Saturday, June 15, 2013

Ligand: Partnership profits in biotech

Jim Oberweis, Jr.Ligand Pharmaceuticals (LGND) is a biotechnology focused on developing or acquiring revenue generating assets and coupling them to a lean corporate cost structure.

Since a portion of their business model is based on the goal of partnering with other pharmaceutical companies to commercialize and market their assets, a significant amount of their revenue is based largely on payments made to them by partners for royalties, milestones and license fees.

The company recognized the important role of the drug reformulation segment in the pharmaceutical industry and in 2011 added Captisol to their technology portfolio.

Captisol is a powerful formulation technology that has enabled six FDA approved products, including Onyx's Kyprolis and Baxter International's Nexterone and is currently being developed in a number of clinical-stage partner programs.

In comparison to their peers, Ligand has assembled one of the largest and most diversified asset portfolios in the industry.

Ligand's portfolio includes over 80 current and future revenue generating programs, 70 of which are fully-funded partner programs that are in all stages of develop- ment, from preclinical research to awaiting commercialization.

They assemble this portfolio by either licensing out their own proprietary drug development programs or acquiring existing partnered programs from other companies. These assets represent the next wave of potential marketed drugs that could generate revenue.

The therapies in their development portfolio address the unmet medical needs of patients for a broad spectrum of diseases including hepatitis, muscle wasting, multiple myeloma, Alzheimer's disease, dyslipidemia, diabetes, anemia, epilepsy, FSGS and osteoporosis.

The company has established multiple alliances with the world's leading pharmaceutical companies including GlaxoSmithKline, Onyx, Merck, Pfizer, Baxter, Bristol-Myers Squibb, Celgene, Lundbeck, Eli Lilly and Co., Spectrum and The Medicines Company.

In the company's latest reported first quarter, sales increased 107% to $11.7 million from $5.6 million in the first quarter of last year. Ligand reported earnings per share of $.16 in the latest reported first quarter versus a loss in the same quarter of last year.

Clients of Oberweis Asset Management own approximately 14,000 shares. These shares may be appropriate for risk oriented investors.

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