Q3 2021 Ligand Pharmaceuticals Inc Earnings Call
Good day, and thank you for standing by.
Welcome to the ligand pharmaceuticals third quarter earnings call.
At this time all participants are in a listen only mode.
After the Speakers' presentation, there will be a question and answer session.
To ask a question you will need to press star one on your telephone keypad.
If you require any further assistance please press star zero.
I'd now like to hand, the conference over to your first speaker for today, Mr. Simon Atlanta.
<unk> of Investor Relations. Please go ahead Sir.
Yes.
Thanks, Eli wells.
Welcome to <unk> third quarter of 2021 financial results and business update conference call. Our speakers for today's call are in separate locations speaking today for ligand will be John Higgins CEO, Matt for CLO, and Matt Kornberg, CFO, we will use non-GAAP financial measures and some of our statements will be forward looking including those related to our financial condition.
Results of operations financial guidance, the impact of the COVID-19, pandemic and plans for <unk> to become a standalone public company additional information concerning risk factors and other matters concerning ligand can be found in our earnings press release, and our periodic filings with the SEC.
We undertake no obligation to revise or update any statements to reflect events or circumstances. After the date of this conference call. A reconciliation between the non-GAAP financial measures, we discuss on the closest GAAP financial measure can be found in our earnings release issued earlier today I would now like to turn the call over to John Higgins.
Simon. Thank you good afternoon, and thanks for joining our third quarter 2021 earnings call.
Today, we have an outstanding quarterly report for our shareholders, we have the highest ever royalties for our largest partner products.
<unk> had a string of partner successes with several approvals in recent months and launches are now underway that we expect will fuel growth in royalty revenue for years to come.
In addition, there has been tremendous progress by our partners, especially around our <unk> platform.
Today on our call. We will also provide more information about our work to split ligand into two separate companies.
First some remarks about our Q3 financial and operating performance one of the things are the main revenue driver for our company and after a solid second quarter for our lead products. We are very pleased to see our partners post higher revenue than we expected for kyprolis and for even milk here in the third quarter.
This is the highest quarter ever for royalties on both products and we see the momentum continuing into the fourth quarter and next year.
For Kyprolis, both Amgen and <unk> posted great Q3 results and we're looking forward to the launch of the product in China by <unk>, which we believe will drive further growth.
Even though it continues to perform well with both our U S and Chinese marketing partners with a 20% royalty. This product is beginning to be a major contributor to our bottom line.
Just since June we've seen jazz received approval for <unk> in the U S. Paul let's get approval in China Merck.
Merck announced U S approval for Baxter advance and Gloria report approval of the Berlin map in China, which is the first approval for an <unk> derived antibody.
This all follows the serum Institute of Indias launch of numerous sale, which also occurred earlier this year.
Royalties on all of these products.
It's a great string of news over the last several quarters now.
Matt <unk> will go into more detail on several of our lead partner programs, but I will highlight some of our Sampson our partner program with <unk> Therapeutics.
This is a major asset for like Amgen has made tremendous progress this year.
In August <unk> announced positive top line interim results from the ongoing phase III study of <unk> in Iga.
Nephropathy.
<unk> Sanford treatment demonstrated a statistically significant reduction of proteinuria from baseline. After 36 weeks that was more than three fold the reduction from the active comparator irbesartan trivial.
<unk> plans to submit for accelerated approval in the U S. For this indication in the first quarter of next year.
<unk> also reported that they met with the FDA for <unk> in <unk>.
<unk>.
And they confirmed plans to submit additional data in the first half of 2022 as part of an accelerated approval process for that indication.
This is a program that has the potential to emerge as our largest warranty driver over the next few years, given the substantial market need and our royalty rate.
As for our plans to split the company given our success growth and evolution of our business. It has become increasingly clear that ligand it would be better positioned to drive value for our partners and our shareholders by operating as two separate independent companies.
Our core business model at ligand is built around technology licensing coupled with revenue sharing with our partners through royalties.
We are now at an inflection point, where we anticipate significant top line growth by existing and new royalties that should fuel superior bottom line results and cash flows as we manage our lean operating structure.
We've talked with investors for years about our vision for growth driven by a diverse portfolio of royalties to drive cash flow we.
<unk> had a string of smart acquisitions, including our well timed transaction with Phoenix last year.
