Ligand Announces Fourth Quarter and Full Year 2010 Consolidated Financial Results
Results to be discussed during management's presentation at the BIO CEO & Investor Conference today at 10:30 a.m. Eastern time
SAN DIEGO-- Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today announced financial results for the three and 12 months ended December 31, 2010, and reviewed business highlights of the fourth quarter of 2010 and early 2011.
"As we move into 2011, Ligand has the strongest portfolio of assets ever in the company's history and a bright future given the substantive anticipated news flow and the quality of our partnerships," said John L. Higgins, President and Chief Executive Officer of Ligand Pharmaceuticals. "Ligand continues to execute well. In just over two years, we have completed five acquisitions, and in the same time have streamlined the company into a lean, efficient business. This year we are anticipating numerous major events from our collaborators including product launches, NDA filings and the announcement of Phase III data."
Fourth Quarter Results
Total revenues from continuing operations in the fourth quarter of 2010 were $3.9 million, compared with $14.0 million in the fourth quarter of 2009. The decrease in revenue of $10.1 million is primarily due to the termination of the Company's remaining collaboration agreements.
Operating expenses from continuing operations in the fourth quarter of 2010 were $10.3 million, compared with $13.1 million in the fourth quarter of 2009. Research and development expenses in the fourth quarter of 2010 were $3.2 million, a decrease of $7.0 million compared with the fourth quarter of 2009, primarily due to the elimination of costs associated with servicing collaboration agreements that have been terminated and the closing of the Company's New Jersey facility. General and administrative expenses increased by $0.5 million to $3.5 million, compared with the same period in 2009, primarily due to costs associated with the acquisitions of Neurogen and Metabasis, Inc.
Net income for the fourth quarter of 2010 was $2.4 million, or $0.12 per share, compared with net income of $3.0 million, or $0.16 per diluted share, in the fourth quarter of 2009. Income from continuing operations in the fourth quarter of 2010 was $2.3 million, or $0.12 per share, compared with income from continuing operations of $2.6 million, or $0.14 per share, in the comparable 2009 quarter. Income from discontinued operations in the fourth quarter of 2010 was $13,000, or $0.00 per share, compared with $0.5 million, or $0.02 per share, in the comparable 2009 quarter.
As of December 31, 2010, Ligand had cash, cash equivalents, short-term investments and restricted investments of approximately $24 million. In addition, the Company had a $4.6 income tax receivable, which was collected subsequent to year-end, as well as other accounts receivables for a licensing deal completed in mid-December.
Total revenues for the year ended December 31, 2010 were $23.5 million, compared with $38.9 million for the same period in 2009. The decrease in revenues is primarily due to the termination of the Company's remaining collaboration agreements. Operating costs and expenses for the year ended December 31, 2010 were $54.5 million, including $16.9 million of lease exit and termination costs, compared with operating costs and expenses of $70.8 million, including $15.2 million of lease exit and termination costs, for the same period in 2009. The net loss for the year ended December 31, 2010 was $12.5 million, or $0.64 per share, compared with a net loss of $1.9 million, or $0.10 per share, for the same period in 2009. The net loss for 2009 includes $21.4 million of accretion of deferred gain on sale leaseback related to the acceleration of deferred gain recognized during the period as a result of the Company's building lease termination.
Select Business and Program Highlights
The following is a summary of business and key program highlights in the fourth quarter of 2010 and early 2011.
