Ligand Pharmaceuticals (LGND) FY Conference August 27, 2025 03:00 PM ET Company ParticipantsLauren Hay - Vice President - Strategic Planning & Investment AnalyticsMelanie Herman - Executive Director - IR & FP&ANone - ExecutiveConference Call ParticipantsNone - AnalystOperatorAlrighty. Nice little Chicago hello. Next, we are pleased to welcome Ligand Pharmaceuticals, a company focused on developing and acquiring technologies that help drive innovation across the biotech and pharmaceutical industry. On behalf ...

Financial Data and Key Metrics Changes - The company reported total revenue of over $45 million for Q1 2025, representing a 46% increase from $31 million in the same period last year [33][34] - Adjusted earnings per share (EPS) for Q1 2025 was $1.33, up from $1.20 in Q1 2024 [42] - Royalty revenue increased by 44% year-over-year, totaling $27.5 million in Q1 2025 [34][35] Business Line Data and Key Metrics Changes - Varonis' O2VARE reported net sales of $71.3 million in Q1 2025, nearly double the previous quarter's results [37] - Trevyr's Filspari achieved first-quarter U.S. sales of $56 million, representing over 180% year-over-year growth [38] - Merck's Capaxib reported Q1 sales of $107 million, more than double the prior quarter [39] Market Data and Key Metrics Changes - The company has over $200 million in cash and investments, with no debt and access to a $125 million revolving credit facility [8] - The current biopharmaceutical financing environment is challenging, leading to increased demand for royalty financing [10][11] Company Strategy and Development Direction - The company aims to deliver profitable and compounding growth through a diversified portfolio of royalty assets [14][16] - A focus on acquiring late-stage development assets and commercial assets with superior risk-reward profiles is central to the company's strategy [15][17] - The company anticipates long-term royalty revenue growth to meet or exceed a 22% compound annual growth rate [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future prospects, citing a strong start to 2025 and the potential for significant growth drivers [44] - The company is navigating short-term disruptions due to policy changes but remains focused on delivering clinical value [50][56] - Management noted that the current environment presents opportunities for mergers and acquisitions in the biotech sector [49] Other Important Information - The company executed a strategic transaction to merge its subsidiary, Pylthos Therapeutics, with Channel Therapeutics, raising $50 million in equity capital [22] - ZELSUVME, an FDA-approved therapy for molluscum contagiosum, is positioned as a first-line treatment option [29][31] Q&A Session Summary Question: Current environment for the space and special situations - Management noted an increase in special situations due to difficult financing markets for biotech companies, presenting good opportunities for the company [48][50] Question: Impact of most favored nation's status for drug pricing - Management indicated that while there may be short-term disruptions, the long-term outlook remains positive as most partners focus on the U.S. market [55][58] Question: Investment capacity and opportunities - Management expects to invest above the normal pace this year due to the number of good opportunities, while maintaining diversification limits [76][78] Question: Launch timing for ZELSUVME - The launch is expected to be independent of the merger closing, with preparations already underway [83] Question: Revenue trends for the year - Management anticipates a balanced revenue cadence throughout the year, reiterating guidance for Captisol and royalty revenue [88]

