Ligand Pharmaceuticals Incorporated · NASDAQ:LGND
Ligand Pharmaceuticals — Investor Day (March 2019)
200 slides from Ligand Pharmaceuticals's investor day presentation, Mar 12, 2019
Slide 1: 2019 Analyst Day
2019 Analyst Day Exhibit 99.1 March 12, 2019 NASDAQ: LGND
Slide 2: Safe Harbor Statement
2a Safe Harbor Statement 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,” “projects,” “cou
Slide 3: Safe Harbor Statement (cont.)
2b SafeSafe HarborHarbor StatementStatement (cont.) AdjustedThe following Financial presentation Measures 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 su
Slide 4: Agenda
3 Agenda Business Overview & OmniAb Platform John Higgins, CEO Edward van den Brink, Ph.D., Associate Director Partner Presentation: Genmab - Discovery of Antibodies with OmniAb of Global Antibody Discovery, Genmab Financial Overview & Investment Philosophy Matt Korenberg, CFO Partner Presentation:
Slide 5: Ligand Today
4 Ligand Today • Highly profitable company with expectations for high revenue growth • Over 200 Shots on Goal • Four technology platforms • Over $3.5 billion in potential contract payments • Over 1,200 patents issued worldwide • Over $1.4 billion in cash on current balance sheet • Revenue and EPS CA
Slide 6: Ligand Team
5 Ligand Team • 112 employees Administration Business • 45 PhDs Development Research 21 • Avg. tenure: 10 years & Dev 3 88
Slide 7: Ligand Board
6 Ligand Board Independent Directors John Kozarich, Ph.D. Chairman John LaMattina, Ph.D. Sunil Patel Merck Research Executive Former President, Pfizer, Inc. Public & Private Biotech Executive CEO, ActivX Biosciences Biotech Advisor and Board Past Companies Include: Abgenix, Alkermes, Chemistry Profe
Slide 8: Ligand's Footprint
7 Ligand’s Footprint Locations support our major technology platforms Decentralized business operations to efficiently serve our technology partners San Diego, California Lawrence, Kansas Corporate Headquarters Captisol Research Center Maintain cost- effective leases in pharma-focused multi-tenant b
Slide 9: Shots-on-Goal Business Model
8 Shots-on-Goal Business Model The “LIGAND MODEL” • Realities of the pharmaceutical industry ‒ Most drug research programs fail, but not all ‒ Programs are not all of equal value – different time to market, risk, economics ‒ BUT, the more quality programs, the higher likelihood of success ‒ Diversif
Slide 10: The Ligand Model
9 The “LIGAND MODEL” The Balance in Our Business What We Do: What Our Partners Do: Conduct early research, discover drugs Decide which indications to pursue Provide tools that make drugs possible Design studies; manage regulatory work License data and patents Price drugs and secure reimbursement Acq
Slide 11: Ligand's Core Value Drivers
10 Ligand’s Core Value Drivers Ligand is a diversified company with a broad portfolio of assets. Three major components are anticipated to drive substantial value going forward: Performance of major Performance High-growth business assets from existing of OmniAb: with strong portfolio, including: in
Slide 12: RPT – Ligand's Foundation of Value
RPT – Ligand’s Foundation of Value Revenue Pipeline Technology
Slide 13: RPT – Ligand's Foundation of Value
RPT – Ligand’s Foundation of Value High Growth Revenue High Margin Strong Protection Large and Growing Pipeline High Quality Advancing Best-in-Class Technology Leverageable Strong IP
Slide 14: Strong Growth Across All Revenue Categories
13 Strong Growth Across All Revenue Categories Royalties Material Sales Contract Payments $50M $40M $30M $20M $10M $0M 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 (Guidance) (Outlook) (Guidance) (Outlook) (Guidance) (Outlook) Note: Contract payments in 2018 excludes on
Slide 15: Major Product 5-Year Launch Potential
14 Major Product 5-Year Launch Potential Annual Royalty 2019 2020 2021 2022 2023 Comments Potential Based on ZULRESSO™ ✓ $5 - $20M analyst estimates Kyprolis $27 - $38M Based on Expanded Label ✓ analyst estimates Based on Sparsentan ✓ $15 - $35M analyst estimates Terms TBD, CE-Iohexol ✓ $50 - $100M
Slide 16: Zulresso Projections
Zulresso Projections: 15 SAGE Sell-Side Analysts These Revenue Projections… …Yield these Royalty Projections $1,200M $36M Annual royalty per consensus $1,000M $30M projected to be $5 to $20 mil $800M $24M $600M $18M $400M $12M $200M $6M $0M $0M 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023
Slide 17: Kyprolis Projections
Kyprolis Projections: 16 AMGN/Ono Sell-Side Analysts These Revenue Projections… …Yield these Royalty Projections $2.2B $56M Annual royalty $2.0B per consensus $48M $1.8B projected to be $27 to $38 mil $1.6B $40M $1.4B $32M $1.2B $1.0B $24M $0.8B $0.6B $16M $0.4B $8M $0.2B $0.0B $0M 2019 2020 2021 20
Slide 18: Sparsentan Projections
Sparsentan Projections: 17 RTRX Sell-Side Analysts These Revenue Projections… …Yield these Royalty Projections $650M $60M Annual royalty $600M per consensus $550M $50M projected to be $500M $15 to $35 mil $450M $40M $400M $350M $30M $300M $250M $20M $200M $150M $100M $10M $50M $0M $0M 2021 2022 2023
Slide 19: VK2809 Projections
VK2809 Projections: 18 VKTX Sell-Side Analysts These Revenue Projections… …Yield these Royalty Projections $4.0B $160M Annual royalty $3.5B per consensus projected to be $3.0B $120M $10 to $75 mil $2.5B $2.0B $80M $1.5B $1.0B $40M $0.5B $0.0B $0M 2023 2024 2025 2026 2027 2028 2029 2030 2023 2024 202
Slide 20: Over $3.5 Billion in Potential Contract Payments
Over $3.5 Billion in Potential Contract 19 Payments Revenue potential from existing contracts $3.5 Billion Presented in three different categories BY TECHNOLOGY BY STAGE BY PARTNER Viking $1,500M OmniAb >$825M Preclinical >$40M Metavant $529M Captisol >$175M Clinical >$500M Janssen $245M Seelos $142
Slide 21: RPT – Ligand's Foundation of Value
RPT – Ligand’s Foundation of Value High Growth Revenue High Margin Strong Protection Large and Growing Pipeline High Quality Advancing Best-in-Class Technology Leverageable Strong IP
Slide 22: Pipeline
21 Pipeline Why is Ligand’s Pipeline Valuable? • In pharmaceuticals, most programs fail; but not ALL programs • Ligand’s pipeline is: ‒ Large and growing ‒ Highly diversified ‒ Many programs have top-tier sponsorship • Unique economic structure of Ligand’s pipeline: ‒ Our deals are fully funded ‒ Li
Slide 23: Current Portfolio
22 Current Portfolio Over 200 Shots on Goal NCE/ECM Portfolio is distributed 13% across multiple technologies and IP 10% LTP/ 35% HepDirect 3% OmniAb, Captisol, VDP and LTP technologies 28% expected to add 11% additional Shots on Goal SUREtechnology Platform™ Confidential
Slide 24: Ligand Portfolio By Stage of Development
23 Ligand Portfolio By Stage of Development MARKETED NDA PRECLINICAL 9% PHASE 3 Half of Ligand’s programs 3% are at clinical stage or later 4% PHASE 2 16% 49% 19% PHASE 1
Slide 25: Categorization of Partner Portfolio
24 Categorization of Partner Portfolio is distributed across a broad spectrum of industry players Large Pharma/ Biotech Start Up/ Private 26% 29% 8% Generics Companies 37% Small Biopharma/ Biotech
Slide 26: A Selection of Potential Upcoming Events
25 A Selection of Potential Upcoming Events Program Partner 2019 2020 Ligand’s portfolio ZULRESSO™ Sage Launch of partnerships Data, and VK-2809 Viking Phase 2b start continues to Phase 3 data, produce news Kyprolis Amgen expanded use CE-Iohexol Ligand Phase 1 data CS1001 C-Stone Phase 3 data A smal
Slide 27: RPT – Ligand's Foundation of Value
RPT – Ligand’s Foundation of Value High Growth Revenue High Margin Strong Protection Large and Growing Pipeline High Quality Advancing Best-in-Class Technology Leverageable Strong IP
Slide 28: Technology Platforms Drive Opportunity
