Q1 2022 Ligand Pharmaceuticals Inc Earnings Call
Matt Korenberg: Our core capsule sales increased year over year from $1.3 million in Q1 of 2021 to $6.2 million in Q1 of 2022. Thus, this is a strong quarter for caps for core capsule sales. As investors know from past periods, quarterly sales are lumpy based on the timing of orders by our large customers. We do not anticipate that Q1 2022 core capsule sales will be a run rate for the rest of the year. And I'll give you more guidance on that.
During todays program.
Star Zero.
[music].
Good day, everyone and welcome to ligand Pharmaceuticals first quarter 'twenty two earnings call. At this time all participants are in a listen only mode. Later, you will have an opportunity to ask questions. During the question answer session. You may registered to ask a question by pressing star and one on you touched on phone. Please note that.
Matt Korenberg: We expect to continue reporting our capsule revenue broken out into two lines for as long as sales related to COVID continue to be a material part of the capsule revenue. Contract revenue in Q1 2022 was $19.9 million, compared with $16.8 million a year ago. Our GAAP EPS for the quarter was a loss of 91 cents.
This call May be recorded it is now my pleasure to turn today's program over to Simon <unk> head of Investor Relations. Please go ahead.
Welcome to <unk> first quarter of 2022 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 .
Matt Korenberg: The net loss for the first quarter of 2022 included a $12.6 million net non-cash loss from changes in the value of Ligand's public company. Also included in the quarter were one-time expenses of just under $5 million related to the planned separation of the company into two publicly traded companies. Adjusted diluted EPS for Q1 2022 was $0.76, and this compares with $1.41 in Q1 of 2021. If we adjust these numbers for captosol COVID-related sales, our adjusted diluted EPS for Q1 2022 would be $58,000, compared with $0.14 in Q1. In the quarter, we repurchased $165.8 million in principal of our convertible notes for $163.7 million in cash.
The use of non-GAAP financial measures and some of our statements will be forward looking including does relate to our financial condition results of operations financial guidance the impact of the COVID-19, pandemic and the expected timing completion and effects of our previously announced plans to spin off the omni business to become a standalone public company pursuant to a business combination with the Vista.
Public acquisition Corp, too.
Additional information concerning risk factors and other matters concerning ligand can be found in our earnings press release, and our periodic filings with the FCC. 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 and the closest GAAP financial measure can be found in our earnings release.
<unk> issued earlier today I'd now like to turn the call over to John Higgins.
Matt Korenberg: As of March 31, 2022, we had cash equivalents and short-term investments of $204 million. Turning now to guidance, we're reaffirming our 2022 revenue outlook for the combined company. We forecast 2022 royalties to be in the range of $55 to $60 million. Capsule material sales are expected to be in the range of 40 to 50 million. And of that 40 to 50 million of expected capsule sales, we expect approximately 17 to 19 million to be core capital, and the rest, the remainder, to be capsule sales. We forecast contract revenue to be in the range of $52 to $62.
Simon Thank you.
Afternoon, and thanks for joining law against first quarter 2022 financial results conference call.
In addition to our strong financial performance at the other main highlight this past quarter is the progress we made towards separating out omni app into a public Standalone company.
We anticipate the split will be completed in the second half of this year. The regulatory process has advanced omni at staffing up and ligand continues to recruit new board members.
There is strong interest from people to join both ligand and omni App, which we believe validates the strength success and outlook for each business.
Matt Korenberg: Within all these numbers provided above, we expect 35 to 45 million of this to be attributable to the Omniab business, principally in the contract revenue. We're also introducing full year 2022 earnings guidance and a breakout of revenue and earnings guidance for the ligand business excluding Omniab and excluding COVID related cap. We expect revenue for Ligand, excluding Omniab and Cova-related capsules, to be $90 to $100 million, and adjusted diluted EPS to be $1.50 to $1.00.
As we move toward the split will be enabling investors to focus on like in going forward or what we call the remaining company or remain co.
Post split we will focus on login being inefficient company built around R&D tools to drive licensing transactions and partnerships while I.
Again, it will leverage its strong R&D heritage.
And we will have a broad and growing portfolio of partner programs.
Our focus will be on financial growth sharing the economics of quality pharmaceutical products developed and commercialized by others.
Matt Korenberg: Anticipating the spinoff of Omniab and knowing COVID-related capital sales are likely to decrease significantly and eventually go away completely, we believe this is the best way to track the performance of the remaining Ligand business. It will be useful for investors to start focusing on these baseline metrics now as we develop our plans and outlook going forward. This is also consistent with how management analyses the business and will continue to provide disclosure that allows investors to track the business on this basis.
