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Executives

Erika Luib - Investor Relations Manager

John L. Higgins - Chief Executive Officer, President and Executive Director

Matthew W. Foehr - Chief Operating Officer and Executive Vice President

John P. Sharp - Chief Financial Officer, Principal Accounting Officer and Vice President of Finance

Analysts

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Steven F. Crowley - Craig-Hallum Capital Group LLC, Research Division

Christopher S. James - Brinson Patrick Securities Corporation, Research Division

Keith Albert Markey - Griffin Securities, Inc., Research Division

Ed Arce - MLV & Co LLC, Research Division

Carol Werther - Summer Street Research Partners

Irina Rivkind - Cantor Fitzgerald & Co., Research Division

Gene Mack - Brean Capital LLC, Research Division

Ligand Pharmaceuticals Incorporated (LGND) Q3 2013 Earnings Call October 30, 2013 9:00 AM ET

Operator

Greetings, and welcome to the Ligand's Third Quarter Earnings Conference Call. [Operator Instructions]

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, filling in for Investor Relations for Ligand, we have Erika Luib. Thank you, Ms. Luib, you may now begin.

Erika Luib

Thanks, Shay. Welcome to Ligand's Third Quarter Financial Results and Business Update Conference Call. Speaking today for Ligand are John Higgins, President and CEO; Matt Foehr, Executive Vice President and COO; and John Sharp, Vice President of Finance and CFO.

As a reminder, today's call will contain forward-looking statements within the meaning of federal securities laws. These may include, but are not limited to, statements regarding intent, belief or current expectations of the company, its internal and partner programs, including Promacta, Kyprolis and Duavive and its management. These statements involve risks and uncertainties and actual events or results may differ materially from the projections described in today's press release and this conference call. Additional information concerning risk factors and other matters concerning Ligand can be found on Ligand's public periodic filings with the SEC, which are available at sec.gov. The information in this conference call related to projections or other forward-looking statements represents the company's best judgment based on information available and reviewed by the company as of today, October 30, 2013, and do not necessarily represent the views of GSK, Pfizer, Onyx, Amgen or any other partners. Ligand undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

At this time, I'll turn the call over to John Higgins.

John L. Higgins

Erika, thank you. And welcome to our Q3 earnings call. We just closed an extraordinary quarter, both financially and operationally. We're pleased to be speaking with you as we enter the final months of 2013.

Our revenues continue to grow sharply, with this quarter's total revenues more than doubling last year's in the same period. Our royalty revenue from our 5 royalty-bearing assets increased significantly, with the most growth contribution coming from Promacta and Kyprolis. Our Captisol business continues to perform very well also. In the third quarter, we received significantly higher Captisol orders than expected, in part from a few new customers and in part due to orders from existing customers as their late-stage trials get underway or their product commercialization efforts ramp up.

Now even with the robust revenue growth, expenses were essentially flat with last year as we projected. Again, strong revenue growth and generally flat expenses. The financial results this quarter are an illustration of the power of the Ligand financial model. This quarter shows how we can realize major revenue growth even without increasing expenses. Couple that with 3 quarters of $1 billion of tax assets and a lean share count, and this is not hard to envision the company's incredible financial leverage, which, over time, should generate significant cash flows.

Now beyond the recent financial results, we are even more excited about Ligand's pipeline. Our portfolio has never been larger or as advanced in stage or quality as it is now. Over the past few months, we entered into new deals, saw trial initiations and newly published data for late-stage programs, a couple of programs advanced towards NDA submissions and most significantly, a couple of products received approvals for new indications. Now a simple way to point out the impressive quality of our pipeline is with the fact that numerous CEOs of the world's largest drug companies, like Pfizer, Merck, Amgen and GSK, talk about Ligand programs in their Q3 press releases and earnings call in just this past week alone. For example, at the very beginning of Pfizer's earnings call yesterday, CEO Ian Read talked about Duavive, a drug that stems from a mid-1990s research deal with Ligand and was approved in the U.S. this month. Now many investors at Ligand wrote Duavive off as a drug that would never get approved given the difficult regulatory environment at the FDA over the past several years for this category of medicine. While that was not an unreasonable view, all along, we were bullish on the approval prospects, given the very well-run trials and the strong data profile of the drug and the very important medical need.

