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Ligand (LGND) Q1 Earnings Beat, OmniAb Spin-Off on Track
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Ligand Pharmaceuticals Incorporated reported first-quarter 2022 adjusted earnings of 76 cents per share, beating the Zacks Consensus Estimate of 61 cents. The company had reported adjusted earnings of $1.41 in the year-ago quarter.
Total revenues of $45.7 million declined 17.2% from the year-ago quarter as growth in Royalties and Contract revenues was more than offset by lower Captisol sales. The top line, however, beat the Zacks Consensus Estimate of $34.31 million.
Ligand’s shares have declined 37.9% so far this year compared with the industry’s 21.2% decrease.
Image Source: Zacks Investment Research
Quarterly Highlights
Royalty revenues were up 92.6% year over year to $13.7 million in the first quarter. Growth in Royalties was mainly driven by additional sales of drugs developed using its Pelican platform. Ligand also earns royalties on sales of Amgen's (AMGN - Free Report) Kyprolis and Acrotech Biopharma’s Evomela, which were developed using its Captisol technology. Amgen recorded $287 million in Kyprolis sales in the first quarter, reflecting growth of 14% year over year. Amgen’s drug will likely continue the growth momentum in 2022, driving royalties for Ligand.
The OmniAb business generated $0.3 million of total royalties in the first quarter.
Total Captisol sales declined 61.2% year over year to $12.1 million. The decrease was due to lower sales of Captisol to support the manufacturing of Gilead’s (GILD - Free Report) COVID-19 drug, Veklury. Gilead’s Veklury is approved for treating COVID-19 in several countries. Gilead stated that Veklury sales were hurt by lower demand.
Ligand reported its Captisol sales separately from core assets and COVID-related sales. The core Captisol sales were $6.2 million compared with $1.3 million in the year-ago quarter. However, COVID-related Captisol sales decreased from $30 million in the year-ago quarter to $5.9 million during the first quarter of 2022.
Ligand reported adjusted earnings of 58 cents during the first quarter, excluding COVID-19 related Captisol sales.
Contract revenues were up 18.5% year over year to $19.9 million in the first quarter. OmniAb business generated $8.9 million of total Contract revenues in the first quarter.
Business Split
Ligand is progressing with its plan to split its business into two publicly traded companies — the existing company focusing on the Captisol business and the new entity will focus on the OmniAb business.
In March, Ligand signed a definitive merger agreementw ith a special purpose acquisition company (“SPAC”), Avista Public Acquisition Corp. II to complete the spin-off of its OmniAb business. Please note that SPAC, Avista Public Acquisition Corp. II is sponsored by a leading private equity firm focused on the healthcare industry, Avista Capital Partners (Avista).
The spin-off of the OmniAb business will be immediately followed by the merger of Ligand’s business with a newly formed subsidiary of Avista Public Acquisition Corp. II. The newly formed merged entity will be renamed to OmniAb, Inc. The spun-off OmniAb business will be led by Ligand’s president, Matt Foehr. The transaction is expected to be closed in the second half of 2022. The spun-off OmniAb business will be listed on the Nasdaq Global Markets under the ticker symbol OABI.
Ligand management is planning to distribute 100% of its ownership of OmniAb to its shareholders in a tax-free distribution.
Key Partnered Pipeline Progress
During the first quarter, Ligand’s partner Immunovant is planning to start a phase III study to evaluate the OmniAb-derived monoclonal antibody candidate, batoclimab, as a potential treatment for myasthenia gravis. Immunovant may start clinical studies trageting four new indications in 2022.
In March, Ligand’s partner, Travere Therapeutics, submitted a new drug application seeking approval for its pipeline candidate, sparsentan, for treating IgA nephropathy. Another partner, Outlook Therapeutics, submitted a biologics license application for its pipeline candidate, ONS-5010, as a potential treatment for wet age-related macular degeneration.
Provides 2022 Guidance Breakup
Ligand reiterated guidance for sales from its combined business for 2022. On its first-quarter earnings call, the company also provided revenue guidance for its OmniAb business separately.
Ligand expects total revenues to be between $147 million and $172 million in 2022, suggesting a significant year-over-year decline. The company continues to expect royalties in the range of $55 million to $60 million, Captisol sales are expected to be between $40 million and $50 million while contract revenues are expected in the range of $52 million to $62 million. It expects core Captisol sales to be in the range of $17 million to $19 million and the remaining Captisol sales from COVID-related therapies.
Ligand expects OmniAb business to generate $35 million to $45 million of revenues, especially in the contract revenue line.
The company expects its adjusted earnings to be in the range of $1.50 to $1.80 per share in 2022, excluding OmniAb and COVID-related Captisol sales that are likely to add between 20 cents and 40 cents per share.
