Bright Outlook at Ligand - Analyst Blog

Ligand Pharmaceuticals Inc. LGND provided a rosy outlook on its business at the 2014 Roth Healthcare conference. The company expects its ‘Shots on Goal' model to drive long-term growth. Ligand expects 14 new partnered programs to be launched by Dec 31, 2017. Five new programs or indications are expected to be launched in 2014 itself.

By 2020, the company expects more than 20 partnered products to enter the market. The company expects its partners to pump in more than $800 million in 2014 to advance its research & development programs. Ligand stated further that it expects its partners to conduct more than 80 trials in 2014. The company anticipates that the compounded annual growth rate for its net income will exceed 85% over the next three years. Ligand also stated that the requests for Captisol samples have doubled since its acquisition of the platform technology. Ligand expects to generate significant cash flow per share in future.

Ligand is highly dependent on revenues from royalties. Royalties from GlaxoSmithKline GSK on Promacta form a significant chunk of royalty revenues. The company expects quarterly royalties from the product to exceed $100 million during the course of 2014. We note that Promacta is currently approved for the treatment of thrombocytopenia (low blood platelet counts) in adults with chronic idiopathic thrombocytopenia purpura (ITP). The drug is also approved for the treatment of thrombocytopenia in adults with chronic hepatitis C virus (HCV) infection.

Ligand and partner Glaxo are looking to expand Promacta's label. Last month, a supplemental New Drug Application (sNDA) for Promacta was submitted to the U.S. Food and Drug Administration (FDA) for the treatment of cytopenias (reduction in blood cells) in patients suffering from severe aplastic anemia SAA, who have not responded sufficiently to immunosuppressive therapy. We expect investor focus to remain on updates regarding Promacta.

Apart from Promacta, Ligand gets significant royalties from Amgen's AMGN oncology drug Kyprolis. Royalties from the product are expected to rise over time.

Ligand was also in the news recently when partner Lundbeck announced that the FDA will review a new drug application for intravenous anti-epileptic candidate carbamazepine (proposed trade name: Carbella). The company expects an action letter before 2014 ends. The FDA move triggered a milestone payment of $200,000 to Ligand. Ligand has an agreement for Captisol-enabled carbamazepine-IV with Lundbeck.

Ligand, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Alexion Pharmaceuticals, Inc. ALXN is a better-ranked biopharma stock with a Zacks Rank #1 (Strong Buy).