Now Duavive is a combination serum and conjugated estrogen product indicated for the treatment of moderate to severe vasomotor symptoms associated with menopause and the prevention of postmenopausal osteoporosis. We encourage investors to do work on this category to consider the potential of the drug. We view this segment of the women's health market to be very significant. And despite many medicines currently on the market, there is still considerable unmet need. We are eager to see Pfizer's launch in the U.S. and the regulatory developments in Europe next year. For now, the good news is we expect to start to earn royalties from this product in just a few months, adding to the other 5 products generating royalties for Ligand.

Now Promacta continues to perform very well. Q3 sales came in at $76 million, up a robust 9% over the prior quarter and up 43% over the period a year ago. What is significant is that now, based on year-to-date sales, we're earning royalties at the third highest gross royalty tier of 8%. That is a meaningful step in rate as royalties start at a 5% tier on sales at the start of the year. Now just 2 months ago, Promacta received EU approval for the use in severe hepatitis C. In Europe, the drug is branded Revolade. Now this is an important medical category even with the new ACV drugs coming online, given the potential to support the medical care for the most severe patients. Just a few months ago, the drug was approved in only 4 countries for the ACV indication. Now it's approved in 37 countries, and the list grows every month.

Now further for Promacta, the impressive body of oncology data continues to grow meaningfully, notably with data presented at IHA this past summer in NBS and AML. And as in past years, we would expect more data to come out for the potential new indications at upcoming medical meetings. As GSK makes progress with its oncology-related trial, it puts the drug on course for potential filings for further expanded uses.

Now in regards to Kyprolis, Amgen completed its $10 billion acquisition of Onyx Pharmaceuticals on October 1. The multiple myeloma market is a large medical category that is predicted to grow substantially over the next 5 years. We see Kyprolis as a drug with significant expansion opportunities, both geographically and potentially into earlier lines of therapy.

Beyond these highlights for some of our key programs, I would like to comment briefly on our R&D initiatives, which are taking hold with recent developments. As an overview, what may be underappreciated at Ligand is our rich drug discovery in early development heritage. While investors are familiar with Promacta, and now Duavive, for example, as commercial stage assets, the significance of these products is they came from our internal R&D efforts. Our top scientists are still at Ligand. And that R&D entrepreneurialism is very much alive now. We are investing in some exciting early-stage programs such as diabetes and cancer supportive care, with new data coming out over the next few quarters. The investment, research, productivity and data are creating additional opportunity and value at Ligand as we pursue new licenses.

Before I turn the call over to Matt, I will add that we remain true to our business model and vision for how to build a high-growth company in the biotech industry. Our business is focused on amassing a large portfolio of fully funded pharmaceutical assets while minimizing the traditional risks that small-cap biotech companies face. The premise of our model is identifying good research targets and technology, good dealmaking through acquisitions and licensing, operating with a lean cost structure and broad portfolio diversity, all with the goal to maximize sustainable cash flow. Now, more than any time before, there is tangible evidence our business model is turning into a success. And as I said on our last call, in many ways, we believe the potential of the Ligand model is just beginning to be realized. Matt?

Matthew W. Foehr

Thanks, John. As John mentioned, we have more than 85 fully funded partner programs that have continued to progress in the able hands of our partners. In our internal R&D team here, Ligand has been executing exceptionally well on our unpartnered pipeline of assets.

