Q4 2019 Earnings Call

Hello, and welcome to two days like any pharmaceuticals fourth quarter and four year 2019 earnings call.

Joella: Hello, and welcome to today's Ligand Pharmaceuticals fourth quarter and full year 2019 earnings call. My name is Joella, and I'll be your event specialist. All lines have been placed on mute to prevent any background noise. Please note that today's webcast is being recorded. During the presentation, we will have a question and answer session. You may ask a question at any time by clicking the green Q&A icon in the lower left-hand corner of your screen, typing your question in the open area, and clicking Send. If you would like to view the presentation in full screen, click the full screen button in the lower right-hand corner of your screen. To escape, press the escape key and return to your original view. For optimal viewing and participation, please disable your pop-up blockers. And, finally, should you need technical assistance, as a best practice, we suggest you first refresh your browser. If that does not resolve the issue, please click the support option in the upper right-hand corner of your screen for online troubleshooting.

My name is July line, I'll be or event specialist.

<unk> to prevent any background noise.

Please note that today's web cast is being recorded.

In the presentation, we will have a question answer session.

You may ask the question at any time by clicking the Green CUNY icon on the lower left in corner of your screen type. Your question any open area and click submit.

Do you like to view the presentation in full screen click the full screen back in the lower right hand corner of your screen.

To escape plus the escape key and return to your original V. <unk>.

Dropped remote viewing and participation face disable your pop up blockers.

And finally said you need technical assistance as a best practice, we suggest you first refresher browser.

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It is now my pleasure to turn today's program over Q., Patrick O'bryan supervisor, an investor relations sorry, the floors yours.

Patrick O'brien: It is now my pleasure to turn today's program over to Patrick O'Brien, Supervisor of Investor Relations. Sir, the floor is yours. Thank you.

Thank you Joe L.N. welcome to my gains fourth quarter in four year 2019 financial results distance update conference call speaking today for like enter John Higgins CEO meant for C.O. and Meg Korenberg CFPO will be using slides to get her discussion today that are located on our website under the I.R. Kelly.

Patrick O'brien: Thank you, Joella, and welcome to Ligand's fourth quarter and full year 2019 financial results and business update conference call. Speaking today for Ligand are John Higgins, CEO, Matt For, COO, and Matt Korenberg, CFO. We'll be using slides to guide our discussion today that are located on our website under the IR calendars section of the website. I know it's not easy to find. We're working on fixing that.

Under section of the website I noticed that easy to find we're working on fixing that but for today, that's where you will be a weekend to them.

Patrick O'brien: for today. That's We will also be using non-GAAP financial measures, and some of our statements will be forward-looking.

We will also be using non get financial measures in some of our statements will be forward looking additional information concerning respect there's another matters concerning liking can be found <unk> press release, the slides associate with today's call in a periodic filings with the L.C.C.

Patrick O'brien: Additional information concerning risk factors and other matters concerning Ligand can be found in our Ligand Earnings Press Release, the slides associated with today's call, and our periodic filings.

John Higgins: I'm going to go ahead and finish it up. Thank you. Thank you. Ligand undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. I will now turn the call over to John. Patrick, thank you. And welcome, everybody joining us for this call. We're very pleased with how 2019 finished up. We had outstanding financial performance and closed some transactions and licensing deals in the second half of the year. We also saw some new product launches. Now, at the beginning of 2020, it's an excellent time to be speaking with investors.

Like end on that takes no obligation to advise you update any statements to reflect events were circumstances. After the the date of this conference call well now turn the call over to John Hopkins.

Patrick Thank you and welcome everybody joining us for this call. We're very pleased with how 2019 finished up.

We had outstanding financial performance and closed some transactions in light to somebody else in the second half a year, we talked a new product launches now in the beginning of 2020, it's an excellent time to be speaking with investors. We look forward to walk framing our results, but then also talking about 2020 and the business going forward.

John Higgins: We look forward to framing our results but also talking about 2020 and the business going forward. On slide four, we have a very high-level chart that plainly lays out the three things that we think Ligand investors should be focusing on when they evaluate the company. Of course, we know we're a biotech company, but we are first focused on financial growth and financial performance. As we talk through the slides, we'll talk about the contributors to revenue. We're very pleased with how we can leverage our business efficiently with a flat cost structure.

Slide for very high level chart that plainly lays out the three things that we think like in his best there should be focusing on Wednesday evaluate the company of course, we know we're biotech company. We are burst focus on financial Growed up financial performance as we talk through the slides.

We'll talk about the contributors to rabbit, we're very pleased with how we can leverage our our business apparently with a a flat cost structure and that's we'll talk about we now have a much lower share account and why did the recent sherry purchases financial growth is important for investors and we're focused at the management team onto.

John Higgins: And as we'll talk about, we now have a much lower share count in light of the recent share repurchases. Financial growth is important for investors, and we are focused as a management team on delivering superior returns on both cash flow and profitability this year and the years going forward. A second factor is our technologies. We're proud of our technologies. They've come through us through early investment in the early years that we were founded, 30 years ago, but we have very substantially augmented our technologies through smart acquisitions. We're going to talk about Captisol and Omniab, but these technologies help drive the enablement and discovery of important drugs in the industry.

Liberating superior returns.

For both cash flow and profitability this year and the years going forward, a second factor or technologies, what part of our technologies they've come through us through early investment when the early years that we were founded 30 years ago, but we have very substantially augmented our technologies through smart acquisitions.

We're going to talk about Captisol in Omniab, but these technologies help drive enable met in discovery of important drugs in the industry and finally investors should focus on our portfolio again people, who know why can't they know our portfolio and the value of it but the quality and quantity of our portfolio is.

John Higgins: And finally, investors should focus on our portfolio. Again, people who know Ligand know our portfolio and the value of it, but the quality and the quantity of our portfolio are really key and integral to driving our future success. What I'm going to do is now take a slide and talk about those three themes, and then we'll turn it over to Matt and Matt to talk about the results and our operations. On slide five, this is just a simple visual aid.

Really key an integral to driving our future success.

But I'm going to do is now take a slide and talk about those three themes and then we'll turn it over to Matt and met to talk about the result in our operations on slide five this is a simple visual aid investors know, we the bastard promacta last year fantastic acid, we discovered that drug we chose to divest.

John Higgins: Investors know we divested ProMacta last year. It was a fantastic asset. We discovered that drug. We chose to divest it at what we think was a very good time for the company, securing an outstanding sale price. When we look at the business, again, this is a financial growth story. When we look at the business over the last few years, and then now our guidance for 2020, in all three of our revenue segments, we're seeing very attractive double-digit growth. We're proud of this. Royalty.

What we think was a very good time for the company securing an outstanding sale price when we look at the business again. This is a financial grow story when we look at the business. The last few years, and then now or guidance for 2020 in all three of our revenue segment, we're seeing very attractive double digit growth I would proud of this.

John Higgins: This is a royalty model. We start with that, with the blue bars. Material sales. This is one element of our technologies. We sell an ingredient to formulate products. We're very pleased with the recent performance of that, even in contract payments.

<unk>. This is a royalty model, we start with that with the blue bars material sales. This is one element of our technologies, we sell ingredient to formulate a products.

We're very pleased with the recent performance of that and then contract payments contract payments are substantial they're growing and we're very pleased with those trends as well.

John Higgins: Contract payments are substantial, and they are growing, and we're very pleased with those trends as well. When we look at slide six, this is another cut of our financial performance for last year. Now Matt Korenberg is going to go deeper into some analytics, but this is a simple chart that shows you the balance of our business. Three main sources of revenue; in the case of royalties, we have two leading products, Caprolis and Evamella, that are really driving a lot of that royalty line right now, but we have 11 other products. A couple of them launched brand new approvals last year or were approved in new territories, so we're very pleased with that royalty segment.

What do we look at slide six this is another cut of our financial performance for last year.

<unk> going to go deeper into some analytics, but this is a simple chart that shows you the balance of our business. Three main sources of revenue indicates a royalty fees, we have two leading products could pull us in either mellowed that it's really driving a lot of that won't be line for right. Now currently but we have 11 other products a couple.

Them launched brand new approvals last year or were approved in new territory. So we're very pleased with that royalty segments material sale again. This is a segment of Captisol. We have over 100 distinct customers. This important it's not one or two that's driving the bulk of this over 100 distinct customers that are by.

John Higgins: Material sales, again, this is a segment of Capsosol. We have over 100 distinct customers. This is important because it's not one or two that's driving the bulk of this; over 100 distinct customers that are buying for clinical use and commercial use. And finally, contract payments. This is an important segment of our revenue. Part of it is tied to service revenue, servicing our relationships, but it's also the license fees we get for securing new contracts and for hitting milestones, for achieving success along the way.

For clinical youth and commercial use finally contract payments. This is an important segment of our revenue part of it is tied to service revenue servicing our relationships, but also it's the license fees, we'd get for securing new contracts and for hitting milestones for achieving success, along the way 70 distinct payment.

John Higgins: Seventy distinct payments, again, outstanding performance and highly diversified revenue. On slide seven, I just want to take one slide and talk about our technologies. Again, this is a second hallmark, a pillar of our story. There are two. We actually have four technologies underlying the story, but there are two that are particularly prominent. These are best in class.

Outstanding performance and highly diversified revenue source.

Slideseven I just want to take one slide and talk about our technologies again. This is a a second hallmark a pillar of our story there are too we actually have for technologies underlying the story, but there are two that are particularly prominent these are best in class in the case of Omniab. This is an antibody discovery platform built up.

John Higgins: In the case of OmniApp, this is an antibody discovery platform built upon multiple species of genetically modified animals to help our partners identify and advance potential antibodies for therapeutic treatment. We built this business around the acquisition of OMT four years ago. That was 2016.

Multiple species of genetically modified animals to help our partners identified and advance a potential antibodies for therapeutic treatment. We built this business around the acquisition of Oh empty four years ago that was 2016.

John Higgins: Along the way, we've tucked in a couple of other small adjacent technologies to help fortify that business. We are way ahead of plan, well ahead of plan for our expectations in terms of revenue contribution, in terms of new licensing, and our ability to secure IP and inventions that our partners want. In the last four years, we've collected $114 million in revenue payments, and notably, we're finding that the royalties that are potentially going to launch are projected to come online sooner than we anticipated three years ago. This is due to the quality of data that is coming out of the clinical programs and the aggressive investment. We are getting information from partners in confidential meetings about substantial investments and what they're doing to advance the program. The new deal flow remains strong.