With an overlay of a lean cost structure.
We have a good core products, including Kyprolis, even mellow and the addition of four new royalty bearing products from our Pelican acquisition about 18 months ago.
We have strong core assets today, and we see major drivers of growth coming from other products in late stage development.
Before I talk more about remain kao first I want to make some comments about our work with gilead and others to support the production of <unk> for the treatment of COVID-19.
Matt Korenberg: As for the other components of Ligand, we estimate that the combined earnings for both COVID-related Capsosol and Omniab for 2022 will be about 20 cents to 40 cents per share. Therefore, for consolidated reporting for the year, the outlook looks to be about $1.70 to $2.20 in adjusted dilution.
We answered the industry's call by stepping up to manufacture captisol at about 10 times the scale of our typical annual production.
We are pleased in terms of our scientific and operational achievements to help serve the overwhelming health needs.
Matt Korenberg: Listeners can... Look to our Q1 earnings press release issued earlier today and available on our website for reconciliation of adjusted financial results with the GAAP financial results. I'll turn now to a brief update on our process to separate Ligand into two independent publicly traded companies. On March 23rd, we announced plans to spin off our OmniAV Antibody Discovery business immediately followed by a merger with the Avista Public Acquisition. Just last week, SPAC filed the initial S4, and Omniab filed the initial Form 10 associated with this transaction.
The world Buckled under the pandemic.
This is an extraordinary chapter like in its history.
One every employee is proud to be a part of.
Matt Korenberg: These filings kick off the review process with the SEC, which, after the registration statements are declared effective, will culminate in the shareholder vote by the Avista SPAC shareholders, and then the spinoff of Omniab and merger with SPAC. The outlook on timing to close the spinoff and merger and have two independent public companies remain is the second half of 2020.
However, ligand is not a COVID-19 company in this business line is moving along.
You saw supply to manufacturer in that sphere is not how investors should evaluate the growth or the potential of the business. The focus should be on royalty revenue and on sales of Captisol for core programs.
Our support for them death severe has been a significant opportunity driven by the pandemic no doubt we have generated hundreds of millions of dollars in capsule sales that yielded substantial cash flow to support our business and strategic investments.
However, it is not a factor to value the company in the future are.
Going forward, we expect that annual sales of Captisol for Rem disappear will decline as would be expected with the waning of the pandemic and we cannot reliably forecast what captisol supply needs for Covid will be.
Matt Korenberg: Lastly, I'll provide a few updates on our Key Portfolio Program. John mentioned previously most of the details around Sparcentin, but I'll just add that we expect a Sparcentin launch early next year, and this program could be a major driver of growth for us in 2023 if the launch is timely and successful. We look forward to tracking Trevere's progress with the FDA and MAA, as well as its commercialization. In April, Mark announced that the FDA granted breakthrough designation for V116. 21 Billion Pneumococcal Vaccine Utilizing Ligand's CREM197 Vaccine Carrier Protein, which is produced using our Pelican Expression Technology Platform
Thus, we will no longer give guidance for sales of Captisol for use with her and desperate or beyond what we've provided already and instead in our financial reports, we are now breaking out captisol sales for room that severe and the other line what we're calling core sales. So investors can see on a historical basis, the trends and contributions to the business.
This will give clarity on how our business is performing and more importantly help investors focus on the core drivers of success.
Matt Korenberg: Merck plans to initiate Phase III clinical trials for V116 in 2022. And along with VaxNuVans, V116 is a key component in the pneumococcal vaccine franchise that Merck continues to build to compete primarily with Pfizer in this multi-billion dollar market. And finally, the products utilizing our Pelican Expression Technology continue to show great commercial progress. In the first quarter, we booked just under $3 million of Terra Peritide royalty revenue, approximately $1.6 million of Rylase royalty revenue, and just under $1 million of Numisil royalty revenue. With that, I'll turn the call over to Matt Foer to provide additional details on OmniEB's business and strategy.
The opportunity for investors is that soon we will have a business wholly separate and independent of omni up along with the ability to analyze remain co. Excluding captisol sales for in depth severe Ah.
This should clearly illustrate the growth and contribution to the numerous remain co assets and compare our favorable position today in terms of growth and valuation versus our peer companies.
On this basis, we expect a ligand will generate solid revenue growth and performance. This year on revenues between 90 and $100 million along with good cash flow as Matt Kornberg will discuss.