And we are patiently awaited partner data Readouts and approvals.
The planning and patients have paid off as we believe the royalty business is now positioned to thrive.
At the same time, our progress and success with our <unk> platform has far exceeded our expectations.
We entered the antibody research tool space six years ago with our acquisition of <unk>.
And industry, leading antibody discovery platform.
At that time, our antibody business had only 15 partners with discovery stage programs.
Clinical trials had been initiated there was no human data.
And we had just two members of the team driving the research and licensing.
Today, we have more than 50 partners with access to the Omnia antibodies and over 200 programs.
Abstentious positive clinical success, our first partner approval and another antibody in line for a potential approval by the end of this year.
Simply put the <unk> business is bigger better and further along than we expected just a few years ago.
Our success is a result of the decisions we've made for how we built out and invested into the platform.
The acquisitions, we've made to bolster the platform and strong licensing and our excellent partner management.
Antibody based medicines are among the best selling products in the pharmaceutical industry. These days and antibody R&D is one of the biggest areas of investment by drug companies.
And we now proudly have a leading tech platform that we continue to strengthen even further.
We're at the right place at the right time with the right platform.
With our success in considering input from partners over the past year or so it has become clear we can structure the business for future growth and success with a dedicated operating team and board with deep domain expertise to drive strategy and investment.
The potential and opportunity are simply too substantial to continue under the ligand parent company.
We are pursuing the path to split log in from a position of strength and good timing the.
The remaining company based on royalties and financial performance has never been better positioned to thrive given our product roster revenue diversity and portfolio.
<unk> is now a substantial established technology leader and the antibody R&D space with a strong and well earned reputation within the industry.
In addition, the equity capital markets are validating quality platforms with dedicated investors and analysts who follow the industry.
We have the assets and the teams to run two great companies.
On the App and one ligand.
The two companies will have dedicated operational focus business specific capital allocation agility to meet partner needs and compelling focused investment profiles.
We are excited about our planning and the potential to provide two companies for our shareholders to own it.
Gain value.
I will now turn the call over to Matt Kornberg for a review of our financials and more discussion about the plans underway to split the company.
Thanks, Sean.
The third quarter of 2021 was a very good quarter for <unk>, both operationally and financially.
In addition to the strong financial results that I'll cover today during the quarter, we saw approvals for Riley spec <unk> Zimbra element all drugs that we believe will help fuel the growth in royalty revenue for years to come.
Turning to the financials total revenues for the quarter were $64 8 million up 55% from $41 8 million a year ago.
Royalty revenue increased 74% to 50, $15 6 million from $9 million a year ago.
Royalty revenues comprised principally of Kyprolis and <unk> royalties.
Growth in royalty revenue reflects strong sales growth for both of these products. In addition to contributions from several programs back there.
Pelican expression technology, including <unk> from jazz numerous steel from the serum Institute of India, and <unk> from Allergan.
Captisol sales were $35 1 million in the quarter and this is up 50% from $23 4 million a year ago.
Our Q3, Captisol revenue exceeded our internal expectations.
Contract revenue in Q3, 2021 was $14 1 million compared.
Compared with $9 5 million a year ago.
The 2021 quarter included significant contributions from Pelican with $7 million of approval and launch milestones receive for release in vaccine advanced combined.
Our GAAP EPS for the quarter was 80.
And our adjusted diluted EPS for Q3, 2021 was $1 58, compared with $1 <unk> last year or an increase of 52%.
We exited the quarter with approximately $323 million of cash cash equivalents and short term investments.
Turning to financial guidance, we are reaffirming our guidance for 2021 revenue and adjusted diluted EPS, We expect full year 2021 total revenues to be between.
$265 million and $275 million.
And adjusted earnings per diluted share to be between $5 $86 <unk>.
With respect to Q4, our year to date results combined with our full year guidance imply about $60 million to $70 million of Q4 revenue.
Within that we expect royalties to grow more than 30% over the year ago period.
We expect contract revenue of $7 million to $10 million and we expect the balance of revenue to be from kept sales of captisol.
Regarding our corporate strategy as John mentioned, we announced today that we've been conducting a strategic review focused on ways to maximize the value of our Omnia platform.
We're pursuing a path to create an independent publicly traded company.
