Attached files
 CyDex
Acquisition Conference Call
January 26, 2011
Exhibit 99.1 |
 2
•
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,
expense
reductions
and
drug
development
programs
may
not
be
realized.
In
addition
there
can
be
no
assurance
that
Ligand
will
achieve
its
guidance
in
2011
or
beyond.
•
The
forward-looking
statements
made
in
the
presentation
are
subject
to
several
risk
factors,
including,
but
not
limited
to,
Ligand’s
reliance
on
collaborative
partners
for
milestone
and
royalty
payments,
regulatory
hurdles
facing
Ligand’s
product
candidates,
uncertainty
regarding
Ligand’s
product
development
costs,
the
possibility
that
Ligand’s
drug
candidates
might
not
be
proved
to
be
safe
and
efficacious,
the
commercial
performance
of
Ligand’s
approved
products,
decreased
demand
for
Captisol
material
and
a
possible
failure
to
successfully
combine
the
businesses
of
CyDex
with
Ligand’s
business.
Additional
risks
may
apply
to
forward-looking
statements
made
in
this
presentation.
•
The
risk
factors
facing
Ligand
are
explained
in
greater
detail
in
Ligand’s
filings
with
the
SEC,
including
the
most
recently
filed
annual
reports
on
Form
10-K
and
quarterly
reports
on
Form
10-Q,
as
well
as
other
public
filings.
•
While
forward-looking
statements
reflect
our
good
faith
beliefs
(or
those
of
the
indicated
third
parties),
they
are
not
guarantees
of
future
performance.
We
disclaim
any
obligation
to
update
or
revise
any
forward-looking
statements,
whether
as
a
result
of
new
information,
future
events
or
otherwise.
Safe Harbor Statement |
 3
Agenda
•
Acquisition Highlights and Value Drivers
•
Continued Transformation of Ligand
•
CyDex
–
Technology Platform and Select Key Assets
•
Financial Outlook and Upcoming Events |
 4
Acquisition Highlights and Value Drivers |
 5
CyDex
Corporate Overview
CyDex
Quick Facts
–
Private company founded in 1993 and located near Kansas City
–
A
successful,
cash-flow
positive
business
based
on
the
Captisol
®
technology
–
5
FDA-approved
compounds
utilizing
Captisol
technology
–
To operate under Ligand
as a wholly-owned subsidiary with 9 employees
Business Model
–
Utilize Captisol
to improve the efficacy, stability, solubility and patent life of new and existing
drugs
–
Pursue
partnerships
with
traditional
licensing
terms
and
product
sales
revenue
Core Assets
–
Proprietary Captisol
technology platform and extensive Drug Master File
–
>25 partnerships with the potential for future milestones and royalties
–
Significant existing revenue generated from Captisol
–
Internal pipeline of Captisol-enabled drugs for future licensing
2010 Key Financials
–
$16.3 million in revenue
–
$7.6 million in EBITDA |
 6
Top Three Reasons for the Acquisition
1.
Immediately accelerates the projected financial growth of Ligand
•
CyDex
is a cash-flow positive business with revenues from royalties, material sales and
licensing fees
•
Ligand’s
2011 revenue with CyDex
is projected to more than double versus Ligand’s
stand-
alone revenue, not including any new licensing revenue (i.e. SARM) or accelerated growth
in Promacta
®
royalties
2.
A transformational portfolio acquisition that significantly expands
Ligand’s
portfolio of fully funded programs
•
The combined company has more than 60 programs (development stage and marketed
drugs) up from 35 programs pre-acquisition
•
The existing CyDex
portfolio includes numerous high-quality license and royalty bearing
agreements, including Onyx for carfilzomib
and Prism for Nexterone
®
3.