We will provide more information later this year about our longer term outlook, but we expect that in 'twenty 'twenty three top line growth will exceed 15% and adjusted earnings for the core business will grow by over 50%.
Matt Foer: Thanks, Matt. I'm going to focus my comments this afternoon on our Omnia platform as we prepare for it to become an independent publicly traded company later this year. The OmniAb Discovery Platform provides our partners with access to diverse antibody repertoires and cutting-edge high-throughput screening technologies to enable the discovery of next-generation therapeutics. At the heart of the platform is the biological intelligence, or what we call BI, of our proprietary transgenic animals. These animals have been genetically modified to generate antibodies with human sequences to facilitate the development of human therapeutic candidates.
I believe it is a good time to own ligand.
Is that the split investors will have an investment in two companies one focused leading antibody discovery business and the other a financial growth business built around valuable pharma contracts and various proprietary technologies.
Now before I turn the call over to Matt I want to comment on our program that is making good progress and that we are particularly excited about sparse Sampson.
Matt Foer: Over 55 partners currently have access to Omniab-derived antibodies, and more than 250 programs are being actively developed. We've added a substantial number of new programs over the past 12 months, and our partners have completed or are conducting over 100 clinical trials. These trials cover indications that span oncology and inflammation, metabolic diseases, and immunology.
In March our partner trivia Therapeutics announced the submission of their NDA to the FDA for accelerated approval of sparse sampling for Iga nephropathy.
<unk> also announced that plans are underway to submit an NDA for accelerated approval for focal segmental glomerular sclerosis or <unk>.
Matt Foer: We've recently added multiple new partners and expect to be adding more this year at potentially an even higher rate than in the recent past, given our ongoing business development discussions. We're looking forward to the ASCO annual meeting early next month, where multiple Omnia partners will present new clinical data. Over time, our platform has become increasingly validated, now with two approved drugs, one under review at the FDA, and many others in or preparing to enter the clinic.
And to file a combined Iga nephropathy and F. S. G S marketing authorization application in Europe in the middle of this year.
Well I again will earn a 6 million milestone related to the NDA filing and a 2 million milestone for the MAA filing.
Like and of course, there's also eligible to receive a 9% royalty on global sales should start to become approved and commercialized.
We are very pleased to see the progress. It has been reported a great dataset and we're really pleased with the advancement that <unk> made the last several months here now I'd like to turn the call over to Matt Kornberg to review, our financial results and guidance.
Matt Foer: We believe the Omniad business is poised for continued growth and believe our growing roster of new partners and programs illustrates the value of our technology. Omniab is now being used in diverse modalities, including full-length IgGs, various formats of bispecifics, antibody drug conjugates, and others.
Thanks, John .
My remarks today will cover three topics I will review our financials I will provide an update on the separation process and I'll provide a brief update on some of our major partner programs.
Matt Foer: We continue to invest in our technology to expand its utility and have developed dozens of different antibody discovery workflows that leverage various elements of our technology and that are then carefully paired with partner programs depending on their needs. Being here at the PEGS Protein Engineering and Cell Therapy Conference here in Boston this week and meeting with current and potential partners, it's very clear to me that our industry scientists place high value on the fact that our team and our technology can feed flexibly into a variety of workflows to meet each program's scientific needs. That flexibility allows us to efficiently grow our portfolio of programs while investing to further improve our comprehensive biologically driven platform.
Starting first on the financial front, the first quarter of 2022 was a strong start to the year for ligand.
Total revenues for the quarter were $45 7 million.
Royalty revenue increased 93% to $13 7 million from $7 1 million a year ago.
All of our major products contributed to our route to royalty revenue growth with a significant portion of the total growth driven by program using our Pelican expression technology, including Riley's care paradigm and new Michelle.
<unk> was launched in the Middle of 2021, Altera parents had a new missile had very nice year over year growth in their second full years of commercialization.
Matt Foer: Our business development team continues to secure new license deals, and we're in the process of expanding that team, given increasing demand for the platform and also given that we seem to be managing more inbound interest than ever before. Within Omniab, we have extensive capabilities for ion channels and transporters that were developed in the iKitchen platform over many years. We view these as best in class capabilities for a viable target to lead delivery and for difficult and high-value ion channel targets. These capabilities were established around small molecules and we believe they have clear potential in multiple formats or modalities.
Total captisol sales were $12 1 million for the quarter and this compares with $31 3 million a year ago.
Beginning this quarter, we're breaking out captisol sales into two separate lines. One includes captisol, we've sold related to the COVID-19 treatment room that severe.
Other includes our sales of capsule for all other programs and customers, which we refer to as our core captisol sales.
