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Here's Why You Should Add Ligand (LGND) Stock to Your Portfolio
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Ligand Pharmaceuticals (LGND - Free Report) is a biotechnology company whose business model is based on developing or acquiring royalty revenue-generating assets. The company is focused on the development and licensing of biopharmaceutical assets.
Ligand’s Captisol formulation technology allowed it to enter into several licensing deals and generate royalties. Captisol is a well-validated chemically modified cyclodextrin designed to improve safety, solubility, stability and bioavailability or lessen the volatility, irritation, smell or taste of drugs. The Captisol drug formulation platform technology was added to Ligand’s technology portfolio following its 2011 merger with CyDex.
Currently, Ligand sports a Zacks Rank #1 (Strong Buy).
Below, we discuss five reasons why adding Ligand Pharmaceuticals stock to your portfolio may prove beneficial in 2023.
Favorable Share Price Movement and Rising Estimates: Shares of the company have increased 6.5% in the year-to-date period against the industry’s 6.3% decline.
Image Source: Zacks Investment Research
In the past 60 days, Ligand’s 2023 earnings per share (EPS) estimates have increased from $3.30 to $4.15. During the same period, EPS estimates for 2024 have risen from $3.10 per share to $4.57. This was likely due to the company’s increased outlook for 2023 and beyond.
Captisol Technology Supporting Revenues: Captisol has a shelf life of five years once manufactured. Ligand derives revenues from selling Captisol material to its partners, who have either licensed its Captisol-enabled drugs or have licensed Captisol for their internal programs.
The Captisol technology has enabled the development of several FDA-approved products, which generate royalties for Ligand. The key drugs include Amgen’s (AMGN - Free Report) Kyprolis and Spectrum’s Evomela. Several of its partners use Captisol technology to develop drugs. These partners have made significant progress with their pipeline candidates. Successful development of pipeline candidates under new and previous agreements is likely to increase the company’s royalties, once commercialized. Ligand’s partner Travere was granted accelerated approval for Filspari (sparsentan) in February 2023 to reduce proteinuria in IgA nephropathy (IgAN). Ligand expects the drug to be a major driver of revenue growth in the coming years.
The Captisol technology is also being utilized in Gilead’s (GILD - Free Report) blockbuster COVID-19 antiviral therapy, Veklury, which spurted revenue growth. The company’s revenues from Captisol sales related to COVID-19 is entirely generated from Gilead’s Veklury sales.
Expanding Technology Platforms: Over the years, the company has been expanding its technology platforms beyond Captisol through acquisitions. In 2020, Ligand added Pelican, a proprietary protein expression platform, through the acquisition of Pfenex. The company generated growth of over 48% in royalty revenues in 2022, mainly driven by additional sales of drugs developed using its Pelican platform. The Pelican platform, added with the Pfenex acquisition, added four royalty-bearing products that are helping Ligand to drive top-line growth.
Positive on Deals: Ligand presently has partnerships and license agreements with over 140 pharmaceutical and biotechnology companies like Amgen, Merck, Gilead, Jazz, GSK and others. Ligand earned $827 million in 2019 from the sale of its rights to Novartis’ Promacta, which was developed using its Captisol technology. Amgen's blockbuster drug Kyprolis, which was developed using the company’s proprietary technologies, has been a significant contributor to the company’s royalty revenues. Ligand generated royalties from Kyprolis product sales worth $30.1 million in 2022, up around 10% year over year.
Conclusion
The company’s collaborations with several leading drug companies provide it with funds through milestone and royalty payments. These technology platforms have been driving its revenues for the past few years. Last November, Ligand successfully separated its OmniAb business into a separate entity to accelerate its core business growth. Ligand is expected to receive potentially $3.5 billion from its contracts with the partners, stretched over multiple years, related to several clinical and commercial milestones.
In the past 60 days, estimates for CRISPR Therapeutics’ 2023 loss per share have narrowed from $8.21 to $7.35. Shares of CRISPR Therapeutics have risen 10.2% in the year-to-date period.
Earnings of CRISPR Therapeutics beat estimates in two of the last four quarters while missing the mark on the other two occasions, witnessing an earnings surprise of 3.19%, on average. In the last reported quarter, CRISPR Therapeutics’ earnings beat estimates by 39.22%.