Technology Platforms 27 Drive Opportunity Ligand Technologies Address the Needs of the Industry • Industry recognition of higher Antibody-based success rates for antibody-based Drugs medicines • Trends to immunology & CAR-T Complex Drug • Potential advances in biology leading to more novel, complex
Slide 29: Technology Platforms Drive Opportunity
Technology Platforms 28 Drive Opportunity Ligand Technologies Address the Needs of the Industry Number of More deals programs expected Antibody-based Drugs Over 70 YES Complex Drug Over 20 YES Targets Formulation & Drug Stability Over 56 YES Drug Targeting in the Body Over 6 YES
Slide 30: Innovation & Investment
29 Innovation & Investment Partners value cGMP scale, reliability of supply and large safety database within our Drug Master Files Ireland Commercial Distribution Established Ligand acquisition of CyDex Ireland cGMP China Drug 160,000 Kg Manufacturing Site Master File (additional site) 140,000 Kg Ca
Slide 31: Ligand's Technology Platform for Delivery of Drugs to the Liver
30 Innovation and Potential Ligand’s Technology Platform for Delivery of Drugs to the Liver • Diseases of the liver are growing quickly 1 Liver-Targeting worldwide Prodrug (inactive) – Hepatitis, liver cancer, NASH, dyslipidemia, metabolic diseases Delivery • LTP leverages the body’s enzymes to pref
Slide 32: Technology & Intellectual Property
31 Technology & Intellectual Property Patent Estate Spread Across Multiple IP Families 75 technology patents >25 patent applications granted worldwide now filed by partners for OmniAb-derived antibodies • Transgenic OmniRodent Patent Term to 2034 • Transgenic OmniChicken Patent • Expected and future
Slide 33: OmniAb Platform
OmniAb® Platform John Higgins
Slide 34: Ligand's most valuable technology business unit
33 Ligand’s most valuable technology business unit Estimated value today of $2 billion to $2.5 billion and growing. Internal analysis based on: - Comparable companies - DCF valuation - Information from partners
Slide 35: OmniAb partners' estimated spend
34 Ligand estimates its OmniAb partners will spend approx. $500 m in the next 12 months advancing OmniAb-based programs
Slide 36: By 2030 outlook for OmniAb products
35 By 2030, outlook … 25 to 35 OmniAb products potentially on the market Given potential market size and royalty rates, there is potential for between $500 million and $1 billion in annual royalties in 2030
Slide 37: Today's overview
36 Today’s overview: Why Antibodies matter Size of Antibody market Strength of OmniAb platform Financial outlook
Slide 38: Today's overview
37 Today’s overview: Why Antibodies matter Size of Antibody market Strength of OmniAb platform Financial outlook
Slide 39: Biology of Antibodies
38 Biology of Antibodies The Power of the Immune System • Antibody therapy leverages an animal’s ability to generate proteins that bind very selectively to specific molecules • It is possible to create an antibody that is specific to almost any cell target Antibodies can influence the biology of tar
Slide 40: Higher Success Rates for Biologics
39 Likelihood of Approval at Phase 1 Our Industry is Recognizing Higher Success Rates for Biologics “Over the past 15 years, it has become clear that • Success rates for antibody classes is antibody therapeutics are nearly twice the rate of small both versatile and molecules successful. The industry
Slide 41: First US or EU Approvals of Antibodies
40 First US or EU Approvals of Antibodies The power of the science of antibodies has been developing for over 2 decades 14 12 Given higher success rates, industry 10 investment in antibodies has expanded and 8 fueled an increase in new approvals 6 Number ofFirst Antibody Approvals 4 The emergence of
Slide 42: Discovering Human Antibodies
41 Discovering Human Antibodies The Immune System is Faster than Bioengineering Optimized Human Antibody • Multi-step, iterative process • Possible gain/loss of activity • Labor intensive • Costly Optimization by Bioengineering • Time-consuming 6-12 months (or longer) • Lingering technical risks bec
Slide 43: Today's overview
42 Today’s overview: Why Antibodies matter Size of Antibody market Strength of OmniAb platform Financial outlook
Slide 44: Monoclonal antibody market has changed rapidly
43 “The monoclonal antibody market has changed rapidly in the last 5 years: it has doubled in size, becoming dominated by fully human molecules …” Grilo and Mantalaris Trends in Biotechnology January 2019, Vol 37, No. 1
Slide 45: Antibodies: Major R&D and Sales Growth
Antibodies: Major R&D 44 and Sales Growth 700 400 640 The number of antibodies in the clinic has more than quadrupled since 2008 350 200 Global sales of based therapeutics (Billions $) (Billions therapeutics based - biologics estimated 150 to approach $400 Antibodies in clinical development clinical
Slide 46: Antibody-Based Research Has Created Blockbuster Medicines
45 Antibody-Based Research Has Created Blockbuster Medicines Product Sales Humira $18.4 b Top 10 Rituxan $9.2 b Enbrel* $7.9 b Antibodies all Herceptin $7.4 b at $4 b or more Remicade $7.2 b in annual Avastin $7.1 b revenue Eylea $6.0 b Opdivo $4.9 b Neulasta $4.7 b Stelara $4.0 b Source: Genetic En
Slide 47: Top Best-Selling Drugs Shift to Antibodies
46 Top 20 Best-Selling Drugs Shift to Antibodies from Small Molecules 2024 2017 (Projected) By 2024, more than half the top 20 drugs are expected 7 13 12 8 to be antibody- based Antibody Small Molecule 100 94.3 77.5 Sales of antibodies 80 64.9 are expected to 57.4 60 nearly double by 2024 40 20 Reve
Slide 48: Today's overview
47 Today’s overview: Why Antibodies matter Size of Antibody market Strength of OmniAb platform Financial outlook
Slide 49: Competition in the Antibody Space
48 Competition in the Antibody Space Antibody discovery research is highly competitive • Multiple companies are pursuing similar targets, making efficiency and speed to market critical • Partners want the best • Partners want OmniAb
Slide 50: OmniAb: A Best-in-Class Technology
OmniAb: A Best-in-Class Technology 49 Pillars of Value Intellectual Publications & Innovation & Property Clinical Progress Customer Service • Broad protection • Science publication of • Next generation exists under issued OmniRat created animals, launched OmniAb patents, with global visibility for 2
Slide 51: OmniAb: Our Animal Platforms
50 OmniAb: A Best-in-Class Technology Our Animal Platforms An industry- Added species Rat with single 3rd species with leading patented, yields additional common light unique epitope validated antibodies chain, coverage human antibody and increased designed for rat epitope bispecific human OmniClic™
Slide 52: Continued increase in use of OmniRat
51 OmniAb: A Best-in-Class Technology Continued increase in use of OmniRat 1400 • Not inclusive of animal utilization by larger fully-integrated partners who now maintain authorized 700 OmniRat breeding colonies to support their growing needs Number of animals ordered animals of Number 0 2015 2016 2
Slide 53: Addition of OmniChicken
52 OmniAb: A Best-in-Class Technology Addition of OmniChicken™ Clearly Solidified Leadership Position Because of evolutionary distance between birds and mammals, chickens enable the generation of novel antibodies against targets that are not immunogenic in rodents MOUSE RAT RESPONSE RESPONSE Overlap
Slide 54: OmniAb's Versatility
53 OmniAb’s Versatility Used by Partners for Multiple Therapeutics Formats Bispecific Monoclonal Antibodies Antibodies Antibody-Drug CAR-T Conjugates Cells OmniAb antibodies can be designed to modify one or more cellular signals, bring a toxin inside a cancer cell or activate immune cells.