From these lines you can see that the decline in capsule sales was a result of a decrease in COVID-19 related sales versus 2021.
Our core Captisol sales increased year over year from $1 3 million in Q1 of 2021 to $6 2 million in Q1 of 2022.
Matt Foer: In addition, these differentiated core capabilities can provide novel reagent generation, proprietary assays, and in silico competencies that can also support partner discovery programs and can be used when pursuing ion channel and transporter targets in a variety of ways. We're making very good progress on our operational and strategic goals as we prepare to become a standalone public company. Our team continues to be highly focused on key areas that include partnered pipeline development and expanding the utility of the OmniAPP platform.
Well this was a strong quarter for caps for core Captisol sales as investors know from past periods.
<unk> sales are lumpy based on the timing of orders by our large customers.
We don't we do not anticipate that Q1 2022 core capsule sales will be a run rate for the rest of the year and I will give you more guidance on this in a few minutes.
We expect to continue reporting our captisol revenue broken out into two lines for as long as sales related to Covid continue to be a material part of the Captisol revenue line.
Matt Foer: And our team is now finalizing the completion of a major expansion of our wet labs and our ion channel R&D facility and a significant expansion of our transgenic vivarium facilities, given increasing demands from our partners. And with that, I will turn the call back over to the operator for questions. Operator? At this time, if you'd like to ask a question, please press the star and 1 on your touchtone phone. You may remove yourself from the queue at any time by pressing the pound key.
Contract revenue in Q1, 2022 was $19 9 million compared with $16 8 million a year ago.
Our GAAP EPS for the quarter was a loss of 91 cents.
The net loss for the first quarter of 2022 included $12 6 million net noncash loss from charges are from.
From changes in the value of law against public Company Holdings.
Operator: Once again, that is star and 1 to ask a question. We'll take our first question from Larry Solow from CJS Security. Great. Thanks, guys, and congrats on the progress with the spin. Sounds like everything's moving ahead on schedule, so glad to hear that. Maybe just a couple of questions on Kyprolis.
Also included in the quarter were one time expenses of just under $5 million related to the planned separation of the company into two public trade publicly traded companies.
Adjusted diluted EPS for Q1, 2022 was 76 cents and this compares with $1 41 in Q1 of 'twenty 'twenty. One if we adjust these numbers for Captisol COVID-19 related sales our adjusted diluted diluted EPS for Q1, 2022 would be 58 cents and this compares with 14 cents and.
John Higgins: I think Amgen put out a pretty good number in Q1. It sounds like they seem pretty optimistic about the full year. So a question around Kyprolis and more just on the recent Bay Biogene approval, just trying to get a little bit more color on how big potentially the opportunity in China could be for Kyprolis. I'll jump in here. I thought Matt might, but Larry, thanks for the question.
Q1 of 2021.
In the quarter, we repurchased $165 8 million in principal of our convertible notes for $163 $7 million in cash.
As of March 31, 2022, we had cash cash equivalents and short term investments of $204 million.
John Higgins: So yeah, to break it down, Coccolis was approved in 2012, early, US only. Now it is sold through Amgen, US Europe, Ono is the Japanese partner, and you referenced Beijing. They just launched it in the first quarter in China, a big market. So the product is annualizing over $1.2 billion. A year and a half ago, sales stalled a little bit. We believe that was largely due to pandemic-related office visits, you know, for oncology treatment. But growth is picking up in the last two quarters. Japan looks strong.
Turning now to guidance, we are reaffirming our 2022 revenue outlook for the combined business.
We forecast 2022 royalties to be in the range of $55 million to $60 million.
Captisol material sales to be in the range of $40 million to $50 million.
And of that $40 million to $50 million of expected capsule sales, we expect approximately $17 million to $19 million to be core captisol sales.
And then the rest the remainder to be capsule sales for Covid.
We forecast contract revenue to be in the range of $52 million to $62 million.
John Higgins: Amgen, you're right, reported a good first quarter. We do not know Beijing's quarter yet. It's a partial quarter. And they have not given guidance or broken it out. China, our estimate would be at least 100 million annual sales. It could be two to 400 million, but it's too early to tell.
Within all of these numbers provided above we expect 35 to 45 million of this to be attributable to the omni air business principally in the contract revenue line.
We're also introducing full year 2022 earnings guidance and a breakout of revenue and earnings guidance for the ligand business, excluding omni AD and excluding COVID-19 related captisol.
