Ligand Pharmaceuticals Incorporated · NASDAQ:LGND
Ligand Pharmaceuticals — Investor Day (December 2022)
57 slides from Ligand Pharmaceuticals's investor day presentation, Dec 13, 2022
Slide 1: Investor & Analyst Day
1 INVESTOR & ANALYST DAY DECEMBER 13, 2022 Nasdaq: LGND
Slide 2: Safe Harbor Statement
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. 2 Words such as “plans,” “believes,” “expects,” “projects,” “coul
Slide 3: Today's Agenda
TODAY’S AGENDA 33 3 Eastern Time Business Overview 11:00 – 11:20 Todd C. Davis, CEO M&A Strategy and Portfolio Highlights 11:20 – 11:40 Matt Korenberg, President and COO Diane Retallack, PhD, SVP Platform Pelican Overview 11:40 – 11:50 Technology and Innovation Intellectual Property & ESG 11:50 – 12
Slide 4: Business Overview
4 BUSINESS OVERVIEW Todd C. Davis, CEO
Slide 5: Ligand Business Overview
5 LIGAND BUSINESS OVERVIEW Focus BioPharma technology company, royalty growth driven 6 major royalty revenue contributors currently Key Financial Drivers Revenue from material sales and contract payments 5 more potential approvals or NDA submissions in 2023 Pipeline 10 major mid to late-stage progra
Slide 6: Ligand Royalty Model
6 LIGAND ROYALTY MODEL Royalty Model Aggregate high margin royalties producing Objective superior risk-adjusted returns Low Cost Licensing Sourcing Infrastructure Efficient deal assessment and World-class licensing capabilities Multiple avenues (M&A, tech license, diligence Maximize our curr
Slide 7: Ligand Plan in Action
7 LIGAND PLAN IN ACTION 1. First 90 days Gap assessment 2. Fill key gaps Bolster scalability 3. Expense review Lean deal machine P&L improvement Wider funnel 4. Accelerate deal flow / activity More opportunities Greater selectivity Greater returns
Slide 8: The Ligand Investment Thesis
8 THE LIGAND INVESTMENT THESIS Investing in BioPharma is difficult Ligand offers a simple solution Diversified portfolio of economic rights to some of the Binary development risk world's most important medicines Comprehensive diligence process supported by decades BioPharma is extremely complex of e
Slide 9: Leadership Team
9 LEADERSHIP TEAM Todd C. Davis Matt Korenberg Tavo Espinoza Chief Executive Officer President & Chief Operating Officer Chief Financial Officer Andrew Reardon Audrey Warfield-Graham Diane Retallack, PhD Chief Legal Officer Chief People Officer SVP Platform Technologies & Innovation
Slide 10: Major 2023 Potential Partner Events
10 MAJOR 2023 POTENTIAL PARTNER EVENTS Partner Program Indication Event Timing Sparsentan IgA Nephropathy FDA Approval Feb 17, 2023 Ensifentrine COPD NDA Submission H1 2023 Rylaze ALL/LBL EMA Approval 2023 Berdazimer Gel Molluscum FDA Approval Q4 2023 Pachyonychia Congenita Phase 3 data QTORIN MLM P
Slide 11: Ligand 2023 Outlook
11 LIGAND 2023 OUTLOOK $118 to $122 million in $46 million run rate in core revenue cash operating expenses ~20% growth over 2022* $55 million in cash flow $150 million in cash $3.10 - $3.30 adjusted diluted EPS and securities >50% growth over 2022* Balance sheet at year end 2022 to fund 2023 invest
Slide 12: Financial Strength to Drive Substantial Growth
12 FINANCIAL STRENGTH TO DRIVE SUBSTANTIAL GROWTH Outsized Strong Financial Robust Growth From Promising Late-Stage Foundation Core Business Blockbuster Assets Growth Potential • Strong balance sheet • 5 high-profile • Major new royalty medicines potential products • No debt after May ‘23 • All 3 re
Slide 13: M&A Strategy and Portfolio Highlights
13 M&A STRATEGY AND PORTFOLIO HIGHLIGHTS Matt Korenberg, President & COO
Slide 14: OmniAb Spinoff Review
14 OMNIAB SPINOFF REVIEW On November 1, 2022, Ligand completed the spin-off of the OmniAb antibody-discovery business Both companies are positioned for success High-growth company with Provides access to technologies that Focused economic rights to some of the enable the discovery of next- world's m
Slide 15: M&A Strategy
Ligand / M&A STRATEGY
Slide 16: M&A Opportunity Focus
16 M&A OPPORTUNITY FOCUS Development Capital Distressed Assets Platform Technologies Fund late-stage clinical trials for >200 public life outsized royalty interest science companies Scalable Technology Invest after proof of concept trading below cash Leverage extensive scientific Broadly Applica
