Can Ligand's Captisol Deals Boost Growth in the Long Run?

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On Aug 14, 2017, we issued an updated report on Ligand Pharmaceuticals IncorporatedLGND .

Ligand's Captisol formulation technology platform has allowed it to enter into partnerships with several leading drug companies like Novartis AG NVS , Merck & Co., Inc. MRK and Amgen Inc. AMGN , providing it with funds in the form of milestone and royalty payments. Royalties depend on the sales of its two key partnered assets - Novartis' Kyprolis and Amgen's Promacta.

Ligand receives royalties and milestone payments for several FDA-approved products that uses its Captisol technology. Latest product approvals include Spectrum's Evomela, Lundbeck's Carnexiv and Melinta Therapeutics' Baxdela. Apart from these, several other candidates are in late-stage development and is expected to bring in royalties for the company once commercialized.

In July, the company announced that it has entered into another commercial license and supply agreement with Amgen, granting it with rights to use Captisol in the formulation of its anti-CD33 x anti-CD3 (BiTE) bispecific antibody, AMG 330. Under the agreement terms, Ligand is entitled to potential milestone payments, royalties and revenues from the future sales of AMG 330.

Regarding the company's internal pipeline, various candidates are being developed for indications like diabetes. One of the most advanced candidates is LGD-6972, presently undergoing a phase II study for treatment of type II diabetes. Data from this trial is awaited in the second half of 2017 with potential to bring in future licensing opportunities.

Nonetheless, Ligand's entry into the Medical Devices Segment with the acquisition of multiple programs owned by CorMatrix is also encouraging.

However, Ligand obtains Captisol from a single supplier, Hovione - a major global supplier of active pharmaceutical ingredients and drug product intermediates, located in Portugal. Any interruption in Captisol's supply would hit the company's results.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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