Separate from Promacta, Kyprolis and Duavive that John already talked about, I want to provide a brief update on some of our other more advanced partner programs. But before I do, I wanted to briefly add, to John's comments on Duavive, and I'll call investor attention to Pfizer's initial launch of the duavive.com website. On the website, they have a nice countdown calendar, literally counting the days to the estimated date of availability of the important new drug, Duavive. That countdown calendar, as of this morning, shows only 96 days until Pfizer's estimated date of drug delivery of February 3.

So I'll switch gears now to some of our other partnered programs. Last quarter, we just closed, for the first time, more specifics relating to our Captisol license and supply relationship relating to Merck's IV program for posaconazole, known by the brand name NOXAFIL. Posaconazole is currently only available in an oral suspension, and Captisol enabled the development of an IV form of the drug. Last month, Merck presented positive Phase III data at the American Society for Microbiology's ICAP meeting in Denver, and we expect further updates relating to the NDA for this product in the near future.

Our partners at Melinta Therapeutics, which was formerly known as Rib-X Pharmaceuticals, have continued to progress their 660-patient multicenter Phase III trial of Captisol-enabled IV delafloxacin for the treatment of bacterial skin infections. They also presented some additional clinical PK data via CAC meeting in September as well.

In March of this year, we signed our global license and supply agreement with Spectrum Pharmaceuticals for Captisol-enabled melphalan. At the time we licensed the asset to Spectrum, the pivotal trial had initiated and we quickly transferred its conduct to Spectrum. We've been very pleased with the actively engaged and highly experienced team assembled at Spectrum, who are managing what we see as swift progress of this asset. In fact, earlier this morning, Spectrum also announced the completion of patient enrollment in that pivotal trial.

Our partners at Lundbeck announced in the quarter that they successfully received orphan designation for Captisol-enabled IV carbamazepine. The Phase III trial for that partner program is complete, and we see that they are making very good progress towards turning that into a marketed product.

Now as I mentioned, the team here at Ligand has made exceptional progress recently on our internal programs. In July, the FDA granted us orphan designation for our Captisol-enabled topiramate program for the treatment of partial onset or primary generalized tonic-clonic seizures in hospitalized epilepsy patients who are unable to take oral topiramate. Shortly after that event, we announced our partnership with CURx Pharmaceuticals. That deal yielded Ligand a potential for $21 million in milestones and a net royalty of 6% to 7.5%.

We've also made some great progress recently on the clinical development of our diabetes asset, LGD-6972, which is a potent, orally bioavailable small molecule glucagon receptor antagonist for the treatment of Type 2 diabetes. As I have mentioned previously, glucagon receptor antagonists are a clinically validated new class of molecules for diabetes. And we feel we have an improved next-generation molecule compared to what's currently in development. For this asset, we submitted our original IND in the third quarter and it opened 30 days later. And I'm pleased to report today we have IRB approval and we are recruiting patients for our first-in-man Phase I study that will include, both healthy volunteers and patients with Type 2 diabetes. We see 6972 as one of our most promising unpartnered assets in a very large therapeutic area with significant unmet needs. And we plan to assess the partnering landscape after the Phase I clinical trials are completed.

I'll cover one other program, as I also wanted to note that Ligand will be presenting data at the ASH Conference in December on our small molecule GCSF program. As a bit of scientific background, GCSF acts in the body to stimulate the differentiation of bone marrow hematopoietic cells to form neutrophils. Several biologic versions of injectable recombinant human GCSF are approved to treat chemotherapy-induced neutropenia, neutropenia associated with stem cell transplant and severe chronic neutropenia. We announced a while back that Ligand discovered a series of novel small molecules that selectively activate human GCSF receptor function. We see this as a first-in-class program that may provide the most significant innovation in the treatment of neutropenia since the approval of the first GCSF biologic in the early 1990s. Lead molecules have been identified, which stimulate GCSF dependent cell growth, increase the STAT phosphorylation and induce the differentiation of human bone marrow cells into granulocytes. Further optimization of this chemical series should provide orally bioavailable molecules to treat neutropenia with improved safety and convenience compared to current injectable forms. And at ASH, we will be presenting some new in vitro and in vivo data for the program.