Slide 55: OmniAb Innovation and Investment
54 OmniAb Innovation and Investment OmniAb Driving New Partnerships and Platform Value Partners 35 30 25 20 15 10 5 0 2012 2013 2014 2015 2016 2017 2018 2019 SD 2.0 2.0 COMING 2.0 SOON: Novel Animal Launches
Slide 56: Over 400 antibody campaigns initiated
55 OmniAb: A Best-in-Class Technology We estimate that over 400 antibody campaigns have been initiated by OmniAb partners Partners report that they have obtained the highest quality antibodies for the most difficult targets when using OmniAb
Slide 57: OmniAb: Future Outlook
OmniAb: Future Outlook 56 Growth in number of clinical-stage antibodies Clinical Stage OmniAb-Derived Programs When we acquired OmniAb there were • 30 ZERO programs in the clinic • There are 12 OmniAb programs in the clinic today, with more to be added this year 20 ‒ Our frequency and depth of inter
Slide 58: OmniAb: Did you know?
57 OmniAb: Did you know? OmniAb programs continue to progress and build value based on partner investment. Have you missed that? • C-Stone went public four weeks ago, raising $300 m at over $1 bil valuation (Goldman Sachs, Morgan Stanley underwriters). Lead asset is OmniAb-derived CS1001, in Phase 3
Slide 59: And… did you also know?
58 And… did you also know? • Arcus Biosciences’ GLS-010 (with Gloria) is an anti-PD-1 OmniAb- derived antibody in Phase 2 for Hodgkin’s lymphoma with completion in early 2020 • Janssen/J&J’s JNJ64007957 is an OmniAb bispecific anti-BCMA/CD3 that’s in a Phase 1/2 with data expected in November 2019 •
Slide 60: Internal Antibody Programs
Internal Antibody 59 Programs Creating Packages for Out-Licensing • Programs initiated in mid-2018, leveraging our existing expertise • Five immuno-oncology targets selected, based upon: 1. Biology with broad clinical interest Target Oncology Area 2. Evolutionary distance advantages of chicken B7-H3
Slide 61: Today's overview
60 Today’s overview: Why Antibodies matter Size of Antibody market Strength of OmniAb platform Financial outlook
Slide 62: 2030 Royalty Revenue Outlook
61 2030 Royalty Revenue Outlook X - Number of programs approved Y - Average sales per program Z - Royalty rate
Slide 63: 2030 Royalty Revenue Outlook: Number of programs
62 2030 Royalty Revenue Outlook Number of programs: 25 to 35 By 2030, over 1,000 OmniAb campaigns projected to have been initiated Product approvals represent less than 5% of all OmniAb programs
Slide 64: 2030 Royalty Revenue Outlook: Avg Revenue
63 2030 Royalty Revenue Outlook Avg Revenue: $750 million Antibody annual revenue today is in range of $100 mil to over $7 bil per antibody Accounting for inflation, reasonable average annual sale per program is approximately $750 mil in 2030
Slide 65: 2030 Royalty Revenue Outlook: Royalty Rate
64 2030 Royalty Revenue Outlook Royalty Rate: 2% to 6% - These are rates in Ligand’s existing contracts - Rates tier up, increasing on sales - Average earned rates across products expected to be in the middle of this range
Slide 66: 2030 Royalty Revenue Outlook
65 2030 Royalty Revenue Outlook X – 25 to 35 programs marketed Y - $750 mil avg sales per antibody Z – 2% to 6% royalties $500 mil to $1 bil in annual royalty revenue to Ligand potential in 2030
Slide 67: OmniAb Partner: Genmab
66 OmniAb Partner: Genmab Introducing: Edward van den Brink, Ph.D. Associate Director of Global Antibody Discovery • Genmab gained access to OmniAb via 2014 platform license agreement • Prolific user of OmniRat, and active participant in all of Ligand’s OmniAb technical Partner Summit meetings, wher
Slide 68: Novel Antibody Generation - Use of OmniAb Platform
Novel Antibody Generation - Use of Ligand’s OmniAb® Platform Edward van den Brink Ligand Analyst Day 12 March 2019
Slide 69: Presentation Overview
Presentation Overview • Review of Genmab antibody innovation, technology and expertise • Ligand partnership and Genmab use of Ligand’s OmniAb platform 2
Slide 70: Genmab: Innovation Powerhouse
Genmab: Innovation Powerhouse Match in-house expertise with strategic partnerships Proprietary technologies → truly differentiated products • For our own and partner pipelines to create revenue streams Deep • Target variety of indications Strong pipeline insight • 6 products in clinical development
Slide 71: Harnessing the Potency of the Immune System
Harnessing the Potency of the Immune System: Basic Immunological Principles to Technologies and Products The power of our immune We are curious to system inspires us understand basic immunological principles We translate this to Innovative technologies and practical applications differentiated antib
Slide 72: Genmab Antibody Technology Innovation
Genmab Antibody Technology Innovation Creating Differentiated Antibody Products ADC technology DuoBody® platform HexaBody® platform Fab arm exchange Hexamerisation Stable bispecifics CDC induction + target clustering Pettit et al. J. Nat. Prod. 44:482-5 (1981) Doronina et al. Nat. Biotechnol. 21:778
Slide 73: Genmab Antibody Technology Innovation
Genmab Antibody Technology Innovation Creating Differentiated Antibody Products Anti-PD-L1 arm derived from OmniRat; reference Genmab A/S published international patent application (PCT) WO2018/162749 A1 6
Slide 74: Expertise at Genmab: ADC
Expertise at Genmab Development of Differentiated Antibody Formats, ADC 1. Binding of ADC to target-positive tumor 2. Internalization cells 3. Intracellular trafficking to lysosomes 4. Enzymatic degradation of ADC, intracellular release of toxin/MMAE 5. Toxin/MMAE induces cell death by microtubule d
Slide 75: Expertise at Genmab: DuoBody Platform
Expertise at Genmab Development of Differentiated Antibody Formats, DuoBody® Platform The DuoBody® Platform: • Efficient generation of stable bispecific antibody therapeutics • Nature-inspired ‘Fab-arm exchange’ • Regular IgG architecture • All IgG human subclasses compatible • Non-active Fc-region
Slide 76: Biology of IgG Hexamerization: HexaBody Platform
Biology of IgG Hexamerization: From Science To HexaBody® Platform Diebolder et al. 2014 Science de Jong et al. 2016 PLoS Biol 9
Slide 77: Antibody Lead Generation - Process Overview
High Level Antibody Lead Generation - Process Overview In-house (or CRO) Lymph Node Rat Immunization Titer Screen Isolation Hybridoma Primary Hybridoma Secondary Generation Screen Picking screen In-house Cloning & Antibody Confirmation Screen Sequencing Expression 10
Slide 78: Use of Ligand's OmniAb Platform
Use of Ligand’s OmniAb® Platform
Slide 79: Use of the OmniAb Platform
Use of the OmniAb Platform Use of the OmniAb platform (OmniRat®) began with partnership in October of 2014 Standard immunization protocols • 4-6 x OmniRat Kappa (K) • 4-6 x OmniRat Lambda (L) • 4-6 x OmniRat Kappa-Lambda (KL) • DNA / protein / cell immunization (8 weeks) • Titer screenings at 2 - 4
Slide 80: Immunization of OmniRats
Immunization of OmniRats Success rate ) % ( 100 r e t i t 75 h t i w 50 s l a m i 25 n A 0 OmniRat OmniRat OmniRat Kappa Lambda Kappa-Lambda • 38 targets (>40 immunization campaigns): ~50 - 98% sequence homology with rat orthologue • >80% of animals (451/543) develop an antigen specific titer • Only
Slide 81: Antibody Panel Generation
Antibody Panel Generation Number of hybridomas/unique antibodies per target N 250 N o 500 s o s . b . a o A o 60 f m f 200 m 100 u o 400 h n d e y i i r u b q b q r u 150 i 75 i y 300 40 e d n h o u m f m f o A 100 o 50 . a 200 b . s o s o / n 20 s / n s l t l t r a 100 50 25 r a t a t a o i n o i n
Slide 82: Antibody Discovery using OmniRat Summary
Antibody Discovery using OmniRat Summary • Highly effective immunization of OmniRats • Access to animals and CROs with Antibody Discovery capabilities • High success rates in generating Ag+ antibody titers • Highly diverse antibody panels generated using OmniRat platform • Large antibody panels • An