John Higgins: And we're looking forward to getting a few quarters of run rate before we can... Sure, and I mean, kind of like, John, like, three to five, a five-year potential, you know, without, I'm not holding you to the number, but it seems like it, you know, just to get a little like relative size or, you know, what this does to the potential TAM for, you know, is really kind of Unknown Speaker Yeah, and a fair question.
We expect revenue for ligand, excluding omni haven't Cobra related capsule to be $90 million to $100 million and adjusted diluted EPS to be $1.50 to $1 80.
Anticipating the spinoff of omni I've been knowing COVID-19 related capsule sales are likely to decrease significantly and eventually go away completely. We believe this is the best way to track the performance of the remaining ligand business.
John Higgins: Again, we're going to get the first quarter and maybe more of a trend line and watch for Beijing signaling. As a public company, they're fairly vocal or out there on their financial performance. So hopefully they'll have some messaging, but it's so early to factor that in. But a long way to say it's a great asset.
It will be useful for investors to start focusing on these baseline metrics now as we develop our plans and outlook going forward.
This is also consistent with how management analyzes the business and we will continue to provide disclosure that allows investors to attract the business on this basis.
As for the other components of ligand, we estimate that the combined earnings for both Covid related Captisol and omni App for 2022 will be about 20 to 40 cents per share.
John Higgins: It's a very good loyalty, and it is definitely still growing. We expect it to drive good cash flow for Ligand going forward. Great. And then just a simple question, maybe on the part of the antenna, and I think you guys have given some numbers just on, you know, potential market size. I think initially we thought the SGS indication might be first, but it seems like they may eventually both be approved together.
Therefore for consolidated reporting for the year, the outlook looks to be about $1.70 to $2 20, and adjusted diluted EPS.
John Higgins: Maybe the IGA and the Prosperity will be first. And I think that the Prosperity market is actually the bigger of the two potential markets. So, again, maybe just potential size or what that could eventually be, even at the low end of expectations. Again, a five-year-plus outlook, not what we're going to do in Q1 of 2023 or anything like that. Yeah, I'll give a comment.
Listeners can look to our Q1 earnings press release issued earlier today and available on our website for a reconciliation of adjusted financial results with the GAAP financial results.
I'll turn now to a brief update on our process to separate lagging into two independent publicly traded companies.
On May on March 20th March 23rd we announced plans to spin off our omni have any antibody discovery business immediately followed by a merger with the Avista public acquisition Corp.
John Higgins: And Matt Korenberg studies the public company research reports as well. It's a broad range. Several years ago, the partners would describe this as, you know, as much as a half a billion to a billion dollar US market. And certainly the pricing potential and the patient needs supported that. I say that because we get those questions and that those numbers are out there. Nobody is planning that right now.
Just last week the spec filed the initial as for an omni have filed the initial form 10 associated with this transaction.
These filings can kick off the review process with the SEC, which after the registration statements are declared effective well will culminate in the shareholder vote by the Vista back shareholders and then the spinoff of Omni Abbott merger with this back.
John Higgins: It's too early to tell. We've seen as low as 200 million. So you know, that's a broad range. But where we are is, we are really at a point now that clinical trials have gone so well. So far, the regulatory process is on or ahead of schedule. Before we jump the gun on commercial, we're really going to listen and watch to see what Travir provides for guidance before we get in front of those numbers. Any other perspective the street might have right now around that asset? Yeah, I think, John, you captured it, and Larry, you mentioned, but the patient population for IgE and nephropathy is... Approximately $100,000, and the patient population for FSGS is close to 30 or 40,000.
The outlook on timing to close the spinoff and merger and have two independent public companies remains the second half of 2022.
Yeah.
Lastly, I'll provide a few updates on our key portfolio of programs.
John mentioned previously our most of the details around spar send him, but I'll just add that we expect as a percent and launch early next year and this program could be a major driver of growth for us in 2023, if the launch is timely and successful we look forward to tracking traverse progress with the FDA and MAA as well as our commercialization efforts.
In April Merck announced that S. The FDA granted breakthrough designation for V 116, a 21 billion pneumococcal vaccine utilizing ligand cram 197 vaccine carrier protein, which is produced using our pelican expression technology platform.
Matt Korenberg: So certainly, hygiene and property are the bigger opportunity. In terms of patients, and the launches, as we mentioned, expected hopefully next year. And then the research, the third-party research that we look to, the consensus numbers that we look to, they are, there is a wide range, as John mentioned, 200 on the low end and a billion on the high end, but something in the several hundred million range.
Merck plans to initiate phase III clinical trials for V 116 in 2022.