-- October 2010, Ligand divested its combinatorial chemical library and associated proprietary technology to Venenum Biodesign, LLC, for $1.8 million -- October 2010, Sunil Patel was appointed to Ligand's Board of Directors -- November 2010, Ligand was awarded $2 million from the U.S. government under the Patient Protection and Affordable Care Act -- January 2011, Ligand formed a strategic drug development alliance with Chiva Pharmaceuticals for the development of select clinical stage hepatitis B and liver cancer programs in China -- January 2011, Ligand acquired CyDex Pharmaceuticals -- February 2011, John L. LaMattina, Ph.D. was appointed to Ligand's Board of Directors
Promacta(R)/Revolade(R) (TPO Receptor Agonist) - GlaxoSmithKline
-- Approved in Japan in November 2011 -- Two Phase III hepatitis C trials targeted for completion in 3Q11
Viviant(R)/Conbriza(R) (SERMs) - Pfizer
-- Bazedoxifene launched in Japan (branded as Viviant) and Spain (branded as Conbriza) in 2H10 for the treatment of postmenopausal osteoporosis
Carfilzomib (proteasome inhibitor) - Onyx Pharmaceuticals
-- FDA granted fast track designation in January 2011 for carfilzomib for the potential treatment of patients with relapsed and refractory multiple myeloma. Onyx initiated filing a rolling NDA for carfilzomib with the FDA and expects submission to be completed by mid-2011 -- International Phase III trial initiated (ASPIRE) for the potential treatment for patients with relapsed multiple myeloma
SCH-527123 (CXCR2 Inhibitor) - Merck
-- Phase II trial in COPD is fully enrolled with 500 patients targeted for completion in 3Q12
Dinaciclib (CDK Inhibitor) - Merck
-- Multiple Phase II studies ongoing in various cancer types, including breast, AML, melanoma, and multiple myeloma. Trials are targeted for completion in 2011 and 2012 -- Multiple clinical studies of dinaciclib reported at the American Society of Hematology (ASH) in December 2010
BMS-582949 (p38 Inhibitor) - Bristol Myers Squibb (BMS)
-- BMS presented Phase II data on BMS-582949 at the American College of Rheumatology (ACR) Annual meeting in November 2010 -- BMS plans to initiate additional Phase II clinical trials on BMS-582949 in 2011 -- Phase II trial for atherosclerosis is ongoing
CC-930 (JNK Inhibitor) - Celgene
-- Phase II trial initiated in January 2011 for CC-930, a JNK inhibitor in idiopathic pulmonary fibrosis
MEDI-528 (IL-9 Antibody) - AstraZeneca
-- Phase II trial in asthma fully enrolled with 320 patients with an expected study completion targeted for 3Q11
LGD-4033 (Ligand SARM Program)
-- Preclinical molecular pharmacology data on LGD-4033 were presented at the 92nd Annual Meeting of the Endocrine Society in June 2010 -- Phase Ib multiple ascending dose trial is ongoing
2011 Financial Outlook
For 2011, Ligand currently estimates total revenues to be between $22 million to $24 million comprised of approximately $13 million to $14 million of revenue (partial year accounting) from the CyDex business, and approximately $9 million to $10 million of revenue from the original Ligand business, before any revenue for new licensing agreements.
Ligand's 2011, operating expenses are currently estimated to be in the range of $16 million to $18 million, with an average cost of goods as a percentage of material sales to be approximately 35%. Ligand expects to determine the CyDex non-cash amortization expense in the near-term. By the end of 2011, Ligand expects its operations to be profitable and cash-flow positive.
Webcast and Conference Call
Ligand's President and Chief Executive Officer, John L. Higgins, will discuss fourth quarter financial results and provide a business update during a presentation at the BIO CEO & Investor Conference today at 10:30 a.m. Eastern time (7:30 a.m. Pacific time). The conference takes place at the Waldorf-Astoria Hotel in New York City. A live webcast of the presentation will be available on Ligand's website www.ligand.com. To access the presentation via telephone please dial (877) 407-4019, passcode: Ligand. Slides accompanying the presentation will be available in the "Investor Relations" section of www.ligand.com.
A replay of the presentation will be archived for 30 days on www.ligand.com and via telephone at (877) 660-6853, Account: 361# passcode: 366800.
About Ligand Pharmaceuticals
Ligand is a BioPharma company with a business model that is based upon the concept of developing or acquiring royalty revenue generating assets and coupling them to an efficiently lean corporate cost structure. Ligand's goal is to produce a bottom line that supports a sustainably profitable business. By diversifying the portfolio of assets across numerous technology types, therapeutic areas, drug targets, and industry partners, we offer investors a de-risked opportunity to invest in the increasingly complicated and unpredictable pharmaceutical industry. We believe Ligand has assembled one of the largest and most diversified portfolio of current assets in the industry for a company of its size, currently exceeding 60 programs, with the potential to generate revenue in the future. These therapies address the unmet medical needs of patients for a broad spectrum of diseases including hepatitis, muscle wasting, Alzheimer's disease, dyslipidemia, diabetes, anemia, COPD, asthma, rheumatoid arthritis, osteoporosis and cancer. Ligand has established multiple alliances with the world's leading pharmaceutical companies including GlaxoSmithKline, Merck, Pfizer, Bristol-Myers Squibb and AstraZeneca. For more information, please visit www.ligand.com.
