BW1598 Aug 16, 1999 13:26 PACIFIC 16:26 EASTERN
( BW)(CA-LIGAND-PHARMACEUTICALS)(LGND) Ligand Reports Results for
Second Quarter and First Six Months 1999; Targretin NDA Designated for
Priority Review by FDA
Business Editors/Health and Medical Writers
SAN DIEGO--(BW HealthWire)--Aug. 16, 1999--Ligand Pharmaceuticals
Incorporated (Nasdaq:LGND) today reported revenues of $8.4 million for
the second quarter ended June 30, 1999, a 91% increase over second
quarter 1998 revenues, and $18.7 million for the first half ended June
30, 1999, a 97% increase over first half 1998 revenues.
Net loss was $18.9 million in the second quarter 1999 compared to
a net loss of $17.4 million in the second quarter 1998, resulting in
an 11% decrease in loss per share to $0.40 versus $0.45 in the
year-earlier quarter. For the first half, net loss was $33.5 million
in 1999, compared to a net loss of $30.9 million in 1998, resulting in
a 9% decrease in loss per share to $0.73 versus $0.80 in the
year-earlier period.
Second Quarter and First Half Results
Ligand generated product sales of $1.9 million (including $0.1
million for Panretin(R) gel and $1.7 million for ONTAK(R)) in the
second quarter 1999, versus first quarter 1999 sales of $4.4 million
(including $3.7 million for Panretin gel and $0.5 million for ONTAK).
In the first half 1999, product sales were $6.3 million. During 1998,
product sales were $87,000 in the second quarter and $179,000 in the
first half.
Second quarter sales of Panretin gel were impacted by a delay in
Medicaid reimbursement to July 1, 1999, limited coverage of the
treating physicians focused on the top 5% of AIDS treaters
representing approximately 30% of the patient market, and a delay in
the rollout of the direct-to-consumer information program which was
launched in May. As a result of these factors, product demand was
supplied largely from existing wholesaler inventory in the second
quarter. New prescription generation from the restricted physician
population covered during the second quarter was positive.
Second quarter sales of ONTAK were encouraging, reflecting solid
growth and increasing adoption of the product by a number of private
practice oncologists and selected centers with expertise in treating
patients with cutaneous T-cell lymphoma (CTCL). Marketing efforts were
devoted primarily to CTCL centers, where we estimate that less than
one-half of the patients with late-stage CTCL are treated. ONTAK was
well received by early adopter private practice oncologists, who are
experienced in administering infusion drugs such as ONTAK, while the
triage of patients from dermatological centers to oncologists
proceeded more slowly than expected.
Contract manufacturing sales were $0.9 million in the second
quarter 1999 and $1.2 million in the first half 1999 versus $0 in
prior periods. Collaborative research and development and other
milestone revenues increased 30% to $5.6 million in the second quarter
1999 and increased 20% to $11.2 million in the first half 1999, versus
the same periods in 1998.
Reflecting the winding down or completion of various registration
clinical trials and the completion of certain research collaborations,
research and development expenses decreased 16% to $14.6 million in
the second quarter 1999 compared to the same period in 1998. For the
first half 1999, research and development expenses declined 9% to
$29.1 million compared to the same period in 1998.
Costs associated with the expansion of our sales and marketing
activities increased principally related to the launch of Ligand's two
new products in February 1999. Selling, general and administrative
expenses were $8.2 million in the second quarter 1999, compared to
$3.3 million in the second quarter 1998, and $14.0 million for the
first half 1999, compared to $6.1 million for the same period in 1998.
Net interest expense increased $1.1 million to $2.2 million in
the second quarter 1999 and increased $2.1 million to $4.1 million in
the first half 1999, versus the same periods in 1998, primarily as a
result of lower cash balances and higher outstanding debt. As of June
30, 1999, Ligand had cash, cash equivalents, short-term investments
and restricted cash of $35.9 million, a decrease of $36.6 million from
year-end 1998.
Commercial Transition and 1999-2000 Goals
"During second quarter 1999, Ligand was highly focused on the
challenge of rolling out simultaneous launches of our first two
products, Panretin gel and ONTAK, and preparing the NDA for
Targretin(R) capsules," according to David E. Robinson, Chairman,
President and Chief Executive Officer. "The second quarter results
indicate that it will take longer to achieve profitability than we had
expected and that our goal of profitability for 1999 will be delayed
to 2000. Nonetheless, the fundamentals of our business are proceeding
in the right direction and commercialization of our pipeline is
accelerating: Over the next 12 months, we anticipate several
additional U.S. and European filings, clinical results in
non-Hodgkin's lymphoma, psoriasis and advanced breast cancer, progress
in the portfolio of Ligand-related products being pursued by our
collaborative partners, and other value-creating transactions.