And along the way we've tucked in a couple of other small adjacent technologies to help fortified that business. We are way ahead, a plan well I had a plan for our expectations in terms of revenue contribution in terms of new licensing and our ability to secure I.P. and inventions that are partners one.

In the last four years, we collected 140, knowing the revenue payments and notably hour, we're finding that the world peace that are potentially going to launch the projected to come on line sooner than we are anticipating three years ago. This is due to the quality of data that is coming out of the clinic.

Programs and the aggressive investment we are getting information from partners in confidential meetings about substantial investments in what they're doing too advanced the programming.

The new deal well remains strong we didn't ideals last year and we're very pleased with this now with Captisol.

John Higgins: We did nine deals last year, and we're very pleased with that. Now, Captosol has been in our business a little longer. We've got more history with it.

Been around our business a little longer we've got more history with it we're very pleased with with this business not only are we are hitting record revenues out of cupolas royalties, we're seeing product launch in China. We thought so wrestle watch this year for a new indication, but this is a technology that is driving.

John Higgins: We're very pleased with this business. Not only are we hitting record revenues from Coprolis royalties, but we're seeing products launch in China. We saw Soreso launch this year for a new indication.

John Higgins: This is a technology that is driving a tremendous opportunity for the company. Notably, about nine years ago, we spent $35 million at the time of acquisition to acquire this technology. To date, we've secured over $350 million in revenue for the Captosol-based business. Finally, on slide eight, I just want to comment on some updates around our partner portfolio. Again, investors who know us know the quality and the depth of our portfolio, but we have over 200 fully funded partnerships across 120 different partners. We have big pharma, we have big biotech, we have specialty pharma, we have generic companies, and we have private or small-cap biotech. It really represents the industry. Companies are coming to us, they want what we have, they are securing licenses, they pay a license fee, sign up for milestones, and if things are successful commercially, ultimately, we'll get a royalty. This year we have over 40 clinical and regulatory events, and there's the potential for as many as eight new products that could be approved out of this portfolio over the next three years, again further driving that growth in our business. With that, we'll turn it over to Matt Korenberg to go a little deeper into the financial performance.

Tremendous opportunity for the company, notably about nine years ago, We spent 35 million around the tide of acquisition to acquire the technology today, we've secured over $350 million in revenue for the capsule based business.

Finally in flight eight I just want to comment I was some updates around her partner portfolio or getting investment to know, what's they know the quality and adept at bard portfolio, but we have over 200 fully funded partnership across 120 different partners. We have big pharma, we have big biotech we have specially form up we have generic companies private or small.

Biotech it really represents the industry companies are coming to us they want what we have their securing license as they pay a license fee slider for milestones end of things are successful commercially ultimately, we'll get a warranty too.

This year, we have over 40 political regulatory beds, and there's a potential for as many as eight new products that can be approved out of this portfolio over the next three years ago and further driving that growth in our business with that will turn over to <unk> I go a little deeper into the financial performance.

Thanks, John.

Matthew E. Korenberg: As you can see on slide 10, 2019 was another solid year for Ligand with strong financial performance and execution of our business model. The business continued to generate significant cash, with 2019 resulting in our seventh consecutive year of strong earnings and positive cash generation. For the year, total revenues were $120.3 million, and as I'll cover on the next slide, our business was strong across each of our revenue streams. For example, royalties were up 20% year-over-year in Q4 2019 versus Q4 2018, excluding Promacta. Our adjusted EPS was $3.09, and in addition, we generated over $700 million in after-tax cash proceeds from the $827 million sale of our Promacta assets, with the core business excluding Promacta generating another $70 million.

As you can see on slide 10, 2900 was another solid year for login with strong financial performance in execution of our business model. The business continued to generate significant cash with 2019, resulting in our seven consecutive you're strong earnings and positive cash generation.

For the year total revenues were 120.3 million and those will cover on the next slide or business was drawn across each of our revenue wines.

As an example royalties were up 20 per cent year over year in Q. for 2019 versus 2002 for 2018, excluding promacta.

Are adjusted D.P.S. was $3 a nine cents.

And in addition, we generate over 700 million and after tax cash proceeds from the 827 million dollar sale or from the I'll come back to assets with the core business, excluding promacta generating another 70 million.

Matthew E. Korenberg: Our revenue and cash flow generation exceeded our expectations and guidance that we gave at the beginning of the year. In addition to our strong operational success in 2019, we returned approximately $450 million to shareholders through our share repurchase program. In Q4, we spent $82 million on share repurchases, and since the end of the year, we've repurchased an additional 380,000 shares of our common stock for $34 million. As we'll disclose in the 10K when we file, we have about 16.5 million basic shares outstanding, and at today's stock price, that is about 17 million fully diluted shares. We began actively repurchasing shares in November of 2018, and over the past 15 months, we've repurchased about 5 million shares, or 24% of our outstanding shares.

A revenue in cash flow generation exceeded our expectations and guidance that we gave at the beginning of the year.

In addition to the strong operational success in 2019 return approximately $450 million to shareholders to our share repurchase campaign and Q. for we spent $82 million on share repurchases insist the end of the year. We've we're purchased an additional 380000 shares of our common stock for $34 million.

As well disclosing the 10 k. when we when we file we have about 16 and a half million basic shares outstanding and it today stock prices about 17 million fully diluted shares.

We begin actively repurchasing shares in November of 2018 and over the past 15 months, we were purchased about 5 million shares or 24% of our outstanding shares. We currently have a 500 million dollar share repurchase authorization in place and have utilized about 205 million about them out today.

Matthew E. Korenberg: We currently have a $500 million share repurchase authorization in place, and we have utilized about $205 million of that amount to date. Even after returning a total of $550 million to shareholders over the last 18 months, we have finished the year with over $1 billion of cash. In addition to the capital return, we remain focused on identifying acquisitions across several types of target companies that I'll talk about in a few slides. Turning now to slide 11, you can see the 2019 performance on revenue, total revenue. The total revenues for the fourth quarter of 2019 were $27 million and included $11 million of royalty revenue, $7.1 million of material sales, and $8.8 million of milestone and license fees. With respect to royalties, Kyprolis and Evamella, along with some launches and growth across a number of smaller products in the portfolio, drove 20% year-over-year growth. Materials Sales continued their strong performance this year and finished with a record year.

Even after returning a total of 550 million to shareholders. We over the last 18 months. We've finished the year with over a billion of cash.

In addition to the capital return remain focused on identifying acquisitions across several types of targeted companies that I'll talk about in a few slides.

Turning out a slight 11, you can see that 2019 performance on revenue total revenues.

For the <unk>. The total revenues for the fourth quarter of 2019 or 27 million included 11 million of royalty revenue 7.1 million a material sales in 8.8 million a milestone and licensee revenue.

With respect to royalties <unk> and even MELA, along with some launches in growth across a number of smaller products and oppose portfolio drove 20 per cent. Your your growth as I mentioned.

Material sales continue their strong performance this year and finished with a record year of in a milestone unlicensed feline finished the year with a solid quarter supported by our recurring service revenue an annual license fee revenue.

Matthew E. Korenberg: And the Milestone and License Fee Line finished the year with a solid quarter supported by our recurring service revenue and annual license fee revenue, as well as the Normal Course Milestone. We also are showing here the 2019 revenue numbers adjusted to remove the two months of pro-active royalty we collected in Q1 2019. This will provide a better benchmark as I discuss guidance shortly. I want to turn now for just a minute to dig a bit deeper on our contract revenue line. First, it's made up of generally four types of payments.

Well, it's a normal course milestones.

We also showing here the 2019 revenue numbers adjusted to remove the two months of Promacta royalty. We collected in Q1 2019. This will provide a better benchmark as I discussed guidance shortly.

I want it turned out for just a minute to take a bit deeper on our contract revenue line first it's made up generally four types of payments.

Matthew E. Korenberg: One bucket is our upfront fees and license fees that are paid upon any new deal, thereby granting access to our technologies or assets. Another bucket is what many traditionally think of as milestones; a partner advances a product successfully and then pays us for success. This can include things like payments upon business progress, events like financings, or sub-licensing of an asset. A third category includes our annual license fees that partners pay us for access to the technology. And then we differentiate this bucket from the first bucket because a deal is already in place, and we know going into the year that we're going to get those licenses.

Bucket as our upfront fees and license fees that are paid upon new deal any new deal, thereby granting access to our technologies are assets. Another bucket is what many traditionally think of as milestones a partner advanced as a product successfully or pays us on and then pays us on success. This can include things like payments upon business.

Progress events like financings or sublicensing of an asset.

A third category includes our annual license fees that part is pay us for access to the technology and then we differentiate this bucket from yeah.

From the first pocket because it deals already in place and we know going into the year that we're going to get those license fees.

The last group is principally include payments that our partners may to us for work that we're doing on her behalf related to our omniab in for analysis P.D.P. platforms.

Matthew E. Korenberg: The last group principally includes payments that our partners make to us for work that we're doing on their behalf related to our Omniab and Vernalis VDP platform. We typically tell investors that we forecast 40 to 60 million dollars a year from our contract payment line. As we consider those numbers, it's important to realize that we never include payments from that first bucket. I mentioned new deals. So deals like our 47 million dollar payment for Mushi a few years ago or 20 million dollar payment related to our diabetes asset license would not be included typically in our Forecast or that 40 to 60 million dollar number. Also, the final two buckets I mentioned, our annual license fees, service, and collaboration revenue, are items for which we have very good line of sight from year to year and are generally recurring in nature. In 2019, those items total over 20 We expect growth across all three revenue lines.

We typically tell investors that we forecast $40 million to $60 million a year from our contract payment line as we consider those numbers. It's important to realize that we never include payments from that first pocket I mentioned, new deals. So deals like our 47 million dollar payment for bushy a few years ago or 20 million dollar payment related to our diabetes outlicense would not be include.

Typically in our our our forecast where that 40 to 60 million dollar number also the final two buckets I mentioned, our annual license fees service and collaboration revenue or items for which we have very good line of sight from year to year and are generally recurring in nature in 2019, those items total over 20 million of revenue and provide a significant.