Slide 83: Acknowledgements
“Y'Genmab Acknowledgements
Slide 84: www.genmab.com
www.genmab.com
Slide 85: Financial Overview and Outlook
Financial Overview and Outlook
Slide 86: Strong Financial Performance and Outlook
68 Strong Financial Performance and Outlook • Strong historical growth across all revenue categories • Continued near-term and long-term growth • Strong per-share cash flow and profits • Balance sheet positioned to take advantage of undervalued stock and M&A targets
Slide 87: 2019 Guidance
69 2019 Guidance Guidance Continued P&L Leverage Royalties $48M Materials $27M • Diversified revenue base Contract $43M ‒ Royalty contribution from Kyprolis, Zulresso, Payments Evomela and 10+ others Total Revenue $118M ‒ Commercial Captisol sales across wide variety of customers Gross Margin >92% ‒
Slide 88: 2019 Revenue Diversity
2019 Revenue Diversity 70 $118M • Contract payments ‒ Wide diversity of payments across more than 50 programs ‒ Potential for additional revenue upside in 2019 based on timing • Material sales ‒ Consistent year-over-year contribution ‒ Most revenue from sales of Captisol for commercial use • Royalti
Slide 89: 2019 Projected Contract Payment Detail
71 2019 Projected Contract Payment Detail Total contract payments of up to $43M across more than 55 events Other Licensing/ Financing Collaboration Revenue NDA Related Trial Progress Preclinical Annual Fees
Slide 90: Reconciliation of GAAP EPS to Adjusted EPS
72 Reconciliation of GAAP EPS to Adjusted EPS 2018 GAAP Earnings Per Share $5.96 Stock-based compensation expense 0.87 Non-cash interest expense 1.83 Amortization related to acquisitions and intangible assets 0.66 Change in contingent liabilities 0.14 Acquisition and integration costs 0.04 (Gain) /
Slide 91: 2020 Preliminary Outlook
2020 Preliminary 73 Outlook Strong growth expected driving margin expansion and increased cash and profits per share ($ in millions) 2019 2020 Core Royalty $33 $45 - $50 Promacta (divested) 15 N/A Royalty 48 45 - 50 • Projected over 35% to 50% growth obscured by two month stub period from Promacta M
Slide 92: Strong Growth Across All Revenue Categories
74 Strong Growth Across All Revenue Categories Royalties Material Sales Contract Payments $50M $40M $30M $20M $10M $0M 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 (Guidance) (Outlook) (Guidance) (Outlook) (Guidance) (Outlook) Note: Contract payments in 2018 excludes on
Slide 93: 2020 Royalty Outlook
75 2020 Royalty Outlook $50M • Growth driven by ‒ Growth of Kyprolis $40M ‒ Approvals and ramps of EVOMELA and ZULRESSO $30M ‒ Additional approvals of smaller- contributing drugs $20M $10M $0M 2016 2017 2018 2019 2020 (Guidance) (Outlook)
Slide 94: 2020 Royalty Revenue Outlook
76 2020 Royalty Revenue Outlook Quarterly trends in 2019 will play a significant role in 2020 outlook however consensus estimates would lead to $45M to $50M of royalty Illustrative 2020 Royalty Table Based on Sell-side Analyst Projections ($ in millions) 2020 Sell-side Estimates Implied Royalties Q4
Slide 95: 2020 Materials Revenue Outlook
77 2020 Materials Revenue Outlook $50M Commercial $45M Clinical $40M $35M 2020 outlook for $30M 5% to 10% growth over $25M 2019 $20M $15M $10M $5M $0M 2016 2017 2018 2019 2020 (Guidance) (Outlook)
Slide 96: 2020 Contract Payment Outlook
2020 Contract Payment 78 Outlook • Growth driven by $100M Milestone/License ‒ Increasing Shots on Goal Wuxi $80M ‒ Maturity of the portfolio – later-stage trials have larger milestones $60M ‒ OmniAb success fuels large portion of growth ‒ Vernalis and OmniAb $40M annual access fees and collaboration
Slide 97: Framing Ligand's 5-Year Outlook
Framing Ligand’s 5-Year Outlook 79 Key Financial Metrics • 5-year CAGR for revenue and EPS exceeding 15% • Cash operating expenses steady at $50 million • Relatively flat, increasing in-line with inflation • EBITDA margins growing from 50% for 2019 to over 75% • Margins expected to increase 5% to 10
Slide 98: Ligand's Investment Philosophy
Ligand’s Investment Philosophy
Slide 99: Ligand's Approach to Capital Deployment
81 Ligand’s Approach to Capital Deployment Royalty Corporate M&A Purchase Large cash balance and growing cash flows drive deal making Share Seed Investment Repurchase
Slide 100: M&A: Acquisition Summary
M&A: Acquisition Summary 82 Outstanding Success with M&A Investments • Since 2008, Ligand has closed 16 transactions • Consideration paid (cash and stock) totals $445 million, and to date Ligand has received $500 million in cash and stock from the deals • More than 100% of our cash back with signifi
Slide 101: Timeline of Ligand's Recent Investments
83 Timeline of Ligand’s Recent Investments $445 million of capital deployed CyDex OMT Crystal Vernalis Viking Metabasis Pharmacopeia Seelos Verrow Palvella Selexis 1 Selexis 2 Dianomi Cormatrix IL-9 Royalty Neurogen 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Corporate M&A Royalty Pu
Slide 102: Our M&A Philosophy
84 Our M&A Philosophy • Acquire companies, technologies and product rights with low/fixed ongoing costs ‒ Transaction sizes $50 million to $1 billion+ for company and technology acquisitions • Targeting diversified portfolio of $5 to $15 million product investments • Selectively fund company formati
Slide 103: Our Share Repurchase Philosophy
85 Our Share Repurchase Philosophy • Ligand today has significant upside potential • M&A attractive, but we want to own more of the Ligand story as well • Share repurchase expected over time • Goal to increase cash flow and profits per share
Slide 104: Partner: Viking Therapeutics
86 Partner: Viking Therapeutics Introducing: Brian Lian, Ph.D. Chief Executive Officer • Ligand signed broad five-program license deal with Viking in 2014 • Ligand also invested early capital to support development and corporate formation at Viking • Viking went public in 2015, and has since announc
Slide 105: Partner: Palvella Therapeutics
87 Partner: Palvella Therapeutics Introducing: Wes Kaupinen Chief Executive Officer • In 2018, Ligand invested $10 Million in Palvella to advance PTX-022 through a pivotal Phase 2/3 clinical study • With the agreement, Ligand acquired: ‒ tiered royalty on net sales in the mid-to- upper single digits
Slide 106: Ligand Analyst Day
Ligand Analyst Day March 12, 2019
Slide 107: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements about our future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from
Slide 108: Investment Highlights
Investment Highlights ► Focused on best-in-class drugs for metabolic and endocrine diseases – Two Phase 2 programs supported by positive clinical data ► Metabolic Disease Program: VK2809 for NASH – Novel, selective thyroid receptor-b (TRb) agonist – Phase 2 results demonstrate significant reduction
Slide 109: Pipeline Overview
Pipeline Overview Product Candidates Indication Development Stage Status Development Preclin Phase 1 Phase 2 Phase 3 Programs Initiate clinical study in VK2809 NASH biopsy-confirmed NASH, (TRb agonist) 2019 VK0214 X-ALD IND planned, 2019 (TRb agonist) Other Programs Preclin Phase 1 Phase 2 Phase 3 V
Slide 110: Metabolic Disease Program
Metabolic Disease Program VK2809: Selective Thyroid Receptor-β Agonist Liver Disorders
Slide 111: Thyroid Receptor b Agonists for NAFLD and NASH
Thyroid Receptor b Agonists for NAFLD and NASH Development of NASH: NASH: Steatosis, Accumulation of Oxidative stress, ballooning, fatty acids, inflammatory hepatocyte triglycerides response damage Healthy liver • Cirrhosis NAFLD Progression • HCC • Liver failure ► b-Receptor: Key role in lipid meta
