Ligand(US:LGND)2023-08-09 02:52Financial Data and Key Metrics Changes - Revenues for Q2 2023 were $26 million, with over $20 million in royalty revenue, compared to $50.1 million in Q2 2022, which included COVID-19-related sales [22][45] - GAAP net income from continuing operations in Q2 2023 was $2.3 million or $0.13 per diluted share, down from $12.6 million or $0.74 per diluted share in the prior year [28] - Adjusted diluted EPS for Q2 2023 was $1.42, up from $0.43 in Q2 2022, driven by gains in sales of Viking Therapeutics stock [47] - The company ended the quarter with cash and short-term investments of $219 million and is now debt-free after paying off the remaining convertible notes [22][29] Business Line Data and Key Metrics Changes - G&A expenses in Q2 2023 were $11.3 million, down from $12.1 million in Q2 2022, primarily due to reduced headcount-related expenses [3] - R&D expenses in Q2 2023 were $6.9 million, down from $8.5 million in Q2 2022, also attributed to decreased headcount-related expenses [3] - Captisol sales were $5.2 million for Q2 2023, compared to core Captisol sales of $3.3 million in the same quarter last year [27] Market Data and Key Metrics Changes - Rylaze reached a record level with $86 million in sales in Q1 2023, indicating strong market performance [4] - Vaxneuvance, marketed by Merck, reported $168 million in sales in Q2 2023, tracking to exceed original 2023 consensus sales estimates of about $300 million [51] - Travere reported sales of $3.5 million for Q2 2023, marking their first full quarter of commercialization for FILSPARI [50] Company Strategy and Development Direction - The company aims to grow its royalty portfolio through project finance, royalty monetization, M&A, and platform technology acquisitions [2] - The acquisition of Novan's assets for $15 million is part of the strategy to enhance the portfolio, with a focus on high-value clinical products [23][35] - The company is focused on maintaining a lean operating structure while maximizing operating margins [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for a productive second half of the year, highlighting the potential of FILSPARI as a significant royalty asset [5][22] - The company raised its adjusted EPS guidance to $4.85 to $5.00, reflecting strong operating income and gains from Viking stock sales [21][48] - Management noted that the industry is shifting towards later-stage opportunities, but this has not negatively impacted the company's portfolio [62] Other Important Information - The company has a robust existing portfolio and pipeline that offers significant financial growth potential [44] - The company is actively expanding its business development capabilities and has established a presence in Boston to enhance deal-making activities [42][43] Q&A Session Summary Question: What is the current mix between commercial and clinical Captisol? - The company indicated that commercial products have taken more than half the share of the Captisol business, with both commercial and clinical uses increasing [57] Question: What are the plans for the share repurchase program? - The company plans to monitor the markets and consult with management and the Board to determine the timing for utilizing the repurchase plan [60] Question: How does the shift in pharma and biotech priorities affect the portfolio? - Management noted that the shift towards later-stage opportunities has not impacted their portfolio, which consists of over 100 programs across various stages [62] Question: What is the royalty structure for Sparsentan's European revenue? - The company clarified that they receive a 9% royalty on Sparsentan sales worldwide, including Europe [100] Question: Any updates on Teriparatide and its competition? - The company mentioned that Teriparatide is facing competition from generics, but they are awaiting further developments regarding its approval and market dynamics [104]