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Here's Why You Should Add Ligand (LGND) Stock to Your Portfolio
Ligand Pharmaceuticals (LGND - Free Report) is a biotechnology company whose business model is based on developing or acquiring royalty revenue-generating assets. The company is focused on the development and licensing of biopharmaceutical assets.
Ligand’s Captisol formulation technology allowed it to enter into several licensing deals and generate royalties. Captisol is a well-validated chemically modified cyclodextrin designed to improve safety, solubility, stability and bioavailability or lessen the volatility, irritation, smell or taste of drugs. The Captisol drug formulation platform technology was added to Ligand’s technology portfolio following its 2011 merger with CyDex.
Currently, Ligand sports a Zacks Rank #1 (Strong Buy).
Below, we discuss five reasons why adding Ligand Pharmaceuticals stock to your portfolio may prove beneficial in 2023.
Favorable Share Price Movement and Rising Estimates: Shares of the company have increased 6.5% in the year-to-date period against the industry’s 6.3% decline.
Image Source: Zacks Investment Research
In the past 60 days, Ligand’s 2023 earnings per share (EPS) estimates have increased from $3.30 to $4.15. During the same period, EPS estimates for 2024 have risen from $3.10 per share to $4.57. This was likely due to the company’s increased outlook for 2023 and beyond.
Captisol Technology Supporting Revenues: Captisol has a shelf life of five years once manufactured. Ligand derives revenues from selling Captisol material to its partners, who have either licensed its Captisol-enabled drugs or have licensed Captisol for their internal programs.
The Captisol technology has enabled the development of several FDA-approved products, which generate royalties for Ligand. The key drugs include Amgen’s (AMGN - Free Report) Kyprolis and Spectrum’s Evomela. Several of its partners use Captisol technology to develop drugs. These partners have made significant progress with their pipeline candidates. Successful development of pipeline candidates under new and previous agreements is likely to increase the company’s royalties, once commercialized. Ligand’s partner Travere was granted accelerated approval for Filspari (sparsentan) in February 2023 to reduce proteinuria in IgA nephropathy (IgAN). Ligand expects the drug to be a major driver of revenue growth in the coming years.
The Captisol technology is also being utilized in Gilead’s (GILD - Free Report) blockbuster COVID-19 antiviral therapy, Veklury, which spurted revenue growth. The company’s revenues from Captisol sales related to COVID-19 is entirely generated from Gilead’s Veklury sales.
Expanding Technology Platforms: Over the years, the company has been expanding its technology platforms beyond Captisol through acquisitions. In 2020, Ligand added Pelican, a proprietary protein expression platform, through the acquisition of Pfenex. The company generated growth of over 48% in royalty revenues in 2022, mainly driven by additional sales of drugs developed using its Pelican platform. The Pelican platform, added with the Pfenex acquisition, added four royalty-bearing products that are helping Ligand to drive top-line growth.
Positive on Deals: Ligand presently has partnerships and license agreements with over 140 pharmaceutical and biotechnology companies like Amgen, Merck, Gilead, Jazz, GSK and others. Ligand earned $827 million in 2019 from the sale of its rights to Novartis’ Promacta, which was developed using its Captisol technology. Amgen's blockbuster drug Kyprolis, which was developed using the company’s proprietary technologies, has been a significant contributor to the company’s royalty revenues. Ligand generated royalties from Kyprolis product sales worth $30.1 million in 2022, up around 10% year over year.
Conclusion
The company’s collaborations with several leading drug companies provide it with funds through milestone and royalty payments. These technology platforms have been driving its revenues for the past few years. Last November, Ligand successfully separated its OmniAb business into a separate entity to accelerate its core business growth. Ligand is expected to receive potentially $3.5 billion from its contracts with the partners, stretched over multiple years, related to several clinical and commercial milestones.
Ligand Pharmaceuticals Incorporated Price
Ligand Pharmaceuticals Incorporated price | Ligand Pharmaceuticals Incorporated Quote
Another Stock to Consider
Another top-ranked stock in the same sector is CRISPR Therapeutics (CRSP - Free Report) , holding a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
In the past 60 days, estimates for CRISPR Therapeutics’ 2023 loss per share have narrowed from $8.21 to $7.35. Shares of CRISPR Therapeutics have risen 10.2% in the year-to-date period.
Earnings of CRISPR Therapeutics beat estimates in two of the last four quarters while missing the mark on the other two occasions, witnessing an earnings surprise of 3.19%, on average. In the last reported quarter, CRISPR Therapeutics’ earnings beat estimates by 39.22%.