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Ligand Up on Multi-Program Captisol Deal with Avion Pharma

Zacks Equity Research

Ligand Pharmaceuticals Incorporated (LGND) entered into a deal with Avion Pharmaceuticals, LLC, under which four Captisol-enabled programs will be developed and commercialized. Shares of Ligand Pharma were up 2.93% following the announcement.

According to the deal, Ligand Pharma will receive an upfront payment along with potential milestone payments. Ligand Pharma is also entitled to revenues and royalties under the deal. This partnership has expanded Ligand’s portfolio of Shots-on-Goal with more than 100 fully funded programs.

We are positive on the agreement between Ligand Pharma and Avion Pharmaceuticals.

Ligand Pharma has announced a number of deals this year including agreements with TG Therapeutics (TGTX) and Omthera Pharmaceuticals (treatment of dyslipidemia, including hypertriglyceridemia). Ligand Pharma has also licensed the rights to five programs to Viking Therapeutics.

The TG Therapeutics deal involves the development and commercialization of Ligand’s interleukin-1 receptor associated kinase-4 (IRAK-4) inhibitors. Ligand Pharma is currently developing IRAK4 inhibitors for the treatment of certain forms of cancer and autoimmune diseases. The IRAK4 program is in pre-clinical development.

According to the deal, Ligand Pharma received 125,000 unregistered shares of TG Therapeutics’ common stock, valued at about $1 million on the date of signing the deal. Additionally, the company will receive $207 million on the achievement of specific milestones and tiered royalties of 6%−9.5% on net sales of licensed products.

Ligand Pharma’s Captisol technology has enabled six FDA approved products, which include Amgen’s (AMGN) Kyprolis and Merck’s Noxafil IV. Meanwhile, more than 30 Captisol enabled products are in clinical development.

Ligand Pharma holds a Zacks Rank #5 (Strong Sell). A better ranked stock in the biotech sector is Actelion Ltd. (ALIOF), carrying a Zacks Rank #1 (Strong Buy).

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