Base for our 2020 estimates.

Turning that one slide 12 to revenue guidance as detail in today's Pressrelease, we're introducing our full year 2020 guidance along with some detail pull your financial information, we expect growth across all three revenue lines first we expect continued solid royalty revenue growth of our continuing royalties for 2020 for the year, we expect 38.

Matthew E. Korenberg: First, we expect continued solid royalty revenue growth for our continuing royalties for 2020. For the year, we expect $38 million of royalty revenue, which is up 16% from the $32.8 million for 2019, excluding ACTA. For material sales, we expect another record year with approximately $35 million in capital sales, which is up 11% from the $31.5 million in 2019. And lastly, for milestones and license fees, we expect $48 million in 2020, which is up 15% from the $41.8 million in 2019. Slide 13 covers more detailed financial guidance. The revenue components that I just went through translate to $120 million in total revenue for 2020. And then on the expense side, we expect the overall corporate gross margin to exceed 90%.

Million of royalty revenue, which is up 16 per cent from the 32.8 million for 2019, which is you know excluding promacta for material sale respect another record year with approximately 35 million of Captisol sales, which is up 11% from the 31.5 million in 2019 and lastly for.

Milestones in license fees, we expect 48 million for 2020, which is up 15% from the 41.8 million in 2019.

Slide 13 covers more detailed financial guidance the revenue components that I just went through total translate to 120 million of total revenue for 2020, and then on the expense side, we expect the overall corporate gross margin to exceed 90%.

For R. and D., we expect 48 to 50 million up Burundi expenses for the year, excluding stock compared to other cast charges, we expect to be R. and D. expense will be 26 to 28 million for G.N.A. expect a total expense be 30 840 million, excluding the non cast charges and stuck cop. We expect you need to be approximately 22 million.

Matthew E. Korenberg: For R&D, we expect $48 to $50 million of R&D expenses for the year, excluding stock comp and other cash charges. We expect that the R&D expense will be $26 to $28 million. For G&A, we expect the total expense to be $38 to $40 million, and excluding the non-cash charges and stock comp, we expect G&A to be approximately $22 million, $22 to $24 million.

2022 to 24 million together, we expect a cash operating expenses for 2020 to be 49 to 51 million.

Related to interesting come in other income we continue to maintain our cash in highly liquid short term investments in 2019, we realize over 250 basis points of interest income on our cash in today's interest rate environment. We expect that number to be below 200 basis points for 2020, given the lower expect to yield environment, we expected.

Decrease in on the other cash income line from about 23 million at 2019 to 17 to 19 million and 2020.

Matthew E. Korenberg: Together, we expect the cash operating expenses for 2020 to be $49 to $51 million, related to interest income and other income. We continue to maintain our cash and highly liquid short-term investments. In 2019, we realized over 250 basis points of interest income on our cash. In today's interest rate environment, we expect that number to be below 200 basis points for 2020.

These revenue an expense components all translate to a full year 2020 adjusted earnings per diluted share of approximately $3.40, which is up 30 per cent, 35% from the 2900 number of $2 and 52 sets if you're just for the Promacta sale.

So lastly, just a quick comment on on quarterly pacing, we expect royalty revenue to increase each quarter with two one being the lowest royalty a quarter for the year just based on the hearing about royalty structures and as of now or Q1 royalty estimate is approximately 6 million beyond that they're facing a milestone.

Matthew E. Korenberg: Given the lower expected yield environment, we expect a net decrease in the other cash income line from about $23 million in 2019 to $17 to $19 million in 2020. These revenue and expense components all translate to a full-year 2020 adjusted earnings per diluted share of approximately $3.40, which is up 30% to 35% from the 2019 number of $2.52 if you adjust for the PROMAC. Lastly, just a quick comment on quarterly pacing. We expect royalty revenue to increase each quarter, with Q1 being the lowest royalty quarter for the year, just based on the tiering of our royalty structures. And as of now, our Q1 royalty estimate is approximately $6 million. Beyond that, the pacing of milestones and material sales is always uncertain.

Materials sales is always uncertain for both cats, all material sales in milestones in contract payments. This year, we do expect that revenue to be more heavily weighted the second half of the year.

Finally on slide 14, <unk> to talk a little bit about capital deployment, we'll continue evaluate opportunities to augment are great financial results by evaluating capital return alternate alternative and strategic transactions. We've used about 350 million of cash in stock to acquire companies over the last.

Nine years, and it's played a significant part and creating the value that has driven or mark up from below 200 million to about 1.6 billion today.

We remain focused on identifying acquisitions across several types of <unk> target companies. We look for companies that will complement are existing omniab captisol M.B.D.B.P.D.P. technology platform.

Matthew E. Korenberg: For both capsule material sales and milestones in contract payments this year, we do expect revenue to be more heavily weighted in the second half of the year. Finally, on slide 14, I want to talk a little bit about capital deployment. We'll continue to evaluate opportunities to augment our great financial results by evaluating capital return alternatives and strategic transactions. We've used about $350 million of cash and stock to acquire companies over the last nine years, and it's played a significant part in creating the value that has driven our market cap from below $200 million to about $1.6 billion today. We remain focused on identifying acquisitions across several types of target companies. We look for companies that will complement our existing Omniab, Capitasol, and VDP technology platforms.

We look for new technology platforms will provide near term revenue contribution and engines for additional licensing in the future and we look for companies that have collections of partner programs are assets of interest in the bio farming industry.

In addition, we continue to look for opportunities to fund promising late stage clinical trials in the form of products and that our product investment effort.

We spend a significant amount of time evaluating these types of capital deployment opportunities and regularly have 15 to 20 ideas running at any given time.

Obviously most of these investments don't come to fruition due to a wide variety of reasons, but we feel confident that your significant potential dealflow to deploy our capital evaluate enhancing way. We believe that we have about 500 to 750 million of task to spend on acquisition without requiring any refinancing of our convertible bonds. I mean, we're <unk> diligently focused on smart.

Matthew E. Korenberg: We look for new technology platforms that will provide near-term revenue contribution and engines for additional licensing in the future. And we look for companies that have collections of partnered programs or assets of interest in the biopharma industry. In addition, we continue to look for opportunities to fund promising late-stage clinical trials in the form of product investment. We spend a significant amount of time evaluating these types of capital deployment opportunities and regularly have 15 to 20 ideas running at any given time. Obviously, most of these investments don't come to fruition due to a wide variety of reasons, but we feel confident that there's significant potential deal flow to deploy our capital in a value-enhancing way. We believe that we have about $500 to $750 million of cash to spend on acquisitions without requiring any refinancing of our convertible bond, and we're diligently focused on smartly deploying our cash resources that can lead to significant revenue Finally, I'd just like to direct listeners to our Q4 earnings release issued earlier today and available on our website for a reconciliation of our adjusted financials to our GAAP-reported items. With that, I'll turn the call over to Matt Fore for some comments on our portfolio and pipeline.

<unk> cash resources that can lead to a significant revenue generation for login.

Finally, I I, just like the directly direct listeners to review our queue for earnings release issued earlier today and available on our website for reconciliation of our adjusted financial is to our gap recorded item.

Without altering the call over them out for for some comments on a portfolio and pipeline.

<unk> I'll start off by reviewing the performance of a couple of our technologies, starting with Omniab, an referencing slide number 16 in the deck.

2019 was omniab most productive year in terms of new Omniab partnerships with nine new deals.

We also note the nice diversity of partners from start ups with interesting novel biology to establish global players like <unk> with deep Orange the infrastructure in history of success with antibody drugs.

We have you Omniab is the best in class technology, and we invest significantly in the platform to continue innovating and keep it on the cutting edge of antibody discovery technologies.

Last year, we launched our newest transgenic chicken pox form known as omni click which is designed to facilitate the development of by specific antibodies.

Click receive substantial attention from existing Omniab partners and is already being utilized in several new partner programs.

Matthew Gregory Hewitt: Thanks, Matt. I'll start off by reviewing the performance of a couple of our technologies, starting with Omniab and referencing slide number 16 in the deck. 2019 was Omniab's most productive year in terms of new Omniab partnerships with nine new deals. We also note the nice diversity of partners, from startups with interesting novel biology to established global players like Takeda and Sanofi with deep R&D infrastructure and a history of success with antibody drugs. We view Omniab as a best-in-class technology, and we invest significantly in the platform to continue innovating and keeping it on the cutting edge of antibody discovery technology. Last year, we launched our newest transgenic chicken platform, known as OmniClick, which is designed to facilitate the development of bi-specific antibodies.

For scientists are also progressing well in the development of a heavy chain only chicken, which we expect will be yet another novel offering and expansion of the Omniab <unk>.

Have you changed chicken is being funded via collaboration with Johnson and Johnson in our plan will be that it made available to all of our Omniab platform partners when it's developed.

The acquisition about an issue in the second half of 2019 also added to our technology capabilities adjacent to the on the platform by combining important antigen generation technology to our antibody discovery technologies and expertise.

Generating quality antigens is the key precursor step to antibody discovery and both existing and perspective Omniab partner see the value of this new capability and are seeking to leverage it for programs in bowling involving challenging biological targets.

Matthew Gregory Hewitt: OmniClick receives substantial attention from existing OmniApp partners and is already being utilized in several new partner programs. Our scientists are also progressing well in the development of a heavy chain-only chicken, which we expect will be yet another novel offering and expansion of the Omnia platform. The Heavy Chain Chicken is being funded via collaboration with Johnson & Johnson, and our plan will be that it's made available to all of our Omniab platform partners when it's developed.

We nearly tripled the number of partners accessing omniab and as a roster of Omniab partners expands we're also seeing and even quicker expansion of the number of Omniab programs in our portfolio as reflected on the right hand side of the slide.

There are now 38 clinical trials, either recently completed or running with Omniab derived antibodies. The number of trials continues to grow as partners continued to evaluate expanded indications, especially in the oncology feel.

The most advanced beyond me up programs. The cease don't see asked one 001, which is the monoclonal antibody directed against P.D.L., one that was discovered using our Ami rat.