This news release contains certain forward-looking statements by Ligand that involve risks and uncertainties and reflect Ligand's judgment as of the date of this release. Actual events or results may differ from Ligand's expectations. For example, we may be profitable before the end of 2011, we may not receive expected revenue from CyDex product sales of Captisol(R), we may not be able to effectively integrate CyDex's business into our current business, expected royalties on partnered products or from research and development milestones, and we and our partners may not be able to timely or successfully advance any product(s) in Ligand's internal and partnered pipeline. In addition, there can be no assurance that Ligand will achieve its guidance for 2011, that Ligand will deliver strong cash flow over the long term, that Ligand will realize the expected benefits of the acquisition of CyDex, that Ligand's 2011 revenues will be driven by royalty payments related and Captisol sales, that Ligand will be able to create future revenues and cash flows by developing innovative therapeutics, that results of any clinical study will be timely, favorable or confirmed by later studies, that products under development by Ligand or its partners will receive regulatory approval, or that there will be a market for the product(s) if successfully developed and approved. Also, Ligand and its partners may experience delays in the commencement, enrollment, completion or analysis of clinical testing for its product candidates, or significant issues regarding the adequacy of its clinical trial designs or the execution of its clinical trials, which could result in increased costs and delays, or limit Ligand's ability to obtain regulatory approval. Further, unexpected adverse side effects or inadequate therapeutic efficacy of Ligand's product(s) could delay or prevent regulatory approval or commercialization. Ligand may also have indemnification obligations to King Pharmaceuticals or Eisai in connection with the sales of the Avinza and oncology product lines and may be subject to future tax liabilities which are larger than the provision for income taxes reflected in Ligand's 2010 year-end financial statements. In addition, Ligand may not be able to successfully implement its strategic growth plan and continue the development of its proprietary programs. The failure to meet expectations with respect to any of the foregoing matters may reduce Ligand's stock price. Additional information concerning these and other risk factors affecting Ligand's business can be found in prior press releases available via www.ligand.com as well as in Ligand's public periodic filings with the Securities and Exchange Commission at www.sec.gov. Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
LIGAND PHARMACEUTICALS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2010 2009 2010 2009 Revenues: Royalties $ 1,942 $ 1,811 $ 7,279 $ 8,334 Collaborative research and 1,998 12,163 16,259 30,606 development and other revenues Total revenues 3,940 13,974 23,538 38,940 Operating costs and expenses: Research and 3,155 10,127 22,067 39,870 development General and 3,465 3,021 12,829 15,211 administrative Lease exit and termination 954 - 16,894 15,235 costs Write-off of acquired in-process 2,754 - 2,754 442 research and development Total operating costs and 10,328 13,148 54,544 70,758 expenses Accretion of deferred gain 426 425 1,702 21,851 on sale leaseback Gain (loss) (5,962 ) 1,251 (29,304 ) (9,967 ) from operations Other income 4,374 (220 ) 13,901 95 (loss) Gain (loss) before income (1,588 ) 1,031 (15,403 ) (9,872 ) taxes Income tax (expense) 3,936 1,535 2,617 1,535 benefit Income (loss) from continuing 2,348 2,566 (12,786 ) (8,337 ) operations Discontinued operations: Gain on sale of AVINZA Product 48 95 70 5,434 Line before income taxes Gain (loss) on sale of Oncology (35 ) 372 201 955 Product Line before income taxes Income tax benefit (expense) on - - - - discontinued operations Discontinued 13 467 271 6,389 operations Net income 2,361 3,033 (12,515 ) (1,948 ) (loss) Basic and diluted per share amounts: Loss from continuing 0.12 0.14 (0.65 ) (0.44 ) operations Discontinued 0.00 0.02 0.01 0.34 operations Net income 0.12 0.16 (0.64 ) (0.10 ) (loss) Weighted average number 19,630,764 18,896,985 19,613,201 18,862,752 of common shares - basic Weighted average number of common 19,636,359 18,918,379 19,613,201 18,862,752 shares - diluted
LIGAND PHARMACEUTICALS INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, 2010 December 31, 2009 Assets Current assets: Cash, cash equivalents and short-term $ 22,697 $ 53,232 investments Accounts receivable, net 993 618 Other current assets 5,295 4,534 Current portion of co-promote termination 8,034 9,782 asset Total current assets 37,019 68,166 Restricted cash and investments 1,341 1,462 Property and equipment, net 559 8,522 Goodwill and other identifiable 12,951 2,515 intangible assets Long-term portion of co-promote 22,851 30,993 termination asset Other assets 838 30,149 $ 75,559 $ 141,807 Liabilities and Stockholders' Equity Accounts payable and accrued liabilities $ 25,894 $ 35,699 Current portion of deferred gain 1,702 1,702 Current portion of co-promote termination 8,034 9,782 liability Current portion of deferred revenue - 4,989 Total current liabilities 35,630 52,172 Long-term portion of co-promote 22,851 30,993 termination liability Long-term portion of deferred revenue 2,546 3,495 Long-term portion of deferred gain - 1,702 Other long-term liabilities 13,179 41,357 Total liabilities 74,206 129,719 Common stock subject to conditional 8,344 8,344 redemption Stockholders' equity (deficit) (6,991 ) 3,744 $ 75,559 $ 141,807
Source: Ligand Pharmaceuticals Incorporated
Released February 15, 2011