Deutsche Bank 40th Annual Health Care Conference

Transcription

1 Deutsche Bank 40th Annual Health Care Conference Boston, MA May 6, 2015 NASDAQ: LGND

2 Safe Harbor Statement The following presentation contains forward-looking statements regarding Ligand s prospects, plans and strategies, drug development programs and collaborations. Forward-looking statements include financial projections, expectations regarding research and development programs, and other statements including words such as will, should, could, plan, etc. Actual events or results may differ from Ligand s expectations. For example, drug development program benefits may not be realized and there can be no assurance that Ligand will achieve its guidance in 2015 or thereafter or that third party research summarized herein is correct or complete. The forward-looking statements made in the presentation are subject to several risk factors, including, statements regarding intent, belief, or current expectations of Ligand, its internal and partnered programs, including Promacta, Kyprolis, and Duavee, Ligand s reliance on collaborative partners for milestone and royalty payments, royalty and other revenue projections based on third party research, regulatory hurdles facing Ligand's and partners product candidates, uncertainty regarding Ligand's and partners product development costs, the possibility that Ligand's and partners drug candidates might not be proved to be safe and efficacious and commercial performance of Ligand's and/or its partners products, risks related to Ligand s internal controls, its compliance with regulations, accounting principles and public disclosure, and other risks and uncertainties described in its public filings with the Securities and Exchange Commission, available at Additional risks may apply to forward-looking statements made in this presentation. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our good faith beliefs (or those of the indicated third parties) and speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Ligand undertakes no obligation to revise or update this presentation to reflect events or circumstances or update third party research numbers after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Securities Exchange Act of Our trademarks, trade names and service marks referenced herein include Ligand and Captisol. Each other trademark, trade name or service mark appearing in this presentation belongs to its owner. The process for reconciliation between non-gaap financial numbers presented on slide 15, and the corresponding GAAP figures is explained in the footnotes on those slides and a full reconciliation can be found in our earnings press release dated, February 9,

3 Ligand: 2015 and Beyond Ligand is a high-growth company with economic rights to some of the world s most important medicines Largest portfolio ever and projected to continue to drive the business significantly Cutting-edge innovations with Captisol and LTP technology are making major drugs possible Well positioned for strong revenue and profitability growth 3

4 Ligand Fast Facts Portfolio Size Blockbusters Catalysts Outlook Over 100 fully-funded programs Currently 2: Promacta and Kyprolis 6 major programs highlighted Over 20 revenue-generating products expected by 2020 Financials Revenue Profits Cash Flow > 30% annualized growth projected > 45% annualized growth projected High due to low costs and low taxes 4

5 Recent Events are Transforming Ligand Date Program Event November 14 Promacta EU submission - Severe Aplastic Anemia December 14 Duavive EU approval December 14 Promacta snda submission - Pediatric ITP December 14 CE-Melphalan NDA submission January 15 Delafloxacin Phase 3 study - Positive interim results January 15 Sparsentan Orphan drug designation - Focal Segmental Glomerulosclerosis January 15 SAGE-547 Phase 1/2 study - Positive data update January 15 Kyprolis US and EU submissions - Relapsed Multiple Myeloma February 15 Lasofoxifene Sermonix licensing agreement February 15 Promacta EU submission - Pediatric ITP March 15 Kyprolis Phase 3 ENDEAVOR study - Positive results March 15 Promacta Promacta acquisition closed (GSK to Novartis) March 15 Kyprolis Priority FDA review Relapsed Multiple Myeloma April 15 SAGE-547 Phase 1/2 completion Positive results April 15 SAGE-547 Phase 3 trial initiated April 15 IRAK-4 Positive preclinical data presented 5

6 Fully-Funded Programs ( Shots-on-Goal ) Commercial Products Generating Revenue for Ligand Ligand s Portfolio Continues to Grow Ligand s Achievement: Portfolio Expansion Partners Achievement: Products Generating Revenue for LGND Excellent record as drug researcher, innovator and licensor Our partners are doing their job getting new products to the market

