Q3 2024 Ligand Pharmaceuticals Inc Earnings Call
Call all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session and if you would like to ask a question during that time.
Press Star followed by the number one on your telephone keypad. If you would like to withdraw your question just press star followed by the number one again thank you.
Speaker Change: With that I would like to turn our call over to Melanie Herman Senior director of financial planning and analysis, Melanie you may begin.
Melanie Herman: Good morning, everyone and welcome to <unk> third quarter earnings call. During the call today, We will review the financial results, we released thus far in today's market.
Melanie Herman: And offer commentary on our partner pipeline and business development.
Melanie Herman: A question and answer session.
Melanie Herman: In Italy, and a link to today's webcast can be found in the Investor Relations section of our website at <unk> Dot com.
Speaker Change: With me on the call today are CEO Tom David.
Melanie Herman: Senior Vice President of investments and head of clinical strategy, Dr. Karen Murray and Chief Financial Officer and Vanessa.
Melanie Herman: This call is being recorded and the audio portion will be archived in the investors section of our website on today's call. We will make forward looking statements regarding our financial results and other matters related to the company's business.
Please refer to the safe Harbor statement related to these forward looking statements, which are subject to risks and uncertainties. We remind you that actual events or results may differ materially from those projected or discussed and then all forward looking statements are based upon current available information lagging assumes no obligation to update these statements.
Melanie Herman: To better understand the risks and uncertainties that could cause actual results to differ we refer you to the documents.
Ligand filed with the Securities and Exchange Commission or SEC that can be found on <unk> website at <unk> dot com or on the SEC website at SEC Gov with that I will turn the call over to Todd.
Todd: Thank you Melanie and welcome to everyone on the call.
Todd: I'm delighted to report one of the best quarters of performance against the Street.
Melanie Herman: Three summarizes our strong business momentum in the third quarter.
We grew total revenue by 58% over the prior year and we increased guidance for the second time this year.
Melanie Herman: We're well capitalized with access to over $300 million in capital to continue to execute on our strategy of acquiring high value royalty generating assets, our growing roster of major commercial programs.
Melanie Herman: Addicted bolt and growing royalty revenue that is the foundation for our strong financial performance this quarter.
Melanie Herman: Thiago will build more into our financial performance later on the call.
I'm extremely proud of our team and the many accomplishments we've achieved in the last 18 months.
Melanie Herman: We have invested almost $300 million since last fall.
Melanie Herman: <unk> added several programs to our pipeline, including cards visa that came from our immediately accretive acquisition of a pair on biologics this summer and our transaction with the <unk> inventors, increasing our royalty rate on that drug to nearly 3%.
Melanie Herman: Additionally, our efforts to incubate telco some ready they will save me for commercial launch continues and urban Ernest and we aim to select a partner that can log sales to me in the first half of 2025.
Melanie Herman: This drug addresses significant unmet need in malls come contingent of some as the first at home prescription product for this condition.
Melanie Herman: But our second quarter earnings call, we talked about two important FDA approvals within our portfolio.
Speaker Change: We own a farmer's oats, who theyre and Merck's capex.
Melanie Herman: We are pleased to report that both products were successfully launched during the third quarter.
Melanie Herman: Additionally, Merck announced in October that the Cdc's Advisory Committee.
Melanie Herman: On a utilization practices or Afib is recommended capex seats for adult pneumococcal vaccination in adults 50 years of age and older.
Melanie Herman: <unk> recommendation lowers the current age based recommendation from 65 and as stated by Merck has the potential to be a practice changing milestone that may improve vaccination rates.
Speaker Change: Analysts estimate that both <unk> and Capex, we have blockbuster sales potential and we believe these products will be meaningful contributors to our royalty revenue over the next few years.
Speaker Change: Dr. Karen reviews will provide more details on these and other programs later in the call.
Melanie Herman: Another important milestone this quarter was the full FDA approval and label expansion of <unk>.
Melanie Herman: This therapy has the potential to become foundational care and Iga nephropathy are rare kidney disease that affects up to 150000 people in the U S and is one of the most common coronary glomerular diseases in Europe, and Japan, we continue to see more widespread adoption of this groundbreaking therapy.
Melanie Herman: As evidenced by the recent Swiss approval of so sorry and.
Melanie Herman: And look forward to the continued European launch in the coming months.
Melanie Herman: We are also excited about <unk> potential indication expansion and the focal segmental glomerular sclerosis, or FCS FCS is a rare kidney disease that has a higher risk of progression to kidney failure.
Melanie Herman: There are no FDA approved therapies for <unk>.
Melanie Herman: Karen Dr. Sharron <unk> attended the Paracel scientific workshop meeting last month, which convened various stakeholder groups, including the FDA to discuss endpoints for the <unk> clinical trials. We are encouraged by the outcomes from this meeting and traverse plan to re engage with the FDA.
Melanie Herman: Later this year about a potential path forward forecast Bari in SSG is all.
Melanie Herman: All of these recent developments reinforce why we believe <unk> will be a significant driver of revenue for us over the next several years.
Melanie Herman: Ligand has a 9% royalty on all indications of the story.
Melanie Herman: Turning to slide four I would like to remind our listeners about ligand strategic differentiation.
Melanie Herman: We are a biopharmaceutical company that seeks to generate profitable diversified compounding growth.
Melanie Herman: We target late stage development assets and commercial assets with superior risk reward profiles.
Melanie Herman: Our highly qualified team brings decades of investing experience, along with clinical operational and regulatory expertise as well as strong origination networks throughout the industry.
Melanie Herman: We continue to execute on our strategy of acquiring high growth low opex assets.
Melanie Herman: <unk>, we outlined nearly two years ago.
Melanie Herman: There is a sizable demand for royalty capital in the life science industry, which allows us to invest selectively as we offer a differentiated capital solution that traditional investors do not typically provide.
Melanie Herman: Our capable team originates doses and negotiates proprietary investments with customized investment structures and novel tactics to create investment opportunities for our acquisition of Empire on as a Prime example of this.
Melanie Herman: It is also important to emphasize that we do this while maintaining low operating expenses are.
Melanie Herman: Our structural approach to investing is a very small percentage of the total capital that is invested in life science companies. Today. Therefore, we believe our model is differentiated scalable and offers immense growth potential for years to come.
Melanie Herman: Turning to slide five for our royalty revenue outlook.
Melanie Herman: We have made substantial progress towards meeting or exceeding the longer term growth goals, we outlined at our analyst day in December of 2023.
Melanie Herman: Our investment origination seeks and identifies high value clinical products that will offer significant positive clinical impact.
Melanie Herman: Looking at the third quarter, we see the results of this focus as we saw an increase in wall Street consensus estimates on several of our partnered products, including <unk>, So sorry, which as I mentioned earlier as received full approval by the FDA and has been granted conditional approval by the European Commission.
