Ligand Pharmaceuticals Incorporated · NASDAQ:LGND
Ligand Pharmaceuticals — Merger or Acquisition (March 2019)
25 slides from Ligand Pharmaceuticals's merger presentation, Mar 5, 2019
Slide 1: Investor Conference Call: Promacta Asset Sale
Exhibit 99.1 Investor Conference Call March 5, 2019 Promacta Asset Sale
Slide 2: Safe Harbor Statement
Safe Harbor Statement The following presentation contains forward-looking statements by Ligand that involve risks and uncertainties and reflect Ligand's judgment as of the date of this presentation. Words such as “plan,” “believe,” “expect,” “anticipate,” “project,” “intend,” and “will,” and similar
Slide 3: Agenda
Agenda • Deal Overview • Promacta Background • Transaction Opportunity • Financial Summary 3
Slide 4: Deal Overview
So —_—_ =. Ligand Deal Overview —_—-S—‘=P-—
Slide 5: Deal Overview and Promacta Highlights
Deal Overview and Promacta Highlights • Royalty Pharma has acquired Ligand’s Promacta assets and royalty rights for $827 million in cash. • Ligand served a major R&D role in the discovery work in the mid-1990s. • Launched in 2008, generated $291 million of royalties for Ligand over past 11 years. •
Slide 6: Promacta Background
So —_—_ =. Ligand Promacta Background —_—-S—‘=P-—
Slide 7: Promacta Product History
Promacta Product History Blockbuster Status, 25 Years in the Making • Discovered out of 1994 Ligand and SmithKline Beecham collaboration. — Ligand scientists performed studies to characterize how drug worked to stimulate platelet production • GSK received accelerated approval for chronic ITP in Nove
Slide 8: Our Deep Heritage with Promacta
Our Deep Heritage with Promacta Key Ligand Team Members Played Central Roles Keith Marschke, Ph.D. Sr. Vice President, Biology and Scientific Affairs — Roles in Ligand’s most significant R&D programs including TPOR agonists, SARM and GRA — Senior member of screening group during Promacta discovery —
Slide 9: Evolution of Promacta Label
Evolution of Promacta® Label Addition of Indications and Dose Sizes FDA Approval, FDA EU FDA Full FDA EU FDA Ped ITP FDA Accelerated Approval, Approval, Approval, Approval, Approval, EU Approval Approval, Approval, ITP ITP ITP HepC HepC SAA SAA 1st Line SAA 75 mg 12.5 mg 100 mg 25 mg dosage dosage d
Slide 10: Transaction Opportunity
So —_—_ =. Ligand Transaction Opportunity —_—-S—‘=P-—
Slide 11: Promacta Facts and Situation
Promacta Facts and Situation • Promacta has been Ligand’s single-largest asset. In 2019, we had projected it to account for over 50% of revenue. • Promacta will inevitably come off patent; precise timing is unknown. — When it does royalties are expected to quickly diminish significantly — When off p
Slide 12: Promacta: Major Considerations
Promacta: Major Considerations • View on length of market protection — We believe patents will hold at least through 2025; however, we do not control the IP and some of the initial patents come off as early as 2021. • View on competition — Competition likely not a major factor, but a second product
Slide 13: Illustrative Use of Proceeds: Over $700 Million After-Tax Proceeds
Illustrative Use of Proceeds: Over $700 Million After-Tax Proceeds • Goal is to invest in products, technologies and pre-approved drug candidates to drive cash-flow and profits per share in the long-term. • Target investments: — M&A – companies and technology platforms — Product investment for royal
Slide 14: Ligand Today without Promacta
Ligand Today without Promacta • Highly profitable company with high revenue growth expectations • 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 balance sheet EPS projected to
Slide 15: Ligand's Core Value Drivers
Ligand’s Core Value Drivers Ligand is a highly diversified company with a broad portfolio of assets. Three major components are anticipated to drive substantial value going forward: 1. Performance of major assets from existing portfolio, including: VK-2809 ZULRESSO™ Sparsentan CE-Iohexol RVT-1502 Ky
Slide 16: Illustrative Revenue Trends
Illustrative Revenue Trends • Resetting Ligand’s current base of revenue leads to much higher growth trajectory ahead, and reduces potential for down year of overall Ligand revenue when Promacta goes off patent. Higher growth rates from existing business without Promacta But, revenue and EPS Higher
Slide 17: Financial Summary
So —_—_ =. Ligand Financial Summary —_—-S—‘=P-—
Slide 18: Transaction Summary
Transaction Summary • $827 million upfront purchase price nets Ligand over $700 million after-tax cash. — Over $1.4 billion total cash on balance sheet after closing • Remaining business continues to generate significant cash going forward. — Core business revenue guidance of $118 million and cash e
Slide 19: Transaction Background
Transaction Background • Process included group of buyers capable of acquiring significant portion or all of Promacta rights. • Through multiple rounds of bidding, achieved a very attractive valuation of $827 million for Promacta. • Carefully considered valuation against internal views, research com
Slide 20: About Royalty Pharma
About Royalty Pharma • Founded in 1996, Royalty Pharma is the industry leader in acquiring pharmaceutical royalties, with over $16 billion in royalty assets • Royalty Pharma is also a leading investor in pre-approval royalties, having since 2011 invested over $4 billion in royalties on pre-approval
Slide 21: Historical Revenue Excluding Promacta
Historical Revenue Excluding Promacta Diversified and Attractive Growth $160 $152 $140 • Consistent, strong annual $120 revenue growth $100 $78 • Driven by royalties, $80 $millions increasing contribution from $66 milestones and consistent $60 contribution from material $43 $41 sales $40 $33 $22 $20
Slide 22: Updated 2019 Guidance
Updated 2019 Guidance • $827 million gain from sale of Promacta: $812 million to be recorded as other income $15 million to be recorded as Q1 Promacta royalty • 2019 revenue guidance of $118 million: Royalty: $48 million Materials: $27 million (unchanged) Milestone/License: $43 million (unchanged) •
Slide 23: Revenue Breakdown Post Promacta
Revenue Breakdown Post Promacta 2019 Revenue Guidance of $118 Million 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 Cap
Slide 24: Q1 2019 Guidance
Q1 2019 Guidance • Q1 Revenue: $38 million — Royalty: $19 million in total royalties, including $15 million of Promacta royalties estimated for the first two months of 2019 — Materials: $7 million — Milestone/License: $12 million — Potential for up to $5 mil additional based on timing and sales • $8
Slide 25: Analyst Day Preview: March 12th, 2019
Analyst Day Preview: March 12th, 2019 • Update on long-term business model, expanded product portfolio, technology platforms and intellectual property. • Overview of key partnerships, including recently acquired programs. • Outlook for the OmniAb® antibody discovery business. • Integration and busin
Ligand Pharmaceuticals — Merger or Acquisition (March 2019) on 6ix