We acquired the initial Omnia business in January of 2016 over the next six years, we significantly grew the business organically and augmented its capabilities with our technology bolt on acquisitions of Crystal Bioscience, Evan SCO hydrogen <unk> and tourists.
Based on our strategic review so far we believe the business will be best served as an independent publicly traded company preparations are underway to file a confidential S. One with the goal of beginning the process of bringing on the public following a traditional IPO.
And then as soon as practical on the future spinning off the entire business to lag and shareholders.
We're extremely excited about this opportunity for <unk> to invest more significantly in its technology platform and the opportunity to unlock.
Value for ligand shareholders.
Our board of directors has not approved a specific course of action and will continue to evaluate other options to optimize value and ensure flexibility to invest in growth and there can be no assurance that this process will result in pursuing a particular transaction are consummating any such transaction.
And lastly, I'll just direct listeners to review our Q3 earnings press release issued earlier today and available on our website for a reconciliation of adjusted financial results with our GAAP financial results.
And with that I'll turn the call over to Matt for for some comments on our technologies and partner programs.
Thanks, Matt.
As John mentioned Q3 was a very productive quarter with a number of significant developments for late stage partnered programs given.
Given the large number of events that occurred I'm going to review the more recent ones in two general categories. Today first recent approvals or launches for royalty bearing assets and then significant data readouts or regulatory progress updates.
I'll start now with approvals and launches.
Beijing announced the approval of Kyprolis in combination with dexamethasone in China for the treatment of relapsed and refractory multiple myeloma.
When Amgen announced its relationship with Beijing, a couple of years back they highlighted that the alliance would significantly accelerate plans to expand amgen's oncology presence in China, which is the world's second largest pharmaceutical market.
<unk> is a global research based oncology focused company with headquarters in Beijing, with an established and highly experienced team in China that includes a 700 person commercial organization. So we were very pleased to see news of the approval of Kyprolis in that market.
Our partners at Merck announced FDA approval of vaccine advance, which is a pneumococcal 15 valent conjugate vaccine for the prevention of invasive pneumococcal disease in adults 18 years and older.
This approval was followed by Cdc's ACI P unanimously voting to provisionally recommend backs in advance any series with Pneumovax 23, as an option for pneumococcal vaccination inappropriate adults.
And very recently Merck also disclosed further regulatory progress with vaccine advanced in the pediatric setting, indicating that they have now submitted a supplemental supplemental BLA application to the FDA for use in children.
It is important to recognize that pneumococcal disease continues to cause serious illness and death worldwide in children under the age of five despite the positive impact of new pneumococcal conjugate vaccine case numbers and vaccination rates.
Certain pneumococcal serotypes, but children at particular risk, including Serotypes, 22, <unk> and 33 F, which are reported to represent 16% of all cases of invasive pneumococcal disease in children under the age of five <unk>.
Vaccines of answers a documented strong immune response to these serotypes and with the inclusion of serotypes 22 apps and 33 F. <unk> has the potential to play an important role in the prevention of invasive pneumococcal disease in children worldwide.
Our partners at Jazz Pharmaceuticals launched <unk> in July as a component of a multi agent chemotherapy regimen for the treatment of acute lymphoblastic leukemia, or lymphoblastic lymphoma, and adult and pediatric patients who are one month or older and who have developed hypersensitivity to E. Coli.
<unk> derived asparaginase.
<unk> provided an update earlier today on their commercial and launch progress with railways, noting $21 million in net sales in its first quarter with reports of positive feedback for the drug with ease of ordering dose preparation and for jazz and support services.
As a reminder, kyprolis uses our captisol technology in its formulation and both vaccine advance and reilly's use elements of ligand Pelican expression technology.
Also in regulatory approvals, we were pleased to see the first approval of an <unk> derived antibody when China's NPA granted marketing authorization to Gloria Biosciences, some barrel of map as a second line treatment for relapsed and refractory classical Hodgkin's lymphoma.
The first approval is a major event for any innovative technology. So it was gratifying to see this first approval for omni app to rods and barrel a map.
We expect another approval decision later this year for a second omni abderite antibody.
This one also in China for <unk> as a first line treatment in combo with chemotherapy for stage for squamous and non squamous cell lung cancer.
Beyond these two medicines, we expect a bright future for omni app with potentially many more approvals to follow.