Melanie Herman: <unk> and Swiss authorities.
Melanie Herman: We also added several major new commercial products to our portfolio, including current Veeva.
Melanie Herman: <unk>, and <unk>, which will positively impact our royalty revenues over the coming years.
Melanie Herman: We will provide an updated long term view that incorporates these recent events at our Investor day on December 10.
Melanie Herman: As I've shared previously we believe our long term royalty revenue growth is on pace to exceed the 22% compounded annual growth rate. We outlined last December the existing portfolio alone supports a royalty revenue CAGR of 18%, which is above our previous estimate of 16%.
Melanie Herman: Further investments should add at least 4% to this with potential upside on top of the current outlook. Our business development team is constantly searching for attractive new investments.
Melanie Herman: In conclusion, we are all proud of what we've accomplished since we began restructuring and executing on this new strategy in the fourth quarter of 2022, and we are very optimistic about our future prospects.
Melanie Herman: <unk> pipeline remains robust we are currently reviewing over 20 investment opportunities representing in excess of $800 million of investment potential.
Melanie Herman: Operating leverage gain from our lean corporate cost structure is expected to result in adjusted EPS of greater than $10 per share in 2028.
Speaker Change: I'll now turn it over to Dr. Sharron <unk> for a portfolio update Karen.
Speaker Change: Thank you Todd.
Speaker Change: Today, we'd like to highlight a few key commercial products in our portfolio.
Speaker Change: Turning to slide six.
Speaker Change: I'd like to go into more detail on 10 years, plus foreign where we are entitled to a 9% royalty on global net product sales.
Speaker Change: In September this year, the FDA granted full approval for <unk>, and Endo, Keelan, and angiotensin II receptor antagonist.
Speaker Change: Slow kidney function decline in adults with primary immunoglobulin.
Melanie Herman: Prophecy IGN who are at.
Melanie Herman: Risk for disease progression. This is the first and only non immunosuppressive therapy approved for the treatment of Ikea, a rare kidney disease that leads to diminished kidney filtering proteinuria and progressive kidney function law.
Melanie Herman: The FDA full approval for sales alright expands the indication to include without qualifiers.
Melanie Herman: With IBM at risk for disease progression.
Melanie Herman: Moreover, with full approval. So far is now indicated to slow kidney function decline from the previous only reduced proteinuria.
Melanie Herman: Importantly, the full approval label details the long term durable benefit I'll fill spirit on proteinuria and kidney function and the two year protect study, which compared to <unk> Bari with urban star can an angiotensin II receptor blocker.
Melanie Herman: <unk> estimates that this broader label means that the addressable so sorry, <unk> patient population can you give any double.
Melanie Herman: We believe full approval will allow for a more detailed physician communications regarding self clearing.
Melanie Herman: And it's sustained proteinuria.
Melanie Herman: Production as well as long term kidney function presentation should give physicians greatest confidence to prescribe the drug.
Melanie Herman: So firing was also recently recommended a foundational kidney targeted therapy for ICANN and the draft kidney disease, improving global outcome. Indeed, though 2024 guidelines, which is a very important positive development that should drive further adoption of the drug.
Melanie Herman: Outside the U S. The European Commission granted conditional marketing authorization for himself borrowing for IBM in April during the third quarter trickier announced that their European commercial partner.
Melanie Herman: <unk> launched <unk> in Germany, and Austria, and Switzerland to achieve temporary marketing approval in October.
Speaker Change: Additionally, two EMEA reported that they have submitted.
Melanie Herman: Supplemental NDA requesting modification to the Rams liver monitoring requirement.
Melanie Herman: We are also excited about initial data standby trim here showing that sells foray induced further proteinuria reduction when used with F. G. L. T two inhibitors.
Melanie Herman: Supportive and the flexibility to be used in combination with other medicines.
Melanie Herman: Turning to slide seven.
Melanie Herman: Thus far and is also being evaluated in a second important indication focal segmental glomerular sclerosis.
Melanie Herman: Our ssds.
Melanie Herman: <unk> is a rare complex kidney disorder, and the leading cause of kidney failure affecting children and adults.
Melanie Herman: Currently no FDA approved pharmacologic treatments for <unk> yet.
Melanie Herman: Prompted by the urgency of no approved drugs in.
Melanie Herman: And the need to develop ssds treatments with alternative proteinuria based endpoint.
Melanie Herman: Just noticed the parasol initiative was formed as an international collaboration of Neff pure and other global kidney foundation patients Nephrologist, academia, scientists and regulators, including the FDA.
Melanie Herman: The parents all team recorded at a scientific workshop with the FDA analyses of existing global databases for more than 1600 children and adults with SSG.
Melanie Herman: A key finding was that the reduction of proteinuria over 24 months.
Melanie Herman: Is associated with a reduction in the risk of kidney failure.
Melanie Herman: The goal of parasol defined quantitative relationship between Biomarkers and long term outcomes to support proteinuria endpoint.
Melanie Herman: As a basis for accelerated and traditional approval.
Speaker Change: On their recent earnings call <unk> stated that they have scheduled a type C meeting with the FDA to discuss a regulatory pathway for <unk> and <unk>.
Speaker Change: And that they are preparing a supplemental NDA.
Speaker Change: There are estimated to be more than 40000, ssgss patients in the United States and a similar number in Europe approximately half of these will be candidates for pillsbury.
Speaker Change: Approval of <unk> for <unk>, which represent the first FDA approved treatment and important milestones for the long waiting.
Speaker Change: Yes community.
Speaker Change: Turning to slide eight I would like to talk about merck's cap vaccine and vaccine.
Speaker Change: Todd noted earlier Merck launched cutbacks fleet during the third quarter of 2024.
Speaker Change: <unk> is a 'twenty one valent pneumococcal conjugate vaccine for the prevention of.
Speaker Change: Invasive pneumococcal disease, and pneumococcal pneumonia in the adult population that was approved by the FDA in June.
Speaker Change: We are entitled to a low single digit royalties on worldwide net sales of kept back seat.
Speaker Change: Mark is there any early stages into the commercial launch.
Speaker Change: Mentioned on their third quarter earnings call that the Quebec lead launch is off to an encouraging start and that they expect to get a majority share of the market over time.
Melanie Herman: The other recent and exciting development with Capex is that in October the Cdc's Acs voted to expand the age based recommendation for cutback feet to 50 years of age and older from the previous 65 and older. This will significantly expand the patient population to the SEC.
Melanie Herman: Z and should accelerate the adoption of capex feet over time.
Melanie Herman: Turning to slide nine let's look at <unk>, which was granted FDA approval in June.