And with that, I'll turn the call over to John Sharp to review the financials.

John P. Sharp

Thanks, Matt. I will now go over just a few of the highlights from our earnings release issued earlier this morning.

This quarter, we reported non-GAAP income from continuing operations of $2.5 million or $0.12 per diluted share. As a reminder, this is the metric we guide to and is also what we use to monitor the business. Our GAAP net income for the quarter was $2 million or $0.09 per diluted share, and includes $500,000 of expense related to an increase in our contingent liabilities as our CyDex CVR liability increased during the quarter.

Total revenues for the quarter were up over 100% compared to the same quarter last year on strong Captisol material sales and the continued upward trend of our royalty revenues. And our G&A and R&D expenses were virtually flat, providing further proof that our business model is working effectively. Our cost of goods solds for the quarter was $2.5 million, resulting in a gross margin on material sales of just over 60%, which is better than expected due to higher clinical material sales.

On the cash side, we ended the quarter with $8.2 million of cash and cash equivalents and restricted investments. And we also had an account receivable balance of $5.5 million. We continue to use our operating cash flow to pay down debt and year-to-date, we have paid down a total of just over $16 million in debt.

As we approach the end of the year, we have refined our guidance and now expect total revenues for the full year to be between $45 million and $46 million, and non-GAAP earnings per diluted share for continuing operations between $0.49 and $0.51 per share. Both our revenue and EPS projections are now at the high-end of our previous guidance ranges.

For the fourth quarter, we expect total revenues to be between $11 million and $12 million, and non-GAAP earnings per diluted share to be between $0.15 and $0.17 per share. Additionally, we expect -- we continue to expect combined R&D and G&A expenses for the full year not to exceed $27 million. As a reminder, our earnings per share guidance for both the full year and the fourth quarter do not include the effects of any increase or decrease in contingent liabilities.

Now as we mentioned last quarter, we expect our Captisol product mix to trend towards the commercial side as Captisol-based products ramp up. For the fourth quarter, we expect cost of goods sold to be about $2 million or approximately 45% to 50% of material sales. With this, we still project our full year cost of goods sold to be in line with our expected range of 40% to 45% of material sales.

And with that, I will turn the call back over to the operator and open it up for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Joe Pantginis from Roth Capital Partners.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

A few questions, if you don't mind. Maybe I'll start off where John ended with regard to material sales. This year -- this quarter, we saw a little bit of a spike in material sales. I know you guys mentioned it had to do with the timing of certain customers. So I guess I just wanted to sort of gauge whether this was sort of an outlier or where we might see a base with regard to the current material sales.

John L. Higgins

Yes, Joe. So as we've always talked about, the Captisol material sales business is very lumpy. And in some cases, we don't have a lot of insight into the timing of orders. And so this quarter's been great. We're very excited about it. It doesn't mean that this trend is going to continue. I think, based on our guidance, you can see that next quarter might be a little bit lower than this quarter.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Yes, sure. That makes sense. All right, that's helpful. I guess, next, maybe a question for Matt with regard to Revolade, Promacta and x U.S. How might Glaxo's marketing plan for the product in targeting HCV patients differ from the U.S. marketing plan, especially since there appears -- there might be much longer term use of interferon x U.S. because of different genotypes?

Matthew W. Foehr

Yes. Yes, thanks for the question, Joe. I -- in general, there will be longer use of interferons in the x U.S. markets, I'll say. Promacta has always been named at the sickest subset of patients. These are patients that are really that sickest slice that have decreasing liver function, who need platelet boosting. And, again, they're already approved now in Europe. They were positioned to launch essentially immediately and have a great footprint. It's already on the market now in 37 countries in that indication. The majority of those are obviously European countries.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Okay. And maybe one, maybe and then a second small one. With regard to your glucagon receptor program, I just wanted to get a better handle on the totality of the program you'll be running before you, I think you said, assess the partnering landscape. I know you're going to be running a Phase I. Is it just going to be one Phase I? Or you're going to have more than one study? What is the package you're looking to present to partners?