Turning now to late stage, recent readouts or regulatory or clinical updates from our partners John already highlighted the late stage and regulatory progress of our partners at <unk> Therapeutics. Their recent positive data and now with approval submission plans for two indications both in the U S and in Europe.
Additionally, our partners at Stormont X announced completion of enrollment in their phase III Ilene, one randomized trial assessing oral laser Fox Athene versus intramuscular all the strength for the treatment of ER positive <unk> negative breast cancer in patients with an ESR one mutation.
<unk> expects to report data from the trial in the first half of next year.
Or a laser Fox <unk> is also being studied in a separate fully enrolled trial named Ilene two in combination with Lilly's CDK four and six inhibitor <unk>.
Topline data from our lean too are also expected in the first half of next year.
And I'll conclude this afternoon with a few comments about some of our technologies overall.
At <unk>, we've assembled and successfully invested in technology that find drugs and make drugs possible.
Pelican, our partners value. The fact that the Pelican expression technology has validated by four approved products and is supported by a robust and growing patent portfolio in the area of Biosimilars microbial toxins and vaccine antigen production as well as a growing number of patents that cover the technology itself.
These include promoters secretion leader sequences methods for high throughput screening protein expression strain engineering and marker systems among others.
Together there are more than 200 issued patents worldwide relating to the Pelican technology and nearly 50 applications now pending.
The increasing complexities of large molecules in the pharma industry pipeline, we believe theres never been a better time to on a validated expression technology like Pelican.
And I'll conclude my remarks, with an overview of omni <unk> and the technology is applicable to it anticipated to be included in the separation described in our releases today.
Regarding our ion channel Tech our <unk> team in North Carolina has extensive capabilities focused on ion channels and transporters and recently reached a data milestone in its application of high throughput electrophysiology with more than 1 billion rows of raw data generated over the last couple of years. This is a truly impressive accomplishment.
The team's downstream processing analysis use bespoke tools developed internally and we're not aware of anyone else who has generated a database like this.
And its largest this for this type of ion channel data.
In addition, we've advanced our partnership with GSK and entered into a third partner program with Roche earlier in the year.
The team also continues to advance a medically important collaboration with the cystic fibrosis Foundation, we see very nice potential for future deal flow with this differentiated set of ion channel technologies and with an added focus on our science and capabilities in this area have opportunities to further leverage and expand the capabilities broadly across modalities.
Including antibodies Adcs.
In addition to the highly differentiated core capabilities can provide novel reagent generation proprietary assays and in silica capabilities that can also support omni app discovery programs and can be accessed by partners when pursuing ion channels and transport our targets in a variety of approaches.
Our <unk> technology platform creates and screens diverse antibody pools and is designed to quickly identify optimal antibodies or related candidates for our partners' drug development efforts, we harnessed the power of biological intelligence or what we call <unk>, which we have built into our proprietary and validated transgenic animals.
And pair with our high throughput screening technologies to enable the discovery of high quality fully human therapeutic candidates.
These high quality antibodies are naturally optimized and are validated host systems for affinity specificity develop ability and functional performance our partners realize that they have access to antibody candidates that are based on unmatched biological diversity and our optimized through integration across a full range of technologies, including antigen design transgenic.
Animals, deep screening and characterization and proprietary assays.
And importantly, our technology can be leveraged to develop multiple therapeutic formats, including mono by and multi specific antibodies antibody drug conjugates or adcs and car T. Therapies. We can provide our partners both integrated end to end capabilities and highly customizable offerings, which address critical industry challenges and provide op.
<unk> discovery solutions.
Over 50 partners have access to <unk> antibodies with over 200 active discovery programs and now as of today, including 20, Omni App derived antibodies in clinical development and also including an approved product as I referenced earlier.
And I'll finish by saying that we see the potential for a very bright future for omni ABA head.
And with that I will turn the call back over to the operator for questions. So ill turn it back over to you.
Thank you Matt.
A reminder, if you would like to register a question. Please press star followed by the number one on your telephone keypad.
If your question has been answered and you would like to withdraw your registration.
Please press <unk>.
One moment please for the first question.
Alright and for your first question, we have from the line of Larry Solow from CJS Securities. Your line is now open.
Great. Thanks, so much for taking my questions.
Good evening.
First question I have is just on the <unk>.