Melanie Herman: Two there is a dual inhibitor of PD <unk> and PD four enzymes that combined bronchodilator and non steroidal nonsteroidal anti inflammatory effects, but the broad indication of maintenance with chronic obstructive pulmonary disease.
Melanie Herman: <unk>.
Melanie Herman: Okay. There is the first inhaled product with a novel mechanism of action for the maintenance treatment of COPD and more than 20 years and we believe it has blockbuster commercial potential we are entitled to a royalty rate of approximately 3% on worldwide sales of <unk>.
Melanie Herman: From the perspective of product reimbursement following the end of the third quarter. The router received notification from the centers for Medicare and Medicaid services CMS that its permanent product specific J code for <unk> has been accepted and will be effective January one 2012.
Melanie Herman: Five.
Melanie Herman: There is also significant pipeline value and owe to bear to be realized.
Melanie Herman: <unk> development partner in greater China, Nuance pharma continues to make great progress and completed enrollment in our pivotal phase III clinical trial evaluating <unk> for the maintenance treatment of COPD in China results from that trial are expected in 2025.
Melanie Herman: At the recent chest annual meeting in late October there were presentations and posters on analyses from rebound the successful phase III enhance study with <unk> for the treatment of COPD.
Melanie Herman: The analyses summarize the efficacy and safety of <unk> in subgroups of COPD patients.
Melanie Herman: <unk> data supporting improvements in lung function symptoms and quality of life as well as reductions in the rate of its excess after patients regardless of COPD severity smoking status and whether or not the patients had chronic bronchitis.
Melanie Herman: Furthermore, and analysis of <unk> impact on reducing exacerbation rate and COPD related healthcare resource utilization over 48 week showed up Tuesday or decrease the exacerbation rate E&P healthcare utilization in patients with moderate to severe COPD.
Melanie Herman: D var.
Melanie Herman: Therefore.
Melanie Herman: <unk> may help decrease the burden of disease for patients and the healthcare system and estimated cost of 24 billion.
Melanie Herman: Annual it with.
Speaker Change: With that I will now turn the call over to <unk> for the financial update.
Speaker Change: Thanks, Karen.
Speaker Change: First I wanted to highlight that I will be discussing non-GAAP results, which exclude certain items, including stock based compensation amortization of intangible assets amortization or impairment of financial assets or derivatives and expenses incurred to incubate the penfolds business amongst others I encourage you to review that.
Speaker Change: GAAP reconciliation of these non-GAAP measures, which can be found in today's release available on our website.
Speaker Change: We believe that the adjusted measures can assist investors in analyzing and assessing our past and future core operating performance.
Speaker Change: The third quarter of 2024 delivered exceptional financial results with continued growth in royalty revenue and an increasingly positive outlook for the year.
Speaker Change: This strength allows us to revise our guidance upward for the second time this year underscoring our confidence in sustained momentum.
This is a presentation on the Pelto's business model which excludes certain items including stock-based compensation, amortization of intangible assets, amortization or impairment of financial assets or derivatives and expenses incurred to incubate the Pelto's business amongst others.
Speaker Change: Total revenues for the third quarter reached $51 8 million, representing a 58% increase over Q3 'twenty three.
Speaker Change: This growth was driven by a 33% increase in royalty revenue, which reached $31 7 million up from $23 9 million in the same period last year.
I encourage you to review the GAAP reconciliation of these non-GAAP measures, which can be found in today's release, available on our website. We believe that the adjusted measures can assist investors in analyzing and assessing our past and future core operating performance.
Speaker Change: We reported adjusted earnings per share of $1 84.
Speaker Change: Which is an 80% increase over Q3, three and we ended the quarter with a strong balance sheet with almost $350 million in available investable capital when you consider our cash and investments in our credit facility.
The third quarter of 2024 delivered exceptional financial results, with continued growth in royalty revenue and an increasingly positive outlook for the year. This rank allowed us to revise our guidance upward for the second time this year, underscoring our confidence in sustained momentum.
Speaker Change: Turning to slide 11.
Speaker Change: Key drivers in royalty revenue growth, where the addition of cars veeva to a royalty revenue portfolio in July coupled with strong performance from Amgen's Kyprolis attributed thus far it.
Total revenues for the third quarter reached $51.8 million, representing a 58% increase over Q3'23.
Speaker Change: While we are contractually limited from disclosing cars. These are sales I can confirm that Q3 sales and the corresponding earn royalty were in line with our July guidance of approximately $1 eight annualized EPS contribution.
This growth was driven by a 33% increase in royalty revenue, which reached $31.7 million up from $23.9 million in the same period last year.
We reported adjusted earnings per share of $1.84, which is an 80% increase over Q3'23, and we ended the quarter with a strong balance sheet with almost $350 million in available investable capital when you consider our cash-in investments in our credit facility.
Speaker Change: And Jen reported $378 million and Kyprolis sales this quarter, marking an 8% increase year over year largely attributed to robust volume growth outside the United States.
Speaker Change: We receive a tiered royalty on <unk> sales from Amgen, ranging between one 5% and 3% given <unk> current annual sales level of approximately $1 5 billion, we achieved the maximum 3% royalty rate in the second half of the year.
Turning to slide 11.
Key drivers in Royalty Revenue growth were the addition of Carziba to our Royalty Revenue portfolio in July, coupled with strong performance from Amgen's Kyprolis and Trabir's Bulsfari.
Speaker Change: <unk> reported $35 6 million and <unk> sales, including 505, new patients start forms which represented strong sequential growth of 31%.
While we are contractually limited from disclosing CARZIBA sales, I can confirm that Q3 sales and the corresponding earned royalty were in line with our July guidance of approximately $1.00 in annualized EPS contribution.
Speaker Change: Sell side research analysts are projecting peak global <unk> sales in the range of $500 million to $700 million in Iga nephropathy alone.
Amgen reported $378 million in CAIPRALIS sales this quarter, marking an 8% increase year-over-year, largely attributed to robust volume growth outside the United States.
Speaker Change: Enforcing our view that this product could be a significant driver of royalty revenue for us over the coming years.
Speaker Change: Turning to the two recently approved programs that have extended our major commercial portfolio.
We receive a tiered royalty on Kuyperales sales from Amgen, ranging between 1.5% and 3%. Given Kuyperales' current annual sales level of approximately $1.5 billion, we achieved a maximum 3% royalty rate in the second half of the year.
Speaker Change: <unk> reported a robust start to the U S launch of ultra bear achieving quarterly net sales of $5 6 million with October sales alone exceeding the entire third quarter.
Speaker Change: Mark also highlighted a promising launch for Capex.
Trivia reported 35.6 million postpartum sales, including 505 new patient SART forms, which represented strong sequential growth of 31 percent.