Matthew W. Foehr

Yes. Our open IND now includes a clinical protocol for a single ascending dose study in both healthy volunteers, as well as patients with Type II diabetes. As I mentioned, we've got IRB approval and are recruiting patients now. So that's our first-in-man study. Generally, trials like this, you also follow with a multiple ascending dose very shortly after that, and we're also looking at that as a planning associated with a trial like that as well.

Operator

Our next question comes from Steven Crowley from Craig-Hallum Capital Group.

Steven F. Crowley - Craig-Hallum Capital Group LLC, Research Division

In terms of Captisol and the opportunities in discussions there, obviously with Onyx, gaining as much profile and love as it recently did, with Kyprolis being a big part of that. I'm wondering what the inbound interest in Captisol is whether or not there's a different pace or trajectory to some of that interest or receptiveness to Captisol. Maybe we'll start there and I have a couple of similar questions or similar topic to questions.

Matthew W. Foehr

Yes, thanks, Steve. This is Matt. I'll say one of the things that is obviously beneficial to enabling technology like Captisol is a validation, not only regulatorily but in the marketplace. One of the biggest selling points of our technology is our history of enabling big products. And obviously, Kyprolis is certainly a success story. We are seeing increased interest, I'll say, our sample request for instance, we have a sampling program with Captisol to facilitate formulators quickly assessing whether Captisol will effectively solve their solubility and/or stability issues. And we do see an increase in our sample requests for Captisol. We also see a general uptick in the number of partners who are interested in entering into general research agreements with us to progress programs. So we do see an increased interest in Captisol.

Steven F. Crowley - Craig-Hallum Capital Group LLC, Research Division

Has that validation through Kyprolis translated into a better leverage or maybe just landscape for starting royalty rates on Captisol deals and how the tiering can move higher?

Matthew W. Foehr

I think, in general, yes. Over the -- and I'll take it back even further to the time we acquired the business in early 2011. The technology has continued to be validated. We've continued to, in a general sense, do better from an economics perspective. And we continue to add value to Captisol in terms of our customer service, our ability to help partners solve their formulation needs. And I think that's a large part of it as well.

Steven F. Crowley - Craig-Hallum Capital Group LLC, Research Division

And then just switching gears, your mention of Duavive and some of the buzz around that product. We've seen a number of new stories and articles and, quite frankly, scientific, are mentioned by scientists in press, especially in London, around the potential preventative aspects as it relates to breast cancer, which is quite the shift from some of the thoughts around the products in this category going back aways. How are you processing that and thinking about the potential aspect of this drug? Just interested in your perspective.

Matthew W. Foehr

Yes, Steve, I'll say, obviously, the current label right now is for treatment to moderate, to severe hot flashes and prevention of osteoporosis. A great indication. And really, credit to Pfizer for all of their work. In that indication alone, there are obviously 33 million women in the U.S. between 45 and 59, and the average age of menopause is about 51. Pfizer has referenced publicly an estimated 50% of postmenopausal women have the hot flashes. Many of them are obviously at risk of osteoporosis, of course. And there's been a long history around estrogens and hormonal treatment, obviously. And part of that history included concerns around potential increased risk of breast cancer. One of the exciting things is this emerging data, as you're talking about, showing potential preventative effects, which I think is very interesting. Obviously, the drug's not indicated for that right now, but the data is very encouraging. The safety profile in the very large 7,500 patient studies that Pfizer ran, it was very clean, safety wise. So we're excited to see all the continued data and focus around the asset.

Operator

Our next question comes from Christopher James from Brinson Patrick.