Financial Data and Key Metrics Changes - In Q1 2025, Verona Pharma recorded net product sales of $71.3 million for O2VARE, nearly doubling sales compared to Q4 2024 [7][13] - Total net revenue for Q1 2025 was $76.3 million, including a $5 million clinical milestone from Nuance Pharma [13] - Operating expenses for Q1 2025 were $86.6 million, resulting in an operating loss of $10.3 million and a net loss after tax of $16.3 million [14] - The company reported an adjusted net income of $20.5 million, excluding $36.8 million in share-based compensation [14] - Cash and equivalents stood at $401.4 million as of March 31, 2025, showing a slight increase from $399.8 million at the end of 2024 [15] Business Line Data and Key Metrics Changes - O2VARE's rapid adoption is highlighted by approximately 25,000 prescriptions filled in Q1 2025, with new patient starts growing over 25% compared to Q4 2024 [7][8] - Refills accounted for 60% of all dispenses during the first quarter, indicating strong patient retention [7] - The number of prescribers increased by about 50% to approximately 5,300, with 60% being tier one healthcare providers [8] Market Data and Key Metrics Changes - O2VARE received regulatory approval in Macau for the maintenance treatment of COPD, marking its first approval outside the U.S. [11] - Nuance Pharma is expected to report results from its pivotal Phase III trial evaluating ensifentrine for COPD maintenance treatment in China in Q2 2025 [11] Company Strategy and Development Direction - The company plans to expand its field sales team from 30 to about 120 representatives to support the ongoing launch of O2VARE [9] - Verona Pharma aims to use future draws from its debt facility primarily for in-licensing or acquiring products as needed [15] - The company is advancing its pipeline with two Phase II clinical programs, including a dose-ranging Phase IIb trial set to begin in the second half of 2025 [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing success of the O2VARE launch, noting high adoption rates and encouraging feedback from patients and healthcare providers [6][20] - The company anticipates continued growth in sales and prescriber base, with a strong belief in the product's potential to redefine COPD treatment standards [8][24] - Management acknowledged the competitive landscape but emphasized O2VARE's unique profile and complementary role alongside potential biologic treatments [61][84] Other Important Information - A new Orange Book listed patent was granted with an expiration date in February 2044, bringing the total to four listed patents [10][92] - The company is actively engaging with regulatory bodies in Europe for potential marketing authorization applications for O2VARE [100] Q&A Session Summary Question: Trends and metrics for Q2 - Management indicated that the launch is going extremely well, with high adoption and growth across all metrics, including prescriptions and new patients [20][21] Question: Sales growth expectations - Management expressed optimism about continued substantial growth, emphasizing the large patient population still symptomatic on current treatments [24][35] Question: Gross to net expectations - The gross to net ratio improved to well below 20%, with expectations for continued improvement as the year progresses [32][42] Question: Refill rates and persistency - Management noted encouraging refill rates and persistency, with potential for upside as more data becomes available [51][52] Question: Competitive landscape and biologics - Management views biologics as complementary rather than competitive, emphasizing O2VARE's unique bronchodilation and anti-inflammatory effects [61][84] Question: Market strategy in Europe - The company is engaging with EMA and MHRA regarding regulatory applications and is considering partnerships based on regulatory clarity [100][101]

Financial Data and Key Metrics Changes - In Q1 2025, the company recorded $71.3 million in net product sales for O2VARE, nearly doubling sales compared to Q4 2024 [9][14] - Total net revenue for Q1 2025 was $76.3 million, including a $5 million clinical milestone from Nuance Pharma [14] - Operating expenses for Q1 were $86.6 million, resulting in an operating loss of $10.3 million and a net loss after tax of $16.3 million [15][16] - The company had $401.4 million in cash and equivalents as of March 31, 2025, compared to $399.8 million at the end of 2024 [17] Business Line Data and Key Metrics Changes - O2VARE's rapid adoption is evidenced by approximately 25,000 prescriptions filled in Q1 2025, with new patient starts growing over 25% compared to Q4 2024 [9][10] - Refills represented 60% of all dispenses during the first quarter, indicating strong patient retention [9] - The total number of prescribers grew about 50% to approximately 5,300, with 60% being tier one healthcare providers [10] Market Data and Key Metrics Changes - O2VARE was approved in Macau for the maintenance treatment of COPD, marking the first regulatory approval outside the U.S. [12] - The company is advancing regulatory activities for potential marketing authorization applications in the EU and the UK [13][102] Company Strategy and Development Direction - The company plans to expand its field sales team to support the ongoing launch of O2VARE, increasing from 90 to 120 representatives [11] - A new patent for O2VARE has been granted, expiring in February 2044, enhancing the company's intellectual property portfolio [11][93] - The company aims to use future draws on its debt facility primarily for in-licensing or acquiring products as needed [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing success of O2VARE's launch, highlighting high adoption rates and strong metrics [22][26] - The company anticipates continued growth in sales, driven by an expanding prescriber base and increasing patient refills [26][35] - Management noted that there remains a significant opportunity for new patient additions, as many patients remain symptomatic on current treatments [26] Other Important Information - The company is focused on advancing its pipeline with two Phase II clinical programs, including a dose-ranging Phase IIb trial [12] - The company has amended its strategic financing arrangement, increasing its debt facility to $450 million on more favorable terms [17] Q&A Session Summary Question: Trends and metrics for Q2 - Management indicated that the launch is going extremely well, with high adoption and growth across all metrics [22][23] Question: Sales growth expectations - Management expressed confidence in continued substantial growth, emphasizing the importance of new patient additions and refill rates [26][35] Question: Gross to net expectations - Management noted that gross to net has improved and is now well below 20% as of Q1 [33][34] Question: Refill rates for long-term patients - Management is encouraged by refill rates and persistency, with expectations for continued improvement [50][51] Question: Competitive landscape with biologics - Management views biologics as complementary rather than competitive, emphasizing O2VARE's unique profile [62][84] Question: Regulatory strategy in Europe - The company is actively engaging with EMA and MHRA regarding marketing authorization applications and plans to update stakeholders mid-year [102] Question: Price stability for O2VARE - Management expects price stability for O2VARE through 2025, with no concrete changes anticipated [109] Question: Phase 2b study expectations - The company plans to measure lung function effects over the dosing interval, with pre-dose trough FEV1 being a secondary measure [111]