Gains complementary antibody technology and
discovery lab, new revenue streams and four fully-funded
partnerships with potential for milestones and royalties
Transaction expected to be accretive to
revenue and earnings beginning in 2018
Ligand’s portfolio now has more than 160
fully-funded Shots on Goal
Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) and
Crystal Bioscience, Inc. (Crystal) announce the signing of a
merger agreement whereby Ligand will acquire Crystal, a leader in
avian genetics and the generation of fully-human therapeutic
antibodies. Under the terms of the agreement, Ligand will pay
Crystal shareholders $25 million in cash at closing, up to an
additional $10.5 million of success-based milestones, and revenue
sharing from existing licensees for a defined period.
Crystal is a leader in the difficult-to-address-epitope area of
antibody research with its HuMab technology, which is believed to
be the world’s only chicken-based human antibody platform to
successfully generate human antibodies. As part of the OmniAb®
brand, HuMab technology will be called OmniChicken™. Because of the
evolutionary distance between birds and mammals, chickens enable
the generation of novel antibodies against targets that are not
immunogenic in mammals like mice and rats, the core species of
Ligand’s existing OmniAb platform. The addition of the OmniChicken
platform will be complementary to Ligand’s OmniAb technology, and
further solidifies Ligand’s position as the world leader in novel,
transgenic antibody discovery platforms.
Crystal’s license agreements will initially add four Shots on
Goal to Ligand, bringing its fully-funded programs to more than
160. It is expected that the OmniChicken technology will be
utilized by some of Ligand’s existing OmniAb partners and potential
new partners. Crystal’s current licensees include Boehringer
Ingelheim, Alexo Therapeutics, Achaogen, and an undisclosed large
pharmaceutical company, most of which are pursuing multiple
targets. This transaction also provides Ligand with an in-house
antibody discovery laboratory to service OmniChicken R&D needs
through contracted service.
Rob Etches, PhD, DSc, a Crystal co-founder and distinguished
geneticist, is expected to join Ligand as Vice President, Antibody
Technologies, further strengthening Ligand’s R&D leadership in
the field of antibody research. Ligand will continue to operate the
19-person Crystal organization based in Emeryville, CA.
“Crystal is an excellent, complementary addition to our OmniAb
antibody discovery platform. The company adds a third species for
fully-humanized antibody discovery for partners, four new
fully-funded partnerships and projected growing annual revenue and
positive cash flow to the business,” said John Higgins, Chief
Executive Officer of Ligand Pharmaceuticals.
“Species diversification is very important in antibody discovery
due to the expanding complexity of therapeutic targets being
pursued by the industry, and given that not all species of animals
will yield the same results,” he added. “In less than two years,
Ligand has assembled the world’s premier offerings of fully-human
antibody discovery technologies based on number and variety of
species, and the highest number of partners broadly deploying the
platform. Antibody research is one of the largest areas of R&D
investment by the pharma and biotech industries given the potential
and medical impact for major new medicines. Ligand is now offering
prospective partners a one-stop shop with its trademarked ‘Three
Species, One-License’ OmniAb partnering opportunity. Ligand will
continue to operate the highly-specialized and profitable Crystal
research unit out of its current labs in Northern California.”
Ligand Pro Forma 2017 and 2018 Financial Outlook
This acquisition is projected to contribute up to $1 million of
revenue and a similar level of operating expenses during the fourth
quarter of 2017. For 2018, Ligand expects incremental Crystal
revenues of at least $5 million and incremental EPS of at least
$0.09.
Including this acquisition, Ligand now expects 2017 total
revenues to be at least $134 million with the potential for an
additional $9 million of contract payments. Ligand estimates that
with revenue of $134 million, adjusted earnings per share would be
approximately $2.93.
Crystal non-cash amortization expense estimates are expected to
be determined in the near term. Amortization charges will be
recognized in GAAP EPS and the non-cash charge will be excluded
from adjusted EPS.
About Crystal Bioscience
Crystal Bioscience is a privately-held company that was founded
in 2008 to develop a therapeutic antibody discovery engine using
chickens. Its platform relies on the large phylogenetic distance
between mammals and birds to generate a diverse array of antibodies
to human targets that have proven intractable in mammalian and
other discovery platforms.
Crystal’s patented platform provides the ability to isolate
monoclonal antibodies from immunized chickens, and can screen
simultaneously for specificity and biological activity. It has led
to the discovery of bioactive monoclonals directed against
difficult targets, including G-protein-coupled receptors (GPCRs)
and ion channels. Chicken antibodies often recognize both human and
mouse orthologs, which can simplify early stages of drug
development where rodent disease models are often used.
The depth of screening provided by Crystal’s Gel Encapsulated
Microenvironment (GEM) assay in combination with the breadth of the
antibody repertoire in immunized birds provides access to a broad
source of affinity matured antibodies with therapeutic potential.
Crystal’s HuMab chickens, which are genetically engineered to yield
fully human sequence mAbs, capture the attributes of the chicken
repertoire in a format with therapeutic potential.