Long with facts, New Vance V 116 is a key component in the pneumococcal vaccine franchise that Merck continues to build to compete primarily with Pfizer and this multibillion dollar market.
And finally, the products utilizing our Pelican expression technology continued to show great commercial progress in the first quarter, we booked just under $3 million of terror paratype royalty revenue approximately $1 6 million of <unk> royalty revenue and just under $1 million of new missile royalty revenue.
John Higgins: Like what everyone is expecting, at least in terms of... Got it. And then just last question, John, I just wanted to confirm. You just referenced potential growth of 23. That was for the remain call, right? For the mid-teens top line, I think you said 50% earnings growth. I know that wasn't guidance.
With that I'll turn the call over to Matt for to provide additional details on omni ups fitness business and strategy.
Thanks, Matt.
Going to focus my comments this afternoon on our Omnia platform as we prepare for it to become an independent publicly traded company later this year.
Unknown Speaker: That was just sort of a fad. Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of the Goldstein on Gelt radio show. He is a licensed financial professional both in the U.S. and Israel. He is also the co-founder and executive director of Profile Investment Services. Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of Got it. Great. I appreciate all the calling that you provided. Thanks.
Yeah on the <unk> discovery platform provides our partners with access to diverse antibody repertoires and cutting edge high throughput screening technologies to enable the discovery of next generation therapeutics.
At the heart of the platform is the biological intelligence or what we call B I of our proprietary transgenic animals. These animals have been genetically modified to generate antibodies with human sequences to facilitate the development of human therapeutic candidates over 55 partners currently have access to omni have derived antibodies and more than 250 programs are being <unk>.
<unk> developed we've added a substantial number of new programs over the past 12 months and our partners have completed or are conducting over 100 clinical trials.
These trials include indications that spanned oncology and inflammation and metabolic diseases and immunology.
We've recently added multiple new partners and expect to be adding more this year and potentially an even higher rate than in the recent past given our ongoing business development discussions.
We're looking forward to the <unk> annual meeting early next month, where multiple omni App partners will present, new clinical data.
Operator: Larry, thank you. Our next question comes from Matt Hewitt from Craig Hallam Capital. Good afternoon, gentlemen. Thank you for the update and congratulations on the strong start to the year. One of the questions I've been getting a fair amount recently regarding funding biotech, small and biotech and pharma companies in particular given the current market dynamics, and I'm curious. I mean, I look at your portfolio of partners, and you've got a pretty wide swath of the market, a lot of large companies. You mentioned Merck, obviously, earlier, and a number of them that are very well funded.
Over time, our platform has become increasingly validated now with two approved drugs one under review at the FDA and many others in or preparing to enter the clinic.
Matt Korenberg: And on the other end, you've got some smaller companies. What are you hearing from your partners regarding funding? And, I guess, for those that are on the smaller side, does this create opportunities for you from an investment standpoint? If one of these or more of these have platform-type opportunities where you could step in, maybe provide some incremental capital, but add to your portfolio? Your stable of platforms?
We believe the omni business is poised for continued growth and believe our growing roster of new partners and programs illustrates the value of our technology.
Omni App is now being used in diverse modalities, including full length agg's various formats of bi specific antibody drug conjugates and others.
We continue to invest in our technology to expand its utility and have developed dozens of different antibody discovery workflows that leverage various elements of our technology and data are then carefully paired with partner programs depending on their needs.
Being here at the pegs protein engineering and cell therapy conference here in Boston This week and meeting with current and potential partners. It's very clear to me that that our industry scientists place high value on the fact that our team and our technology can eat flexibly into a variety of workflows to meet each program's scientific needs that flexibility allows.
Matt Korenberg: Matt, do you want to comment? Yeah, thanks, Matt. Appreciate the question. And I guess first off, generally, we We certainly see what you're commenting on out there, markets are difficult for fundraising in the biopharma sector, that's not rocket science right now, and we've seen hundreds of companies that are trading at or below cash levels, and or private companies that are struggling to finance, and a lot of those companies are coming to Ligand, looking to partner or looking for financing, and so the opportunity set is certainly, at this point, the market is certainly providing a wide opportunity set for us.
US to efficiently grow our portfolio of programs, while investing to further improve our comprehensive biologically driven platform.
Matt Korenberg: Within our own partner base, most of our partners are well funded through whatever the next key value-driving event is, if not just fully large companies that are set for funding. But there are a subset, exactly as you suggested, where we do see opportunities to invest more in a business or a program and, in exchange, get economics, and that is something that we think is, A good opportunity. We know the programs really well, we either created the science, or they're using our technology in most cases, and we can use that as a competitive advantage to have some insight into the programs.