Matthew Gregory Hewitt: The acquisition of Ab Initio in the second half of 2019 also added to our technology capabilities adjacent to the Omnia platform by combining important antigen generation technology with our antibody discovery technologies and expertise. Generating quality antigens is a key precursor step to antibody discovery, and both existing and prospective Omniab partners see the value of this new capability and are seeking to leverage it for programs involving challenging biological targets. We've nearly tripled the number of partners accessing Omniab, and as our roster of Omniab partners expands, we are also seeing an even quicker expansion of the number of Omniab programs in our portfolio, as reflected on the right-hand side of the slide. There are now 38 clinical trials, either recently completed or running with Omniab-derived antibodies.

He has one 001 is being investigated in a number of ongoing trials, including a phase one bridging study here in the U.S.A. multi arm. It phase one b. study to pivotal phase two studies and we're phase three studies in several tumor types.

2020 promises to be an important here with more than a dozen omniab related clinical trial scheduled to be completed.

Our partners clearly are continuing to invest significantly in their omniab programs.

I'm going to switch now to our Captisol technology and slide number 17.

2019 was our biggest year to date for Captisol and the technology continues to provide value to our partners as we expand or active captisol drug Master files in the U.S., Canada, Japan and China.

In addition to the D.M. apps, the global footprint are reliability of supply out of our to manufacturing plants and multiple distribution facilities as well as an established inconsistent quality profiles are also significant value drivers for our partners.

Matthew Gregory Hewitt: The number of trials continues to grow as partners continue to evaluate expanded indications, especially in the oncology field. The most advanced of the Omnia programs is Seastone CS1001, which is a monoclonal antibody directed against PD-L1 that was discovered using Omnia. CS1001 is being investigated in a number of ongoing trials, including a phase one bridging study here in the U.S., a multi-arm phase one B study, two pivotal phase two studies, and four phase three studies in several tumor types. 2020 promises to be an important year, with more than a dozen Omniab-related clinical trials scheduled to be completed. Our partners clearly are continuing to invest significantly in their OmniApp program. I'm going to switch now to our CaptiSol technology and slide number 17.

Capital has a rich history of enabling groundbreaking medicines and cancer C.N.S. diseases, like postpartum depression, infectious diseases, and others and I know that it was recently disclosed that our partners that can we had scientists are making remnants of your available for the emerging Corona virus threat.

I'm definitely have you ever use is kept us all in its formulation.

A fight 18 highlights a view of our portfolio of partnerships.

And gives a sense of its depth in diversity.

I want to note that these are not all of like dance partner programs listed as reflected in the development stage level detailed from the slide.

<unk> portfolio partnerships has never been larger or more diverse than it is today with over 200 programs in more than 120 different partners pursuing research in 19 different therapy areas.

Matthew Gregory Hewitt: 2019 was our biggest year to date for Captisol, and the technology continues to provide value to our partners as we expand our active Captisol drug master files in the U.S., Canada, Japan, and China. In addition to the DMFs, the global footprint, our reliability of supply out of our two manufacturing plants and multiple distribution facilities, as well as an established and consistent quality profile, are also significant value drivers for our partners. CapiCel has a rich history of enabling groundbreaking medicines in cancer, CNS diseases like postpartum depression, infectious diseases, and others. And I note that it was recently disclosed that our partners at Gilead Scientists are making remdesivir available for the emerging coronavirus threat. Remdesivir uses Capitofol in its formulation.

Portfolio strength is driven by partners with scientific expertise and focused in t. therapeutic areas, along with diversity and the quality of our technologies that support and enable their work.

The next slide shows a selection of potential pipeline events and I'll also briefly highlight selected partner programs in mentioned a few of them here that we think investors should be watching.

B.M.S. is progress on Captisol enabled B.M.S. 986231 for cardiovascular disease.

They've highlighted cardiovascular diseases A.T. franchise within B.M.S., and we look forward to their further progress with this captisol enables program.

Takita has indicated plans towards the potential accelerated U.S. filing for Captisol enabled have on the dentist that in my oldest plastic syndrome or M.D.S. and they're also conducting a phase three study in and out.

Matthew Gregory Hewitt: Slide 18 highlights a view of our portfolio of partnerships and gives a sense of its depth and diversity. However, I want to note that these are not all of Ligand's partnership programs listed, as reflected in the development stage level details of the slide. Ligand's portfolio of partnerships has never been larger or more diverse than it is today, with over 200 programs and more than 120 different partners pursuing research in 19 different therapy areas. Portfolio strength is driven by partners with scientific expertise and focus in key therapeutic areas, along with diversity and the quality of our technologies that support and enable their work. The next slide shows a selection of potential pipeline events.

In our partners that Paul Bella Therapeutics announced that they now commenced the phase three portion of the phase two three pivotal study of P.T.N.O. two two in packing Nikki a congenital.

This is a fast track designated program that aims to be the first targeted therapy addressing the root cause of what is a chronically debilitating and rare genetic disease.

Patients in the phase two portion have met the pre specified Chronicle response criteria and have advanced into the phase three portion.

But they'll also decided to implement and open label extension study.

And we see both of these is generally positive developments for the program and note that the pivotal top line study results are expected to be available in Q4 of this year.

Matthew Gregory Hewitt: And I'll also briefly highlight selected partner programs and mention a few of them here that we think investors should be watching, such as BMS' progress on captocella-enabled BMS 986231 for cardiovascular disease. They've highlighted cardiovascular disease as a key franchise within BMS, and we look forward to their further progress with this captocella-enabled program. Takeda has indicated plans for a potential accelerated U.S. filing for capitol-enabled pebonidinostat in myodysplastic syndrome, or MDS, and they're also conducting a Phase III study in AML, and our partners at Palvela Therapeutics announced This is a fast-track designated program that aims to be the first targeted therapy addressing the root cause of what is a chronically debilitating and rare genetic disease.

[noise] Verona recently announced positive top line face to be data in C.O.P.D. for instance, <unk> when given on top of to your trip on therapy and plans to progress to phase three the primary endpoint was met at all doses tested <unk> produce clinically and statistically significant improvements in lung function. Following just.

Four weeks of treatment.

Asset came to us from our acquisition of or analysis, and what we now term R.V.D.P. platform, which has been contributing nicely to the business.

Retrophins Sparsentan isn't too P. three trials now for rear kidney diseases, and lastly, Ah I'll mention Viking, which is now in a phase to be study called the voyage study for V.K., two eight or nine in biopsy confirm Nash.

On the next Friday, while discussing the pipeline I also like to mention that I'd encourage investors to follow like end on Twitter. We found that Twitter is a great way for us to communicate developments on her partner pipeline on publications and on other events that are relevant to our stakeholders.

Matthew Gregory Hewitt: Patients in the Phase 2 portion have met the pre-specified clinical response criteria and have advanced into the Phase 3 portion. Pavela also decided to implement an open-label extension study. And we see both of these as generally positive developments for the program. And note that the pivotal top-line study results are expected to be available in Q4 of this year. Verona recently announced positive top-line Phase IIb data in COPD for encephentrine when given on top of teatropin therapy and plans to progress to Phase III. The primary endpoint was met at all doses tested, and encephentrine produced clinically and statistically significant improvements in lung function following just four weeks of treatment. This asset came to us from our acquisition of Vernalis and what we now term our VDP platform, which has been contributing nicely to the business. Retrophin sparsantan is in two phase three trials now for rare kidney diseases.

And I'll wrap up briefly with a discussion of some internal r. and D., we announce positive top line results remember phase one clinical trial of capsule unable biotechs, all last year and our team is not working towards the goal of filing U.U.S.I.M.D. in start a a phase two eight trial in the second half of this year.

We also continue to make very good progress on our selected internal antibody programs that leverage or Ami chicken technology, and we'll update investors as we present data and consider partnerships for those programs.

And with that all past the call back over to John.

Yeah. Thank you on slide 22, just to wrap up.

We want to just thinking frame the business for investors like in a weird devoted to creating a driving shareholder value and they get our our business model, we're focusing on on three things financial growth. We've talked about we're very pleased with our revenue performance and our outlook. If we can keep driving revenue along the three keys.

Matthew Gregory Hewitt: And lastly, I'll mention Viking, which is now in a phase 2B study called the Voyage Study for VK2809 in biopsy-confirmed NAS. On the next slide, while discussing the pipeline, I'd also like to mention that I would encourage investors to follow Ligand on Twitter. We found that Twitter is a great way for us to communicate developments in our partnered pipeline, on publications, and on other events that are relevant to our stakeholders. And I'll wrap up briefly with a discussion of some internal R&D. We announced positive top-line results from our phase one clinical trial of captisol-enabled iohexol last year, and our team is now working towards the goal of filing a U.S. IND and starting a phase 2a trial in the second half of this year. We also continue to make very good progress on our selected internal antibody programs that leverage our OmniChicken technology, and we'll update investors as we present data And with that, I'll pass the call back over to John.

Segments keep expenses flat, which is our expectation and now with the new lower share count the last year or so we believe we have a significant potential to deliver a superior cash flow and profitability per share returns. The technology is best in class, we like or technologies there.

Valuable for our partners, we're looking to augment those not only building new I.P. around what we own but also expanding by acquiring or bolting on other adjacent technologies and into portfolio that is the future of like in we're very proud of the quantity and the quality of our portfolio a investors should know what our focus it this year in next year. The next few.

The point Capitol, We think we are very good stewards of capital, we understand financial management financial stewardship, we have a very robust balance sheet. We've smartly deployed capital of the last five to 10 years, we expect to continue doing that and Matt Kornberg outline the four key areas of focus customer service, we know it's.

John Higgins: Yeah, thank you. On slide 22, just to wrap things up. Unknown Speaker.

Unknown Speaker: Hi, everyone. I'm Lawrence Solow. I'm Scott Henry, and we hope to see you again soon. Bye.

Not just about securing a license it's about serving that customers we ever growing segment of service related revenue. It's lucrative there's good margin in it but more importantly, we know by providing expert service and answers we can help accelerate the potential for success or typing for when certain milestones might be achieved that.

John Higgins: We want to just, again, frame the business for investors. Ligand is devoted to creating and driving shareholder value. And again, in our business model, we're focusing on three things. Financial growth, we've talked about. We're very pleased with our revenue performance and our outlook. If we can keep driving revenue across the three key segments, keep expenses flat, which is our expectation, and now with the new lower share count over the last year or so, we believe we have the significant potential to deliver superior cash flow and profitability per share returns. The technology is best in class.

