Bank of America Merrill Lynch 2015 Health Care Conference

Transcription

1 Bank of America Merrill Lynch 2015 Health Care Conference May 12, 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 10, and the corresponding GAAP figures is explained in the footnotes on that slide and a full reconciliation can be found in our earnings press release dated, May 11,

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 Recent Events are Transforming Ligand Date Program Event 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 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; Phase 3 trial initiated April 15 IRAK-4 Positive preclinical data presented May 15 Multiple Selexis 15+ program portfolio acquisition 4

5 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

6 Diverse Capital Allocation Building Asset Base and Increasing Returns for Investors In last several years, Ligand has deployed capital in the following ways Company acquisitions Royalty acquisitions Share buybacks Investment in a private company that has completed its IPO Invested in development of new technology platforms Investors have come to expect not any one specific type of deal from Ligand, but instead for us to take advantage of our market knowledge and the experience we gain from our vast roster of partners to find opportunities to invest and create value from the biopharma industry We will continue to explore original opportunities that our programs and the markets present us 6

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 Diverse Portfolio Among Drug Companies Select Big Pharma Select Generic Big Pharma 29% Generic 18% Select Biotech Biotech 44% Spec Pharma 10% Select Spec Pharma Over 70 Partners 8

9 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 9

10 Quarterly Results Q1 Reported Q2 Outlook 2015 Full Year Outlook Revenue $14.6M $17.0M - $17.5M $81.0M - $83.0M Adjusted EPS $0.33 $ $0.40 $ $2.18 Strong growth in quarterly Royalty Revenue. Increase of 31% Q over Q Strong growth in operating cash generation Q over Q Note: Adjusted EPS excludes changes in contingent liabilities, mark-to-market adjustment for amounts owed to licensors, non-cash stockbased compensation expense and non-cash debt related costs. 10

11 $ millions Accelerating Projected Revenue Growth $150 $120 $90 Growth due to: New products launched Growth in existing brands Higher royalties $60 $30 $

12 Commercial Product Highlights

13 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 13

14 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 14

15 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% 15

16 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

17 DUAVEE 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 US Monthly Prescriptions Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Product for post-menopausal hot flashes and osteoporosis Direct-to-consumer campaign launched in September US prescriptions over 12,200 per month in March, a 26% increase over prior month EU approved in December, premium pricing expected to be finalized in Q Ligand is owed royalties in the range of 0.5%-2.5% 17 Source: Bloomberg/Symphony Health

18 2015 Ligand Nexerone Revenue (USD, thousands) Nexterone: Royalty Revenue $160 $140 $120 $100 $80 $60 $40 $20 $0 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Captisol-enabled product for treatment of ventricular fibrillation Shown consistent growth over recent quarters Quarterly royalties to Ligand up over 70% Q vs Q Baxter is dedicated to the brand and is pursuing expansion

19 2015 $ millions Noxafil: Total Quarterly Revenue $120 $100 $80 $60 Captisol-enabled IV form of a super-potent anti-fungal Launch of IV form appearing to reinvigorate growth for the brand $40 $20 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 US: March 2014 EU: September 2014 Canada: November 2014 LTM revenues up 38% ($120 million) over prior 12 months Merck reported quarterly reports

20 The Big Six

21 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 21

22 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 22

23 Viking Therapeutics

24 VKTX: Company Overview San Diego-based biotech, developing novel, first-in-class or best-in-class drugs for metabolic disorders Leading clinical-stage programs with preliminary efficacy signals in humans SARM VK5211:Non-steroidal selective androgen receptor modulator Entering Phase 2 Development for Hip Fracture Data Expected 2Q 2016 TR-β VK0214, VK2809: Novel, Selective thyroid receptor-β Agonists Strong scientific rationale for application in X-ALD with potential Human POC data in 1H 2016 Additional opportunities in NASH and cholesterolemia Three additional programs also partnered with Ligand, targeting diabetes, anemia, lipid disorders 24

25 VKTX: Investment Overview Initial single-program partnership with Ligand in 2012 Partnership expanded to five programs in 2014 Viking IPO closed May 5, 2015 Ligand received ~3.4M shares of stock as an equity milestone for license programs Ligand purchased an additional ~1.1M shares in offering Benefits to Ligand Potential to receive significant future royalties through 5 additional Shots-on-Goal Equity stake in promising growth biotech 25

26 Selexis Portfolio Acquisition

27 Selexis Acquisition: Highlights May 2015 acquired royalty rights to over 15 biotech programs Selexis technology increases yields for biologic manufacturing Royalty assets an excellent fit with Ligand s business model Expands Ligand s royalty portfolio further into novel biologics and biosimilars $4.0 million acquisition price Potential for more than $20 million in milestones and an estimated over $40 million in peak annual royalties from these assets 27

28 Selexis Acquisition: Portfolio Summary Novel Biologics: Partners pursuing monoclonal antibodies for large market opportunities in oncology, inflammatory and rare inherited diseases: Inflammatory disease targets include rheumatoid arthritis, Crohn s disease and multiple sclerosis 55% 45% Cancer targets include lung, colorectal, breast, gastric and non-hodgkin lymphoma Biosimilars: Rare inherited disease targets include epidermolysis bullosa and Gaucher s disease Novel Biologics Biosimilars Biosimilars market projected to potentially exceed $35 billion worldwide in 2020 Biosimilars for blockbuster novel biologics in the acquired Selexis portfolio include: Humira Aranesp Rituxan 28 Avastin Cerezyme Herceptin Source: Allied Market Research Global biosimilars/follow-on-biologics market (types, applications and geography) - Size, Share, Global Trends, Company Profiles, Demand, Insights, Analysis, Research, Report, Opportunities, Segmentation and Forecast, , July 2014

29 Ligand s Novel R&D: Glucagon Receptor Antagonist

30 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 30 1 Brinson Patrick report 12/3/12; SunTrust report 6/25/13

31 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 31

32 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 32

33 Potential Upcoming Events Target Date Program Event Q2 15 Duavive EU product pricing/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 33

34 Bank of America Merrill Lynch 2015 Health Care Conference May 12, 2015 NASDAQ: LGND