<unk>.
It's.
Somewhat of a surprise, but I know you guys have been sort of exploring options for for a while.
John you touched on sort of why now but is it sort of it seems like it's sort of the culmination of these things.
The market.
Certainly several sort of public companies out there.
Somewhat similar technology, but also companies specific you guys have built a lot of.
And whatnot, so I'm just trying to.
Assesses it was just some inflection point.
We have specific.
You too.
Timing decision or a little more color on that would be great.
Any way to <unk>.
Think of in terms of valuation I know you guys have thrown out a number a couple of years back and I don't know if you could discuss that.
Probably more of a higher value.
Company's value today, so im just trying to assess.
Those thoughts.
Larry Thank you.
Absolutely.
Your first question and then Matt Kornberg can comment on.
On process of evaluation so the.
The business people, who don't like this.
<unk> team.
I believe we are creative.
We look at opportunities obviously, we we focus on excellent science and excellent partner relations.
That is our craft, our core business, but when it comes to optimizing.
Value, we're looking at M&A ways that we can acquire and build.
This is a very unique transaction.
And in my experience that lag and obviously, we've never split the company.
But we're doing it as we've said in our prepared remarks.
<unk>.
Our sense of confidence and this is.
The right decision at the right time, what's driving it.
Is the success of the business and.
And also a real belief that we have an opportunity here.
The success.
We described across.
The whole business, we're doing well, but specifically as we look at the diversity of the royalty the royalty momentum the new approvals. Some recent acquisitions that is further supporting the warranty business.
Great business, we are licensing technology, we are driving products.
In that business.
The last 345 quarters.
It's really emerged as a great growth position right now the RBI business.
It's not a surprise.
Last month or two what we have but.
But no doubt our decisions our acquisitions to fortify that platform.
Partner success, the last several quarters last year or so through the pandemic, especially we have emerged with confidence that we have got.
A very very strong technology, leading platform.
So it's out of success that we've seen this we've got a board we've got management team, we have the resources to run two companies. The other part is the view of opportunity. We believe by having focused teams that look at R&D investment that look at capital allocation.
<unk> focused compelling.
Investor profiles for investors, but we think the opportunity.
Better serve our investors to create and grow value out of two companies versus one combined so that's where we are we have been planning there are different ways to do this but.
With I think a lot of thoughtful work.
And decision, making we feel very good about the circumstances, Matt I'll, let you comment on valuation.
Thanks, John.
Larry that.
Evaluation point, we really can't comment on valuation, but I will just reiterate from what Jon said that I think.
In addition to all the <unk>.
Good reasons that John gave I think there is an opportunity for the new business too.
Invest more significantly in.
And driving the long term value of that business that might not be as overlapping with the short term EPS goals of the combined business and so that's just another reason that we think the.
<unk> term value will be will be more significant as two separate companies. So.
Breaking out some of the bigger products. In addition in our quarterly filings.
So that you can start to track some of the other individual products beyond just Kyprolis Eva Miller.
And that that's really something that we're excited about those products become top top of the royalty char contributors for us.
But on the on the overall business I'd say, a core business performing extremely well all three lines.
Business royalties contract payments.
And.
Capsule sales.
From a core standpoint in the court legacy customer base are all performing quite well and we see really nice growth in the next year in the queue for and into next year.
We didn't change guidance for this quarter largely because the captisol related to Ram Destrier is still unknown to us generally speaking in terms of.
Where exactly to land this quarter versus next quarter, we're shipping significant amount still so some of that may it may spill into next year, maybe in this year, but Jenny.
Generally speaking.
Each of the parts of the business that we sort of have a better handle on them more control over all all.
Forming ahead of expectations.
Okay fair enough. Thanks, I appreciate that call.
Alright. Your next question is from that you would.
Having a capital group your line is now open.
Good afternoon, gentlemen, congratulations on the strong quarter.
Okay.
First one regarding that the the COVID-19 felt that you're really recent recently all licensed do you have any sense, how quickly that could move into the clinic and how you are thinking about that potential opportunity.
Yeah, Yeah, Thanks, Matt we announced.
A collaboration with.
Annie's resources double crane around or be pro technology, which is a proprietary prodrome technology.
It's based around a COVID-19, antiviral treatment and oral treatment.