Slide 17: M&A Ligand Activity: Typical Deal Funnel
17 M&A LIGAND ACTIVITY Typical Deal Funnel Central deal team efficiently 300+ Transactions Reviewed evaluates every transaction through scalable, data-driven process refined over many years 50 – 75 Detailed Review Deal Team 10 – 20 Term Sheets Legal & Operations & R&D Patent Commercial Regulatory Ma
Slide 18: Portfolio Review
Ligand / PORTFOLIO REVIEW
Slide 19: Partnered Pipeline Snapshot
PARTNERED PIPELINE SNAPSHOT 19 OVER 100 ACTIVE PROGRAMS WITH ECONOMIC RIGHTS Partner Program Therapy Area Phase 1 Phase 2 Phase 3 NDA Approved Kyprolis® Oncology / EVOMELA® Oncology Teriparatide Osteoporosis Rylaze™ Oncology Vaxneuvance™ Infection Pneumosil® Infection Sparsentan Kidney Disease Ganax
Slide 20: Sparsentan Select Pipeline Program
20 SPARSENTAN SELECT PIPELINE PROGRAM • Sparsentan – A potential new treatment standard for rare kidney diseases ‒ Dual inhibitor of angiotensin and endothelin receptors in development for severe kidney diseases ‒ In late-stage development in focal segmental glomerulosclerosis “We continued to (FSGS
Slide 21: Sparsentan Market Sizing
21 SPARSENTAN MARKET SIZING • Patient population with limited treatment options Analyst Revenue Estimates(1) (Charts in millions) ‒ IgAN: 140k patients in U.S. $1,500 ‒ FSGS: 40k patients in U.S. $1,000 ‒ Similar number of patients treated in EU $500 • Upcoming approval decision $0 ‒ Travere announc
Slide 22: Ensifentrine Select Pipeline Program
22 ENSIFENTRINE SELECT PIPELINE PROGRAM • Ensifentrine is a Phase 3, first-in-class candidate for the maintenance treatment of COPD ‒ Positive topline Phase 3 results released showing clinically meaningful 42% reduction in the rate of exacerbations observed over 24 weeks in symptomatic patients ‒ ND
Slide 23: Ensifentrine Market Sizing
23 ENSIFENTRINE MARKET SIZING • Ensifentrine is complementary to existing therapies Analyst Revenue Estimates(1) (Charts in millions) ‒ Potentially first new drug class for COPD in decades $1,500 ‒ 70% of patients have activity limitations $1,000 • Significant U.S. market opportunity at launch $500
Slide 24: Berdazimer Gel Select Pipeline Program
24 BERDAZIMER GEL SELECT PIPELINE PROGRAM • Berdazimer Gel (formerly SB206) is being developed by Novan as a topical treatment for molluscum and acne vulgaris ‒ Novan announced positive Phase 3 clinical results in 2022 in molluscum and expects to submit an NDA in Q4 2022 There are currently no FDA a
Slide 25: Berdazimer Gel Market Sizing
25 BERDAZIMER GEL MARKET SIZING • Potentially first FDA approved treatment for molluscum Analyst Revenue Estimates (Charts in millions) ‒ 6 million patient addressable market in U.S. $500 • Lack of approved alternatives will likely limit payor- $400 mandated step edits or non coverage $300 $200 ‒ Pr
Slide 26: Captisol Technology
Ligand / CAPTISOL TECHNOLOGY
Slide 27: Captisol Technology
27 CAPTISOL TECHNOLOGY Addresses consistent and enduring industry need: formulation solubility and stability ‒ An estimated 40% of small molecule drug candidates have low solubility(1) Clinical and regulatory success, combined with vast safety database have significantly increased awareness, visibil
Slide 28: Captisol Key Technology Features
28 CAPTISOL KEY TECHNOLOGY FEATURES Manufacturing, Global Reach Intellectual Property Drug Master Files Quality & Scale Captisol-enabled drugs are ‒ Substantial know-how ‒ Type 4 and 5 DMFs in U.S. Manufacturing is conducted marketed in >70 countries with >20,000 pages in cGMP plants via validated >
Slide 29: Captisol Track Record of Partnerships
29 CAPTISOL TRACK RECORD OF PARTNERSHIPS A LONG HISTORY OF SUCCESSFULLY BRINGING IN NEW PARTNERS New Captisol Partnerships • Captisol remains an important tool in the drug 14 discovery and development process 12 • Ligand has consistently generated new interest each 10 year demonstrated by the contin
Slide 30: Captisol for Remdesivir