Slide 112: VK2809: Selective Liver-Targeted TRb Agonist
VK2809: Selective Liver-Targeted TRb Agonist Drug Accumulation by 14C QWBA (4 h) Brain VK2809, Novel Prodrug High Following oral dosing: Heart • Cyp3A4-mediated cleavage of prodrug Liver • 3A4 primarily expressed in liver • Results in targeted Small delivery of drug to liver Intestinal Contents • 2
Slide 113: VK2809 Has Shown Benefits on Liver and Plasma Lipids
VK2809 Has Shown Benefits on Liver and Plasma Lipids ► Reduced steatosis observed in DIO mouse model ► Significantly improved histology in diet-induced NASH models – Up to 80% reduction in liver lipid content – >50% reduction in fibrosis, collagen content – 40% improvement in NAS ► Evaluated in more
Slide 114: VK2809-201: Phase 2 Study Design
VK2809-201: Phase 2 Study Design Placebo NAFLD patients with 10 mg VK2809 QOD Follow-up elevated LDL-C Randomize 10 mg VK2809 QD Double-Blind Treatment, Weeks 13-16 Weeks 1-12 Screening D1 W1 W4 W6 W8 W12 W16 MRI-PDFF MRI-PDFF MRI-PDFF ► Multi-arm, dose-ranging, 12 week Phase 2 trial – Target enroll
Slide 115: VK2809 Significantly Reduced LDL-C
VK2809 Significantly Reduced LDL-C After 12 Weeks Placebo-Adjusted % Change in LDL-C at Week 12 ► Significant Reductions from VK2809 VK2809 All VK2809 Baseline in LDL-C 10 mg QOD 10 mg QD Treated (n=15) (n=16) (n=31) – Placebo mean change: 0.53 mg/dL Baseline (mg/dL) 150.3 140.4 145.2 – 10 mg QOD ch
Slide 116: VK2809 Produced Significant Reductions in Liver Fat
VK2809 Produced Significant Relative Reductions in Liver Fat Median Relative % Change in Liver Fat at ► Significant Relative Reductions 12 Weeks from Baseline in Liver Fat by VK2809 10 VK2809 10 All VK2809 MRI-PDFF Placebo mg QOD mg QD treated (n=11) (n=13) (n=11) (n=24) ► Patients receiving VK2809
Slide 117: VK2809 Cohorts Demonstrated Response Rates up to 91%
VK2809 Cohorts Demonstrated Response Rates of up to 91% Patients with ≥30 % Reduction in Liver Fat ► Up to 91% of VK2809 patients at 12 Weeks experienced response, as defined by ≥30% decrease in VK2809 10 VK2809 10 All VK2809 Placebo mg QOD mg QD treated liver fat (n=11) (n=13) (n=11) (n=24) ► Two-t
Slide 118: VK2809-201: Summary of Adverse Events
VK2809-201: Summary of Adverse Events VK2809 VK2809 Placebo 10 mg QOD 10 mg QD Randomized (n) 15 16 16 Number of Reported AEs 36 21 31 Number (%) of subjects with at least one reported: Treatment emergent AE (TEAE) 9 (60) 11 (69) 10 (62) Serious TEAEs 0 (0) 0 (0) 0 (0) Drug-related serious TEAE 0 (0
Slide 119: VK2809-201: Summary and Conclusions
VK2809-201: Summary and Conclusions ► VK2809 produced robust reduction in liver fat on MRI-PDFF in NAFLD patients after 12 weeks of oral dosing ► Up to 91% of patients dosed with VK2809 experienced a response as demonstrated by liver fat reductions ≥30% relative to baseline; 67% experienced liver fa
Slide 120: VK2809-201: Next Steps
VK2809-201: Next Steps ► Results from 5mg QD cohort expected 1H19 ► Submit IND to GI division 2019 ► Initiate clinical study in biopsy-confirmed NASH 15
Slide 121: Musculoskeletal Program
Musculoskeletal Program VK5211: Selective Androgen Receptor Modulator Hip Fracture
Slide 122: Musculoskeletal Program: VK5211 for Hip Fracture
Musculoskeletal Program: VK5211 for Hip Fracture ► Novel Selective Androgen Receptor Modulator (SARM), for hip fracture – VK5211 is a potentially best-in-class small molecule SARM ► Promising efficacy signals to date – Significant improvements in lean body mass in animals and humans ► Target indicat
Slide 123: Phase 2 Results Show Increases in Lean Body Mass
Phase 2 Results Show Significant Increases in Lean Body Mass Primary Endpoint: Change in Secondary Endpoint: Change Lean Body Mass, Less Head in Appendicular Lean Mass ► Significant increases in LBM and appendicular lean mass VK5211 VK5211 VK5211 VK5211 VK5211 VK5211 2.0 mg following 12 weeks of dai
Slide 124: VK5211 Demonstrates Potency Advantages
VK5211 Demonstrates Potency Advantages to Other Mechanisms Reported Changes in Total Lean Body Mass in Older Adults ► Significantly greater potency relative to testosterone analogs VK5211 VK5211 VK5211 Nandrolone1 LY24956552 Enobosarm3 0.5 mg 1.0 mg 2.0 mg 10 ► Improved potency on muscle compared wi
Slide 125: VK5211-201: Change in Body Composition
VK5211-201: Change in Body Composition at 12 Weeks Change in Mean Body Weight, at Week 12 Change in Mean Fat Mass, at Week 12 VK5211 VK5211 VK5211 VK5211 VK5211 VK5211 Placebo 0.5 mg 1.0 mg 2.0 mg Placebo 0.5 mg 1.0 mg 2.0 mg Baseline (kg): 66.0 62.2 68.1 65.1 4 3 2 3 1 0 2 -1 -2 1 -3 % Change in Bo
Slide 126: VK5211 Phase 2 Study: Safety and Adverse Events
VK5211 Phase 2 Study: Overall Safety and Adverse Events ► Encouraging safety and tolerability ► Frequency of reported adverse events demonstrates no dose- relationship ► No drug-related SAEs ► Next steps – Exploring collaboration and licensing opportunities – Plan for next steps in orthopedic settin
Slide 127: Financial Summary
Financial Summary ► Capital structure and summary financials Capital Sept 30, 2018 In ‘000s Financials1 Structure1 ($’000s) Cash, cash Shares equivalents and 71,285 $304,162 outstanding short-term investments Options, RSUs 2,152 Debt - Warrants 6,745 Notes: 1) As of September 30, 2018. Total shares,
Slide 128: Investment Highlights
Investment Highlights ► Focused on best-in-class drugs for metabolic and endocrine diseases – Two Phase 2 programs supported by positive clinical data ► Metabolic Disease Program: VK2809 for NASH – Novel, selective thyroid receptor-b (TRb) agonist – Phase 2 results demonstrate significant reduction
Slide 129: Ligand Analyst Day
Ligand Analyst Day March 12, 2019
Slide 130: Ligand Pharmaceuticals Analyst Day
LigandPharmaceuticals Analyst Day March 12,2019
Slide 131: Palvella: From Finnish 'To serve'
From Finnish “To serve” Palvella is a privately- held rare disease biopharmaceutical company committed to serving patients with serious, debilitating genetic diseases through the development and commercialization of life-changing, pathogenetically-targeted therapies
Slide 132: Palvella Therapeutics Summary Snapshot
Palvella Therapeutics Summary Snapshot ✓ PTX-022 (QTORINTM rapamycin formulation): poised to be first and only therapy to address root cause of pachyonychia congenita (PC), serious, chronically debilitating, lifelong monogenic disease; near-term potential to expand PTX-022 beyond PC into other high
Slide 133: Pachyonychia Congenita
Pachyonychia Congenita CURRENTLY NO FDA OR EMA APPROVED TREATMENTS FOR PACHYONYCHIA CONGENITA
Slide 134: Pachyonychia Congenita
Pachyonychia Congenita Normal keratin filaments Mutated keratin proteins • Definition: Chronically debilitating genetic disorder caused by a mutation in keratin genes that makes walking difficult orimpossible ▪ Monogenic: KRT6A, KRT6B, KRT6C, KRT16 or KRT17; autosomal dominant ▪ Mutant keratins orig
Slide 135: PTX-022 for PC: Key Elements to Accelerating Towards FDA Approval
Palvella PTX-022 for PC: Key Elements to Accelerating Towards FDA Approval 2006 – 2016 2016 – 2019 Specific Molecule for Palvella Therapeutics Optimize P2/3 Design Treating Causative Proprietary QTORINTM for Regulatory Success PC Genes Formulation
Slide 136: 2006: Breakthrough discovery of targeted approach
2006: Breakthrough discovery of targeted approach addressing root cause of PC Selective Repression of Mutant Keratin Genes in PC with Rapamycin Sources: Hickerson et al, Journal of Dermatological Science, 2009
Slide 137: Rapamycin for PC: Encouraging responses in pilot studies
Rapamycin for PC: Encouraging responses in pilotstudies “Rapid improvement of pain and ability to ambulate…results suggest that topical sirolimus could be a safe and effective treatment.”
