Ligand Pharmaceuticals (LGND +1%) enters into a global license and supply agreement with Novartis (NVS +0.2%) for the development and commercialization of a Captisol-enabled oral liquid formulation of melanoma med Mekinist (trametinib).
Under the terms of the deal, Ligand will be eligible to receive a license fee, royalties from end-product sales and, of course, revenue from Captisol material sales.
Captisol is a chemically modified cyclodextrin (sugar molecule) that optimizes the solubility and stability of drugs.
Ligand Pharmaceuticals (LGND -9.3%) gets some rude treatment by the market in early trading. Shares are down on more than double normal volume in apparent response to the failure of Amgen's (AMGN -1.1%) Phase 3 study of a combination regimen including KYPROLIS (carfilzomib) for the treatment of certain multiple myeloma patients.
Investors may be a bit premature on their perception that sales of KYPROLIS will be hampered by the negative results considering the company's statement that the standard-of-care for newly diagnosed multiple myeloma has moved away from the chemo agent melphalan, which was a component of the combo regimens investigated in the study. The long-term trial commenced in March 2013.
Ligand receives sales-based royalties from 1.5 - 3.0% from KYPROLIS. In the most recent four quarters, Amgen booked $611M in sales for the drug which translated to a 2.5% royalty for Ligand or ~$15.3M, almost 21% of the company's revenues over the same time frame.
Ligand Pharmaceuticals (NASDAQ:LGND) out-licenses four development programs to newly formed Seelos Therapeutics, including its aplindore program for various central nervous system (CNS) disorders, a CRTH2 antagonist program for respiratory disorders, a Captisol-enabled acetaminophen program for pain and fever management and an H3 receptor antagonist program for narcolepsy.
Under the terms of the agreement, Ligand will receive an upfront payment of $1.3M in cash or Seelos equity after Seelos completes a financing round of at least $7.5M, an additional $3.5M if Seelos becomes a public company and up to $145M in milestones. Ligand will also be eligible to receive sales-based royalties of 4 - 10%. Seelos is responsible for all development activities.
The company has also entered into a supply agreement for Captisol. Contingent on certain conditions, Ligand will extend a three-year convertible loan facility to Seelos for up to $500K.
Ligand Pharmaceuticals (NASDAQ:LGND) purchases the economic rights to multiple programs from privately-held CorMatrix for $17.5M. The deal includes synthetic royalties from sales of CorMatrix's currently marketed portfolio of vascular, cardiac and pericardial tissue repair products as well as its CanGaroo ECM Envelope for cardiac implantable electronic devices. Ligand also has the potential to earn mid-single digit royalties from CorMatrix's development-stage Micronized ECM product and replacement valve products.
CorMatrix's offerings, designed to permit the development and regrowth of human tissue, enables Ligand to enter into the medical device space.
The transaction will be immediately accretive, adding $1M in revenue this year and ~$0.04 to non-GAAP EPS. Ligand will not incur any expenses to develop or commercialize the products. The amounts Ligand will record as revenue will reflect deductions for deal amortization as an offset.
Micro cap Spectrum Pharmaceuticals (NASDAQ:SPPI) is up 6% premarket, albeit on only 388 shares, in response to its announcement that the FDA has granted seven years of market exclusivity, as provided under Orphan Drug status, for EVOMELA (melphalan) for use as a high-dose conditioning treatment prior to hematopoietic stem cell transplantation in multiple myeloma patients. The product was approved last month.
The company acquired the global rights to the product from Ligand Pharmaceuticals (NASDAQ:LGND) in March 2013. The estimated market opportunity in the U.S. is ~$100M.