Christopher S. James - Brinson Patrick Securities Corporation, Research Division

I think most of my questions have been answered. I just I have one quick follow-up to the Duavive program. And I think you've touched upon this a bit, but how should we view the opportunity, given that OB/GYNs would love -- the ones I have spoken to, would love something for hot flashes but are a bit reluctant to prescribe estrogens just given the negative effects, particularly on the uterine. Do you think that Pfizer is planning a large educational effort to educate the OBs on the effects that the serums would have in offsetting some of these negative effects of estrogen?

John L. Higgins

Chris, thanks for the question. Generally, what we'll offers is we aren't going to comment on Pfizer's plans. Frankly, we don't know the details of their plans and really, it's their prerogative to address those questions specifically. For Ligand, the opportunity that we would ask investors to explore, one, is the quality of the data. As we know, this is a combination drug. It involves a synthetic estrogen, bazedoxifene, which came out of our research labs; and Premarin, which is a well-known, well-established and, at one point, a very well liked drug in the medical community. It's low doses of both. And as we've commented, Pfizer, over the last 10, 15 years, has run extensive trials, really, a broad and exquisite set of studies that have produced a robust data package. The data are compelling. And so we'd invite investors to first just understand and look at the data as it relates to this category. The second thing is to consider how the landscape has changed. This market, this medical category, frankly, has been suppressed over the last 5 or 6 years in light of the initial conclusions coming out of the Women's Health Initiative research in the early 2000, a sense of whether or not women, postmenopausal women, should be on estrogen treatments and at what dose. The sentiment for treatment intervention, for the need for hormone replacement therapy, has changed significantly in the last 1 or 2 years. We have seen multiple HRT-related drugs approved. And it's our view, given what we know, that Duavive is really a standout medicine. It's got a very unique profile. So in that context, if you have a good data package, a unique drug profile and what is ostensibly a very large women's health category, the medical need is unquestioned. It's a very large category. Those are the factors that, from Ligand's perspective, we'd ask investors and analysts to spend some time doing research on. And as I said in my remarks, we are very eager to see the launch in the U.S., early part of 2014 and, of course, what the European action holds for the drug next year as well.

Operator

Our next question comes from Keith Markey from Griffin Securities.

Keith Albert Markey - Griffin Securities, Inc., Research Division

A question. I was just wondering I had a little catch-up on one thing that you mentioned, the number of companies -- countries in which Promacta has been approved for HDV.

Matthew W. Foehr

Yes. So that's -- that now stands at 37, Keith. Obviously, with the European approval and across Europe submission, so that bumped the number up quite significantly this quarter.

John L. Higgins

And that was just in the last, really, 4 to 6 weeks.

Matthew W. Foehr

Yes, yes.

John L. Higgins

So those markets, while they're online and the drug's available for ITP, from a commercial perspective, the HCV market is just being built out in those new markets.

Keith Albert Markey - Griffin Securities, Inc., Research Division

Fantastic, great. So we should be looking forward to HCV really contributing from Europe next year for the first time?

Matthew W. Foehr

Yes, I think so. Yes.

Keith Albert Markey - Griffin Securities, Inc., Research Division

Yes. Is there an estimate or a sale -- and real sales number for Kyprolis sales from the September quarter you could share with us? I didn't see that in the Amgen release site. I'm just wondering.

John L. Higgins

No, Amgen didn't put it in their release.

Keith Albert Markey - Griffin Securities, Inc., Research Division

Yes, okay. And then, I was -- could you remind me, what are the royalty tiers related to Duavive?

John L. Higgins

The royalty rates, it starts at the 0.5% on the first 400 million. It's 1.5% from 400 million to 1 billion annual sales. And then it's a 2.5% rate over 1 billion, annually.

Operator

Our next question comes from Ed Arce from MLV & Co.

Ed Arce - MLV & Co LLC, Research Division

A lot of my questions have been answered, but I did have a couple of follow-ups. On Duavive, I can appreciate that it's still early days, so I'll defer on that for now. But I just wanted to ask on the Captisol material sales. I know you've discussed this before, I was just wondering if you mentioned that some of the partners were now entering late stage Phase III trials. I was wondering if you could disclose which drugs are partners, some of those are.