30 CAPTISOL FOR REMDESIVIR FIRST FDA-APPROVED COVID TREATMENT • Remdesivir is an intravenous, hospital-administered antiviral treatment developed by Gilead for COVID-19 ‒ Product highly insoluble and requires Ligand’s Captisol to enable the drug • Pandemic demand required Ligand to invest in manufac
Slide 31: Pelican Overview
31 PELICAN OVERVIEW Diane Retallack, SVP Platform Technologies & Innovation
Slide 32: Pelican: Solving Protein Production Challenges
32 PELICAN SOLVING OUR INDUSTRY’S PROTEIN PRODUCTION CHALLENGES • Over 30% of all approved protein therapeutics are manufactured in traditional microbial systems • Our Pelican Expression Technology™ Platform offers key advantages over traditional microbial systems for complex protein drug production
Slide 33: Pelican: A Unique Value-Driving Platform
33 PELICAN A UNIQUE VALUE-DRIVING PLATFORM Platform delivers significant competitive advantages to our partners, including: Pelican Expression Technology® platform has given rise to approved products and has maintained a success rate Regulatory and commercial validation ~80% in expressing a variet
Slide 34: Pelican: Deep Prokaryotic Protein Production Platform
34 PELICAN ONE OF THE INDUSTRY’S DEEPEST PROKARYOTIC PROTEIN PRODUCTION PLATFORMS P. fluorescens: A GRAM-NEGATIVE, NON-PATHOGENIC, METABOLICALLY VERSATILE ORGANISM ‒ Genomic, RNAseq and proteomics data leveraged to engineer host strains and design expression plasmids ‒ Animal origin-free and used wi
Slide 35: Rylaze (Recombinant Erwinia Asparaginase)
35 RYLAZE® (RECOMBINANT ERWINIA ASPARAGINASE) FROM GENE TO MARKET IN UNDER 6 YEARS • Erwinia asparaginase: treatment for ALL • Strong U.S. launch and LBL patients with hypersensitivity to E. coli derived asparaginases ‒ $86M in net sales for 2H2021 following July ‘21 launch ‒ >$200M net sales report
Slide 36: CRM197 Carrier Protein
36 CRM197 CARRIER PROTEIN NON-TOXIC DIPHTHERIA TOXIN MUTANT FOR CONJUGATE VACCINES Vaccine Carrier Protein – Immunostimulant • CRM197 is mutant of diphtheria toxin that is used in conjugate vaccines to boost the immune response against weak antigens CRM197+ weak antigen that are attached to it • Wea
Slide 37: CRM197 Vaccine Partnerships
37 CRM197 VACCINE PARTNERSHIPS Vaxneuvance™ (15 valent) Pneumosil® (10 Valent) ‒ U.S. pediatric approval June ’22 and now ‒ Developed for middle-income countries and included in the CDC immunization schedule developing world (~1yr ahead of Prevnar20); EU pediatric approval Oct ‘22 ‒ Launch progressi
Slide 38: Intellectual Property & ESG
38 INTELLECTUAL PROPERTY & ESG Andrew Reardon, Chief Legal Officer
Slide 39: Legal Protections for Revenue Sources
39 LEGAL PROTECTIONS FOR REVENUE SOURCES INTELLECTUAL PROPERTY PROTECTIONS ‒ Ligand’s continued innovation strengthens IP ‒ Ligand’s revenue tied to strength of both internal IP and partner IP TRANSACTIONAL PROTECTIONS ‒ Licensing of owned technologies ‒ Funding of third-party product development
Slide 40: Revenue Protection IP
40 REVENUE PROTECTION IP Ligand IP • Layered protection with partners ‒ Combining with our IP can increase market potential • Ensuring platform performance Layered Ensuring Protection ‒ The stronger our IP, the more partnerships may be Platform directed to us (i.e. patents, knowhow, DMF) with Streng
Slide 41: Revenue Protection Transactions
41 REVENUE PROTECTION TRANSACTIONS Technology Licensing Development Capital Providing access to Ligand’s technology platforms Funding of third-party product development Assurance of continued effort IP assessment and protections Tiered royalties Alignment with partners Maintenance of IP
Slide 42: 2022 ESG Report
42 2022 ESG REPORT GOOD PROGRESS RENEWED FOCUS BRIGHT FUTURE
Slide 43: 2022 ESG Report: Good Progress
43 2022 ESG REPORT GOOD PROGRESS • $2.5 million solar investment at Kansas University Innovation Park • Modified Captisol manufacturing process resulting in water savings and packaging reduction ‒ 11 million liters of water saved, 2.4 million liters of ethanol saved, and 9,100 kg of carbon filtered,
Slide 44: 2022 ESG Report: Renewed Focus