Speaker Change: For Capex during our third quarter earnings call.
Speaker Change: We earn a low single digit royalty on both programs and expect them to contribute more meaningfully to our royalty revenue in 2025.
Cell Site Research Analysts are projecting peak global phosphorus sales in the range of $500 to $700 million in IgA nephropathy alone, reinforcing our view that this product could be a significant driver of royalty revenue for us over the coming years.
Speaker Change: Captisol sales came in at $6 3 million down from $8 6 million in Q3, three primarily due to the timing of customer orders can't.
Speaker Change: Contract revenue for the quarter was $13 5 million driven mainly by a milestone payment from <unk> following the commercial launch of <unk>.
Turning to the two recently approved programs that have expanded our major commercial portfolio, Verona reported a robust start to the U.S. launch of O2Bear, achieving quarterly net sales of $5.6 million, with October sales alone exceeding the entire third quarter.
Speaker Change: Operating expenses increased this quarter with G&A expenses at $24 $5 million and R&D expenses of $5 7 million compared to $14, seven and $5 5 million respectively. In Q3 23.
Merck also highlighted a promising launch for CAVAXIS during their third quarter earnings call. We earn a low single-digit royalty on both programs and expect them to contribute more meaningfully to our royalty revenue in 2025.
Speaker Change: This increase in operating expenses was primarily due to an increase in personnel related costs as well as continued investments made to incubate the pellet business.
Speaker Change: This quarter's operating expenses also included a $7 8 million non cash expense stemming primarily from a fair value adjustment on several partnered programs for makena that what that will return to them in Q3.
Capital sales came in at $6.3 million, down from $8.6 million in Q3'23, primarily due to the timing of customer orders. Contract revenue for the quarter was $13.5 million, driven mainly by a milestone payment from Verona following the commercial launch of O2Bear.
Speaker Change: On our income statement. This adjustment is reflected at fair value adjustment to partner program derivatives.
Speaker Change: GAAP net loss in the third quarter of 2024 was $7 2 million or <unk> 39 per diluted share compared to a GAAP net loss of $10 3 million or <unk> 59 per diluted share in Q3 three.
Operating expenses increased this quarter with G&A expenses at $24.5 million and R&D expenses at $5.7 million, compared to $14.7 and $5.5 million respectively in Q3-23.
Speaker Change: This quarter's GAAP net loss was primarily impacted by several noncash items, including a $7 4 million Buffalo Award modification expense related to the departure of our former president and CEO, COO and $8 million fair value reduction of a genome warrants and the previously mentioned $7 8 million fair value adjustment on our partner.
This increase in operating expenses was primarily due to an increase in personnel-related costs as well as continued investments made to incubate the Pelto business.
This quarter's operating expenses also included a $7.8 million non-cash expense stemming primarily from a fair value adjustment on several partner programs from Agenas that were returned to them in Q3.
Speaker Change: Our program derivatives.
Speaker Change: Adjusted diluted EPS for the third quarter of 2024 was $1 84.
On our income statement, this adjustment is reflected as Fair Value Adjustment to Partner Program Derivatives.
Speaker Change: Up from $1 <unk> in Q3 three.
Speaker Change: This increase reflects growth in royalty revenue and a $13 5 million milestones earned from the commercial launch of <unk>, partially offset by an increase in shares outstanding.
Speaker Change: Turning to the balance sheet in July we invested $100 million to acquire a fire biologics to partially offset this outlay, we accessed our ATM facility issuing 334000 shares of common stock at an average price of $105 per share, which contributed $35 million to our cash position.
This quarter's gap net loss was primarily impacted by several non-cash items, including a $7.4 million stock award modification expense related to the departure of our former president and COO.
An $8 million fair value reduction of a genus warrants, and the previously mentioned $7.8 million fair value adjustment on our partner program derivatives.
Speaker Change: As of September 32024, our cash and short term investments totaled $220 million, including $53 million in holdings of Viking common stock.
Adjusted diluted EPS for the third quarter of 2024 was $1.84, up from $1.02 in Q3'23.
Speaker Change: Turning to slide 12, and turning to guidance, we are raising our 2024 core revenue forecast to a range of 100 to 165 million with adjusted earnings per share now expected to be between $5 50, and $5 70 a.
This increase reflects growth in royalty revenue and a $13.5 million milestone earned from the commercial launch of Boats of Air, partially opted by an increase in shared job standing.
Turning to the balance sheet, in July, we invested $100 million to acquire Apyron Biologics.
Speaker Change: 38% increase over last year's adjusted EPS of $4 six.
To partially offset this outlay, we accessed our ATM facility, issuing 334,000 shares of common stock at an average price of $105 per share, which contributed $35 million to our cash position.
Speaker Change: This upward revision reflects robust performance across our three primary revenue streams royalty revenue captisol material sales and contract revenue.
Speaker Change: For the full year 2024, we now expect total royalty revenue to be in the range of $105 million to $108 million up from prior guidance of $100 million to $105 million Captisol material sales between 27 and $29 million previously, 25% to $27 million in contract revenue to come in at $28 million.
As of September 30th, 2024, our cash and short-term investments totaled $220 million, including $63 million in holdings of Viking Common Stock.
Turning to slide 12, and turning to guidance, we are raising our 2024 core revenue forecast to a range of 100 to 165 million with adjusted earnings per share now expected to be between $5 50, and $5 70.
Turning to slide 12 and turning to guidance, we are raising our 2024 total revenue forecast to a range of $100 to $165 million with adjusted earnings per share now expected to be between $5.50 and $5.70, a 38% increase over last year's adjusted EPS of $4.06.
Speaker Change: Previously $15 million to $25 million year.
Speaker Change: Year to date, we recorded total revenue of $124 million and core adjusted EPS of $4 46.
A 38% increase over last year's adjusted EPS of $4 six.
Speaker Change: We feel confident that we're on track to meet or exceed our updated 2024 financial guidance.
This upward revision reflects robust performance across our three primary revenue streams royalty revenue captisol material sales and contract revenue.
This upward revision reflects robust performance across our three primary revenue streams, royalty revenue, cap-to-sale material sales, and contract revenue.
Speaker Change: We also continue to feel confident about the longer term outlook with share, which goes out to 2028 and calls for royalty revenue growing at a compound annual growth rate above 20% and adjusted core EPS growing even faster at a compound annual growth rate above 25%.
For the full year 2024, we now expect total royalty revenue to be in the range of 105 to 108 million up from prior guidance of $100 million to $105 million Captisol material sales between 27 and $29 million previously, 25% to $27 million in contract revenue to come in at $28 million.
For the full year 2024, we now expect total royalty revenue to be in the range of $105 to $108 million, up from prior guidance of $100 to $105 million, capital material sales between $27 and $29 million, previously $25 to $27 million, and contract revenue to come in at $28 million.
