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Ligand (LGND) Beats on Q3 Earnings, Lags Sales, Ups '22 Outlook
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Ligand Pharmaceuticals Incorporated (LGND - Free Report) third-quarter 2022 adjusted earnings (excluding the impact of gross profit for Captisol sales related to COVID-19) of 41 cents per share, missing the Zacks Consensus Estimate of 45 cents. The company had reported adjusted earnings of 64 cents in the year-ago quarter.
Adjusted earnings (including the impact of gross profit for Captisol sales related to COVID-19) for the third quarter stood at $1.31 per share, a 17.1% decline year over year.
Total revenues of $66.1 million were up 1.9% from the year-ago quarter as growth in Royalties revenues more than offset lower Contract revenues. The top line, however, beat the Zacks Consensus Estimate of $38 million.
Completion of Separation of OmniAb Business
Earlier this month, Ligand completed the separation of the OmniAb business into a separate independent entity named OmniAb (OABI - Free Report) . Following the separation, Ligand will continue to focus on its Captisol business.
Ligand management has completed the distribution of 100% of its ownership of OmniAb to its shareholders in a tax-free distribution. Shares of OmniAb started trading on the NASDAQ on Nov 2, 2022.
Presently, 85% of OmniAb shares are held by Ligand shareholders. The remaining stake is being held by strategic investor Avista Healthcare.
Quarter in Detail
Royalty revenues were up 27% year over year to $19.8 million in the third 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, developed using its Captisol technology. Amgen recorded $318 million in Kyprolis sales in the third quarter, reflecting growth of 9% 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 third quarter.
Total Captisol sales were up 2.4% year over year to $35.9 million. Ligand reported its Captisol sales separately from core assets and COVID-related sales. The core Captisol sales were $3.6 million compared with $5.4 million in the year-ago quarter. COVID-related Captisol sales increased 9% to $32.4 million during the third quarter of 2022.
Contract revenues were down 27% year over year to $10.3 million in the third quarter due to the timing of partner milestone events. The OmniAb business generated $6.3 million of total Contract revenues in the third quarter.
2022 Guidance Raised
Ligand raised its guidance for sales from its business for 2022. The company now expects total revenues to be between $184 million and $189 million, up from the previous guidance of $133-$146 million. The company expects to earn royalties in the range of $66-$69 million.
Captisol sales are expected to be around $100 million, up from the previous the outlook of $55 million to $60 million. Out of $100 million, management expects to generate around $15 million from core Captisol sales and the remaining Captisol sales from COVID-related therapies.
Excluding COVID-related Captisol sales, management expects to record revenues in the range of $99-$104 million. Contract revenues are expected in the range of $18-$20 million.
Management now expects to record adjusted earnings between $4.30 and $4.45 per share in 2022, up from the previous guidance of $2.40-$3.00. These figures include the contribution of COVID-related Captisol sales that are likely to be around $2.25 per share.
Shares of Ligand were up 5% in after-market trading on Nov 7, likely due to the raised 2022 outlook. Yet, the stock has declined 59.3% this year compared with the industry’s 21.8% fall.
Key Partnered Pipeline Progress
During the quarter, Ligand’s partner Verona Pharma announced top-line data from the phase III ENHANCE-2 study, which evaluated ensifentrine for chronic obstructive pulmonary disease (COPD). The study achieved both its primary and secondary endpoints evaluating lung function, including a reduction in risk of COPD exacerbations.
Last month, the European Commission (EC) granted label expansion to Merck’s (MRK - Free Report) pneumococcal 15-valent conjugate vaccine, Vaxneuvance, for use in children six weeks to less than 18 years of age. Following the label expansion, Merck’s Vaxneuvance can now be given to prevent invasive disease, pneumonia and acute otitis media in kids of this age group. Merck had previously received approval for Vaxneuvance for use in adults aged 18 years and older in Europe last December to protect against invasive pneumococcal disease.