Slide 138: Palvella QTORIN: Cutaneous mTOR Platform
Palvella QTORINTM: Cutaneous mTOR Platform 18 months 85 different prototypes Penetration Strength Stability Presentation • Addressing disease • Formulated to • Developed a • Patient- at root source optimally release multi-purpose preferred API and robust • Quick absorption, • Optimized vehicle to pe
Slide 139: FDA Patient-Focused Drug Development Meeting on PC
FDA Patient-Focused Drug Development Meeting on PC (April 6, 2018) “I can only walk for about two minutes before my body starts to shut down. My legs will go all red and purple, and I will have to sit down…When I come home from school at the end of the day, I usually park my car in the driveway, and
Slide 140: FDA Patient-Focused Drug Development Meeting on PC
FDA Patient-Focused Drug Development Meeting on PC (April 6, 2018) “95% of you experience pain with every step…a limitationof steps…I’m not ashamed to say you moved me to tears, I wept…something I did not hear of was effective pharmaceutical approaches, not direct therapeutic approaches…challenge is
Slide 141: PTX-022 Seamless P2/3 Study for PC
PTX-022 Seamless P2/3 Study for PC: Enrichment Strategy via RandomizedWithdrawal Responders randomized into Part 3 Part 3 (Double-blind): Part 2 (Open-label): Placebo for 12 weeks Moderate-severe In adult PC patients All patients treatedwith PTX-022 once daily for Run PTX-022 daily for 12 12 weeks w
Slide 142: Phase 2/3 Study Kickoff Meeting
Phase 2/3 Study Kickoff Meeting (Jan 2019; Salt Lake City) Pivotal study start-up underway with readout targeted for Q2 2020
Slide 143: Internal R&D: Captisol-enabled Iohexol Program
Internal R&D Captisol-enabled Iohexol Program
Slide 144: Ligand selectively invests in internal R&D
89 Ligand selectively invests in internal R&D to drive partnering events with upsized licensing terms
Slide 145: R&D Investment at Ligand
90 R&D Investment at Ligand • Our business model is primarily focused on technology licensing, at the earliest opportunity • HOWEVER, it’s a priority for Ligand to make investment in selected R&D programs to expand the data package and derisk the program. By doing so, the goal is to secure superior
Slide 146: R&D Investment Return Case Study: Evomela
91 R&D Investment Return Case Study - 10X Cash Return and Growing Ligand spent $2 Captisol-enabled Melphalan (now EVOMELA®) million on Multiple Myeloma Evomela R&D and to date has received over $21 Initiated License Event: 20% royalty million in cash Pivotal Trial US Approval China Approval Ongoing
Slide 147: R&D Investment Return Case Study: GRA
92 R&D Investment Return Case Study - Calculated investment yielded one of Ligand’s most valuable potential royalties Ligand spent $15 million on GRA GRA (now RVT-1502) Type 1 and Type 2 Diabetes clinical R&D License Event: OUTCOME: $20 m upfront Low double-digit Major Deal to mid-teen royalty $20 m
Slide 148: Captisol-enabled Iohexol
93 Captisol-enabled Iohexol R&D investment with focus on future partnering • Leveraging patented uses1 of Captisol to reduce acute kidney injury (AKI) during medical interventions, including: – Iodinated contrast agents: iohexol, iopamidol, iodixanol – Anticancer agents: cisplatin, doxorubicin, meth
Slide 149: Captisol-enabled Iohexol: CV Imaging Market
94 Captisol-enabled Iohexol Cardiovascular (CV) imaging is a large, growing market • 30 million imaging procedures per year in the US1 – Iodinated contrast agents represent >60% of all X-ray imaging “Acute kidney injury 2 agents sold, an estimated $3 b market globally remains a concern for patients
Slide 150: Risks Associated with Use of Current Contrast Agents
Risks Associated with Use of 95 Current Contrast Agents IV iodinated contrast associated with risk of both temporary and permanent decrease in kidney function No standardized criteria for diagnosis of PC-AKI or CIN Post-Contrast Acute Kidney Injury (PC-AKI) Diagnosis of AKI made according to Acute K
Slide 151: Recent Clinician Survey on Radiocontrast Agents
96 Recent Clinician Survey on Radiocontrast Agent Selection and Use • Assessed perceptions, practices, unmet needs of radiocontrast agents via primary market research • Survey population consisted of related specialists from qualified US hospitals: ‒ 20 Interventional Cardiologists ‒ 20 Radiologists
Slide 152: 23% of Prescreened Patients Have Elevated Kidney Risk
97 On Average, 23% of Prescreened Patients are Identified as Having Elevated Kidney Risk Question: Do you screen 32% prospective radiocontrast imaging patients for elevated kidney risk? 24% What % of total are 23% identified as having elevated kidney risk? 16% (n=62) 98% surveyed reported pre- scree
Slide 153: Risk of CIN/CI-AKI Highest in High Renal Risk Patients
98 Risk of CIN/CI-AKI Highest in High Renal Risk Patients and Emergency Procedures Elective procedures with high renal risk patients (7.1/10) was rated highest risk of CIN/CI- AKI, followed by Emergency procedures (6.7/10) and Elective procedures (5.1/10) Question: On scale of 1, being negligible ri
Slide 154: Primary Market Research Key Takeaways
99 Primary Market Research Key Takeaways • Safety is a clear, predominant priority for improvement of all groups surveyed • Cardiologists see safety as the most important contrast selection factor and the greatest area for improvement -- they make final contrast decisions • Nephrologists identify an
Slide 155: Phase 1 Bioavailability Study
100 Phase 1 Bioavailability Study Trial launching, data expected in 2H 2019 Goal: Establish pharmacokinetic bioequivalence to support later clinical trials and provide basis for 505(b)(2) approval Study Design: • Single-center, randomized, double-blind, 2-period crossover study to determine relative
Slide 156: Mike Wood, PhD, Managing Director Vernalis Research
Mike Wood, PhD Managing Director Vernalis Research, a Ligand Company
Slide 157: VDP: The Vernalis Design Platform
VDP: The Vernalis Design Platform A leader in structure-guided drug discovery Protein structure, fragment screening and modelling are integrated with medicinal chemistry to enable novel drug discovery Proven success with highly-challenging targets Broad portfolio of discovery projects 68 employees b
Slide 158: VDP Model of Shot-on-Goal Creation
VDP Model of Shot-on-Goal Creation Economic Model Collaborations generally include FTE funding and milestones from partners plus potential for royalty payments, aligned with Ligand business model History of valuable long-term collaborations with large and small pharma, with multiple repeat partners
Slide 159: Challenging Drug Targets: A Growing Issue
Challenging Drug Targets: A Growing Issue Modern biology is identifying an “unprecedented torrent of novel targets” More and more targets of interest to the industry are considered “undruggable” 1 Vernalis is successful in drug discovery for difficult and novel targets2,3,4,5 through: • Developing a
Slide 160: Challenging Drug Targets: Target Enablement
Challenging Drug Targets: A Growing Issue Essential for these challenging targets is “target enablement,” a core strength at Vernalis • Establish structural information system via X-ray crystallography and Nuclear Magnetic Resonance (NMR) methods • Develop reliable assay systems for testing - biophy
Slide 161: Cutting Edge Innovation: VDP Process
Cutting Edge Innovation: VDP Process Vernalis focuses on adopting, adapting and developing new methods for fragment and structure-based drug discovery, integrating: • Biophysics • Computation • Protein structure • Fragment library design • Proprietary assays of cell penetration and protein aggregati
Slide 162: VDP: Capabilities Deliver Novel Drug Candidates
VDP: Capabilities Deliver Novel Drug Candidates Target Hit ID, H2Ls and Lead Preclinical Characterization Characterization Optimization Development Protein Production: Fragment Screening: In vitro DMPK and Bioanalysis: bacterial, insect cell, NMR, SPR, X-ray, TSA microsomes, hepatocytes and mammalia
Slide 163: What Makes VDP a World-Leading Platform?