Speaker Change: Finally, I'd like to direct listeners to our second quarter earnings press release issued earlier today, including a reconciliation of GAAP results to adjusted financial results, which is available on our website.
Previously $15 million to $25 million.
Year to date, we recorded total revenue of $124 million and core adjusted EPS of $4 46.
previously $15 to $25 million.
Speaker Change: Before we open it up for questions I'd like to remind everyone that we'll be hosting our annual Investor day on December 10th in Boston, where we plan to provide you with an update to our financial guidance and long term outlook.
Year-to-date, we've recorded total revenue of $124 million and core adjusted EPS of $4.46. We feel confident that we're on track to meet or exceed our updated 2024 financial guidance.
We feel confident that we're on track to meet or exceed our updated 2024 financial guidance.
We also continue to feel confident about the longer term outlook with share, which goes out to 2028 and calls for royalty revenue growing at a compound annual growth rate above 20% and adjusted core EPS growing EBIT faster at a compound annual growth rate above 25%.
Speaker Change: With that I'd like to turn the call over to the operator to open it up for questions.
We also continue to feel confident about the longer-term outlook we've shared, which goes out to 2028 and calls for royalty revenue growing at a compound annual growth rate above 20% and adjusted core EPS growing even faster at a compound annual growth rate above 25%.
Speaker Change: Ladies and gentlemen, once again, if you would like to ask a question today you need to hit Star followed by the number one on your Touchtone keypad.
Speaker Change: Okay.
Speaker Change: Our first question from today comes from the line of Matt Hewitt with Craig Hallum.
Finally, I'd like to direct listeners to our second quarter earnings press release issued earlier today, including a reconciliation of GAAP results to adjusted financial results, which is available on our website.
Finally, I'd like to direct listeners to our second quarter earnings press release issued earlier today, including a reconciliation of GAAP results to adjusted financial results, which is available on our website.
Speaker Change: Yes.
Speaker Change: Congratulations on the strong quarter guys.
Speaker Change: Okay.
Before we open it up for questions I'd like to remind everyone that we'll be hosting our annual Investor day on December 10th in Boston, where we plan to provide you with an update to our financial guidance and long term outlook.
Speaker Change: Go ahead can you hear me Okay, yes, we.
Before we open it up for questions, I'd like to remind everyone that we'll be hosting our annual Investor Day on December 10th in Boston, where we plan to provide you with an update to our financial guidance and long-term outlook.
Speaker Change: We can hear you, yes, sir thank you.
Speaker Change: Great.
Speaker Change: Maybe first question is.
Speaker Change: You still have a very strong balance sheet and I'm just curious what the pipeline looks like.
With that I'd like to turn the call over to the operator to open it up for questions.
With that, I'd like to turn the call over to the operator to open it up for questions.
Speaker Change: The election results. This week have any impact on that on how you think about the market.
Speaker Change: Ladies and gentlemen, once again, if you would like to ask a question today you need to hit Star followed by the number one on your Touchtone keypad.
Speaker Change: From an investment standpoint, any update basically on your thoughts regarding.
Speaker Change: Ladies and gentlemen, once again, if you would like to ask a question today, you need to hit star followed by the number one on your touchtone keypad.
Speaker Change: Adding more shots on goal.
Speaker Change: Our first question from today comes from the line of Matt Hewitt with Craig Hallum.
Unknown Speaker
Speaker Change: Yes, I think the.
Our first question from today comes from the line of Matt Hewitt with Craig Hallium.
Speaker Change: Pipeline remains very robust.
Yes.
Speaker Change: Very high demand for capital regardless of the election results, one way or the other.
Speaker Change: Congratulations on the strong quarter guys.
Thanks. Bye.
Congratulations on a strong quarter, guys.
Okay.
Speaker Change: And the pharmaceutical industry performance in terms of revenue is generally uncorrelated.
Speaker Change: Go ahead can you hear me, Okay, Matt Yes, we can hear you yes, Sir thank you.
Speaker Change: Go ahead. Can you hear me okay? Can you hear me, Matt? Yeah, we can hear you. Okay, thank you.
Speaker Change: Great maybe.
Maybe first question is.
Speaker Change: Market volatility even around the election, that's one of the beauties of.
Speaker Change: Great. Maybe first question is, you still have a very strong balance sheet and I'm just curious what the pipeline looks like.
Speaker Change: You still have a very strong balance sheet and I'm just curious what the pipeline looks like does do the election results. This week have any impact on that on how you think about the market.
Speaker Change: Royalties and pharmaceutical products as this non correlated.
Speaker Change: Capital markets volatility typically so.
Speaker Change: Do the election results this week have any impact on that, on how you think about the market?
Speaker Change: The demand for capital continues on that.
Speaker Change: From an investment standpoint, any update basically on your thoughts regarding.
Speaker Change: And we continue to look.
Speaker Change: From an investment standpoint, any update basically on your thoughts regarding, you know, adding more shots on goal?
Speaker Change: At each asset that's presented to us in the form of a deal opportunity.
Speaker Change: Adding more shots on goal.
Speaker Change: Yes, I think.
Speaker Change: Analyze those.
Speaker Change: Pipeline remains very robust, there's still very high demand for capital regardless of the election results one way or the other.
Speaker Change: The best we can that we're constantly calling that pipeline to pursue what we think are the very best opportunities and that activity is now pretty continuously at a very high level and I think the business development machine is pretty well honed here at this point.
Speaker Change: There's still very high demand for capital regardless of, you know, the election results one way or the other.
Speaker Change: And the pharmaceutical industry performance in terms of revenue is generally uncorrelated.
and the pharmaceutical industry performance in terms of revenue.
Speaker Change: It's generally uncorrelated with market volatility, even around elections. That's kind of one of the beauties of having royalties in pharmaceutical products, is it's non-correlated.
Speaker Change: Market volatility even around elections.
Speaker Change: Duties and.
Speaker Change: Having royalties and pharmaceutical products as non correlated with capital markets volatility typically so.
Speaker Change: Thats great alright, Thank you very much congratulations.
Speaker Change: Thank you for your questions.
Speaker Change: Our next question is from the line of Douglas <unk> with RBC capital markets.
Speaker Change: The demand for capital continues on that.
Speaker Change: We continue to look.
Speaker Change: At each asset that's presented to us in the form of a deal opportunity.
Speaker Change: Your line is live.
Speaker Change: Yes. Thank you.
Speaker Change: And analyze those.
Speaker Change: Mike.
Speaker Change: Mike first question just has to do delve a little deeper into those 25 potential investments that you are looking at when.
Speaker Change: The best we can that we're constantly calling that pipeline to pursue what we think are the very best opportunities.