Difficult to say exactly when it may enter the clinic.
Great. We've got a very dedicated partner who is highly focused on it but obviously, it's a preclinical program at this stage.
Okay, great. Thank you and then kind of thinking along those tracks looking ahead to next year. There is there the potential for any additional drugs that use that the pro technology to be always <unk>.
We're always cautious not to promise licensing deals we I will direct you there are.
More more datasets related to be pro and related technologies coming out at the <expletive> on the conference. So we generally direct you there but.
Yes, there is.
Definitely applicability of the platform across other active ingredients as well.
Okay, and then one last one for me and then I'll hop back into Q.
Early on with the success of robbed us of your victory.
You commented and I can't remember, which quarter was but you commented on the record number of sample request that you had received and as time has gone on I'm. Just curious if you have seen I guess either follow on orders if you've seen some of those projects or customers may be blossom into.
The next stage of potential development, all because of what happened with where I'm does severe in the early days. Thank you.
Yeah, Matt is John good question.
We've had inbound inquiries more licensing and research sampling.
But we're focusing on the major value drivers right now important best herself.
We are spending time tracking those.
Anonymous calls at this time.
Understood Alright, thank you.
Next we have Jacob Johnson from Stevens. Your line is now open.
Thanks, Good afternoon, congrats on a nice quarter, just just saw on the omni avenues can you just talk about the the timeline for potentially deciding to to IPO Omnia, maybe just any kind of brackets for how we should think about the timeline for that and then I don't know if you can but can you just maybe discuss.
What other options are on the table because I think you alluded to maybe they're being other options out there as well.
Sure.
Yeah. Thanks.
So generally speaking.
We've talked with investors over the last couple of years.
About ways to monetize value around the Omnia business.
Concepts like selling.
10% of the business for.
Economics, just the economics of the business to some.
Investors or a minority investments in the business or collaborate strategic collaborations are things, we've all talked about and John already went through.
Sort of the list of.
Factors why we came to the conclusion that now is the right time to be more aggressive about separating the companies.
So with that I think.
We have been and will be open to sort of all potential path forward, probably one that's on investors' minds are the stock market.
There are certainly some.
Potential spak transactions that have happened that.
Could be very analogous to what we're trying to do here with with <unk> and that's something that we have and will continue to explore but based on everything we've seen so far.
The path to the best path, we think right now too.
Two independent publicly traded companies as the traditional IPO path followed by.
Depression through.
Spin off of the remaining interest and so I think that's generally.
The path, we expect to proceed down.
Obviously if.
Circumstances change, we are open and nothing's been definitively decided yet but that's that's generally the path her on.
Terms of timing look we are not committed to specific timing will continue to pursue the path is sort of expeditiously is prudent.
I think we're we're hoping to file an S. One sometime in the coming months if not.
Near future and then looked.
Look too.
For next year.
Consummated transactions sometime next year.
So it's not something that's years out, but it's not something that's going to happen certainly not happening in calendar 2021.
Got it.
Thanks for that man and then just maybe sticky on on the App.
The last couple of quarters, you've talked about kind of a number of investments in that business. I think it includes things like maybe providing more custom customized services to partners can you just talk about some of the efforts.
And omni I've recently, where you've been kind of spending opex there.
Yeah. This is Matt for clearly we built the omnia business through not only I'll say focused and shrewd acquisitions of adjacent technologies, but also through through internal investment and we see growing trends in the industry around.
Partners coming to us and needing more technology, they certainly understand the value not only of the depth.
Of engineering behind our transgenic animals, but also through our screening technologies are really bespoke capabilities around ion channels, which are commonly seen as very high value targets.
But we've continued to invest not only in.
Keeping our technology on the cutting edge, but also <unk>.
Continuing to invest in the integration of the technology within the different pieces of our stack.
And all of those things are things that drive partner use our partners, we see more and more.
Partners using our technology broadly, we just had another one start a clinical trial yesterday, which brought her a number of clinical omnia antibodies up to 20, which is always good to see and we see growth in the number of patents and our partners are filing for.
And on the App derived antibodies being the primary invention of course and that creates a very long royalty tail long term. So a lot of efficiency in the business itself, but also.
We see a lot of opportunity as we continue to invest in keeping it on the cutting edge.
Got it Super helpful I'll leave it there.
