Ligand Pharmaceuticals Incorporated
LGND
reported first-quarter 2022 adjusted earnings of 76 cents per share, beating the Zacks Consensus Estimate of 61 cents. The company had reported adjusted earnings of $1.41 in the year-ago quarter.
Total revenues of $45.7 million declined 17.2% from the year-ago quarter as growth in Royalties and Contract revenues was more than offset by lower Captisol sales. The top line, however, beat the Zacks Consensus Estimate of $34.31 million.
Ligand’s shares have declined 37.9% so far this year compared with the
industry
’s 21.2% decrease.
Image Source: Zacks Investment Research
Quarterly Highlights
Royalty revenues were up 92.6% year over year to $13.7 million in the first quarter. Growth in Royalties was mainly driven by additional sales of drugs developed using its Pelican platform. Ligand also earns royalties on sales of
Amgen
‘s
AMGN
Kyprolis and Acrotech Biopharma’s Evomela, which were developed using its Captisol technology. Amgen recorded $287 million in Kyprolis sales in the first quarter, reflecting growth of 14% year over year. Amgen’s drug will likely continue the growth momentum in 2022, driving royalties for Ligand.
The OmniAb business generated $0.3 million of total royalties in the first quarter.
Total Captisol sales declined 61.2% year over year to $12.1 million. The decrease was due to lower sales of Captisol to support the manufacturing of
Gilead
’s
GILD
COVID-19 drug, Veklury. Gilead’s Veklury is approved for treating COVID-19 in several countries. Gilead stated that Veklury sales were hurt by lower demand.
Ligand reported its Captisol sales separately from core assets and COVID-related sales. The core Captisol sales were $6.2 million compared with $1.3 million in the year-ago quarter. However, COVID-related Captisol sales decreased from $30 million in the year-ago quarter to $5.9 million during the first quarter of 2022.
Ligand reported adjusted earnings of 58 cents during the first quarter, excluding COVID-19 related Captisol sales.
Contract revenues were up 18.5% year over year to $19.9 million in the first quarter. OmniAb business generated $8.9 million of total Contract revenues in the first quarter.
Business Split
Ligand is progressing with its plan to split its business into two publicly traded companies — the existing company focusing on the Captisol business and the new entity will focus on the OmniAb business.
In March, Ligand signed a
definitive merger agreement
w ith a special purpose acquisition company (“SPAC”),
Avista Public Acquisition Corp. II
AHPA
to complete the spin-off of its OmniAb business. Please note that SPAC, Avista Public Acquisition Corp. II is sponsored by a leading private equity firm focused on the healthcare industry, Avista Capital Partners (Avista).
The spin-off of the OmniAb business will be immediately followed by the merger of Ligand’s business with a newly formed subsidiary of Avista Public Acquisition Corp. II. The newly formed merged entity will be renamed to OmniAb, Inc. The spun-off OmniAb business will be led by Ligand’s president, Matt Foehr. The transaction is expected to be closed in the second half of 2022. The spun-off OmniAb business will be listed on the Nasdaq Global Markets under the ticker symbol OABI.
Ligand management is planning to distribute 100% of its ownership of OmniAb to its shareholders in a tax-free distribution.
Key Partnered Pipeline Progress
During the first quarter, Ligand’s partner Immunovant is planning to start a phase III study to evaluate the OmniAb-derived monoclonal antibody candidate, batoclimab, as a potential treatment for myasthenia gravis. Immunovant may start clinical studies trageting four new indications in 2022.
In March, Ligand’s partner, Travere Therapeutics, submitted a new drug application seeking approval for its pipeline candidate, sparsentan, for treating IgA nephropathy. Another partner, Outlook Therapeutics, submitted a biologics license application for its pipeline candidate, ONS-5010, as a potential treatment for wet age-related macular degeneration.
Provides 2022 Guidance Breakup
Ligand reiterated guidance for sales from its combined business for 2022. On its first-quarter earnings call, the company also provided revenue guidance for its OmniAb business separately.
Ligand expects total revenues to be between $147 million and $172 million in 2022, suggesting a significant year-over-year decline. The company continues to expect royalties in the range of $55 million to $60 million, Captisol sales are expected to be between $40 million and $50 million while contract revenues are expected in the range of $52 million to $62 million. It expects core Captisol sales to be in the range of $17 million to $19 million and the remaining Captisol sales from COVID-related therapies.
Ligand expects OmniAb business to generate $35 million to $45 million of revenues, especially in the contract revenue line.
The company expects its adjusted earnings to be in the range of $1.50 to $1.80 per share in 2022, excluding OmniAb and COVID-related Captisol sales that are likely to add between 20 cents and 40 cents per share.
Ligand Pharmaceuticals Incorporated Price, Consensus and EPS Surprise
Ligand Pharmaceuticals Incorporated price-consensus-eps-surprise-chart
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Ligand Pharmaceuticals Incorporated Quote
Zacks Rank
Currently, Ligand is a Zacks Rank #3 (Hold) stock. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
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