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Ligand Partner Novartis Gets Key E.U. Approval: Roth Capital Likes It

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The European Commission [EC] has expanded the label for Revolade [Promacta], developed by Ligand Pharmaceuticals Inc. (NASDAQ: LGND) partner Novartis AG (ADR) (NYSE: NVS), by approving the drug for children older than 1 year with chronic ITP. Roth Capital Partners’ Joseph Pantginis reiterated a Buy rating for the company, with a price target of $147.

Impact Of The EC Expansion

This latest approval by the EC supports the “underlying thesis” that Ligand’s growth would be driven by Promacta and Kyprolis, analyst Joseph Pantginis said. He further mentioned that growth would result from the initial approvals for these two drugs, while there is also “potential positive inflection points to the revenue growth curves based on continuing label expansions for both drugs.”

Other Growth Drivers

There are new revenue drivers in 2016, led by the recent approval of Evomela, developed by Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI), for which Ligand would receive a 20 percent royalty, Pantginis mentioned. Moreover, partner Retrophin Inc (NASDAQ: RTRX) is expected to report Phase IIb data for sparsentan FSGS in 3Q16, and Ligand would receive a 9 percent royalty on potential approval.

Melinta Therapeutics Inc is expected to file for approval for Baxdela in 2016, with Ligand receiving a 2.5 percent royalty. SAGE Therapeutics Inc (NASDAQ: SAGE) is likely to report top-line Phase III data for SRSE in the back half of the year, for which Ligand would receive a 3 percent royalty.

“Lundbeck could also see FDA action this year for CE-carbamazepine for seizures this year (2.75% royalty). We also expect increasing visibility from the GRA program with the expected start of the Phase II program for LGD-6972,” the analyst wrote.

Latest Ratings for LGND

Nov 2017H.C. WainwrightMaintainsBuy
Sep 2017H.C. WainwrightAssumesBuy
Aug 2017Deutsche BankMaintainsHold

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Posted-In: Joseph Pantginis ROTH Capital PartnersAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas


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