Our business development team continues to secure new license deals and we're in the process of expanding that team even increasing demand for the platform and also given that we seem to be managing more inbound interest than ever before.
Within <unk>, we have extensive capabilities for ion channels and transporters that were developed in the <unk> platform over many years.
We view these as best in class capabilities for viable target to lead delivery and for difficult and high value ion channel targets.
These capabilities were established around small molecules and we believe have clear potential in multiple formats or modalities.
In addition, these differentiated core capabilities can provide novel reagent generation proprietary assays and in silica competencies that can also support partnered discovery programs and can be used when pursuing ion channel in transport or targets in a variety of approaches.
We're making very good progress on our operational and strategic goals as we prepare to become a standalone public company.
Our team continues to be highly focused on key areas that include partnered pipeline development and expanding the utility of the Omnia platform.
And our team is now finalizing completion of a major expansion of our wet labs, and our ion channel R&D facilities and a significant expansion of our transgenic vivarium facilities, given increasing demands from our partners.
And with that I will turn the call back over to the operator for questions operator.
Matt Korenberg: And so for us, it does provide an additional opportunity, and we do think we're excited about that, at least from that standpoint. 6 to 12 months as the markets sort themselves out.
At this time, if you'd like to ask a question. Please press the star one on your Touchtone phone you may remove yourself from the queue at any time by passing the punky. Once again that is star and wanted to ask a question.
Operator: That's great. Thank you very much. And once again, that is the star and one to ask a question. We'll pause for a moment. Okay, well, thank you. It sounds like that's the end of our questions. We appreciate people dialing in and listening to the story. It's been a busy year so far. We'll have some updates. We're at two conferences later this month at HCW. May 24th, we'll have a live presentation, and then we'll be at the Craig Hallam Conference June 1st.
We'll take our first question from Larry Solow from C. J S Securities.
Great. Thanks, guys and congrats on the progress with the spend it sounds like everything is moving ahead on schedule. So I was glad to hear that.
Maybe just a couple of sort of questions on Kyprolis I think Amgen put out a pretty good number in Q1, it sounds like a nice seem pretty optimistic on the full year. So a question around kyprolis and more just on the Beijing Biogen a recent approval just trying to get a little bit more color on how big potentially that the Chinese the opportunity in China.
Could be for Kyprolis.
Okay.
Operator: Thank you, everyone. We appreciate your time. This does conclude today's program. Thank you for your participation. You may disconnect at this time. Have a great day.
I'll I'll jump in there I I thought Matt might but Larry Thanks for the question. So yeah to break it down Kyprolis approved in 2012 early U S. Only now it is sold.
Sold to Amgen.
Operator: ... [music]... [music]
U S. Europe Ono is the Japanese partner and you referenced B gene. They just launched in the first quarter in China.
It's a big market. So the product is is.
Annualized go over $1.2 billion, a year and a half ago sales stalled a little bit. We believe that was largely pandemic related office visits for oncology treatments, but the growth is picking up in the last two quarters.
Japan looks strong and Jim you're right reported a good first quarter, we do not know Beijing quarter, yet, it's a partial quarter.
They have not given guidance you've broken it out.
China, our estimate would be at least 100 million annual sales it could be two to 400 million, but it's it's too early to tell and we're looking forward to getting a few quarters run rate.
Before we can sure and I mean kind of like a oh, John like a you know a three to five five year potential you know without I'm not holding you to a number but it seems like the you know just to get a little like relative size or you know what this does to the the potential Tam for car yeah. It was really kind of what I'm looking at.
And.
Fair question again, we're going to get the first quarter and maybe a more of a trend line.
And watch for basically signaling as a public company, they're fairly vocal or are out there on their financial performance. So hopefully they'll have some messaging, but it's so early it's hard to factor that in but a long way to say the it's a great asset its a very good royalty and it is definitely still growing and we expect it to drive good cash flow for ligand going forward.
Great and then just similar question maybe on as far as the antenna and I think you guys have given some numbers just on you know potential market size I think initially we thought after U S. S. G S indication might be first but it seems like they may come eventually both be approved together, maybe the Iga nephropathy will be first and I think probably more.
Market is actually the bigger over the two potential markets. So.
Again, maybe just potential size or you know what what that could eventually be even at the low end of expectations.
<unk> again, a five year plus outlook not what we're going to do it.
One of 23 or anything like that.
Yeah, I'll I'll give a comment and Matt Kornberg studies, the public company research reports as well right.
It's a broad range right.
Several years ago.
<unk>.