About OmniAb®
OmniAb includes three transgenic animal platforms for producing
mono- and bispecific human therapeutic antibodies. Ligand’s OmniAb
platform is the world’s leading antibody discovery platform
technology featuring the highest number of unique species for drug
discovery work and has more users than any other human antibody
platform. OmniAb is positioned for partnering with the trademarked
“Three species, one license” motto. OmniRat® is the industry’s
first human monoclonal antibody technology based on rats. It has a
complete immune system with a diverse antibody repertoire and
generates antibodies with human idiotypes as effectively as
wild-type animals make rat antibodies. OmniMouse® is a transgenic
mouse that complements OmniRat and expands epitope coverage.
OmniFlic® is an engineered rat with a fixed light chain for
development of bispecific, fully human antibodies. The three
platforms use patented technology, have broad freedom to operate
and deliver fully human antibodies with high affinity, specificity,
expression, solubility and stability.
About Ligand Pharmaceuticals
Ligand is a biopharmaceutical company focused on developing or
acquiring technologies that help pharmaceutical companies discover
and develop medicines. Our business model creates value for
stockholders by providing a diversified portfolio of biotech and
pharmaceutical product revenue streams that are supported by an
efficient and low corporate cost structure. Our goal is to offer
investors an opportunity to participate in the promise of the
biotech industry in a profitable, diversified and lower-risk
business than a typical biotech company. Our business model is
based on doing what we do best: drug discovery, early-stage drug
development, product reformulation and partnering. We partner with
other pharmaceutical companies to leverage what they do best
(late-stage development, regulatory management and
commercialization) to ultimately generate our revenue. Ligand’s
Captisol® platform technology is a patent-protected, chemically
modified cyclodextrin with a structure designed to optimize the
solubility and stability of drugs. OmniAb® is a patent-protected
transgenic animal platform used in the discovery of fully human
mono- and bispecific therapeutic antibodies. Ligand has established
multiple alliances, licenses and other business relationships with
the world's leading pharmaceutical companies including Novartis,
Amgen, Merck, Pfizer, Celgene, Gilead, Janssen, Baxter
International and Eli Lilly.
Follow Ligand on Twitter @Ligand_LGND.
Forward-Looking Statements
This news release contains forward-looking statements by Ligand
that involve risks and uncertainties and reflect Ligand's judgment
as of the date of this release. Words such as “plans,” “believes,”
“expects,” “anticipates,” and “will,” and similar expressions, are
intended to identify forward-looking statements. These
forward-looking statements include, without limitation, statements
regarding: the benefits of the acquisition of Crystal, the expected
timing of the completion of the transaction, the expected revenues
and expectations that the acquisition will be accretive to revenues
and adjusted EPS, future financial and operating results of Crystal
and Ligand, the number of partners to be added to Ligand’s
portfolio due to the acquisition, growth in the number of products
in Ligand’s portfolio, Ligand’s future revenues and other projected
financial measures, expected value creation for shareholders and
guidance regarding full-year 2017 and 2018 financial results.
Actual events or results may differ from Ligand's expectations. For
example, various closing conditions for the transaction may not be
satisfied or waived, including risk that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of
the transaction, or the terms of such approval. In addition,
Crystal’s partners are able to terminate its partnership agreements
for convenience, which may reduce the number of our shots on goal.
The number of shots on goal may not be independent if one of
Crystal’s partner’s programs fails due to a problem related to the
Crystal platform. Further, we believe that Dr. Etches is critical
to the success of the Crystal business and the loss of his services
would adversely impact the success of the Crystal business after
the transaction. With regards to Ligand’s pro forma projections,
Ligand may not receive expected revenue from material sales of
Captisol, expected royalties on partnered products and research and
development milestone payments. Ligand and its partners may not be
able to timely or successfully advance any product(s) in its
internal or partnered pipeline. In addition, there can be no
assurance that Ligand will achieve its guidance for 2017 or 2018 or
any portion thereof or beyond, that Ligand's 2017 revenues will be
at the levels or be broken down as currently anticipated, 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, that there will be a market for the product(s)
if successfully developed and approved, or that Ligand's partners
will not terminate any of its agreements or development or
commercialization of any of its products. Further, Ligand may not
generate expected revenues under its existing license agreements
and may experience significant costs as the result of potential
delays under its supply agreements. 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. 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 can be found in prior press releases available at
www.ligand.com as well as in Ligand's public periodic filings with
the Securities and Exchange Commission available 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171004006266/en/
Ligand Pharmaceuticals IncorporatedTodd Pettingill(858)
550-7500investors@ligand.com@Ligand_LGNDorLHA Investor
RelationsBruce Voss(310) 691-7100bvoss@lhai.com
Ligand Pharmaceuticals (NASDAQ:LGND)
Historical Stock Chart
From Aug 2024 to Sep 2024
Ligand Pharmaceuticals (NASDAQ:LGND)
Historical Stock Chart
From Sep 2023 to Sep 2024