44 2022 ESG REPORT RENEWED FOCUS WE RECOGNIZE OUR INCREASING RESPONSIBILITY • Patients • Investors • Employees • General public • Partners • Planet CONSTANTLY IMPROVING OUR ROBUST PROCESSES • Board discussion • Employee engagement • Partnership influence • Community involvement SEEKING TO INCREASE D
Slide 45: 2022 ESG Report: Bright Future
45 2022 ESG REPORT BRIGHT FUTURE Develop and disclose Develop and disclose Disclose use of policies to address Apply environmental Evaluate climate a clear approach to corporate funds for disparity of the standards to change risks, reduce energy political advocacy quality and suppliers and performan
Slide 46: Financial Outlook
46 FINANCIAL OUTLOOK Tavo Espinoza, CFO
Slide 47: 2022 Financial Guidance
2022 FINANCIAL GUIDANCE 47 Core Business Financial Outlook Excludes COVID-related Revenue Royalty Revenue $66 – 69M Royalties on partners’ recent product approvals expected to drive significant financial Core Captisol Sales $15M growth going forward Contract Revenue $18 – 20M Core Captisol business
Slide 48: 2022 & 2023 Financial Guidance
2022 & 2023 FINANCIAL GUIDANCE 48 2022 2023 • ~ 20% core revenue growth over 2022 Core Revenue* $99 - 104M $118 - 122M ‒ Royalties $72 - 76M Cost of Goods Sold $6M $7M ‒ Contract $25M Cash Opex $53M $46M ‒ Captisol $21M Other Income, net $3M $3M • Gross margin projected to improve in 2023 to mid 60%
Slide 49: Revenue Breakdown Post OmniAb Spin
REVENUE BREAKDOWN POST OMNIAB SPIN 49 2023 Revenue Guidance of $118 - $122 million Royalty • Contribution from 10 commercial products • Amgen’s Kyprolis contributes 45% of total $72-76M • Projected commercial launch of Travere’s Sparsentan in 2023 Material Sales • Captisol for commercial use compris
Slide 50: Projected Core Business Operating Expenses
PROJECTED CORE BUSINESS OPERATING 50 EXPENSES 2022 vs 2023 Projected Operating Expenses • Projected core business cash operating $60 $53M expenses exclude expenses directly attributable to OmniAb $50 $46M • Decrease in opex due primarily to leaner $40 G&A and R&D support functions post In millions $
Slide 51: Royalty Revenue Drives Cash Generation
ROYALTY REVENUE DRIVES CASH GENERATION 51 Royalty Revenue & Adjusted Operating Expenses • Estimated cash and investment balance of Cash From Ops $150M at 12/31/22 (excluding 6.6M share investment in Viking) $80M Cash Balance Following Repayment • $77M convertible note expected to be paid in cash in
Slide 52: Tax Attributes Post OmniAb Spin
TAX ATTRIBUTES POST OMNIAB SPIN 52 • Ligand has approximately $85 million U.S. federal and $168 million state (mostly California) net operating losses (NOLs) to offset future taxable income ‒ NOLs will provide some relief on taxable income as the company projects tax profits will grow • Due to tax c
Slide 53: Components of Adjusted Diluted EPS
COMPONENTS OF ADJUSTED DILUTED EPS 53 Item Rationale Stock-based compensation and • Non-cash expense based on Black-Scholes valuation of option grants associated tax benefits • Value is fixed at time of grant; value based on stock price Amortization of acquired • Non-cash expense representing the am
Slide 54: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION 54 NET INCOME FROM CONTINUING OPERATIONS AND DILUTED EPS FOR FY 2021 & YTD 9/30/2022 (UNAUDITED) For the year ended December 31, 2021 For the 9-months ended September 30, 2022 As Discontinued Continuing As Discontinued Continuing (in thousands, except per share amount
Slide 55: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION 55 NET INCOME (LOSS) FROM CONTINUING OPERATIONS AND DILUTED EPS FOR THE 3-MONTHS ENDED 12/31/21, 3/31/22, 6/30/22 & 9/30/22 (UNAUDITED) For the 3-months ended December 31, 2021 For the 3-months ended March 31, 2022 For the 3-months ended June 30, 2022 For the 3-months
Slide 56: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION 56 The company is in the process of finalizing tax impact from the discontinued operations. For this presentation, the Company assumed 21% tax rate for the discontinued operations for all periods presented. (1) Amounts represent non-cash debt related costs that are ca
Slide 57: Questions?
57 QUESTIONS? LIGAND INVESTOR AND ANALYST DAY DECEMBER 13, 2022 Nasdaq: LGND
Ligand Pharmaceuticals — Investor Day (December 2022) on 6ix