Speaker Change: When you think about.
Speaker Change: That activity is now pretty continuously at a very high level.
Speaker Change: Whether there while the size number one is there a range that you can provide.
Speaker Change: The business development machine is pretty well honed here at this point.
Speaker Change: What's the mix of let's say royalties versus structured deals versus <unk>.
Speaker Change: That's great alright, Thank you very much congratulations.
Speaker Change: Any acquisitions at this point.
Speaker Change: Thank you for your questions.
Speaker Change: Okay.
Speaker Change: Our next question is from the line of Douglas <unk> with RBC capital markets.
Speaker Change: Okay. That's a great question Doug.
Speaker Change: Inc.
Speaker Change: About half of what we're looking at right now is what we call. The project finance. That's often also called synthetic royalties, that's where you are providing capital to small and mid cap companies that need capital.
Speaker Change: Your line is live.
Speaker Change: Yes. Thank you.
Mike.
Mike first question just has to do.
Speaker Change: I'll go a little deeper into those 25 potential investments that you are looking at.
Speaker Change: To develop their assets and in return for that you are creating a royalty as a form of financing.
Speaker Change: When you think about.
Speaker Change: Whether there while the size number one is there a range that you can provide.
Speaker Change: Those fields are really creative they're not made theyre not shop.
Speaker Change: What's the mix of let's say royalties versus structured deals versus.
Speaker Change: Proactively or identifying companies and products, you're interested in approaching them and making those deals happen as an alternative form of capital that's available to them.
Speaker Change: Any acquisitions at this point.
Doug: Okay. That's a great question Doug.
Speaker Change: On the M&A front, we continue to scour opportunities on that front as well.
Speaker Change: I think that.
Speaker Change: About half of what we're looking at right now is what we would call.
Speaker Change: I think that's a little chunkier.
Speaker Change: The project Finance, that's often also called synthetic royalties, that's where you are providing capital to small and mid cap companies that need capital to develop their assets and in return for that you are creating a royalty as a form of financing those deals are really created they are not made.
Speaker Change: We've got one of those we're looking at now amongst the many deals we are looking at and on the passive royalties growth.
Speaker Change: We are actively engaged in.
Speaker Change: Academic inventor community as well as the corporate community looking at.
Speaker Change: Royalties that are currently held in the form of license agreements by those institutions and Thats, probably another third of our pipeline that we're looking at at any given time.
Speaker Change: Theyre not shop.
Speaker Change: Proactively or identifying companies and products, you're interested in approaching them and making those deals happen as an alternative form of capital that's available to them on the M&A front, we continue to scour opportunities on that front as well.
Speaker Change: Okay.
Speaker Change: Oh, yes.
Speaker Change: Excuse me of the size that we didn't answer that.
Speaker Change: But right now at our current size.
Speaker Change: That's a little Chunkier.
Speaker Change: To maintain kind of our diversity limits that we're trying to achieve where.
Speaker Change: One of those we're looking at now.
Speaker Change: We're targeting 30 to 40 or so.
Speaker Change: The many deals we're looking at and on the passive royalty front.
Speaker Change: Her product attributes on the development side, if something is significantly lower risk for commercial for example, we will size rock and we view diversification.
Speaker Change: We are actively engaged in academic inventor community as well as the corporate community looking at.
Speaker Change: Royalties that are currently held in the form of license agreements by those institutions and Thats, probably another third of our pipeline that we're looking at at any given time.
Speaker Change: By product not necessarily investments. So if we're doing a basket of products those deals may be sized up too, but at our current size, we think kind of $30 million to $40 million per asset is appropriate for us.
Okay.
Doug: Oh excuse me on the side, Doug I didn't answer that but right now at our current size.
Speaker Change: And that's how we're structuring most of the deals.
Speaker Change: In that range as we grow over time.
Doug: To maintain kind of our diversity limits that we're trying to achieve where.
Speaker Change: It will inevitably kind of size that up a little bit on a proportionate basis.
Doug: We're targeting 30 to 40 years so.
Speaker Change: Great Okay.
Speaker Change: Per product if it's on the development side with something that is significantly lower risk for commercial for example, we will size up and review diversification.
Speaker Change: My question has to do with Phil sparring, and which is going to be an important backbone.
Speaker Change: Of the company.
Speaker Change: Going forward.
Speaker Change: And I was just wondering if you'd be able to talk a little bit about how you see that competitive environment. I know you only go for the <unk> systems earnings call.
Speaker Change: By product not necessarily investments. So if we're doing a basket of products those deals may be sized up too, but at our current size, we think that 30% to $40 million per asset is appropriate for us.
Speaker Change: Matt M ATK Hewitt Acw RCC.
Speaker Change: And Thats, how we are structuring most of the deals.
Speaker Change: One second.
Speaker Change: Ahead with your question, yes, sorry.
Speaker Change: In that range as we grow over time.
Speaker Change: Yes, I just wanted to expand a little bit on the competitive environment, you see pork feels fine it seems to be quite attractive, but maybe you could provide a bit more context. Thank you.
Speaker Change: It will inevitably kind of size that up a little bit on a proportionate basis.
Speaker Change: Great Okay.
Speaker Change: Hello, My question has to do with Phil sparring, which is going to be an important backbone.
Speaker Change: Sure why don't I.
Speaker Change: Karen addressed this I think in <unk> as a monotherapy in combination and then of course <unk> is currently no other treatments.
Speaker Change: Of the company.
Speaker Change: Going forward.
Speaker Change: And I was just wondering if you'd be able to talk a little bit both how you see that competitive environment. I know you only go for the <unk> systems earnings call.
Speaker Change: Yes. Thanks, Thank you for the question.
Speaker Change: We believe that that <unk> will be a.
Speaker Change: Matt and AT&T Hewitt Acw ICC.
Speaker Change: A foundational treatment for the treatment of of IBM.
Speaker Change: One second.
Head with your question, yes, sorry.
Speaker Change: Yes, I just wanted to expand a little bit on the competitive environment, you see fortress sale spire and it seems to be quite attractive, but maybe you could provide a bit more context. Thank you.
Speaker Change: And the guidelines that are in the draft guidelines have recently come out really talk about it.
Speaker Change: Two aspects of this.
Speaker Change: This disease.
Yeah.
Speaker Change: It's going to be important that so sorry can be seen app.
Speaker Change: Sure why don't I.
Speaker Change: Karen addressed this I think in <unk> as a monotherapy in combination and then of course FX shifts where there's currently no other treatments.
Speaker Change: A.
Speaker Change: Primary treatment.
Speaker Change: And in addition, along with other <unk>.
Speaker Change: Yes. Thank you for the question.
Speaker Change: <unk> therapy, and recently trickier actually shows some some very big data, which I mentioned.