Priority for it and operational excellence continuing to do what we do to driver side to decision, making internally finally, just a little insight on our team. We're very proud of our culture. We welcome investors come and visit US at the company. We've got a fantastic team. It's a cultural yes, we're hardworking people and it's a based upon.

John Higgins: We like our technologies. They're valuable for our partners. We're looking to augment those, not only building new IP around what we own but also expanding by acquiring or bolting on other adjacent technologies and the portfolio. That is the future of Ligand.

Great site too great side test.

I I do want to comment on our board of directors, we've got a very diverse board of directors inexperience engender highly experienced across the industry investments pharmaceutical management business development and notably just this past a few months to a bar directors two members of our board Nancy Gray and.

John Higgins: We're very proud of the quantity and the quality of our portfolio. Investors should know what our focus is this year and next year, the next few years, in deploying capital. We think we are very good stewards of capital. We understand financial management and financial stewardship. We have a very robust balance sheet. We've smartly deployed capital over the last five to ten years. We expect to continue doing that, and Matt Kornberg outlined the four key areas of focus. Customer service, we know it's not just about securing a license. It's about serving that customer. We have a growing segment of service-related revenue. It's lucrative. There's a good margin in it.

There are boys were name in women's magazine as 2019, most influential corporate directors. Obviously, we're pleased with that and finally, we want investors to know that we are focused on E.S.G.M. corporate governance, we are working on adopting in implementing policies and practices aimed at improving.

Or environmental sustainability, possibly impacting hours involvement in social community and made Tinian cultivating good corporate governance now by focusing on these environmental social governance, the E.S.G. policies and practices well I get believes that we can affect the meaningful and positive change in our community and maintain an open a collaborative corporate color.

John Higgins: But more importantly, we know by providing expert service and answers, we can help accelerate the potential for success or timing for when certain milestones might be achieved. That's a priority for us. And operational excellence, continuing to do what we do to drive our science and decision-making internally. Finally, just a little insight into our team.

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We are pleased about performance. We're please report these results and with that will turn it over to.

The operator for Q. in a.

Yeah.

Mm.

Alright, Joe well can you up by the first question. Please thank you.

John Higgins: We're very proud of our culture. We welcome investors to come and visit us at the company. We've got a fantastic team. It's a culture of, yes, we're hardworking people, and it's based on great science and great scientists.

Yeah.

Like unit this time would like to take questions.

And if you'd like to ask a question of you the wheel <unk>. According to your screen type your question no pioneering click submit.

You like to ask questions via the phone lines. Please press start then and then when it is time repulsive just a moment to compile the CUNY roster.

John Higgins: I do want to comment on our board of directors. We've got a very diverse board of directors in experience and gender, highly experienced across the industry, investment, pharmaceutical management, and business development. And notably, just these past few months, two of our directors, two members of our board, Nancy Gray and Sarah Boyce, were named in Women's Inc. Magazine as the 2019 Most Influential Corporate Directors. Obviously, we're pleased with that.

[laughter].

[noise] and do we have any questions you at the phone lines.

Mm.

I'm, sorry, operator, I'm seeing for people cued up to ask questions. How are we not kicking over to them.

Okay.

Oh right could the audio operator could you give us our first question.

[laughter].

The line of Matt Hewitt is now open you may ask your question.

Good afternoon, gentlemen, thank you very much for the update and the outlook for 2020 I guess my first question given the success that you've been having with Omniab and the nine new partner programs or nine new deals that were signed in 2019, how should we be thinking about that for 22.

John Higgins: And finally, we want investors to know that we are focused on ESG and corporate governance. We are working on adopting and implementing policies and practices aimed at improving our environmental sustainability, positively impacting our involvement in the social community, and maintaining and cultivating good corporate governance. Now, by focusing on these environmental, social, and governance (ESG) policies and practices, Ligand believes that we can affect a meaningful and positive change in our community and maintain an open and collaborative corporate culture. We are pleased with our performance, we're pleased to report these results, and with that, we'll turn it over to..., the operator for Q&A. All right, Joelle can take the first question, please. Thank you.

I mean, I would assume that you've got a pipeline building, but do you expect a similar number of <unk> partners to be signed in 2020.

Yeah I met a good question, it's John last year was a fantastic you're not only in the quantity, but notably there are two a high value high marcie deals with.

<unk> generally we've been talking about five a year and and that's our outlook for this year you know we update along the way as we meet with investors throughout the year, but that that is our target and it's it feels about right for the 2020 outlook as well.

Joella: Thank you, and at this time, we'd like to take questions. And if you'd like to ask a question via the web, click the Q&A button in the lower left-hand corner of your screen, type your question over there, and click Submit. If you'd like to ask questions via the phone lines, please press start, then number one at this time. We'll pause for just a moment to compile the Q&A list. And do we have any questions via the phone line?

Okay. Thank you and then maybe if you could help me a little bit or help us a little bit with the royalty number it's a little bit below what I was expecting and I didn't have promacta in my estimate obviously for 20, but maybe if you could kind of break down if if you're comfortable doing that break down where the or the the you know we're <unk> and.

Unknown Speaker: I'm sorry, operator. I'm seeing four people queued up to ask questions. How are we not kicking it over to them?

Unknown Speaker: Okay. All right, I could

Unknown Speaker: All right, could the audio operator, could you give us our first question? The line for Matt Hewitt is now open. You may ask your questions.

Melon particular, how those should trend over the course of the year.

Matthew Gregory Hewitt: Good afternoon, gentlemen. Thank you very much for the update and the outlook for 2020. I guess my first question is, given the success that you've been having with Omniab and the nine new partnered programs, or nine new deals that were signed in 2019, how should we be thinking about that in 2020? I mean, I would assume that you've got a pipeline building, but do you expect a similar number of partners to be signed in 2020?

Hmm Hmm, thanks, just to be clear, you're you're talking about that twentytwenty projected royalty number that's correct.

Yeah. So.

With Kyprolis given a cue for number that was solid we are essentially looking at that number rolling forward and comparing that with the consensus that we see out there. The consensus we see out there is about a billion to have control us revenue.

John Higgins: Yeah, Matt, good question. It's John. Last year was a fantastic year, not only in the quantity but also in the quality.

That's that's the number were working from and Yeah. We'll we'll have those slides I'm sure over the course of the year on evil Mel The next biggest number obviously, we have not seen the cows E.Q. for report this year, but obviously the the first quarter from <unk> was a good quarter.

Unknown Speaker: Notably, there are two.

John Higgins: Generally, we've been targeting about five a year, and that's our outlook for this year. You know, we update along the way as we meet with investors throughout the year, but that is our target, and it feels about right for the 2020 outlook as well.

And Q3 and yeah, we look forward to good growth out of evil Melon next year and that's probably the the two biggest components little gets you to to the royalty number in one just a comment his arrest. So it's a product approved a middle last year actually replete with our partnership with stage and then.

Matthew Gregory Hewitt: Okay, thank you. And then maybe if you could help me a little bit or help us a little bit with the royalty number, it's a little bit below what I was expecting. And I didn't have PROMECTA in my estimate, obviously, for 20. But maybe if you could kind of break down, if you're comfortable doing that breakdown, where Kyprolis and Evamel, in particular, should trend over the course of the year.

They've done it's an important medicine in a in a.

Vitally high value need medical target, we're taking a very conservative outlook. This year say just not report a cue for we don't have a trend line.

Matthew Gregory Hewitt: Thanks, Matt. Just to be clear, are you talking about the 2020 projected royalty number?

Matthew Gregory Hewitt: That's correct.

[noise] lie again is taking a very very conservative view of that ramp data described need to get authorization and reimbursement in line in like so that may be one factor, but we we approached this year for projections to be conservative. So there's no I'll say downside disappointment or surprise around that product line until we get more trend line.

Matthew E. Korenberg: Yeah, so with Kyprolis, given the Q4 number that was solid, we are essentially looking at that number rolling forward and comparing that with the consensus that we see out there. The consensus we see out there is about $1.2 billion of Kyprolis revenue, and so that's the number we're working from, and we'll have those slides, I'm sure, over the course of the year. On Evomela, the next biggest number, obviously, we have not seen the CASI Q4 report this year, but obviously, the first quarter from CASI was a good quarter in Q3, and we look forward to good growth out of Evomela next year. And those are probably the two biggest components that will get you to the royalty number.

Information.

That's that's very helpful. Thank you and then maybe one last one for me and I might have missed this earlier, but regarding I Oh heck. So you are gonna planned or you are playing it go ahead with fees to trial on your own versus Perjuring now.

Thanks, Matt Yeah. This is Matt for we ran the successful phase one trial last year, we ran that trial in Canada. It got positive phase one results were really pleased with that and so the next step for the program internally is the filing of an I.M.D., which we expect a here in the U.S., we expect to do.

John Higgins: And one, just a comment, Xeresso, it's a product approved in the middle of last year. Obviously, we're pleased with our partnership with Sage and the work they've done. It's an important medicine in a vitally high-value need medical target.

John Higgins: We are taking a very conservative outlook this year. Sage has not reported Q4. We don't have a trend line, and Ligand is taking a very, very conservative view of that ramp. Sage has described the need to get authorization and reimbursement in line and the like, so that may be one factor, but we approach this year for projections to be conservative. So there's no, I'll say downside, disappointment, or surprise around that product line until we get more trend line information.

In the second half of this year. The next study conducted under that I.N.D. will be a face to approve concept to study in patients with renal function undergoing invasive coronary <unk> and the main purpose of it will be to determine equivalents of image quality of C.I.O.X., all too jeez omni.

And then compared to Reno safety of the agents as well so that that trial have about 140 patients in it. It. It's one that we know we can run internally and we're we're ramping that out and at the same time as we always do we're assessing the partnering landscape and partnering potential.

Matthew Gregory Hewitt: And then maybe one last one from me, and I might have missed this earlier, but regarding Iohexol, are you planning to go ahead with the Phase II trial on your own versus partnering now?

That's great. Thank you very much.

Next question comes from the line, if Joe Pant units, Joe Your line snow.

Matthew Gregory Hewitt: Thanks, Matt. This is Matt Ford.