7 Fasting Glucose (mg/dl) Fasting Glucose (mg/dl) Technology and Novel R&D Drive Deal Making Our Platform Technologies Solving solubility and stability challenges LTP Technology Designed to selectively deliver broad range of pharmaceutical agents to the liver Our Novel R&D Potential Launch Glucagon Receptor Antagonist Program for Diabetes Phase 1 Positive Phase 1a data showing robust effects after single dose Phase 1b study expected to complete in coming weeks Change in fasting glucose (24 hr post dose) Placebo 2 mg 10 mg 40 mg 120 mg -15 Mean SEM 240 mg 480 mg Change in fasting glucose diabetic subjects (24 hr post dose) Mean SEM -80 Oral GCSF Preclinical Leveraging our technology and heritage in small molecule discovery Placebo 40 mg 7

8 20 Products by 2020 Significant Expansion of Revenue Generating Assets Projected Ligand s Revenue Generating Assets > 20 Over 20 commercial programs projected to be generating revenue for Ligand by the end of this decade 1 7 Programs expected to come from existing portfolio; no new deals required to drive that expansion Projected

9 Diverse Portfolio Among Drug Companies Select Big Pharma Big Pharma 34% Select Generic Generic 12% Select Biotech Biotech 44% Spec Pharma 10% Select Spec Pharma 65 Different Partners 9

10 Fully-funded Partnerships Driving Growth We estimate our partners will spend over $1.1 billion in 2015 on R&D to advance our programs More partnered programs and late-stage trials are pushing spending up over 30% higher than Phase 3 trials 14 preclinical programs 38 Phase 2 trials Manufacturing scale-up 58 Phase 1 trials Regulatory filing fees 2 Phase 4 trials 10

11 Financial Overview Continued strong financial performance Business model provides tremendous earnings leverage Growing total revenues Flat cash operating costs Significant estate of tax assets Accelerating revenue and earnings growth going forward 11

12 $ millions Accelerating Projected Revenue Growth $150 $120 $90 Growth due to: New products launched Growth in existing brands Higher royalties $60 $30 $

13 $ millions Projected Revenue $160 $140 >$146 $120 >$107 $100 License and other $80 $81-$83 Material Sales $60 $49.0 $64.5 Royalties $40 $20 $

14 $ Millions Ligand s Cash-Generating Power Becoming Increasingly Clear $150 $120 $90 $60 Strong revenue growth Operating expense levels projected to remain similar the next few years $30 $ Significant increase in cash-flow projected 14 Actual Revenue Cash Expenses Outlook

15 Accelerating Projected Non-GAAP EPS Growth $4.50 $4.00 $3.50 $3.00 $2.50 Growth due to: Higher revenues High gross margins Low and flat expenses Lean share count $2.00 $1.50 $1.00 $0.50 $ Note: Non-GAAP EPS excludes changes in contingent liabilities, mark-to-market adjustment for amounts owed to licensors, non-cash SBC expense and non-cash debt related costs

16 Promacta

17 Promacta : Blockbuster Commercial Potential Oral medicine that boosts platelets. Ligand owed royalties Long patent protection, Orange Book patent expiration in 2027 Blockbuster commercial potential (>$1 billion) due to growing and large list of potential therapeutic indications Ongoing Development Currently Approved Indications New Markets ITP HCV AA ORT Idiopathic Thrombocytopenia 95 Countries Recent Pediatric ITP filings Thrombocytopenia Induced by Hepatitis C 53 Countries Global filing and launch investment Aplastic Anemia 3 Countries Recently filed in the EU Oncology Related Thrombocytopenia Major clinical investment ongoing: MDS, AML, CLL, CIT, others 17

18 Promacta : Oncology-Related Thrombocytopenia Myelodysplastic Syndromes (MDS) Severe cytopenia, patients need frequent transfusions Excess bleeding results in major complications or death for nearly 25% of patients 1 ~19,000 new diagnoses in US each year 2 Global Phase 3 studies in progress Cancers of the Blood Acute Myeloid Leukemia (AML) Fast-progressing cancer of the blood Abnormal red blood cells and platelets can quickly crowd out normal cells ~14,500 new diagnoses in US each year 2 Clinically, Promacta shown to increase platelets and pre-clinically, inhibits leukemia growth Chronic Lymphocytic Leukemia (CLL) Slow-progressing cancer Focused in white blood cells ~16,000 new diagnoses in US each year 2 Clinical data in CLL indicates 80% response rate in CLL-associated ITP, 55% overall response rate 18 1 Expert Opinion: Thrombocytopenia & Myelodysplastic Syndrome medscape.org/viewarticle/ National Cancer Institute, SEER Cancer Review, 2012