Speaker Change: We believe that.
That so far it will be a.
Speaker Change: Regarding SDLP two inhibitors.
Speaker Change: That they are doing a study of using both of them and you can see that when you add felspar either the reduction of proteinuria goes up which is good news because the guidelines now are saying you should be lowering your approved proteinuria.
Speaker Change: First mark would be less than 0.3 grams per day.
Speaker Change: So that is good news.
Speaker Change: In addition.
Speaker Change: Some initial data was shown.
Speaker Change: Are you seeing so far as the primary.
Speaker Change: Drive.
Speaker Change: Patients who have no treatment and that also is showing excellent results.
Speaker Change: We're confident that pillsbury is going <unk>.
Speaker Change: <unk> really only graph in one state will continue in <unk>.
Speaker Change: Again and in addition, we just reported on the <unk>.
Speaker Change: The outcome from the Paris fall initiatives and FX Geos. This is a huge area of unmet need.
Speaker Change: <unk> been an FDA approved drug for.
Speaker Change: This.
Speaker Change: Illness.
Speaker Change: And trickier is going to the FDA to discuss what is needed now choosing to spend than in SMB.
Speaker Change: For that trial now that the parasol initiatives has come up with proteinuria related endpoint.
Speaker Change: Thank you very much that was helpful.
Speaker Change: Thank you for your questions.
Speaker Change: Our next question comes from the line of Dr. Joseph Pecina with Wainwright Your line is wide.
Speaker Change: Everybody. Good morning, Thanks for taking the questions.
Speaker Change: First couple of just two quick questions. If you don't mind, so Todd when you look at obviously the number of opportunities that you're currently looking at how do we view that with regard to your ability to look at even more and it really correlates to my question is.
Speaker Change: As ligand right sized right now.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: I think yes, we are.
Speaker Change: If I understand your question, Joe when you say rightsize to me Andrew will show data access to capital relative to our current market cap or how are you thinking about that.
Speaker Change: The employee base.
Speaker Change: The number of people Oh, yes, yes.
Speaker Change: Yes, I think.
Speaker Change: We've made a number of senior hires over the over the past year and a half as we put this strategy in place.
Speaker Change: We have.
Speaker Change: This year kind of tweak that with.
Speaker Change: Executives at the Vice President level.
Speaker Change: Come in with significant skill sets to back that up as well and I think we're pretty set on the team and that's kind of one of the things about this business model is that it offers very high operating leverage on the investment side, and we don't really need to add a lot to our team at this point.
Speaker Change: Even if the size of the company grows dramatically over the next two to four years.
Speaker Change: So we're just under 40 employees now.
Speaker Change: I'd be surprised if we're over 50 employees three years from now that's just the way this business model works.
Speaker Change: And we like it that way.
Speaker Change: No. That's very helpful. Thanks, and then just a quick logistical question before I ask my usual question is what is the status don't think you'd really be doing it right now, but what's the status of your buyback program.
Speaker Change: Yes.
Speaker Change: Well, we just have that in place as a matter of general.
Speaker Change: I would say corporate hygiene.
Speaker Change: Our already significant dislocations.
Speaker Change: And the markets that have nothing to do with what we view as the inherent value of our business. We may take advantage of that we have no immediate plans to use it right now.
Speaker Change: No. That's helpful and then as I alluded to my usual question focuses on Captisol.
Speaker Change: It's typical volatility that you alluded to earlier with regard to the timing of payments and customer orders.
Speaker Change: So I guess.
Speaker Change: The concept I want to look at is the mix here, obviously you have growing.
Speaker Change: Revenues from typo Im sorry from Captisol used products or cabinet captisol formulated products. So I guess, how should we view the mix right now and you view it going forward with regard to say research request versus say early clinical study requests.
Speaker Change: Yes, Joe Talamo here. Thanks for the question. It's a similar answer nothing has really changed here. Its in the 80 20 rule, we get 80% of our of our revenue from 20% of our customer base across the commercial customers and then and then a long tail of smaller research clinical.
Speaker Change: <unk> only customers and that tailwind we're encouraged by the activity. There we expect that some of those smaller customers well will be successful in their development and eventually become some of the joined the roster of the larger commercial but said that business is doing well.
Speaker Change: And like a slide with our updated guidance.
Speaker Change: <unk> exceeded our guidance.
Speaker Change: Guidance for the year, so the business continues to perform.
Speaker Change: Great. Thank you very much.
Speaker Change: Thank you for your questions.
Speaker Change: Our next question is from the line of Dr. <unk> Prasad with Barclays. Your line is live.
Speaker Change: Good morning. This is Shawn I'll fall <unk>, thanks for taking our questions.
Speaker Change: Just a follow up question I'll first Perry so as premier is preparing.
Speaker Change: Supplemental NDA for <unk> wondering if <unk> already factored into the 18% CAGR of the dots like you highlighted earlier, although only like.
Speaker Change: The current indication Iga and is already factory. Thank you.
Speaker Change: Yes. This is Tom good question. So when we came out with our our long term outlook at Investor Day last December 'twenty three.
Speaker Change: Had significantly discounted very very small contribution.
Speaker Change: Allocated to the.
Speaker Change: The pipeline is from from <unk>.
Speaker Change: We will update our view here coming up in December 10th.
Speaker Change: Very helpful. Thank you.
Speaker Change: Thank you for your question.
Speaker Change: Our next question comes from the line of Trevor already with Oppenheimer. Your line is live.
Trevor: Hey, good morning.
Speaker Change: Can you guys talk about some of the recent changes with the again, it's royalty assets have you had any interactions with them and do you have any great expectations for those royalties going forward.
Speaker Change: Yes, I think for the achieved this acquisition overall I think that they did have some programs return to BMS was a bit of a surprise to us.
Trevor: As you know just sort of through the general audience here there were seven assets overall.
Trevor: The main asset.
Trevor: Underlying the deal is a genus and bought battle.
Trevor: Our investment thesis around that is primarily driven by Novatel asset.
Trevor: And that particular asset.
Trevor: We review the six month data in an ongoing study that they have underway, which we viewed as a V.
Trevor: Very promising.
Trevor: And the next.
Trevor: A few months there should be 12 months data available, which is what we're really focused on.
Trevor: And if that is consistent with the six months data.
Trevor: I think we're in good shape.
Trevor: This is in good shape in that regard.
Trevor: So that's.
Trevor: What's kind of driving our thinking around the <unk>.
Trevor: Deal and we will wait for that data to unfold.
Speaker Change: Okay. Thanks for that and can you also talk about some of the things that give you confidence of a commercial launch for <unk>.
Trevor: <unk> in first half 'twenty five.
Trevor: Yes.
Trevor: We would be happy to so.