Matthew Gregory Hewitt: We ran a successful Phase 1 trial last year. We ran that trial in Canada. It got positive Phase 1 results. We're really pleased with that.

Hey, guys. Good afternoon. Thanks taken the questions three things I want to focus on first if you go to your prior press release around Corona virus, obviously, the gilliatt opportunity is clear.

Matthew Gregory Hewitt: And so the next step for the program internally is the filing of an IND, which we expect here in the U.S., to do in the second half of this year. The next study conducted under that IND will be a Phase 2 proof-of-concept study in patients with renal function undergoing invasive coronary angiography. And the main purpose of it will be to determine equivalence of image quality of CEIO hexol to GE's OmniPaque and then compare the renal safety of the agents as well. So that trial will involve about 140 patients. It's one that we know we can run internally, and we're ramping that up. And at the same time, as we always do, we're assessing the partnering landscape and partnering potential.

You mentioned you know the potential around the Omniab platform, but I want to ask the question more broadly obviously, you know, we're not sure which way Corona viruses going yet is it gonna burn out like it did sars or is it going to get worse, but I guess you know since Omniab is currently or the majority of your assets are focused on college.

Are you getting increased interest overall for infectious diseases.

Yeah, Yeah, Joe This is Matt for Yeah, we've we've fielded inbound interest specific to Corona virus, specifically to leverage our army chicken platform as well as omni omni rat, so and there's.

Matthew Gregory Hewitt: That's great, thank you very much. This next question comes from the line of Joe Pantginis. Joe, your line is now open. Hey guys, good afternoon. Thanks for taking the questions. There are three things I want to focus on.

Well established a literature out there that antibody approaches can be used for infectious diseases.

So that that's one element and then as you reference been we announced earlier. This week. We are obviously a focused on supporting our our partners <unk> as they ramp up production substantially of rent death of your which uses a captisol in its formulation.

Joseph Pantginis: First, if you go to your prior press release around coronavirus, obviously, the Gilead opportunity is clear, and you mentioned the potential around the Omniab platform. But I wanted to ask the question more broadly.

Joseph Pantginis: Obviously, you know, we're not sure which way the coronavirus is going yet. Is it going to burn out like SARS did, or is it going to get worse? But I guess, you know, since Omniab is currently, or the majority of your assets are focused on oncology, are you getting increased interest overall in infectious diseases?

Got it no. That's helpful. And then I'm just switching back to Iowa Heck's, all for a second I'm glad to hear the plans for it moving forward I guess can you just spend a second to end of course, you've done this around the data you know when you look at the commercial profile of the drug obviously, it's around safety, but what do you consider the potential rate limiting steps with for with regard to pay.

Matthew Gregory Hewitt: Yeah, Joe, this is Matt Poore. Yeah, we've fielded inbound interest specific to coronavirus, specifically to leverage our Omni chicken platform, as well as Omni, our Omni rat. So, and there's well-established literature out there that antibody approaches can be used for infectious diseases. So, that's one element. And then, as you referenced and we announced earlier this week, we are obviously focused on supporting our partners at Gilead as they ramp up production substantially of remdesivir, which uses capital in its formulation.

<unk> physician uptake of the asset as an image any agent. Thanks.

[noise] Yeah, Joe So we from the start of of initiating the program have it's been very well established that renal safety is an important consideration when when people are going in for elective or non an elective contrast.

Contrasts using <unk> or or therapies in in in test and that's continued the literature around that has continued to grow there was a new England journal of medicine publication that that highlighted this and as we talked to experts, it's very clear to us that there is a substantial need out there for.

Matthew Gregory Hewitt: Got it. No, that's helpful. And then just switching back to io-hexol for a second, I'm glad to hear the plans for it moving forward. Can you just spend a second, and of course, you did this around the data, you know, when you look at the commercial profile of the drug, obviously it's around safety, but what do you consider the potential rate-limiting steps with regard to potential physician uptake of the asset as an imaging agent? Thanks.

Since you undergo.

Scans that need to be in that that that physicians d. to ensure that that renal elements are not compromise. So we do see a a real need there and expect that the the market would eventually see that as well should the trials be successful of course.

Matthew Gregory Hewitt: Yeah, Joe. So from the start of initiating the program, it's been very well established that renal safety is an important consideration when people are going in for elective or non-elective contrast, contrast using therapy, or therapies, and tests. And that's continued; the literature around that has continued to grow. There was a New England Journal of Medicine publication that highlighted this. And as we talked to experts, it's very clear to us that there is a substantial need out there for patients who undergo Transcripts provided by Transcription Outsourcing, LLC so that the renal elements are not compromised.

No that's great and my last when if you don't mind, obviously know van or just put out an update about their plans going forward and <unk>. Obviously, the data were a little grey and you know they're looking to get some.

Very important guidance from the F.D.A. If you will so it's just curious you know what your views are on moving that program forward of the potential of it moving forward and what your goal would be to see from the F.D.A.

Yeah, Hey, Joe what's Matt <unk>.

Matthew Gregory Hewitt: So we do see a real need there and expect that the market will eventually see that as well, should the trials be successful, of course.

So the the November posts are definitely planning to meet with the F.D.A. to as they sit on their initial call or initial press release.

Joseph Pantginis: That's great. And my last one, if you don't mind, obviously, NoVan just put out an update about their plans going forward with Moleskine. But obviously, the data were a little gray, and they're looking to get some very important guidance from the FDA, if you will. So I was just curious, you know, what your views are on moving that program forward or the potential of it moving forward, and what your goal would be to see from the FDA.

Trying to determine how much of the data. They generally is already is usable essentially and and how what a clinical plan looks like going forward.

Are obviously, you know getting our information from them and we don't know anything, but it's really not public but from our perspective. It looked like the drug did work and that it really was the trial design on trial execution issue and so our hope is that they'll find a way to continue to move out program forward.

Matthew E. Korenberg: Yeah, hey, Joe, it's Matt Korenberg. Yeah, so the NOVIM folks are definitely planning to meet with the FDA to, as they said on their initial call or initial press release, try and determine how much of the data that they've generated already is usable, essentially.

And we run the trial and eventually going to get to the finish line in a successful way that's perfect. Appreciate it guys. Thanks.

Again, if you have any questions. Please first star one then your telephone.

Matthew E. Korenberg: and what the clinical plan looks like going forward.

And next question comes from the line, if Larry Sallow, Larry or New line is an open.

Matthew E. Korenberg: We're obviously getting our information from them, and we don't know anything that's really not public, but from our perspective, it looked like the drug did work and that it really was a trial design or trial execution issue, and so our hope is that they'll find a way to continue to move that program forward and rerun the trial and eventually get to the finish line in a successful way.

Good afternoon, guys have just a quick up the quick fall on the nose and they're going to need more funding I know they needed. Some funding obviously from you guys. When they we did that partnership are they going to need more funding to continue to do work on this or I I'd actually didn't suit early so.

Yeah, It's say hey, Larry it they said initially when they they put out there press release it their funding. They had on hand was was really sufficient to get through to one of this year. They they didn't say explicitly that that was as far as it would go but but my sense is they definitely need to raise some money to to go ahead and.

Joseph Pantginis: That's perfect. I appreciate it, guys. Again, if you have any questions, please press star 1 on your telephone.

Lawrence Scott Solow: telephone. And the next question comes from the line of Larry Solow. Larry, your line is now open.

Lawrence Scott Solow: Good afternoon, guys. Just a quick update, a quick follow-up on the Novant. Are they going to need more funding? I know they needed some funding obviously from you guys when they did that partnership. Are they going to need more funding to continue to do work on this? I actually didn't see their release.

One that trial got it okay gotcha. Okay. Just a couple of question <unk>, mostly follow up <unk> and the evil Mel expectations. So just to review did the queue for number you essentially just sort of taken runrate number.

Matthew E. Korenberg: Yeah, hey Larry. They said initially when they put out their press release that their funding they had on hand was really sufficient to get through Q1 of this year. They didn't say explicitly that that was as far as it would go, but my sense is they definitely need to raise some money to go ahead and run that trial.

So it where it was a little bit of growth in twenties, that's sort of how are you looking at it.

Yeah, I mean, yeah as we always do we we look at the consensus and my point about the queue for was just that <unk> as you just said with with a cue for number and a little bit of growth you can get to the consensus number pretty easily right right just a little more color we.

Lawrence Scott Solow: Okay, gotcha. Okay, just a couple of questions, actually mostly follow-ups, on the Kyprolis and the Evo-Mela expectations. So just to review, did the Q4 number, are you essentially just sort of taking that run rate number? Is that, or with a little bit of growth in 20, is that sort of how you're looking at it?

As investors saw out of M., Jan and all those reports <unk> had a real nice growth in the U.S. a restaurant for their number and got down a bit we believe that part of that it is F.X. currency exchange violated we've seen this with other.

Lawrence Scott Solow: Yeah, I mean, as we always do, we look at the consensus. And my point about Q4 was just that, as you just said, with a Q4 number and a little bit of growth, you can get to the consensus number pretty easily.

Pharma companies, who announced so that's a factor Japan. The older numbers were fantastic highest grade rubber by by a nice margin. So we put that together, we do see grow but it's map mentioned were using street estimates to help guide us we're looking at about a 1.2 billion dollar revenue figure for.

Unknown Speaker: I love you.

Unknown Speaker: Right. Okay. A little more color.

John Higgins: As investors saw in Amgen and Ono's reports, Amgen had real nice growth in the U.S., but the rest of the world for their numbers went down a bit. We believe that part of that is FX, currency exchange related. We've seen this with other pharma companies who've announced. So that's a factor. Japan, the Ono numbers were fantastic, the highest score ever by a nice margin.

Pulls for our assumptions for this year right I think again, Larry I'll, just yeah, Yeah, I'll I'll add is well. This is Matt for yeah. Obviously, we haven't continue to be a engine has and continues to be a great partner very committed very active in clinical activities right <unk>. So multiple phase three studies ongoing now the.

John Higgins: So we put that together. We do see growth, but as Matt mentioned, we're using street estimates to help guide us. We're looking at about a $1.2 billion revenue figure for our assumptions.

He must study which is in combo with to know if he's us to talk to map the arrow to trial, which is comparing a once weekly in twice weekly face phase three trial and then the the phase three Cobra study also.

