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Ligand Pharma : The Long And Short Of It


With over 50 partnered programs covering more than 10 therapeutic areas, the next few quarters are expected to be packed with events for Ligand Pharmaceuticals Inc. (LGND).

For readers who are new to this La Jolla, California-based biotech, here's a brief overview of its business and upcoming events...

Founded in 1987, the company's core strategies include building a large portfolio of sustainable revenue streams, assembling an industry unprecedented partnered portfolio to support revenue expansion, developing innovative internal R&D and aggressively acquiring assets to expand its business. Ligand has multiple partnerships and its list of partners reads like a Who's Who of pharmaceutical companies including, GlaxoSmithKline plc (GSK), Baxter International Inc. (BAC), Merck & Co. Inc. (MRK), Pfizer Inc. (PFE), Bristol-Myers Squibb Co. (BMY), Onyx Pharmaceuticals Inc. (ONXX) and The Medicines Co. (MDCO).

The company's most valued revenue asset is Promacta, an oral drug approved for chronic ITP (idiopathic thrombocytopenic purpura), a rare blood disorder, developed in collaboration with British drug giant GlaxoSmithKline. Promacta is marketed by GlaxoSmithKline in the the U.S. The drug is also marketed in the EU as well as in India, Australia, Ireland, Japan, Taiwan, Turkey, Singapore, Kuwait, Chile, Russia and Bahrain under the brand name Revolade.

Promacta was granted accelerated approval for chronic ITP by the FDA in November 2008 and full approval in February 2011. Sales of the drug have been growing steadily forward - raking in $20.6 million in 2009, $48 million in 2010 and $47 million in the first half of 2011. Ligand only receives royalties on the worldwide sales of Promacta from GlaxoSmithKline.

As part of label expansion, Promacta is being evaluated in two parallel global phase III studies in hepatitis C-related thrombocytopenia. The studies dubbed - ENABLE 1 and ENABLE 2, are double blinded, placebo controlled with 750 patients enrolled in each trial in more than 300 sites worldwide. Data from the trials is expected to be presented this quarter (4Q).

New markets and new indications for Promacta are expected to accelerate the drug's revenue growth, which in turn will benefit Ligand in terms of increased royalties.

Ligand added a new revenue stream this year following the launch of Nexterone, an antiarrhythmic agent, by Baxter in mid-June 2011. Nexterone was originally developed by Ligand through its CyDex Pharmaceuticals subsidiary with its patented Captisol formulation technology and was licensed to Prism Pharmaceuticals in 2006. Baxter acquired Prism in April 2011 for $338 million in upfront and milestone payments. The peak sales of Nexterone are expected to range between $150 million and $200 million per year. Ligand receives milestones, royalties and Captisol material sales from the Nexterone program.

The Captisol Technology is also outlicensed to third parties, such as Pfizer, Bristol-Myers Squib and Onyx. Besides five marketed drugs that are Captisol-enabled, there are over twenty such products in development too.

Some of the other events to watch out for this quarter...

Onyx Pharma completed the NDA submission to the FDA under the accelerated approval process for Carfilzomib, formulated with Ligand's Captisol formulation technology, for refractory multiple myeloma on September 28, 2011. Ligand is eligible to receive milestone and royalty payments, as well as revenue from sales of Captisol from this program. The FDA is expected to decide in 60 days whether to file the NDA so that it can be reviewed.

Ligand's partner Pfizer is expected to file NDA for Aprela, a progesterone-free treatment for menopausal symptoms, in the fourth quarter. Aprela is a combination of Bazedoxifene, a selective estrogen receptor modulator, and Premarin. Bazedoxifene is a product of a research and development collaboration of Ligand and Wyeth, which was in place in 1994. Aprela came into Pfizer's quiver following the takeover of Wyeth by Pfizer.

Ligand's LGD-4033, a non-steroidal selective androgen receptor modulator, or or SARM , is an unpartnered program, which is positioned to enter phase II development. Update regarding the advancement of this program is expected to be announced in the fourth quarter of this year. LGD-4033 is being evaluated as a potential treatment for a variety of muscle wasting conditions like cachexia, cancer, osteoporosis, sarcopenia and cystic fibrosis.

Yet another unpartnered program of Ligand is Captisol-enabled melphalan, a new IV formulation of melphalan that has the potential to offer multiple advantages for clinicians and patients in the multiple myeloma transplant setting. The company plans to seek a partnership for its Captisol-enabled melphalan program, which is under phase II testing, this quarter. Full results of an ongoing phase II study of Captisol-enabled melphalan are expected in the fourth quarter of 2011.

A pivotal study of Captisol-enabled melphalan is targeted to begin in the first quarter of 2012 and is currently designed to enroll approximately 60 patients. If all goes well, the NDA may be submitted by mid-2013. The company plans to pursue a 505(b)(2) NDA application process for Captisol-enabled melphalan. The 505(b)(2) regulatory pathway allows a company to rely, at least in part, on the FDA's findings of safety and/or effectiveness for a previously approved drug (the "reference drug").

Looking ahead, Ligand expects top-line results from a phase II study of MEDI-528, an interleukin-9 antibody program for moderate-to-severe asthma, to be announced in the first quarter of 2012.

MEDI-528 was originally identified by Genaera Corp. and then licensed to MedImmune in 2001. After AstraZeneca's acquisition of MedImmune in 2007, AstraZeneca continued to support the interleukin-9 program by initiating a 320-patient phase II study in 2009 for MEDI-528.

Last May, Ligand purchased from Genaera Liquidating Trust certain intellectual property and interests in future milestones and royalties for MEDI-528 by paying $2.75 million. Now that MedImmune has exercised its right to terminate the 2001 collaboration and license agreement, all of its materials and know-how are required to be returned to Ligand.

A quick look at Ligand's balance sheet...

The company has incurred significant losses since its inception, and at June 30, 2011, had an accumulated deficit of $683.4 million. However, by the end of 2011, Ligand expects its operations to be profitable and cash-flow positive.

The revenue getter for the company is its Captisol formulation technology, which brings in royalties from five marketed drugs, material sales from the selling of Captisol, and license and milestone payments.

In the second quarter of 2011, the company incurred a net loss of $914 thousand or $0.05 per share on total revenues of $7.46 million. This compares with a loss of $283 thousand or $0.01 per share and revenues of $5.84 million in the second quarter of 2010.

For full year 2011, Ligand foresees total revenues to range between $22 million and $24 million. In 2010, the total revenues were $23.5 million.

Shares of Ligand have gained 49 percent year-to-date and trade around $13. The stock has a 52 week low of $8.14 and a 52 week high of $16.24. According to Ligand, its directors have personally purchased more than $1.2 million of the stock over the past 6 months and now own 10% of the company.

by RTTNews Staff Writer

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