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Ligand (LGND) Beats on Q3 Earnings, Plans to Separate OmniAb
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Ligand Pharmaceuticals Incorporated (LGND - Free Report) reported third-quarter 2021 adjusted earnings of $1.58 per share, which beat the Zacks Consensus Estimate of $1.02. The company had reported adjusted earnings of $1.04 in the year-ago quarter.
Total revenues were $64.8 million, up 55% from the year-ago quarter. The significant increase was mainly due to higher year-over-year Captisol revenues as well as contract revenues. The top line also beat the Zacks Consensus Estimate of $60.4 million.
Ligand’s shares were up 5.7% in after-market trading, following the strong third-quarter results and presumably due to the spin-off announcement for its OmniAb business. The company’s shares have gained 52% so far this year against the industry’s 12.2% decrease.
Image Source: Zacks Investment Research
Quarterly Highlights
Royalty revenues were up 73.3% year over year to $15.6 million in the third quarter. Ligand primarily earns royalties on sales of Amgen's (AMGN - Free Report) Kyprolis and Acrotech Biopharma’s Evomela, which were developed using its Captisol technology. Approvals to five new partnered drugs during 2021 are likely to drive Royalty revenues going forward.
Captisol sales gained 50% year over year to $35.1 million. The increase was due to higher sales of Captisol to support the availability of Gilead’s (GILD - Free Report) remdesivir, which is approved for treating severe COVID-19 patients in the United States and several other countries.
Contract revenues were up 48.4% year over year to $14.1 million in the third quarter. The increase was driven by additional revenues from Pfenex, which was acquired by Ligand in October 2020.
Business Split
In a separate press release, Ligand stated that it is planning to split its business into two publicly traded companies. One company will handle its OmniAb business along with Ab Initio antigen design technology, Icagen’s ion channel technology and the xPloration high-throughput screening technology. The entity is likely to be named OmniAb, Inc., which will be made public through an initial public offering.
The other entity will own the rest of the business, including the existing collection of core royalties and the technologies, pipeline and contracts associated with the Pelican protein expression platform and the Captisol business.
Ligand believes that the spin-off its business into two separate entities will likely help to boost operational focus and business-specific capital allocation. The separataion will also likely help to meet partner needs quickly.
We note that during the third quarter, the first OmniAb-derived partnered drug received regulatory approval. In September, Ligand’s partner, Gloria Biosciences received approval for OmniAb-derived anti-PD-1 monoclonal antibody, zimberelimab, for the treatment of recurrent or refractory classical Hodgkin’s lymphoma in China. A regulatory application for another OmniAb-derived partnered drug, sugemalimab, is under review in China and is set to receive approval by the end of 2021 as a potential first-line treatment for lung cancer. As of September end, there were 19 different OmniAb-derived antibodies in clinical development. Following the planned separation, the company will accelerate investment into the OmniAb platform and technologies to further drive value.
However, Ligand’s board of directors is yet to approve the split or a specific course of action for the same. The company is evaluating other options to optimize the value of its business and maximize shareholders’ returns.
Key Partnered Pipeline Progress
Merck’s (MRK - Free Report) 15-valent pneumococcal conjugate vaccine (PCV), Vaxneuvance, received FDA approval in July. The product was developed using Ligand’s Pelican Expression technology. BeiGene received first approval for Kyprolis in China as a treatment for multiple myeloma in the same month.
2021 Guidance Maintained
Ligand maintained its previously announced guidance for sales and earnings for 2021. It expects total revenues to be between $265 million and $275 million in 2021. It expects earnings to be in the range of $5.80-$6.05 per share for the year.
Ligand Pharmaceuticals Incorporated Price, Consensus and EPS Surprise
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Ligand (LGND) Beats on Q3 Earnings, Plans to Separate OmniAb
Ligand Pharmaceuticals Incorporated (LGND - Free Report) reported third-quarter 2021 adjusted earnings of $1.58 per share, which beat the Zacks Consensus Estimate of $1.02. The company had reported adjusted earnings of $1.04 in the year-ago quarter.
Total revenues were $64.8 million, up 55% from the year-ago quarter. The significant increase was mainly due to higher year-over-year Captisol revenues as well as contract revenues. The top line also beat the Zacks Consensus Estimate of $60.4 million.
Ligand’s shares were up 5.7% in after-market trading, following the strong third-quarter results and presumably due to the spin-off announcement for its OmniAb business. The company’s shares have gained 52% so far this year against the industry’s 12.2% decrease.
Quarterly Highlights
Royalty revenues were up 73.3% year over year to $15.6 million in the third quarter. Ligand primarily earns royalties on sales of Amgen's (AMGN - Free Report) Kyprolis and Acrotech Biopharma’s Evomela, which were developed using its Captisol technology. Approvals to five new partnered drugs during 2021 are likely to drive Royalty revenues going forward.
Captisol sales gained 50% year over year to $35.1 million. The increase was due to higher sales of Captisol to support the availability of Gilead’s (GILD - Free Report) remdesivir, which is approved for treating severe COVID-19 patients in the United States and several other countries.
Contract revenues were up 48.4% year over year to $14.1 million in the third quarter. The increase was driven by additional revenues from Pfenex, which was acquired by Ligand in October 2020.
Business Split
In a separate press release, Ligand stated that it is planning to split its business into two publicly traded companies. One company will handle its OmniAb business along with Ab Initio antigen design technology, Icagen’s ion channel technology and the xPloration high-throughput screening technology. The entity is likely to be named OmniAb, Inc., which will be made public through an initial public offering.
The other entity will own the rest of the business, including the existing collection of core royalties and the technologies, pipeline and contracts associated with the Pelican protein expression platform and the Captisol business.
Ligand believes that the spin-off its business into two separate entities will likely help to boost operational focus and business-specific capital allocation. The separataion will also likely help to meet partner needs quickly.
We note that during the third quarter, the first OmniAb-derived partnered drug received regulatory approval. In September, Ligand’s partner, Gloria Biosciences received approval for OmniAb-derived anti-PD-1 monoclonal antibody, zimberelimab, for the treatment of recurrent or refractory classical Hodgkin’s lymphoma in China. A regulatory application for another OmniAb-derived partnered drug, sugemalimab, is under review in China and is set to receive approval by the end of 2021 as a potential first-line treatment for lung cancer. As of September end, there were 19 different OmniAb-derived antibodies in clinical development. Following the planned separation, the company will accelerate investment into the OmniAb platform and technologies to further drive value.
However, Ligand’s board of directors is yet to approve the split or a specific course of action for the same. The company is evaluating other options to optimize the value of its business and maximize shareholders’ returns.
Key Partnered Pipeline Progress
Merck’s (MRK - Free Report) 15-valent pneumococcal conjugate vaccine (PCV), Vaxneuvance, received FDA approval in July. The product was developed using Ligand’s Pelican Expression technology. BeiGene received first approval for Kyprolis in China as a treatment for multiple myeloma in the same month.
2021 Guidance Maintained
Ligand maintained its previously announced guidance for sales and earnings for 2021. It expects total revenues to be between $265 million and $275 million in 2021. It expects earnings to be in the range of $5.80-$6.05 per share for the year.
Ligand Pharmaceuticals Incorporated Price, Consensus and EPS Surprise
Ligand Pharmaceuticals Incorporated price-consensus-eps-surprise-chart | Ligand Pharmaceuticals Incorporated Quote
Zacks Rank
Currently, Ligand is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.