Trevor: <unk> is the company that we formed to.
Trevor: Commercialize Zelle sued me Doug <unk> was first approved take home treatment for most come contagiosum. The only other treatments that have been available historically has.
Trevor: Has been in office procedures.
Trevor: That are I would just say relatively inconvenience and can be painful there's cryo and then there's the use of Ken stared in oil as well some companies a companies reformulated that in.
Trevor: A presentation of that be considered an oil has been around for quite a while so we're competing in a prescription market for take home medications when that drug is launched.
Trevor: And there's very high demand.
Trevor: For this product we believe.
Trevor: I think conservatively estimating that this is a $150 million to $200 million.
Trevor: Net sales potential in the U S market.
Trevor: Have global rights.
Trevor: To the product.
Trevor: And so we're pretty optimistic about what can be achieved here and that's the lead assets around.
Trevor: A platform that we purchased if you recall, we're very focused on that because it is now FDA approved.
Trevor: We are engaged with potential marketing partners to launch it.
Trevor: And so that is our number one priority around that but I would just remind people.
Trevor: We're pretty enthusiastic about the platform overall, we have clinical data on four other assets that we will.
Trevor: Bill.
Trevor: Start to look for partners.
Trevor: <unk>.
Trevor: Further develop and then potentially commercializing successful and nitric oxide in general as a platform is why that plagued the applicability and why it is not an anti viral or antibiotic definition really that has those characteristics broadly.
Trevor: It is.
Trevor: As promising clinical data and other products. So long term, we think we could end up with a few royalties around this platform and leading off with <unk>.
Speaker Change: <unk> me.
Speaker Change: We think that the numbers and the investment of a pretty positive overall in the long term.
Speaker Change: Okay.
Speaker Change: Thank you for your question.
Speaker Change: Ladies and gentlemen, once again, if you would like to ask a question today remember it is star followed by the number one on your telephone keypad.
Speaker Change: Our next call is from the line of Zack <unk> band or hosted with I'm, sorry, Jon Vander Hueston with Zacks small capital research.
Speaker Change: Your line is live.
Speaker Change: Great. Thank you and good morning.
Speaker Change: So we like to look at M&A to get a sense of what where things are going in and I took a quick look at some of the.
Speaker Change: Over 1 billion dollar transactions that have taken place and they've been in neuro cancer in dermatology.
Speaker Change: You look at these at all to get a sense of kind of where that next trend will be in terms of.
Speaker Change: Good investments and where products may have a good end market.
Speaker Change: Okay.
Speaker Change: We do but our primary driver because were very product focused.
Speaker Change: Is high unmet clinical need.
Speaker Change: And so even on the commercial side when we come across.
Speaker Change: Commercial products were looking at things like cards VEBA in neuroblastoma.
Speaker Change: We don't specifically have.
Speaker Change: Our strategy around.
Speaker Change: Certain therapeutic areas what's.
Speaker Change: What's the market can.
Speaker Change: It tend to group around the market moves around various therapeutic areas can come in and out of favor.
Speaker Change: We're very focused.
Speaker Change: Our focus on the products and the high unmet clinical need and whether they are addressing something thats really important clinically to patients and the reason we're focused on that is one I think thats important in general.
Speaker Change: In terms of what we do with our daily lives, but.
Speaker Change: That's your best Defense also against payer pressure and so ultimately all of these products are going to have to sit down when and if the development of successful and have discussions with payers around reimbursement.
Speaker Change: The best positioned companies are getting drugs approved that make big clinical differences in the lives of patients.
Speaker Change: So that's why we're focused on that just as a matter of business strategy.
Speaker Change: And that does drive us into different corridors.
Speaker Change: Sometimes we'll make contrarian investments I would say that right now something like Zelle suit me, which is a topically applied medication may be viewed as contrarian because it's more of a specialty pharma products. It's topically applied I think dermatology is a little out of favor right now, but the reality is there.
Speaker Change: Very high unmet clinical need.
Speaker Change: <unk> present, primarily to PV attrition they can't really do much for these patients other than refer them to pediatric dermatologists. The waiting list for a very long to get them to see those types of physicians and so we just think that this offers a really key solution in there.
Speaker Change: This clinical arena for patients that are <unk>.
Speaker Change: Confident in it.
Speaker Change: So that's kind of how we think about our investing in our choices because in the long term various therapeutic areas will come in and out of favor even if they.
Speaker Change: It remained relatively underserved.
Speaker Change: That just happens.
Speaker Change: As a matter of investing strategies so.
Speaker Change: That's how we view it if that's helpful.
Speaker Change: Yes, Thanks, Doug.
Speaker Change: A couple of questions on Captisol I think that the company had indicated that there might be some lifecycle management type of efforts that could take place and then secondly, what does the competitive environment like for solubility and stability agent out there do you guys control I guess I'm just wondering how much of the market do you do you have a handle on.
Speaker Change: There and who are the some of the others that might come up.
Speaker Change: When somebody is looking for anything like that.
Speaker Change: Sure Yeah, there remains very high demand for solubility enhancing molecules.
Speaker Change: Our excipient so it can enhance the solubility of the chemical entities that are active.
Speaker Change: Solubility and permeability are the two biggest drug delivery issues stability being the third.
Speaker Change: Captisol itself is probably the strongest position amongst the soluble <unk> there are other ways to do that obviously with nano crystals.
Speaker Change: And things like that.
Speaker Change: So there are different technological approaches.
Speaker Change: So why is Captisol why does it have 16 approved products historically, that's probably I don't know because I havent done the historical analysis, that's probably the most prolific single drug delivery platform and a history of 16 approved products on more and maybe theres, a gel gel cap technology or something thats similar but.
Speaker Change: In terms of soluble amortization thats pretty dominant and the reason why its dominant because it works so well it works broadly and it's very easy to work with so our customers can.
Speaker Change: Basically you get samples from us they can.
Speaker Change: Any chemist in the pharmaceutical industry can work with it very easily if it works on their molecules that come back to us and they take a license. So we make it easy to work with.
Speaker Change: And.
Speaker Change: It solves a lot of the solubility problems that our customers face.
Speaker Change: Chemicals, there and Theyre trying to formulate so.
Speaker Change: I hope that helps answer that question yes.
Speaker Change: Yes. It does thank you.
Speaker Change: Yeah.
Speaker Change: Thank you for your question and with that ladies and gentlemen that will conclude our Q&A session for today and to wrap up I'd like to turn the call back over to Todd.
Speaker Change: Thank you.
Speaker Change: We are confident and optimistic we believe we have the right strategy, we have the right team and we are executing with discipline.
Speaker Change: On the right market segments to deliver lasting predictable and compounding growth. Thank you all for attending the earnings call today.