Ligand Pharmaceuticals Incorporated Price, Consensus and EPS Surprise
Image: Bigstock
Ligand (LGND) Q1 Earnings Beat, OmniAb Spin-Off on Track
Ligand Pharmaceuticals Incorporated reported first-quarter 2022 adjusted earnings of 76 cents per share, beating the Zacks Consensus Estimate of 61 cents. The company had reported adjusted earnings of $1.41 in the year-ago quarter.
Total revenues of $45.7 million declined 17.2% from the year-ago quarter as growth in Royalties and Contract revenues was more than offset by lower Captisol sales. The top line, however, beat the Zacks Consensus Estimate of $34.31 million.
Ligand’s shares have declined 37.9% so far this year compared with the industry’s 21.2% decrease.
Image Source: Zacks Investment Research
Quarterly Highlights
Royalty revenues were up 92.6% year over year to $13.7 million in the first quarter. Growth in Royalties was mainly driven by additional sales of drugs developed using its Pelican platform. Ligand also earns royalties on sales of Amgen's (AMGN - Free Report) Kyprolis and Acrotech Biopharma’s Evomela, which were developed using its Captisol technology. Amgen recorded $287 million in Kyprolis sales in the first quarter, reflecting growth of 14% year over year. Amgen’s drug will likely continue the growth momentum in 2022, driving royalties for Ligand.
The OmniAb business generated $0.3 million of total royalties in the first quarter.
Total Captisol sales declined 61.2% year over year to $12.1 million. The decrease was due to lower sales of Captisol to support the manufacturing of Gilead’s (GILD - Free Report) COVID-19 drug, Veklury. Gilead’s Veklury is approved for treating COVID-19 in several countries. Gilead stated that Veklury sales were hurt by lower demand.
Ligand reported its Captisol sales separately from core assets and COVID-related sales. The core Captisol sales were $6.2 million compared with $1.3 million in the year-ago quarter. However, COVID-related Captisol sales decreased from $30 million in the year-ago quarter to $5.9 million during the first quarter of 2022.
Ligand reported adjusted earnings of 58 cents during the first quarter, excluding COVID-19 related Captisol sales.
Contract revenues were up 18.5% year over year to $19.9 million in the first quarter. OmniAb business generated $8.9 million of total Contract revenues in the first quarter.
Business Split
Ligand is progressing with its plan to split its business into two publicly traded companies — the existing company focusing on the Captisol business and the new entity will focus on the OmniAb business.
In March, Ligand signed a definitive merger agreementw ith a special purpose acquisition company (“SPAC”), Avista Public Acquisition Corp. II to complete the spin-off of its OmniAb business. Please note that SPAC, Avista Public Acquisition Corp. II is sponsored by a leading private equity firm focused on the healthcare industry, Avista Capital Partners (Avista).
The spin-off of the OmniAb business will be immediately followed by the merger of Ligand’s business with a newly formed subsidiary of Avista Public Acquisition Corp. II. The newly formed merged entity will be renamed to OmniAb, Inc. The spun-off OmniAb business will be led by Ligand’s president, Matt Foehr. The transaction is expected to be closed in the second half of 2022. The spun-off OmniAb business will be listed on the Nasdaq Global Markets under the ticker symbol OABI.
Ligand management is planning to distribute 100% of its ownership of OmniAb to its shareholders in a tax-free distribution.
Key Partnered Pipeline Progress
During the first quarter, Ligand’s partner Immunovant is planning to start a phase III study to evaluate the OmniAb-derived monoclonal antibody candidate, batoclimab, as a potential treatment for myasthenia gravis. Immunovant may start clinical studies trageting four new indications in 2022.
In March, Ligand’s partner, Travere Therapeutics, submitted a new drug application seeking approval for its pipeline candidate, sparsentan, for treating IgA nephropathy. Another partner, Outlook Therapeutics, submitted a biologics license application for its pipeline candidate, ONS-5010, as a potential treatment for wet age-related macular degeneration.
Provides 2022 Guidance Breakup
Ligand reiterated guidance for sales from its combined business for 2022. On its first-quarter earnings call, the company also provided revenue guidance for its OmniAb business separately.
Ligand expects total revenues to be between $147 million and $172 million in 2022, suggesting a significant year-over-year decline. The company continues to expect royalties in the range of $55 million to $60 million, Captisol sales are expected to be between $40 million and $50 million while contract revenues are expected in the range of $52 million to $62 million. It expects core Captisol sales to be in the range of $17 million to $19 million and the remaining Captisol sales from COVID-related therapies.
Ligand expects OmniAb business to generate $35 million to $45 million of revenues, especially in the contract revenue line.
The company expects its adjusted earnings to be in the range of $1.50 to $1.80 per share in 2022, excluding OmniAb and COVID-related Captisol sales that are likely to add between 20 cents and 40 cents per share.
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.