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Ligand (LGND) Beats on Q3 Earnings, Lags Sales, Ups '22 Outlook
Ligand Pharmaceuticals Incorporated (LGND - Free Report) third-quarter 2022 adjusted earnings (excluding the impact of gross profit for Captisol sales related to COVID-19) of 41 cents per share, missing the Zacks Consensus Estimate of 45 cents. The company had reported adjusted earnings of 64 cents in the year-ago quarter.
Adjusted earnings (including the impact of gross profit for Captisol sales related to COVID-19) for the third quarter stood at $1.31 per share, a 17.1% decline year over year.
Total revenues of $66.1 million were up 1.9% from the year-ago quarter as growth in Royalties revenues more than offset lower Contract revenues. The top line, however, beat the Zacks Consensus Estimate of $38 million.
Completion of Separation of OmniAb Business
Earlier this month, Ligand completed the separation of the OmniAb business into a separate independent entity named OmniAb (OABI - Free Report) . Following the separation, Ligand will continue to focus on its Captisol business.
Ligand management has completed the distribution of 100% of its ownership of OmniAb to its shareholders in a tax-free distribution. Shares of OmniAb started trading on the NASDAQ on Nov 2, 2022.
Presently, 85% of OmniAb shares are held by Ligand shareholders. The remaining stake is being held by strategic investor Avista Healthcare.
Quarter in Detail
Royalty revenues were up 27% year over year to $19.8 million in the third 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, developed using its Captisol technology. Amgen recorded $318 million in Kyprolis sales in the third quarter, reflecting growth of 9% 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 third quarter.
Total Captisol sales were up 2.4% year over year to $35.9 million. Ligand reported its Captisol sales separately from core assets and COVID-related sales. The core Captisol sales were $3.6 million compared with $5.4 million in the year-ago quarter. COVID-related Captisol sales increased 9% to $32.4 million during the third quarter of 2022.
Contract revenues were down 27% year over year to $10.3 million in the third quarter due to the timing of partner milestone events. The OmniAb business generated $6.3 million of total Contract revenues in the third quarter.
2022 Guidance Raised
Ligand raised its guidance for sales from its business for 2022. The company now expects total revenues to be between $184 million and $189 million, up from the previous guidance of $133-$146 million. The company expects to earn royalties in the range of $66-$69 million.
Captisol sales are expected to be around $100 million, up from the previous the outlook of $55 million to $60 million. Out of $100 million, management expects to generate around $15 million from core Captisol sales and the remaining Captisol sales from COVID-related therapies.
Excluding COVID-related Captisol sales, management expects to record revenues in the range of $99-$104 million. Contract revenues are expected in the range of $18-$20 million.
Management now expects to record adjusted earnings between $4.30 and $4.45 per share in 2022, up from the previous guidance of $2.40-$3.00. These figures include the contribution of COVID-related Captisol sales that are likely to be around $2.25 per share.
Shares of Ligand were up 5% in after-market trading on Nov 7, likely due to the raised 2022 outlook. Yet, the stock has declined 59.3% this year compared with the industry’s 21.8% fall.
Key Partnered Pipeline Progress
During the quarter, Ligand’s partner Verona Pharma announced top-line data from the phase III ENHANCE-2 study, which evaluated ensifentrine for chronic obstructive pulmonary disease (COPD). The study achieved both its primary and secondary endpoints evaluating lung function, including a reduction in risk of COPD exacerbations.
Last month, the European Commission (EC) granted label expansion to Merck’s (MRK - Free Report) pneumococcal 15-valent conjugate vaccine, Vaxneuvance, for use in children six weeks to less than 18 years of age. Following the label expansion, Merck’s Vaxneuvance can now be given to prevent invasive disease, pneumonia and acute otitis media in kids of this age group. Merck had previously received approval for Vaxneuvance for use in adults aged 18 years and older in Europe last December to protect against invasive pneumococcal disease.
Ligand Pharmaceuticals Incorporated Price
Ligand Pharmaceuticals Incorporated price | Ligand Pharmaceuticals Incorporated Quote
Zacks Rank
Ligand currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.