Matthew W. Foehr

Yes, Ed. In general, we'd like to provide investors as much detail as we can on our partnerships for -- we don't discuss details around ordering patterns for individual partners for a variety of reasons so that I'm sure you can understand.

Ed Arce - MLV & Co LLC, Research Division

Sure, fair enough. And then on near-term milestones I know that we -- you've got 3 NDAs that had -- expected in the fourth quarter, NOXAFIL, carbamazepine and the hospira product. I'm just wondering if those, from your perspective, are still due to hit this quarter.

Matthew W. Foehr

Yes. I'll say we're very pleased with the progress on all 3 of those partnerships. And obviously, we'll continue to watch as those partners provide updates.

Ed Arce - MLV & Co LLC, Research Division

Okay, great. And one last question. On the royalty revenue for the quarter, if you could just give us the breakdown.

John P. Sharp

For Q3. So I'll give you a couple of the major ones that are out there in the public domain. So on GSK's website, you can see that they had $70 million of sales in the second quarter. And so that's -- equates to about a $3.9 million royalty to us. And Onyx reported...

Matthew W. Foehr

In Q3.

John P. Sharp

In Q3, yes. And Onyx reported about $60 million in Q2 sales, which is about $900,000 in Q3.

Operator

Our next question comes from Carol Werther from Summer Street.

Carol Werther - Summer Street Research Partners

I was just also wondering, as we look forward to the next 12 months, are there any Phase III trial results or NDA filings we can look towards?

Matthew W. Foehr

Yes, Carol. I'll say we've got a number of partners in -- who are -- have data events upcoming in the next little while here. Obviously, the Rib-X team, as I mentioned, the formerly Rib-X, which is now Melinta, well, they're running their 660-patient Phase III trial. That's up on ClinTrials, should read out in the middle of next year. Spectrum Pharmaceuticals, obviously, announced this morning they've completed enrollment in the pivotal trial for Captisol enabled melphalan, so that's on track to read out next year. Obviously, Amgen/Onyx will have additional data for Kyprolis, they've stated in the first half of next year. GSK continues to present data, additional data, on Promacta at medical meetings. And we'd expect that to continue as well. And then, obviously, one other one that is worth mentioning, our partners at Merck on the base program have a safety read-out for their Phase II, III program that should come in the next few months, and they've designed that trial so it would seamlessly transition into a Phase III. And they've also posted an additional Phase III for the base program and the prodromal population or an earlier onset patient population. And then, Lundbeck has completed the Phase III trial for IV carbamazepine. That's been up on ClinicalTrials.gov. It's completed for a while, and there are some upcoming medical meetings, where we may expect to see that data presented as well.

Operator

Our next question comes from Irina Rivkind from Cantor Fitzgerald.

Irina Rivkind - Cantor Fitzgerald & Co., Research Division

I just had a couple. I wanted to follow up on base inhibitor, whatnot you were just talking about. Do you -- I mean, Merck has likely been receiving safety data in a blinded fashion this whole time from their trial. So do you interpret that they're posting the prodromal study on ClinTrials as kind of a positive signal that they are likely to pursue the program into Phase III? That's the first question.

Matthew W. Foehr

Yes. I'll say that question was posed to Merck in general at their earnings call, their Q3 call on Monday. And they basically pointed out that they're in the planning phase for that trial and that's why it's up on ClinTrials. They have said, for quite a while, that one of their objectives was to look into an earlier prodromal population. But at this point, they've just said they're in the planning phase.

Irina Rivkind - Cantor Fitzgerald & Co., Research Division

Okay. And then the second question I have is, you guys mentioned the guidance for this year and the quarter. I know you have an Analyst Day coming up, so maybe you'll mention 2014 guidance at that time, but I just wanted to see if you still stand by your earlier 2014 guidance of revenues over $60 million and earnings over $1.05.

John P. Sharp

Yes, Irina.