Provides proprietary and well-validated platform in the increasingly
important drug reformulation segment of the pharma
industry
•
With increasing industry-wide clinical and regulatory challenges and the market erosion
due to generics, we believe the need to protect and expand existing markets has
never been greater |
 7
Other Potential Benefits of the Acquisition
•
Integration of a business model that is highly complementary with
Ligand’s
business model
•
Possible cross development/reformulation of select internal drug
development candidates (e.g., topical JAK 3)
•
Further leverage strong relationships with existing partners
•
Utilize NOLs*
(estimated to be over $500 million) and accelerate
unlocking value of our tax assets
*Subject to limitations per tax rules |
 8
•
Guaranteed payments
–
$31.2 million upfront acquisition payment
–
$4.3 million cash payment January 2012
–
$800,000 at close for an adjustment for working capital
•
Contingent payments
–
$5.5
million
of
total
milestones
payable
on
Onyx
carfilzomib
NDA
filing and approval
–
Other payments to CyDex
based on sharing of non-royalty revenue from a clopidogrel
license transaction
–
20% of annual CyDex
revenue between $15 million and $35 million
through 2016
–
30% of annual CyDex
revenue >$35 million through 2016
•
Acquisition Financing
–
$20 million borrowed on a secured loan from Oxford Financial Corporation
Primary Acquisition Terms |
 9
Continued Transformation of Ligand |
 10
Pre-Merger: 35
Programs Post-Merger: Over 60 Programs
•
Through
5
acquisitions
in
past
two
years,
Ligand
has
amassed
a
rich
trove
of
partnerships
and
assets
•
Post-merger corporate portfolio is comprised of 7 marketed drugs and more than
50 fully funded partnered collaborations
Expanding “Shots on Goal”
Portfolio
Approved
13%
Preclinical
9%
Phase I
34%
Phase II
36%
Phase III
8% |
 11
CyDex
–
Technology Platform
and Select Key Assets |
 12
•
Captisol
is a chemically modified cyclodextrin
used to improve solubility,
stability and bioavailability of active pharmaceutical ingredients (API)
•
Mainly used to formulate IV drugs, but can also be used for oral, ocular and
topical formulations
•
Multiple Captisol-enabled products in clinical development and on the
market
•
Extensive drug master file (DMF), patents and know-how built by CyDex
over past 20 years provide important barriers to entry
•
Exclusively manufactured for CyDex
by Hovione
What is Captisol
®
? |
 13
•
CyDex
enters Use Agreements with partners to enable
pre-clinical/Phase I POC studies with a Captisol-enabled
drug
–
Generates revenue from contract fees and sale of Captisol
–
CyDex
currently has more than 20 of these agreements with partners
–
If
successful,
partners
advance
to
license
and
supply
agreements
for
Phase
II and beyond
•
CyDex
signs standard license and supply agreements
for Phase II development and beyond
–
CyDex
currently has more than 10 such agreements with partners
–
Deals generally provide for a combination of upfront fees, milestones
and commercial-based revenue
The CyDex
Captisol
®
Licensing Model |
 14
FDA-Approved Captisol
®
Marketed Drugs
U.S., Europe
Pfizer
Schizophrenia
Geodon
®
IV
U.S., Europe
Pfizer
Canine
Motion Sickness
Cerenia
®
U.S., Europe, Japan
Pfizer
Antifungal
VFEND
®
IV
Drug
Indication
Partner
Approved Markets
Abilify
®
IM
Bipolar Disorder
Bristol-Myers Squibb
U.S, Europe
Nexterone
®
Ventricular Fibrillation
Prism
U.S.