What Makes VDP a World-Leading Platform? Partners seek out Vernalis for their most difficult targets, and we have a proven track record of success Our success and leadership in this area is driven by: Custom informatics software platforms Our broad and integrated expertise Our profitable partnership
Slide 164: Introducing VDP Partner: Verona Pharma
Introducing VDP Partner: Verona Pharma Jan-Anders Karlsson, PhD - CEO Verona is advancing ensifentrine (RPL554), a first-in-class candidate for the treatment of respiratory disease, including COPD • Ensifentrine is a long-acting PDE3 and PDE4 inhibitor Discovery program originated at Vernalis/Vangar
Slide 165: Breathtaking science
Breathtaking science Developing respiratory drugs to improve health and quality of life Ligand Pharmaceuticals Nasdaq VRNA Analyst Day, New York www.veronapharma.com 12 March 2019
Slide 166: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward‐looking” statements that are based on the beliefs and assumptions and on information currently available to management of Verona Pharma plc (together with its consolidated subsidiaries, the “Company”). All statements other than statement
Slide 167: Advancing first-in-class candidate for respiratory disease
Advancing first-in-class product candidate for treatment of respiratory disease from Phase 2 to commercialization Initial Disease Focus Novel Drug Candidate Ensifentrine (RPL554) Inhaled Inhibitor of Enzymes PDE3 and PDE4 Chronic Obstructive Pulmonary Disease Bronchodilator AND Anti-inflammatory Age
Slide 168: COPD: The Silent Epidemic
COPD: The Silent Epidemic Living with It Dying from It 24M in US alone 1.5M ER visits 16M Diagnosed 20% 687K Rehospitalized Hospitalizations within 30 days of discharge 2M 20% Severe/ Die within 1 year very severe of hospitalization 129K Deaths annually In the Workplace 3rd Largest Chronic Disease K
Slide 169: Ensifentrine: Bronchodilator and Anti-inflammatory in Single Compound
Ensifentrine First-in-Class Candidate: Bronchodilator and Anti-inflammatory in Single Compound Ensifentrine: Dual PDE3 and PDE4 Enzyme Inhibitor Airway Smooth Inflammatory Epithelial Muscle Cells Cells Neutrophils Epithelial cells Macrophages PDE3, PDE4 PDE3, PDE4 PDE4 PDE3, PDE4 PDE3, PDE4 Relaxati
Slide 170: Phase 2b: Improved Lung Function and Symptom Relief
4 Week Phase 2b: Rapidly Improved Lung Function and Progressive Symptom Relief as Single Bronchodilator Lung Function Symptom Relief Peak Change FEV1 (mL) (p<0.001)* Total Score E-RS: COPD by Week, p<0.02** N=403 N=403 300 0.75mg 1.5mg 3mg 6mg RPL554 0 250 -0.5 200 -1 150 -1.5 100 -2 MCID § 50 -2.5
Slide 171: Phase 2: Improvement in FEV1 and Residual Volume
Phase 2: Improvement in Both FEV1 and Residual Volume on Day 3 when Inhaled on Top of Two Bronchodilators Lung Function FEV1 (mL)# Residual Volume (mL) Evening dose 12.25h Morning dose Evening dose # FEV1 (mL) Change from Baseline on Day 3 Day 3 Peak FEV1, primary endpoint was not statistically sign
Slide 172: Nebulized ensifentrine: Phase 3 Program
Nebulized ensifentrine: Systematic Phase 2 Program Informing Phase 3 design Focus on well-established regulatory endpoints Establish activity + profile in Ph2 A. Potential Pivotal studies: Design and endpoints based on Ph2 to Standalone increase chance of positive outcome (Dose Ranging) 400 pts Bron
Slide 173: 40% of US COPD Patients Symptomatic Despite Treatment
Opportunity for Ensifentrine: 40% of US COPD Patients Symptomatic Despite Current Treatment 6M Treated COPD Patients 3 Million 2 Million Single Bronchodilator Dual (LAMA or LABA) Bronchodilator (LAMA + LABA) Other Therapies 40% 40% Still symptomatic Still symptomatic 2M target population = 1.2M = 0.
Slide 174: US Commercial Opportunity for Nebulized Ensifentrine
Substantial, addressable US Commercial Opportunity for Nebulized Ensifentrine 3 Million 2 Million Single Bronchodilator Dual (LAMA or LABA) Bronchodilator (LAMA + LABA) Other Therapies 40% 40% Still symptomatic Still symptomatic 2M target population = 1.2M = 0.8M for ensifentrine Target population #
Slide 175: Positive Interim Phase 2 Data with Dry Powder Inhaler
Positive Interim Phase 2 Data with Ensifentrine Dry Powder Inhaler Formulation in COPD Data from first of two-part clinical trial Dose-dependent, significant and clinically meaningful bronchodilator response Peak and Average FEV1 AUC0-4h N=37 Change from Baseline vs Placebo 350 * * * * * 300 * 250 2
Slide 176: DPI Ensifentrine: Expanding US Commercial Opportunity
DPI Ensifentrine: Potential to Substantially Expand US Commercial Opportunity 3 Million 2 Million Single Bronchodilator Dual (LAMA or LABA) Bronchodilator (LAMA + LABA) Other Therapies 40% 40% Still symptomatic Still symptomatic 2M target population = 1.2M = 0.8M for ensifentrine Target population #
Slide 177: Ensifentrine Lifecycle: Expanding the Pipeline
Ensifentrine Lifecycle: Expanding the Pipeline Over Time Supporting Trials Expanding Expanding Pre- Indications Delivery Clinical Phase 1 Phase 2 Phase 3 COPD 2020 – Maintenance 2022 (Home) COPD Acute (Hospital) Expanding Cystic Pipeline Fibrosis Nebulizer Severe Asthma COPD Maintenance DPI (Home) C
Slide 178: Well Financed with Major Healthcare Investors
Well Financed with Major Healthcare Investors Financial Overview December 31, 2018 Shareholdings3 1 Cash and Cash $82.6M Novo A/S 11.8% Equivalents Others 27.4% Vivo Capital 11.4% 1 Operating Expenses $32.7M OrbiMed Year To Date 3Q18 Arthurian 9.5% 3.2% Aisling 3.4% Tekla New 2 4.9% Market cap $73.7
Slide 179: 2019: Multiple Value Inflection Points
2019: Potential for Multiple Value Inflection Points as we Prepare Ensifentrine for Phase 3 Nebulized Data from 4 week Ensifentrine Top-line Phase 2 Phase 2 dose ranging Advancing into as data: RPL554 as as add-on to single Phase 3 trials Maintenance add-on to therapy FDA: EOP2 Treatment of LAMA/LAB
Slide 180: Thank you
Thank you
Slide 181: 2019 Analyst Day
2019 Analyst Day March 12, 2019 NASDAQ: LGND
Slide 182: 2019 Analyst Day Appendix
2019 Analyst Day Appendix March 12, 2019 NASDAQ: LGND
Slide 183: Kyprolis sales update
1 Sales (in millions) • Kyprolis® viewed as a superior proteasome inhibitor for multiple myeloma (MM) US ROW Japan $300 • Developed and marketed by Amgen, sold in $275 Japan by Ono Pharmaceuticals $250 ‒ Utilizes Ligand’s Captisol technology $225 $200 • Amgen/Ono reported combined 2018 $175 revenue