Irina Rivkind - Cantor Fitzgerald & Co., Research Division

Okay. And then, I just have one final one, which is, just wanted to get your view on adding new assets to Ligand and if anything has changed in your thinking about that. I know you have, obviously, a big portfolio that you're working on, but just wondering how you're thinking about any additional new compound?

John L. Higgins

Sure, Irina, the business is designed to keep growing or expanding in terms of our partner programs. As we've discussed, there are 3 main ways that we go about expanding our portfolio. The first is through our discovery and research, identifying new targets, answering early-stage questions around the preclinical or maybe early human safety studies, with the goal to license at the early inflection points. So that's one area. And as I said, the R&D team, people who are scientists, who are involved in Duavive and Promacta, they are here. Scientists of 15 or 20 years are still at Ligand, and that research heritage is very much alive and is driving our internal projects. So that's one area. And if we're successful, we expect to use those channel -- that channel to expand our licenses. Secondly, Captisol. Obviously, we're very excited about the technology, what it's doing to facilitate our partners' programs to advance. As Matt said, we are seeing an increase in inbound calls and interest around Captisol, increase in sampling and proof of concept work, which we take as a good sign, that this is a highly sought-after technology. That's the second basis for driving new deals. And thirdly, of course, we will continue to evaluate acquisitions. Disciplined transactions, appropriately valued or structured that fit in with the Ligand model that can also bolt on partnered assets or even new technologies. So those are the 3 ways that we are spending our efforts to try to continue to expand our business.

Operator

Our next question comes from Gene Mack from Brean Capital.

Gene Mack - Brean Capital LLC, Research Division

I can help you out with that earlier one on Amgen, they reported $65 million, I think, in Kyprolis sales for the third quarter for your earlier call. But I was just wondering if you, guys, could talk a little bit about Promacta, the development in oncology, whether or not -- I guess, the ASH abstracts will be out on November 7. But are you guys aware of any notable presentations for Promacta in either MDS or AML at the conference?

Matthew W. Foehr

Gene, I'll say, you're right. The ASH Abstracts go public on November 7. I'll say, GSK has been very committed to the MDS/AML indications you're asking about. Specifically, they've got a number of trials ongoing in addition to the 30 plus trials they've got going on around the world. They've been quite prolific at publishing data as it's available at meetings and they have had abstracts, and poster presentations and orals at ASH for the last couple of years. So we expect that to continue. Can't comment specifically on data until, obviously, we'll see abstracts come out on November 7. But in general, GSK has continued to publish at meetings like that and we expect that to continue.

Gene Mack - Brean Capital LLC, Research Division

And do you, guys, book any material sales for Promacta for clinical trials or is that all GSK manufactured at this point?

Matthew W. Foehr

Promacta is manufactured by GSK in full. We have no role in the manufacture of Promacta.

Gene Mack - Brean Capital LLC, Research Division

Okay. So you don't have any insight in terms of clinical trial material?

Matthew W. Foehr

No.

Operator

Thank you. At this time, we have no further questions. I'd like to turn the call back to Mr. Higgins for closing comments.

John L. Higgins

Thank you. Appreciate the turnout, great turnout this morning. Appreciate the questions and interest. Just a preview of a couple of events coming up. We are hosting an Analyst Day in Chicago, November 14. And if you're interested in attending, please contact us. In addition to Matt and John Sharp and myself, Nishan DeSilva, our Head of Business Development will be with us; as well as Keith Markey, our Head of Biology. So we're excited to get on the road and meet with investors and talk more broadly about the state of the business. I'll be at the Deutsche Bank Conference the following week, November 19, in Miami at that investor conference as well.

We are very proud of what we are building at Ligand. This is a unique company. It is a different business. And we believe that the execution is really beginning to pay off. So we appreciate investors' interest in the company, the time they spent with us and we are committed to continuing to drive and build value as we have the last several quarters. Thank you for your time.

Operator

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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