
Slide 82: Quarterly Revenue Patterns
82 Royalties • Most royalties have escalating royalty rates based on higher sales • Escalating rates reset annually • Royalties paid on a 1-quarter lag • Q2 typically lowest quarter of the year for royalty revenue Captisol • Clinical orders based on size and timing of trial initiation • Commercial/l
Slide 83: General Assumptions
83 2015 - 2017 Royalty and milestone gross margin 100% Captisol material sales gross margin ~55% Gross margin including all revenue 85% - 90% Cash operating expense $20 - 22M Fully-diluted share count ~21M, increasing ~0.2M/year Tax rate <5% General Assumptions
Slide 84: 2015 Projected Cost Structure
40% 50% 10% Company Operations Facilities, insurance, taxes and administrative expenses 2015 Projected Cost Structure • Annual cash costs of ~$20 million • Efficient cost structure that supports activities to further expand the “Shots-on-Goal” portfolio Pipeline Costs Research & development, busines
Slide 85: Convertible Debt Interest Expense
2014 2015 2016 2017 2018 2019 2020 Cash: $0.7 $1.8 $1.8 $1.8 $1.8 $1.1 $0.0 Non-Cash: Debt Discount Amortization (1) 3.4 9.5 10.1 10.7 11.4 7.5 0.0 Issuance Cost Amortization (2) 0.3 0.8 0.9 0.9 1.0 0.6 0.0 Total Expense $4.4 $12.1 $12.8 $13.5 $14.2 $9.3 $0.0 (1) Amortization of accounting estimate
Slide 86: Non-GAAP EPS
86 • Four items excluded from GAAP EPS to derive non-GAAP EPS: Item Rationale Change in contingent liabilities • Non-cash adjustment in fair value of CVRs • Based partly on market values – unknowable in advance Mark-to-market adjustment for investments owed to licensors • Non-cash adjustment based o
Slide 87: Three-Year Financial Outlook
• High annual revenue growth projected for next three years — 2015: $81 - $83 million — 2016: > $107 million — 2017: >$146 million • Low annual cash expenses of $20 - $22 million per year • Significant earnings per share growth projected next three years — 2015: $2.14 - $2.18 — 2016: >$3.20 — 2017:
Slide 88: Tax Assets
Tax Assets • Ligand has three types of tax assets — Net operating loss carryforwards (NOLs) — Tax credits — Future tax deductions • Based on current tax analysis, Ligand’s projected gross tax assets are $778 million 88
Slide 89: Summary of Tax Assets
Summary of Tax Assets • NOLs: — $547 million of federal NOLs (~$500 million unrestricted) — $165 million of state NOLs • Tax credits: — $24 million of federal R&D tax credits — $19 million of state R&D tax credits • Future deductions: — $55 million of future federal NOLs (capitalized R&D) Based on c
Slide 90: Projected Tax Expense
Projected Tax Expense • Ligand currently has a full “valuation allowance” against its deferred $241 million tax assets – Until “valuation allowance” is released, annual book tax expense is equal to ~$0.4 million plus actual taxes paid • Upon reaching consistent, multi-year profitability, Ligand will
Slide 91: Calendar of Potential Events
Data Approvals Progression 91 Calendar of Potential Events Potential Milestones for Ligand and Partners in Coming Quarters LGD-6972 Multiple Dose Trial Ligand SAGE-547 SRSE Data Sage Therapeutics MM-121 Breast Cancer Phase 2 Merrimack Delafloxacin IV Phase 3 Melinta Duavee EU Action Pfizer Carbella
Slide 92: 2015 and Beyond Analyst Day
2015 and Beyond Analyst Day New York - November 18, 2014 NASDAQ: LGND
Ligand Pharmaceuticals — Investor Day (November 2014) on 6ix