Ligand Pharmaceuticals (LGND) 7 Nov 24 2024 Q3 Earnings call transcript

Ligand Pharmaceuticals reported robust financial results for the third quarter of 2024, showcasing a significant 58% increase in total revenue compared to the same period last year. The company's focus on acquiring high-value royalty generating assets has paid off, with a growing roster of major commercial programs providing predictable and growing royalty revenue.

Strategic Acquisitions and Developments

Ligand has been actively acquiring assets to bolster its portfolio. The acquisition of [indiscernible] Biologics this summer added QARZIBA to its pipeline, while the transaction with the Ohtuvayre inventors increased its royalty rate on that drug to nearly 3%. Additionally, the company's efforts to incubate Zelsuvmi for commercial launch are ongoing, with plans to select a partner for launching the drug in the first half of 2025. This drug addresses a significant unmet need in [indiscernible] as the first at-home prescription product for this condition.

Product Launches and Regulatory Approvals

Two important products in Ligand's portfolio, Verona Pharma's Ohtuvayre and Merck's CAPVAXIVE, were successfully launched during the third quarter. The CDC's Advisory Committee on Immunization Practices recommended CAPVAXIVE for adult pneumococcal vaccination in adults 50 years of age and older, which could potentially improve vaccination rates and lower the current age-based recommendation from 65 and older.

Financial Performance and Outlook

The third quarter saw exceptional financial results, with a 58% increase in total revenue and an adjusted earnings per share of $1.84, marking an 80% increase over Q3 2023. Ligand's strategic differentiation lies in its ability to acquire high-growth, low-Operating Expenses assets, offering a differentiated capital solution to traditional investors. The company is confident in its long-term outlook, with a projected royalty revenue growth on pace to exceed the 22% compounded annual growth rate outlined at its Analyst Day in December 2023.

Pipeline and Future Prospects

Ligand's pipeline remains robust, with over 20 investment opportunities representing in excess of $800 million of investment potential. The company is currently reviewing these opportunities and expects to meet or exceed its updated 2024 financial guidance, with a strong balance sheet and access to over $300 million in capital. The operating leverage from its main corporate cost structure is expected to result in adjusted EPS of greater than $10 per share in 2028.

In conclusion, Ligand Pharmaceuticals' Q3 2024 earnings call highlighted the company's robust financial performance and strategic acquisitions, underscoring its position as a biopharmaceutical company focused on generating profitable, diversified compounding growth. With a strong pipeline and a disciplined approach to executing its strategy, Ligand remains optimistic about its future prospects.