I would describe this as you know as much as a half a billion to a 1 billion dollar U S market.
And certainly the pricing potential and the patient need supported that IDE.
I say that because we get those questions and that those numbers are out there and nobody is planning that right now it's too early we've seen as low as 200 million. So you know that's a broad range.
But where we are is is really at a point now the clinical has gone so well so far the regulatory is on or ahead of schedule.
Before we jumped the gun on commercial we're really going to listen and watch to see what your beer and provides our guidance before we get in front of those numbers.
Any other perspective, the street might have right now around that asset Yeah, I think John you captured that and Larry you mentioned, but the patient population for Iga nephropathy is.
<unk> hundred thousand.
And in the patient population for F. S. G. S is closer to 30 or 40000, so certainly Iga nephropathy is the bigger opportunity in terms of patients.
And the launches.
As we mentioned expected hopefully next year and then the research the third party research that we look to the consensus numbers that we look to them. They are there is a wide range as John mentioned, you know 200 on the low end and a $1 billion on the high end, but something in the several hundred million range seems.
Like what everyone is expecting at least in terms of potential.
Got it and then just last question I think John just to I just wanted to just confirm you.
Do you just referenced the potential growth in 'twenty three that was for the remain call right sort of the mid teens top line. I think you said, 50% earnings growth I know that wasn't a guidance I was just sort of oh.
Target right what I heard.
Correct, Yes, we did and.
I'm sure it's clearer by the prepared remarks, we're excited about the business investors now as we move toward the spin we can't predict the exact.
Date or month of this but we expect to spend will happen. We're gonna have a remaining company at it it's a very well positioned company. Yeah, we'll have more detail at conferences et cetera, but what do we look at the portfolio.
In line currently royalty generating assets and then the calendar on a potential approvals. The next one to three years and this is everything you know I've been here 15 years. This is everything that we worked for in terms of building high quality research business backed by a royalty growth and and so what we're one try to give more clarity.
Around the business components.
And specifically, we did give some numbers today, but it's early days, we're very confident in top and bottom line growth in <unk>.
As the quarters move on we'll have more.
The specificity around that.
Got it great I appreciate all the color that you can provide it thanks Larry.
Thank you.
Our next question comes from Matt Hewitt from Craig Hallum Capital.
Good afternoon, gentlemen, thank you for the update and congratulations on the strong start to the year one of the questions I've been getting a fair amount recently regarding funding.
Funding, a biotech small end and biotech and pharma companies in particular given.
The current market dynamics and I'm curious I mean, I look at your portfolio of your partners and you've got a pretty wide.
A swath of the market a lot of large companies you mentioned Merck, obviously earlier a number of them that are very well funded and on the other end you've got some smaller companies. What are you hearing from your partners regarding our funding and I guess for those that are on the smaller side does this create opportunities for you from an investment standpoint, if one of these or.
More of these have a partner you know platform type opportunities, where you can step in and maybe provide some incremental capital, but add to your stable of platforms.
Yeah, Matt you want to comment.
Yeah. Thanks, Matt I appreciate the question and I guess first off generally.
We.
We certainly see what you're commenting on out there markets are difficult for our fund raising in the Biopharma sector. That's not rocket science right now and we've seen hundreds of companies that are trading at or below cash levels and or private companies that are struggling to financing a lot.
Those companies are coming to ligand are looking to partner or looking for financing and so the opportunity set is certainly.
At this at this point the market is certainly providing a wide opportunity set for us.
Within our own partner base.
Most of our partners are well funded through whatever the next key value driving event is if not.
Just fully large companies that are set for funding, but there are a subset exactly as you suggested where we do see opportunities to invest more in a business or a program and an exchange get economics and Ah that is.
That we think is.
A good opportunity we know the programs really well are we either creative the science or they're using our technology in most cases, and we can use that as a competitive advantage to have a some insight onto the program. It's so for us It does provide a additional opportunity and we do think where we're at.
Cited about that at least from that standpoint for the next six to 12 months as the market sort themselves out.
That's great. Thank you very much.
Thanks, Matt.
And once again that is star one to ask a question, we'll pause for a moment.
Okay.
Yeah.
Okay, well. Thank you it sounds like that's the end of our questions.
Appreciate people dialing in and listening to the story, it's been a busy year so far.
Well have some updates were at two conferences later this month.
And H C W.
On May 24th we'll have a live presentation and then we'll be at the Craig Hallum Conference June 1st. Thank you everyone. We appreciate your time.
This does conclude today's program. Thank you for your participation you may disconnect at this time have a great day.
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