19 $ millions Promacta : Regional Quarterly Revenue $100.0 $80.0 ROW EU US Expected strong growth of LGND royalties New territories being added New indications being pursued Higher royalties on higher sales $60.0 $40.0 Strong year-over-year growth in all geographies 1 ROW 26% $20.0 EU 8% US 39% TOTAL 25% $0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q GSK reported quarterly sales. Figures converted from GBP to USD 1 Growth calculations 2014 vs. 2013

20 GSK and Novartis: Business Unit Profiles 1 Novartis has a superior oncology business, ~6 times larger than GSK s; Promacta transitioned to Novartis on March 1 st 2014 Oncology Revenue ($B) $11.7 Oncology Employees 8,000 Countries with Presence $2.0 1,300 GSK Novartis GSK Novartis GSK Novartis 1 GSK and Novartis company disclosures relating to revenue and business unit structures; GSK.com, Novartis.com 20

21 $ Millions Promacta Projections: NOVN Analysts Annual Revenue Projections $900 $800 $700 $600 $500 $400 $300 $200 $100 High Low Average $ NOVN covering analyst reports as of 4/27/15

22 Kyprolis

23 Kyprolis Leading 3 rd -line treatment for multiple myeloma (MM) in the US Viewed as best-in-class proteosome inhibitor 25% year-over-year growth in 2014 Amgen has submitted US and EU applications for relapsed MM Granted priority FDA review; July 26, 2015 PDUFA date Also granted EU Accelerated Assessment Major investment by Amgen focused on further expansion of the label Front-Line MM: Phase 3 (CLARION) Small-cell Lung Cancer: Phase 2 Dr. Keith Stewart The Mayo Clinic ASPIRE Phase 3 Data We are observing an unprecedented duration of remission, without additional toxicity, in relapsed and heavily pretreated patients. Royalty rates of 1.5% to 3.0% 23

24 Kyprolis Recent data and events have continued to demonstrate the significant potential of Kyprolis APSIRE Phase 3 trial demonstrated an unprecedented PFS (26.3 months) in relapsed MM ENDEAVOR Phase 3 trial demonstrated a DOUBLING of median PFS over Velcade (18.7 vs. 9.4 months) in relapsed MM Significant unmet needs remain in MM, and the market is expected to double to over $13 billion by Reference AMGN March 2, 2015 corporate presentation

25 $ Billions Kyprolis Projections: AMGN Analysts Annual Revenue Projections $3.0 $2.5 $2.0 $1.5 $1.0 High Low Average $0.5 $ AMGN covering analyst reports as of 4/27/15

26 The Big Six

27 The Big Six: Major Pipeline Assets Certain portfolio assets stand above others, having the potential to add significantly to Ligand s top and bottom line They do so as a result of a mixture of factors, including: Market size or therapy area addressed Upcoming potential milestone events Royalty rate or specifics of deal economics Major news catalysts expected over the next 6 to 24 months More potential programs could move into the Big Six 27

28 The Big Six: Major Pipeline Assets Partner Program (Therapy Area) Stage Royalty Rate Potential Launch Potential 2015 Events CE- Melphalan (Oncology) Delafloxacin IV (Infection) SAGE-547 (Neurology) NDA 20% 2015 Approval Phase 3 Undisclosed 2016 Phase 3 data Phase 2 Undisclosed 2017 Pivotal Initiation Sparsentan (FSGS - Kidney Disease) Phase 2 9% 2017 Enrollment Completion MK-8931 (Alzheimer s Disease) IRAK-4 (Oncology) Phase 3 Undisclosed 2018 Updates Preclinical % 2019 Clinical Start 28