Unknown Speaker: Unknown Speaker Right, I think that's it.

Lawrence Scott Solow: Larry Alpert

Unknown Speaker: Unknown Speaker Yeah, I'll add as well, this is Matt Foer. Yeah, obviously, we have and continue to be Amgen.

Any any continue a lot of face to work as well. So were you know continue it'd be very pleased with with the work they're doing around the assets.

Unknown Speaker: Unknown Speaker Obviously, we have and continue to be; Amgen has and continues to be a great partner.

The supplementary idea that that's that's because it does that just for a combination with doors looks up that's that's what you expected in the file and this year.

Unknown Speaker: [inaudible]

Unknown Speaker: Unknown Speaker, The Theory of Success and The Theory of Failure, Unknown Speaker, David Solomon, Simon Latimer, Lawrence Solow, Scott Henry, Paul Hadden, Lawrence Solow, Simon Latimer, Unknown Attendee, Octavio Espinoza, Simon Latimer, Paul Hadden, Lawrence Solow, Unknown Attendee, Octavio Espinoza, Simon Latimer, Unknown Attendee, Unknown

That's correct. There's also obviously to work there's also filings in in new markets I like China via the Beijing collaboration <unk> announced last year and and at the thought as you mentioned it was one of as one of these studies I know, they're doing some study where where the one I assume an in front line is that something that we might that we might see.

Within the next told months or is that it'd be on that yeah. They they haven't given precise timing on that but they've got multiple studies in what's called a newly diagnosed multiple myeloma, combining kyprolis with with Darzalex in in Revlimid. So yeah. Those trials are ongoing as well.

Lawrence Scott Solow: And of the studies you mentioned, is one of these studies, I know they're doing some studies or more than one, I assume, in frontline, is that something that we might see within the next 12 months or is that beyond that?

I don't just switching gears onto the evil Mel you you mentioned <unk> you haven't seen there were poor queue for which obviously, they're sort of first.

Lawrence Scott Solow: Yeah, they haven't given precise timing on that, but they've got multiple studies in what's called newly diagnosed multiple myeloma, combining Kyprolis with Darzalex and Revlimid. So yeah, those trials are ongoing as well.

Quarter at at the gate for sales in China, I know there they've had some pretty optimistic views that you know that this market and trying to could be equivalent to the size of the U.S., maybe down volume, but would probably making that up <unk>. You. Obviously not initially in the first whole month, but could you assuming some contributions and growth.

Lawrence Scott Solow: And then just switching gears on to the EVO-Mela, you mentioned CASI, you haven't seen their Q4 report, which obviously is their sort of first full quarter out of the gate for sales in China. I know they've had some pretty optimistic views that, you know, that this market in China could be equivalent to the size of the US, maybe not in volume, but with price making that up. Can you just, obviously, not initially in the first 12 months, but are you assuming some contributions and growth overall, you know, contributions to China and growth overall at EVO-Mela, which was sort of flat in the US in the last year?

Overall, you know contribution to China Grove overall.

Was sort of flat in the U.S. in the last year.

Yeah Hillary it I think that's exactly right. It it we basically view it as as relatively stable in the U.S. right and ramping from.

Launched two about the same size of the U.S. over a five year period.

<unk> Larry on the market Mad on the yeah. The market there I keep in mind that that even Mel as the only approved <unk> yeah right in China I. Unlike the U.S., where they're all forms and I.V. forms. It. It is the only approved for right. So that should afford them the ability to price at at a a branded price Mona there'll be no job.

Lawrence Scott Solow: Yeah, Hillary, I think that's exactly right. We basically view it as relatively stable in the U.S.

Unknown Speaker: Unknown Speaker Yeah, and Larry is on the market.

Unknown Speaker: Unlike in the U.S., where there are oral forms and IVs.

Unknown Speaker: Unknown Speaker Right, so that should afford them the ability to price it at a branded price, not a generic price, I guess, right? This should get better.

Competition, I guess right so.

It should get better pricing or right right.

Right and then just switching <unk> I'll just give it some some <unk> you know.

Unknown Speaker: Transcription by Trans-Expert at Fiverr.com

Good School board updates on a on the as we see two seats you've acquired the three enough years ago, whatever that was four years ago on both the partnerships in the <unk> on the programs can you maybe just give us a little color. Obviously, you know I know a lot of the revenues back and loaded but I think some investors Miss the key that in a lot of your milestone.

Lawrence Scott Solow: Right, and then just switching gears to the OMT, you've obviously given us some, you know, good school board updates on the, as we continue to see, to acquire the three and a half years ago, whatever that was, four years ago, on both the partnerships and the programs. Can you maybe just give us a little color, obviously, you know, I know a lot of the revenue is back in, but I think some investors missed the key that, you know, a lot of your milestones are driven by events long before approval, and you mentioned sort of the base of 20 million in that 40 to 60 range, that's sort of reoccurring, is the majority of that from OMT? Can you maybe give us a little color on how that's grown and, you know, where you are?

<unk>.

Driven by by that's long before approval.

So the base of 20 million and not not 40 to 60 range, that's sort of recurring it's just a majority of that from Owen tea.

Can you maybe give us a little color and how that's grown and you know what you expected to grow the next couple of years.

Yeah. So on a on a recurring side, we there's really a few different things that contribute to that is work with our our V.D.P. platform and work with C. on me up platform principally on the chicken side and then the annual license fees that come with beyond me out business. So in total though.

Matthew E. Korenberg: Yeah, so on the recurring side, there's really a few different things that contribute to that. It's work with our BDP platform and work with the OmniApp platform, principally on the chicken side, and then the annual license fees that come with the OmniApp business. So in total, those three buckets are in excess of $20 million and have been growing pretty significantly over the last several years, particularly as a result of the OmniApp acquisition.

Three buckets are in excess of $20 million and and has been growing I'm pretty significantly since the over the last several years, particularly as a result of the on the of acquisition.

Lawrence Scott Solow: Okay, just a couple of miscellanies. Any updates on Bextella? Is that, you know, is that product just dead now, or what's going on? Melinda is sort of, you know, on life support. Are they trying to raise funds? Is there anything going on there that might make that product could be sold or something?

Okay.

<unk> is that you know.

<unk> product just dead now or what's going on my went to sort of you know on life support are they trying to raise funds or anything going on there that me there could be sold or something.

Yeah, Yeah, Larry Melinda, obviously, it's I'll say I changed hands right back Stella clearly, there's a need for novel antibiotics. You go to any infectious disease conference and you realize very quickly how important it is that new antibiotics are being developed and pursued so it no real v.

Lawrence Scott Solow: Yeah, Larry, Melinta obviously has changed hands, right, Baxtella. Clearly, there's a need for novel antibiotics. You go to any infectious disease conference, and you realize very quickly how important it is that new antibiotics are being developed and pursued. So no real detailed update on its commercial status at this point, but obviously, there are medical needs out there for new antibiotics, and we continue to watch that space.

Held update on it on its commercial status at this point, but obviously there there are medical needs out there for new antibiotics, and we continue to watch that space.

Lawrence Scott Solow: Last question on the use of capital, obviously acquisitions seem to be your primary focus, and you've already bought back a significant amount of shares. It looks like you bought about another million back since... During the quarter, is that right, or since you reported last? Any thoughts about, can you, can you actually buy back the Convert, which I believe trades at a pretty high price?

Because they're just last question on a and the use of capital.

Obviously acquisition seem to be your your primary and you've you've.

Already bought back a significant amount of shares <unk> looks like you, but but but another million bucks and.

During the quarter is that right or since you're poor last.

Thoughts about can you you use strict or can you actually buy back to the convert which I believe trends that are pretty significant discount.

Matthew E. Korenberg: Thanks, Larry. So just generally on share repurchase and capital return more broadly, you know, as I went through in my prepared remarks, we've spent over half a billion dollars returning capital to shareholders, which was really a big part of the plan when we sold the Promact asset if, you know, if the story played out sort of the way we expected it to play out. We've done that now.

Yeah. Thanks, So just generally on on share repurchase and capital return more broadly.

You know as as I went through in my prepared remarks, we spent over half a billion dollars.

Returning capital to to shareholders, which was really a a big part of the plan when we when we sold to from Act asset. If you know if the story played out sort of the way we expected it to play out.

We've done that now in our our share repurchase going forward, we expect to be relatively minimal in the near term as we explore kind of where the the markets in stock price goes over time, we obviously continue to think the stock prices is significantly undervalued, but we.

Matthew E. Korenberg: And our share repurchase going forward, we expect to be relatively minimal in the near term as we explore kind of where the markets and stock price go over time. We obviously continue to think the stock price is significantly undervalued. But we had a defined plan to return a significant amount of capital to shareholders, and we've already gotten through that portion of the plan. We could buy back the converted bonds. They trade at a discount to where the par value is, and we could have to pay them back in a few years.

Had a define plan to return a significant amount of capital of shareholders and we'd gotten through that portion of the plants, we could buy back the the converts they traded at a discount to where.

Where the car is and and where we can have to pay them back in a few years, we continually evaluate that as well, but really at the moment, we're focused on <unk> the strategic agenda and I think the bulk of the capital we spend over the balance of this year will be on.

Matthew E. Korenberg: We continually evaluate that as well. But really, at the moment, we're focused on M&A and the strategic agenda. And I think the bulk of the capital we spend over the balance of this year will be on the strategic agenda based on what we expect now. Just to illustrate that, our guidance that we gave for this year does not assume any further share repurchase during the year. And then do you see, you know, that getting into details, you know, and, you know...

Strategic agenda based on what we expect now just to illustrate that our our guidance that we gave for this year did not assume any further share repurchase during the year God and D.C., you know that getting into details.

Lawrence Scott Solow: I don't want to ask you how the M&A Q looks, but I will go ahead and ask that. Do you see, you know, just sort of the color on the Q, are some of these acquisitions or companies that you may be targeting, do you see some larger opportunities, you know, an ability to, without forcing anything, spend, you know, a lump sum of money in one place?

Yeah, I don't want to ask you how how the M.N.A.Q. looks but I will go ahead enough that do do you see you know just sort of you know the the the the car on the queue or some of these acquisition or companies that you may be talking to do you see some larger opportunities and ability to without forcing anything spend you know a lump sum of money and place.