•
Successful
regulatory
track
record
of
five
Captisol
enabled
drugs
being
approved
and four currently paying royalties |
 15
The CyDex-Onyx Collaboration
•
CyDex Relationship: Captisol-enabled IV formulation of carfilzomib for refractory
multiple myeloma
–
Onyx planning to file NDA in 2011 based on Phase IIb data
–
Two large ongoing Phase III studies expected to be completed in 2012
•
Product: Carfilzomib
–
Proteozome inhibitor acquired in the acquisition of Proteolix in 2009 for $276 million and
$575 million in earn-outs
–
Ono Pharmaceuticals licensed Japan-only rights from Onyx (September 2010) for $59
million upfront and $300 million in milestones
•
Recent Phase II Data:
–
Overall response rate reported to be 24.1% with no worsening of neuropathy
–
Strong potential for improvement over Velcade
•
Commercial Outlook:
–
CyDex receives milestones, royalties, and revenue from Captisol material sales
–
Third-party analysts project peak annual sales of carfilzomib as high as $500 million
® |
 16
•
Prism Collaboration
–
CyDex
developed and licensed to Prism a Captisol-enabled IV formulation of
amiodarone
(Nexterone) for atrial
fibrillation
•
Prism has recently received FDA approval for Nexterone
–
New Captisol
formulation allows for more convenient premixed preparation that
eliminates time and errors associated with pharmacy mixing
–
CyDex
receives milestones, royalties, and revenue from Captisol
material sales
•
Undisclosed Large Pharma
Captisol-Supply Collaborations
–
CyDex
currently has multiple collaborations with undisclosed large pharmaceutical
companies to supply Captisol
for their development programs
–
These collaborations have Captisol-enabled drugs in clinical development and
CyDex
anticipates selling Captisol
to these partners in the coming years for clinical
and commercial use
Other Key CyDex
Collaborations |
 17
Summary of CyDex
Internal Pipeline
Program
Reformulation
Indication/Stage
Potential Product Advantages
Clopidogrel
IV –
Plavix
®
Atherothrombosis
Pivotal study pending
•
Reach peak blood levels in as
little as 15 minutes (vs. 2 –
4 hours
for the current formulation)
Melphalan
IV –
Alkeran
®
Multiple Myeloma
Phase IIa
•
Longer use time after
reconstitution
•
Administration flexibility
•
No propylene glycol solvent
Topiramate
IV –
Topomax
®
Epilepsy
Phase I
•
Faster onset of drug
•
Administration to a wider
audience
Budesonide/
Azelastine
Nasal –
Rhinocort
Aqua
®
/
Astelin
®
Allergic Rhinitis
Phase II
•
Unique solution formulation
•
Potential for less overall steroid
exposure
•
Phase II-type studies have shown
improvement in onset and symptom
relief
•
Internal pipeline adds further opportunities for new licensing agreements
|
 18
Financial Outlook and Upcoming Events |
 19
Ligand Preliminary and Unaudited Information
•
2010 revenues total approximately $23 million
•
Cash highlights: ~$30 million
–
$24 million –
2010 year-end cash
–
$1.5 million –
January cash proceeds from recent deals
–
$4.5 million –
Expected tax refund (January 2011)
•
Q4 2010 share repurchases total ~$100,000 at average price of $8.53
|
 20
2011 Revenue Outlook
•
Total 2011 revenue currently projected to be
$22 -
$24 million
–
$9 -
$10 million from original Ligand business
–
$13 -
$14 million from CyDex
(partial year
accounting)
•
Ligand (pre-CyDex) revenue currently expected to
consist of:
–
Three royalty streams (Promacta, Avinza,
Conbriza)
–
Revenue for license/deal fees
–
With the termination of the Roche contract in
December 2010, Ligand will not be eligible to
receive $4 -
$5 million in milestones that were
projected earlier
•
Potential for additional sources of revenue and cash
in 2011 above these projections based on new
license agreements (i.e. SARM)
2011 Revenue Breakdown*
License And Other
Royalties
Material Sales
*Excludes revenue from new deals, if any
~15%
~35%
~50% |
 21
2011 Expense Outlook
•
Operating expenses currently expected to be $16 million to
$18 million
•
Average cost of goods as a percentage of material sales projected
to be approximately 35%
•
CyDex
non-cash amortization expense estimates to be determined
in the near-term |
 22
Upcoming Portfolio Events
2011 Potential Near-Term Catalysts
•
Conbriza
royalties commence
Q1
•
Promacta
Japan ITP launch
Q1
•
Nexterone
launch
Q1
•
Clopidogrel
license deal
Q1
•
SARM Phase I data
Q2
•
Promacta
HepC
Phase III data
2H
•
IL-9 Phase II data
2H
•
Promacta
Phase II oncology data
2H
•
Dinaciclib
Phase II data
2H
•
Carfilzomib
NDA filing
2H
•
New CyDex
Captisol
license(s)
2H
•
p38 trial initiation
2011
•
Aprela
NDA Filing
2011
Approved
13%
Preclinical
9%
Phase I
34%
Phase II
36%
Phase III
8% |
 23
Event
Location
Date
•
Year-End Earnings Call
Webcast
February -TBD
•
BIO CEO Investor Conference
New York
February 15
•
Citi
2011 Global Health Care Conference
New York
March 2
•
BIT's
3rd Annual World Congress of BIO-SOFT
Beijing, China
March 23
•
Analyst Day
New York
Q2
Upcoming Investor Events |