Slide 184: Commercial Captisol Asset Updates
2 Commercial Captisol Asset Updates Evomela®, Baxdela™ and Nexterone® • Evomela® is a Captisol- • Baxdela® (delafloxacin) is a • Nexterone® is a Captisol- enabled™ formulation of Captisol-enabled™ IV product enabled™ formulation of melphalan approved for use in approved in the US for treating amioda
Slide 185: MINNEBRO (esaxerenone)
3 MINNEBRO™ (esaxerenone) • Daiichi Sankyo received approval in Japan for MINNEBRO™ (esaxerenone) tablets for the treatment of hypertension • MINNEBRO is an oral, non-steroidal, selective mineralocorticoid receptor (MR) antagonist “The approval of identified during a prior research collaboration MIN
Slide 186: ZULRESSO (brexanolone)
4 ZULRESSO™ (brexanolone) • ZULRESSO™ (brexanolone) is a proprietary, Captisol-enabled™, IV formulation of allopregnanolone for the treatment of postpartum depression, or PPD ‒ Allosteric GABAA receptor modulator If approved, ZULRESSO™ would • ZULRESSO™ demonstrated significant and clinically meanin
Slide 187: Select Pipeline Assets: Sparsentan and RVT-1502
5 Select Pipeline Assets Sparsentan (Phase 3) and RVT-1502 (Phase 2) • Sparsentan is a dual inhibitor of • Metavant, a Roivant affiliate, is angiotensin and endothelin receptors in developing RVT-1502 (LGD-6972), a development for severe kidney diseases novel, orally-bioavailable glucagon receptor a
Slide 188: Select Pipeline Assets: PTX-022 and Lasofoxifene
6 Select Pipeline Assets PTX-022 (Phase 2/3) and Lasofoxifene (Phase 2) • PTX-022 is a novel, topical formulation of • Lasofoxifene is a nonsteroidal selective high-strength rapamycin in development estrogen receptor modulator (SERM) with to treat pachyonychia congenita (PC) novel activity in estrog
Slide 189: Select Pipeline Assets – OmniAb: CS1001 and AB122/GLS010
7 Select Pipeline Assets – OmniAb Technology CS1001 (Phase 3) and AB122/GLS010 (Phase 2) • CStone is developing CS1001, a human • AB122/GLS010 is an anti-PD-1 mAb mAb targeting PD-L1 developed using developed using the OmniAb technology the OmniAb technology • Arcus conducting Phase 1 trials to • Ph
Slide 190: Select Pipeline Assets – OmniAb: APVO436 and JNJ-64007957
8 Select Pipeline Assets – OmniAb Technology APVO436 (Phase 1) and JNJ-64007957 (Phase 1) • Aptevo developing APVO436, a bispecific • Janssen is developing JNJ64007957, a antibody targeting CD123 and CD3, for BCMAxCD3 bispecific antibody the potential treatment of hematological discovered in part wi
Slide 191: Select Pipeline Assets – OmniAb: RVT-1401 and SYM023
9 Select Pipeline Assets – OmniAb Technology RVT-1401 (Phase 1) and SYM023 (Phase 1) • Immunovant and partner HanAll • SYM023 is a mAb that binds TIM3 and Biopharma, are developing RVT-1401 induces activation of immune cells (HL161) for the treatment of pathogenic IgG-mediated autoimmune diseases •
Slide 192: Select Pipeline Assets – Captisol: Pevonedistat and Prexasertib
10 Select Pipeline Assets – Captisol Technology Pevonedistat (Phase3) and Prexasertib (Phase 2) • Pevonedistat (TAK-924) is a Captisol- • Prexasertib is a Captisol-enabled™ enabled™ Nedd8-Activating Enzyme checkpoint kinase 1/2 inhibitor for the Inhibitor for the IV treatment of treatment of solid t
Slide 193: Select Pipeline Assets – Captisol: Merestinib and BMS-986231
11 Select Pipeline Assets – Captisol Technology Merestinib (Phase 2) and BMS-986231 (Phase 2) • Merestinib is a Captisol-enabled™ c-Met • BMS-986231 is a Captisol-enabled™, inhibitor for the treatment of cancer novel, nitroxyl (HNO) donor in development for acute decompensated • Merestinib inhibits
Slide 194: Select Pipeline Assets – Captisol: Ganaxolone IV and Remdesivir
12 Select Pipeline Assets – Captisol Technology Ganaxolone IV (Phase 2) and Remdesivir (Phase 2/3) • Ganaxolone is a positive allosteric • Remdesivir (GS-5734) is a Captisol- modulator of GABAA receptor enabled™ nucleotide prodrug in development for the IV treatment of • Marinus is conducting clinic
Slide 195: Select Pipeline Assets – Captisol: E2007 and AMG 330
13 Select Pipeline Assets – Captisol Technology E2007 (Phase 2) and AMG 330 (Phase 1) • Eisai is developing a Captiosl-enabled™ • AMG 330, a bispecific T-cell engager IV formulation of perampanel (E2007) as (BiTE®) antibody targeting CD33 and an adjunctive therapy for epilepsy and CD3 formulated wit
Slide 196: Select Pipeline Assets – VDP: Ensifentrine and MIK665
14 Select Pipeline Assets - VDP Ensifentrine (Phase 2) and MIK665/S64315 (Phase 1) • Ensifentrine (RPL554) is dual PDE3 and • Servier’s partner, Novartis, is developing PDE4 enzyme inhibitor for the treatment MIK665/S64315, a highly selective of respiratory disease inhibitor of Mcl-1 • Verona conduc
Slide 197: Select Pipeline Assets – VDP: CPI-444 and BCL201
15 Select Pipeline Assets - VDP CPI-444 (Phase 1b/2) and BCL201 (Phase 1) • CPI-444 (ciforadenant) is an adenosine • BCL201 (S-55746) is a small molecule A2A receptor antagonist for the BCL-2 selective inhibitor in development treatment of solid tumors for relapsed/refractory CLL and B-cell non-Hodg
Slide 198: Select Pipeline Assets – Selexis: BIVV009 and CHS-0214
16 Select Pipeline Assets – Selexis Technology BIVV009 (Phase 3) and CHS-0214 (Phase 3) • BIVV009 is a potential first-in-class, • CHS-0214 is a biosimilar of etanercept humanized, mAb designed to block C1s (Enbrel), and uses the Selexis serine protease in the classical immune SUREtechnology platfor
Slide 199: Select Pipeline Assets: VK-2809 and VK-5211
17 Select Pipeline Assets VK-2809 VK-5211 (Phase 2) (Phase 2) • VK2809 is a selective, liver-targeted TRβ • VK5211 is a novel, best-in-class selective agonist for the treatment of metabolic androgen receptor modulator (SARM) for disorders, including non-alcoholic patients recovering from hip-fractur
Slide 200: Select Pipeline Assets: ECF843 and SLS-008
18 Select Pipeline Assets ECF843 (Phase 2) and SL-008 (Pre-clinical) • Novartis is developing ECF843, a • SLS-008 is a once-daily, oral CRTh2 recombinant human lubricin, for the (Chemo-attractant Receptor-homologous treatment of dry eye and other molecule expressed on Th2 cells) for the ophthalmic i