And next we have is Scott Henry.
Roth capital your lines now open.
Thank you good afternoon.
You guys certainly been very busy a couple of questions I.
I guess first.
On Captisol, we're now into November I know.
Expectations have been low as far as.
A COVID-19 pale into 2022, given where we are now three months later than the last quarter. You. What are your thoughts on there, perhaps being a little larger tale for Captisol going into 2022, then perhaps expected prior.
Thank you.
Scott hour.
Look is unchanged obviously ever guidance for this year is unchanged camps.
Cancel have been a big driver of revenue this year no surprise of course with our major contributions to to decorate.
But our outlook.
It really is unchanged or three months for their long you're right about that as expected. Some other oral anti viral some treatments have come along good data and now approvals.
The vaccines are still holding up very well there is abundant supply and vaccine rates are going up.
Obviously, we're watching case rates U S and internationally in the major commercial markets case rates are coming down hospitalizations and death rates are coming down.
And there is.
Growing narrative from Scott Gottlieb and other thought leaders that.
The pandemic really is is moving along we're hopeful for human health as the case specific to our partnership with Gilead, we will be there we will continue to supply, but our outlook is it's really to focus on our core business.
The 60 or 70 customers that are buying captisol for other products for clinical use we're going to get back to really focusing on our core capsule revenue.
If there's a chance to supply gilead in the consortium for Ron Desperate, we will but we do expect it's going to.
Subside and be a smaller smaller contributor going forward.
Okay. Thank you.
Shifting gears the royalty line.
Even I mean, we can kind of put in kyprolis numbers.
We don't have Ono, but we can kinda assess that and then adding a very strong evo melon number there is still a pretty big delta to getting too.
Total royalties were there any stocking orders for some of the new products, just trying to get a sense of.
Where some of that significant upside is coming from and third quarter.
Yeah. Good question Scott.
Like you said the.
The math is pretty easy on Kyprolis Eva Miller.
And the previous sort of other bucket used to be.
<unk> steady growing nicely every quarter, but pretty predictable.
The new products from the Pelican acquisition are quite.
Performing quite well, so I think like I mentioned in.
Earlier in the call.
We won't break it out in this queue, but probably in either the next cure starting next year as we start to have comparable numbers for these these different royalty lines I think you'll see that.
The biggest contributor this quarter was tear paratype from from Alvin.
And then.
Both the chairman's too and the jazz Reilly's program.
Both both for meaningful contributors to the quarter as well so those three programs probably account for for all the different so you can't back into from published and no numbers.
Okay great. Thank you. That's helpful final question just on Terror paratype.
Should we still be thinking about that <unk> rating coming in 2022, So that's still look like a likely occurrence.
Yeah Scott.
Scott This is Matt for.
We don't see as as we said in the last quarter, we don't Cte happening. This year. So that's obviously been discussed and disclosed.
On average in as a partner I'll say it has a real strong and committed team managing the work towards T.
And they've been in dialogue with the FDA and based on their discussions with the FDA.
Performing.
Some additional tests that they.
Ordinated with the FDA on so they're doing that work, we expect they'll submit that work.
Sometime in the near future and there is not a typical paducah timeline for this sort of thing but we.
We do we are continuing to monitor it and I will say, we've got a very committed partner who is highly focused on getting TGE as soon as they can we don't see that happening this year, but they're very committed to it.
Okay, great. Thank you for the color and thank you for taking my questions.
Yeah.
And there are no further questions at this time that concludes the Q&A session.
I will now turn the call back to John Higgins for closing remarks.
Yeah. Thank you yeah, just a quick remark I appreciate the turn out in the cold is a good questions.
Very pleased with the business.
It's truly an exciting time to be at la again.
We've grown significantly in laboratory operation.
Headcount staff I want to acknowledge our team it is a plus.
We're doing great science and research for answering some major world health questions and challenges and and really I think providing outstanding service to our partners.
All with the focus of delivering a great company for four investor. So one acknowledged that the support of our board they've been highly engaged obviously substantial strategic planning and work underway.
We are confident in our decision making.
Clarity on a path forward and and feel very good about the team in place and.
And our future. So thank you appreciate the time and we will keep you posted as our business evolves.
And this concludes today's conference call. Thank you all for your participation stay safe and you may now disconnect.
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