Unknown Speaker: Yeah, we continue to evaluate everything from the smallest deals to things that are upwards of 500 million to a billion dollars and more. You know, as I typically will say, the higher-value assets are harder to make happen for lots of different reasons, and the lower ones tend to be more transactional. And so, you know, we'll see what plays out. But we were evaluating the whole

Yeah.

We continue evaluate everything from the smallest deals to things that are upwards of 500 million to a billion dollars and more.

You know as I typically will say the the higher value assets are harder to make happen from right to different reasons.

And the the little ones tend to be more transactional and so yeah, well, we'll see what plays out but we were evaluating the landscape.

Unknown Speaker: Got it. Okay, great. I appreciate it, Constantin.

<unk>, Okay, great appreciate it costs ducks.

Sorry.

So we still have done for one more question. So again you May press star one on your telephone if you have any questions.

Unknown Speaker: We still have time for one more question, so again, you may press star 1 on your telephone if you have any questions.

X. question comes from the land if the <unk> Blockier line is now open.

Unknown Speaker: [inaudible]

Unknown Speaker: Hi, thank you, and good afternoon, everyone. I'll just restrict myself to a couple of questions.

Hi, Thank you and a good off many of them. So just restrict myself to a couple of cushions, mostly thank you for getting the data no department programs, but I want to bring the food goes back to your technology itself and understand you punish him approach better. So can you help me understand why the economics of the <unk>.

Balaji V. Prasad: Firstly, thank you for giving the update on all the partner programs, but I want to bring the focus back to your technology itself and understand your partnership approach better. So can you help me understand why the economics of the Sanofi deal were different compared to other partnerships? And probably an extension to that question is, is that something that you find desirable and would want more of, that you want to see more partnerships with larger upfronts, rather than a more steady stream?

Friend compared to other partnerships and probably and <unk> extension to that question is is that something that you find desirable and would want more off do you want to see more partnerships with logical fronts, oh, rather than a more studies <unk> three.

Matthew Gregory Hewitt: Yeah, thanks, Balaji. This is Matt for obviously, when you have a technology like the OmniApp platform, right, that has multiple species with fully human immune systems, we've got adjacent technologies around it, like our antigen technology. And as partners, when they enter into a license with us, they also get access to our future innovations, like our OmniClick that we launched last year and the Heavy Chain Chicken that I talked about earlier. We obviously have a range of partners who have an interest in leveraging the platform, from small players that have novel biology all the way up to the Sanofis of the world, right, who also have novel biology but also have substantial capabilities. And there are generally 3 different economic levers in any deal upfront element, milestones that are paid along the way, and then the royalty on the back end. And various touch points with partners or areas of sensitivity can be different from partner to partner.

Yeah that thanks Blotchy. This is a mass for obviously when you have technology like the Omniab platform right that has multiple species with fully human immune systems, we've got a Jason technologies round, it like or antigen technology and as partners when they enter into a license with.

They also get access to our future innovations like or on the click that we launched last year and the heavy chain chicken that I I talked about earlier.

We obviously have a range of partners, who have interest in in leveraging the platform from small players that have novel biology, all the way up to the Sanofis or the world right, who also have novel biology, but also have substantial capabilities and they're generally three different economic weaver's in any.

He ideal upfront elements.

Milestones that are paid along the way and then the royalty on the back end and and.

Various touch points with partners or or areas of sensitivity can be different partner to partner if you're a small start up company. They may be more sensitive to to up front and less so on on on milestones or royalties.

Matthew Gregory Hewitt: If you're a small startup company, they may be more sensitive to upfronts and less so on milestones or royalties. And with someone like Sanofi, they approach us because obviously they've had a rich history in past collaborations using other transgenic animal platforms, namely in the mouse space. And so those that follow the space well realize that Sanofi recognizing the importance of Omniab to their discovery capabilities and their discovery needs is, of course, a continued validation of the importance of the technology. But in terms of the deal structure, as you know from our portfolio, we've got over 200 fully funded partnerships, over 120 different partners. One thing I can say with some assurance is that no two partnerships are exactly alike economically, and we pride ourselves on that in terms of finding ways to get deals done. And it's no different with Omniab technology.

And with someone like Sanofi. They they approach obviously, they've had a rich history I in past collaboration of using other transgenic animal platforms, namely in the my space and so those that follow the space well realize that that Sanofi recognizing the importance of.

Romney up to their discovery capabilities and their discovery needs is a is a is a of course I continued validation of the importance of the of the technology, but in terms of the deal structure <unk> as as you know from our portfolio got over a 200 fully funded partnerships over 120 different <unk>.

<unk> one thing I can say with with some assurances no two partnerships are exactly alike economically and we pride ourselves on that in terms of finding a ways to get deals done and and that no different with the on the up technology.

Balaji V. Prasad: My second question is on the coronavirus development. I mean, you have called it a couple of times now, called it out.

Alright, Thanks, My <unk> on the <unk>, none of my time and you call. It a couple of times now <unk>. So <unk>. So if they are successful what does this mean for you do you have any kind of would they need to use.

Balaji V. Prasad: So there's this recent news flow on Wuhan Institute wanting to patent remdesivir for corona. So if they are successful, what does this mean for you? Do you have any kind of, would they need to use captisol too? Or do you have a way to get into a partnership with them? Or does it mean that the Gilead partnership would probably not materialize in terms of revenues for you?

So too or.

Me too getting do a bunch of but them oh or doesn't mean that <unk> <unk> <unk>.

Matthew Gregory Hewitt: Thanks, Balaji, for the question. Obviously, the coronavirus space is a fast-developing area.

Yeah. Thanks, <unk> for the the question, obviously instead the current a virus space as a as a fast developing space. We saw the news yesterday as well on on a patent filings in China, I think I saw a statement from gilliatt, they've obviously already filed they had already filed patents in China and.

Matthew Gregory Hewitt: We saw the news yesterday as well about a patent filing in China. I saw a statement from Gilead. They've obviously already filed.

Matthew Gregory Hewitt: They've already filed patents in China, and they're obviously a partner of ours, and we continue to supply them and make sure we're positioned to meet their supply needs. But, you know, as Gilead essentially said, there's a public narrative on this that they don't plan to get into a patent dispute, that their key is focused on making the product available. Now, if someone else were to create a molecule very similar to that, it's highly likely that that molecule would also have solubility issues. Generally, it comes out of the design of the molecule and the structure of the molecule, and things that have solubility problems, which remdesivir had very early in its development, need a technology to dissolve them and solubilize them, which captosol does effectively.

They are obviously a partner of hours and and we continue Ah to supply them and make sure were positioned to meet need their supply needs, but you know as as gilliatt essentially said, there's public narrative on this that they don't plan to get into a patent dispute that they're.

Key is focused on making their product available now if someone else works create a a molecule very similar to that it's highly likely that that molecule would also have solubility issue and and that's that generally comes out of the the the design of the molecule in the structure of the molecule and and things that have a solubility problem.

<unk>, which remnants of your had very early in its development need a technology to dissolve it and solubilized, which which captisol does effectively.

Unknown Speaker: Just to add, though, our partnerships on Capsule are typically compound-specific, not necessarily disease-specific. So, to the extent that it is a different approach to treating coronavirus, there's a possibility for us to supply both parties.

Just to add though are are are partnerships on capsular typically compound specific not necessarily disease specific so to the extent to as a different approach to treating current a virus, there's a possibility for us to supply both parties.

Balaji V. Prasad: Okay. All right. My third and last question is a follow-up on your IRXL program. So you're starting Phase 2A. What kind of investments do you envisage for that and for this year and for next year?

Okay, Alright, my turn them last question of cell phone up on your I excelled program. So you're starting place to a what kind of investments do you and this crash where I'd done for this you have them for next year.

Unknown Speaker: Yeah, so the amounts around the Phase 2a are in our budget numbers, they're in our projections. We'll, as I said, we'll plan to file the IND in the second half of this year and initiate the trial in the second half of this year. It's a 140 patient study, so a very manageable study in which we're going to be treating patients with impaired renal function undergoing invasive coronary angiography, and then we'll be looking at a number of safety measures and quality of

Yeah. So the the the <unk> around the phase two way or in our our budget numbers, they're in our our projections <unk> well as I said, we'll plan to file the I.N.D. in the second half of this year and initiate the trial and the second half of this year, it's a 140 patients.

Study, so very manageable study in which we're going to going to be treating patients within impaired renal function undergoing invasive.

Coronary <unk> and then we'll be looking at and number of safety measures and and quality of image measures.

Unknown Speaker: Thank you. Did you mention any number on the capital investments required?

I can do the mentioning number.

On on the capitalism squid.

Balaji V. Prasad: Yeah, I mean, it's a typical cost for a trial that's about that size, a few million dollars over the course of the length of the trial.

Yeah, I mean, it's it's a typical costs for a trial. That's that's about that size a few million dollars over the course of building the trial.

Unknown Speaker: Okay, thank you.

Okay. Thank you.

Unknown Speaker: Thanks, Balaji.

Thanks Buddy.

Unknown Speaker: And There are no further questions at this time.

There are no further questions at this time presenters see me continue.

Unknown Speaker: Proceeding may continue.

John Higgins: Thank you. Thank you.

Thank you. Thank you appreciate people's attention and time here on the call. We have a few conferences coming up a quick headline Barclays's sponsored conference in Miami will be presented their March 10th.

Unknown Speaker: I appreciate people's attention and time on the call. We have a few conferences coming up. A quick headline, Barclays is sponsoring a conference in Miami. We'll be presenting there on March 10th. Roth is having a conference. Their annual event in Laguna Niguel will be presented on March 17th. And then H.C. Wainwright is having a conference in London from April 19 to 21, and we'll be participating in that as well. Thank you for your time and interest, and we look forward to updating you as the year goes on. Goodbye.

Roth is having a conference their annual event in Laguna Niguel will be presenting March 17th.

An H.C. Wainwright is having a conference in London April 19 to 21 will be participating in that as well. Thank you for your time and interest and we look forward to updating your your goes on goodbye.

[laughter].

Thank you for joining today slap Kath.

Unknown Speaker: Thank you for joining today's webcast. Thank you. You may now disconnect. Have a great day.

See how p. found this up casting for Medicare.

Thank you you may now disconnect half a great day.