29 Viking Therapeutics

30 VKTX: Company Overview San Diego-based biotech, developing novel, first-in-class or best-in-class drugs for metabolic disorders Clinical-stage programs with preliminary efficacy signals in humans VK5211: Entering Phase 2 development for hip fracture Non-steroidal selective androgen receptor modulator (SARM) Promising efficacy in both bone and muscle Phase 2 data expected 2Q16 TR-β agonists: X-linked adrenoleukodystrophy (X-ALD) VK0214, VK2809: Novel, selective thyroid receptor-β agonists Strong scientific rationale for application in X-ALD, rare neurodegenerative disorder Preclinical work on-going Potential human POC data 1H16 Additional opportunities in lipid disorders such as NASH and cholesterolemia Three additional programs targeting diabetes, anemia, lipid disorders 30

31 VKTX: Investment Overview Initial single-program partnership with Ligand in 2012 Partnership expanded to five programs in 2014 Viking IPO priced last week Equity milestone payment to Ligand initially valued at ~$27M, subject to adjustment on issuance of IPO over-allotment shares Ligand invested additional $9M in offering Benefits to Ligand Potential to receive significant future royalties through 5 additional Shots-on-Goal Equity stake in promising growth biotech 31

32 Ligand s Novel R&D: Glucagon Receptor Antagonist

33 Novel R&D: Glucagon Receptor Antagonist LGD-6972 for Diabetes Novel, highly potent, oral GCGR antagonist for treatment of type 2 diabetes completed Phase 1a trial in mid-2014, and Phase 1b trial initiated late last year One of Ligand s most promising un-partnered assets Potential best-in-class properties Diabetes market is expected to double to $60 billion by Combo therapy highly prevalent and necessary to optimize management of disease Creates significant opportunity for novel treatment mechanisms 33 1 Brinson Patrick report 12/3/12; SunTrust report 6/25/13

34 Novel R&D: Glucagon Receptor Antagonist Advantages of Potent GCGR Antagonist Product profile and recent clinical data suggest significant market advantages for a safe, highly potent, oral GCGR antagonist as compared to existing classes of new mechanisms Existing Class DPP-IV Inhibitors GLP-1 Agonists SGLT-2 Inhibitors Product Profile Modest reduction of plasma glucose Only available as injectables Contraindicated for renally impaired patients GCGR Advantage Higher glucose reduction Oral Spares kidney 34

35 Fasting Glucose (mg/dl) Fasting Glucose (mg/dl) Novel R&D: Glucagon Receptor Antagonist Positive Phase 1a Clinical Data for LGD-6972 Positive clinical data presented in 2014 Excellent safety profile Dose-dependent decreases in fasting plasma glucose in normals Robust decreases in glucose in type 2 diabetics after just a single dose Change in fasting glucose (24 hr post dose) Mean SEM Placebo 2 mg 10 mg 40 mg 120 mg 240 mg 480 mg Change in fasting glucose diabetic subjects (24 hr post dose) Mean SEM Recent scientific ripening of the field, glucagon receptor antagonism widely seen as one of the most promising novel approaches to treatment of diabetes Multi-dose trial currently in progress, data expected in coming weeks Placebo 40 mg 35

36 Potential Upcoming Events Target Date Program Event Q2 15 Duavive EU product launch Q2 15 LGD-6972 Phase 1b results 7/26/15 Kyprolis Multiple Myeloma snda PDUFA date 2H 15 Promacta Pediatric ITP NDA and MAA approvals 2H 15 Kyprolis Relapsed multiple myeloma NDA and MAA approvals 2H 15 NS-2 Phase 2 trial initiation 2H 15 Delafloxacin NDA Submission Q4 15 Promacta Severe Aplastic Anemia MAA approval Q4 15 CE-Melphalan NDA approval Q4 15 Carbella NDA approval Q4 15 Topiramate Phase 2 trial initiation Q4 15 IRAK-4 Phase 1 trial initiation 36

37 Deutsche Bank 40th Annual Health Care Conference Boston, MA May 6, 2015 NASDAQ: LGND