Laguna Niguel, California March 9, 2015 NASDAQ: LGND

Transcription

1 Roth Conference Laguna Niguel, California March 9, 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. 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 slides 36 and 37, 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, 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

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 Repurchase > 30% annualized growth projected > 45% annualized growth projected High due to low costs and low taxes 1.25 mil shares (6%) during 2H

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) 5

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

7 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 Q2 Fasting Glucose (mg/dl) 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 -80 Oral GCSF Preclinical Leveraging our technology and heritage in small molecule discovery Fasting Glucose (mg/dl) 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 Select Generic Select Biotech 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 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 11

12 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 12

13 Promacta

14 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 3Countries Recently filed in the EU Oncology Related Thrombocytopenia Major clinical investment ongoing: MDS, AML, CLL, CIT, others 14

15 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 15 1 Expert Opinion: Thrombocytopenia & Myelodysplastic Syndrome medscape.org/viewarticle/ National Cancer Institute, SEER Cancer Review, 2012

16 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 $ millions $60.0 $40.0 Strong year over year growth in all geographies 1 $20.0 ROW 26% 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

17 GSK and Novartis: Business Unit Profiles 1 Novartis has a superior oncology business, ~6 times larger than GSK s; Promacta transitioned to Novartis last week 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 17

18 Promacta Projections: NOVN Analysts Annual Revenue Projections $900 $800 $700 $ Millions $600 $500 $400 $300 $200 $100 High Low Average $ NOVN covering analysts reports as of 3/6/15

19 Kyprolis

20 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 Action expected in 2015 Recently 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% 20

21 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

22 Kyprolis Projections: AMGN Analysts Annual Revenue Projections $3.0 $2.5 $2.0 $ Billions $1.5 $1.0 High Low Average $0.5 $ AMGN covering analysts reports as of 3/6/15

23 Captisol

24 Captisol Technology Enabling New Products and Gaining Momentum Enabling Excipient Supply & Tech Service Drug Master File Patent Estate Designed to maximize safety and improve solubility, stability, bioavailability or lessen the volatility, irritation, smell or taste of drugs Multi metric ton cgmp supply chain using highest quality partner and pharmaceutical standards Vast safety and clinical database with >145 studies, maintained with FDA Issued in the US through 2029 and in Europe through 2025, with additional intellectual property granted and pending 24

25 Spectrum: Captisol enabled Melphalan Captisol enabled formulation of chemotherapy drug used for stem cell transplant conditioning in multiple myeloma (MM) Incidence of MM is increasing Stem cell transplant an important therapy in MM Captisol improves product stability, and enables the removal of propylene glycol, which is associated with toxicities including renal dysfunction and arrhythmias Opportunity Product well matched with Spectrum s sales infrastructure 25 Partnership signed with Spectrum in 2013, following Ligand s initiation of pivotal trial 20% royalty >$50 Min potential milestones

26 Spectrum: Captisol enabled Melphalan Positive pivotal trial data presented in detail at 2015 BMT Tandem Meeting in February Overall response rate improved from 79% at study entry to 95% following CE Melphalan and transplant Complete response rate increased from 10% to 31% NDA submitted in December and action and launch expected by year end Dr. Parameswaran Hari Medical College of Wisconsin CE Melphalan The improved stability of CE Melphalan may ensure that cancer patients receive the full intended therapeutic dose Product profile could lead to rapid adoption 26

27 Melinta Therapeutics: Delafloxacin IV Captisol enabled, IV formulation of Delafloxcin Delafloxacin kills bacteria faster Journal of Chemotherapy and Journal of Antimicrobial Chemotherapy More potent than current standards of care against multiple strains of drug resistant Gram+ bacteria, including MRSA Improved efficacy when compared to traditional quinolone compounds Pursuing first line hospital treatment indication of acute skin and skin structure infections (ABSSSI), including infections caused by MRSA 27 Potential new standard of care for first line treatment of serious infections Reference IMS Health

28 Melinta Therapeutics: Delafloxacin IV Positive Top Line Phase 3 results in acute bacterial skin and skin structure infections (ABSSI) caused by MRSA announced in January Multicenter 660 patient trial met endpoints designed for both US and EU submission Obtained FDA designated Qualified Infectious Disease Product (QDIP) for ABSSI and community acquired bacterial pneumonia (CABP) 5 yr market exclusivity, Priority Review and Fast Track eligibility Opportunity Late stage clinical asset targeted at large market with evolving and unmet medical needs Medically important and growing market, as new antibiotics are urgently needed MRSA market alone grew to $2 billion in US in Reference IMS Health

29 SAGE Therapeutics: SAGE 547 Sage s lead program in Super Refractory Status Epilepticus (SRSE), an acute, Orphan disease Captisol enabled, SAGE 547 is an intravenous allosteric modulator of both synaptic and extra synaptic GABA A receptors Orphan Designation and Fast Track Designation both granted in 2014 Positive Phase 1/2 data reported in January Opportunity Well funded and highly experienced team advancing programs with validated targets and accelerated development timelines Overall response rate of greater than 70%, observed in two patient groups Data reinforce clinical activity and safety profile 29 Reference Sage disclosures

30 SAGE Therapeutics: SAGE 547 Phase 3 pivotal trial initiation in SRSE anticipated by mid 2015 SAGE 547 has potential to dramatically improve therapeutic approach for patients with SRSE Could meet significant unmet medical need with high cost of care (~$300 K+) Recent initiation of exploratory Phase 2 trials in the treatment of essential tremor, and as adjunctive therapy for treatment of severe postpartum depression may create additional opportunities Sell side analysts estimate peak sales of up to $1.7 billion 30 Reference Sage disclosures Reference SunTrust Robinson Initiating Coverage report dated 1/26/15

31 Financial Overview

32 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 32

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

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

35 Ligand s Cash Generating Power Becoming Increasingly Clear $ Millions $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 35 Actual Revenue Cash Expenses Outlook

36 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

37 Cash and Profit Margins Expanding Actual 2013 Actual 2014 Projected 2015 Gross Margin 88% 86% 86% Adjusted Cash Flow Margin* 48% 52% 60% Adjusted Profit Margin* 43% 50% 55% Gross margin expected to be consistent Adjusted cash flow and profit margins projected to grow * Adjusted to exclude non cash expense items such as SBC, CVRs, debt expense, etc. (profit is non GAAP profit) 37

38 Potential Upcoming Events Target Date Program Event Q2 15 Duavive EU product launch Q2 15 LGD 6972 Phase 1b results Mid 15 SAGE 547 Phase 3 trial initiation 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 38

39 Roth Conference Laguna Niguel, California March 9, 2015 NASDAQ: LGND