"Revenues from ONTAK and Panretin gel should accelerate in the
second half of 1999 as our full national promotion programs have their
full impact and as our sales and marketing teams expand their market
coverage among a larger proportion of the treating physician
population. Product sales from our currently marketed products and
from at least two additional product launches targeted in the U.S. and
one launch targeted in international markets, together with continued
tight expense control, should accelerate Ligand's march to
profitability in 2000."
To strengthen Ligand's cash position to provide operating capital
through to profits, Ligand and Elan have agreed to amend the existing
convertible note agreement to provide that the remaining convertible
note takedown of up to $30 million (issue price) may be utilized for
general corporate purposes. Pursuant to this agreement, Ligand will
issue to Elan on or before August 31, 1999, $20 million (issue price)
of notes with terms similar but not identical to the notes previously
issued to Elan.
"Because our expenditures continue to be tightly controlled and
potential revenues from product sales, licensing fees and milestones
are expected to continue to grow in the second half, we expect the
second half of 1999 to reflect a declining cash burn," said Paul V.
Maier, Ligand Senior Vice President and Chief Financial Officer. "Our
cash resources, together with completion of the draw down of the Elan
facility, are expected to bridge us through the transition to
commercialization and profits in 2000 and represents a cost-effective
source of funds relative to other private or public alternatives."
Targretin Capsules NDA Designated for Priority Review and Other
Developments
On June 23, 1999, Ligand submitted a New Drug Application (NDA)
for Targretin capsules to the U.S. Food and Drug Administration (FDA)
under orphan drug status. On August 3, the FDA accepted the NDA as
"file-able" and designated it for priority review. The priority review
process requires the FDA to review and act on the NDA within six
months of the NDA submission date.
Ligand is targeting submission of a Marketing Authorization
Application (MAA) with the European Agency for the Evaluation of
Medicinal Products (EMEA) for Targretin capsules in the fourth quarter
1999. The NDA for Targretin gel, the topical formulation of Targretin,
is currently being assembled and we expect to submit the NDA in the
fourth quarter 1999.
In June 1999, Ligand received approval in Canada to market
Panretin gel, which will be marketed and sold through Ligand's wholly
owned Canadian subsidiary, and, in May 1999, the Eastern Cooperative
Oncology Group (ECOG) of the National Cancer Institute initiated a
Phase II study of ONTAK in patients with non-Hodgkin's lymphoma.
Ligand Pharmaceuticals Incorporated
Ligand Pharmaceuticals Incorporated discovers, develops and
markets new drugs that address critical unmet medical needs of
patients in the areas of cancer, skin diseases, and men's and women's
hormone-related diseases, as well as osteoporosis, metabolic disorders
and cardiovascular and inflammatory diseases. Ligand's first two drugs
-- Panretin(R) gel and ONTAK(R) -- were approved for marketing in the
U.S. in early 1999 and are being marketed through its specialty cancer
and HIV-center sales force in the U.S. Four additional
oncology-related products are in late-stage development, including
Targretin(R) capsules, Targretin(R) gel, Panretin(R) capsules, and
Morphelan(tm) (licensed from Elan). Ligand's proprietary drug
discovery and development programs are based on its leadership
position in gene transcription technology, primarily related to
Intracellular Receptors (IR) and Signal Transducers and Activators of
Transcription (STATs).
Except for the historical information contained herein, this
press release may contain certain forward looking statements by Ligand
and actual results could differ materially from those described as a
result of factors, including, but not limited to, the following. There
can be no assurance that (a) projected revenues or profits will be
achieved in a timely manner or at all; (b) if a need for additional
financing occurs, such financing will be available to the Company when
required or such financing would be available under favorable terms;
(c) any product will be successfully developed, regulatory approvals
will be granted, patient and physician acceptance of these products
will be achieved or final results of human clinical trials will be
consistent with any interim results, or results will be supportive of
regulatory approvals required to market products; or (d) changes in
the existing collaborative research relationships will not occur,
including their early termination. Additional information concerning
these factors can be found in press releases as well as in Ligand's
public periodic filings with the Securities and Exchange Commission.
Ligand undertakes no obligation to update the statements contained in
this press release after the date hereof.
(See following tables.)
Note: Public information on Ligand Pharmaceuticals Incorporated,
including our financial statements and other filings with the
Securities and Exchange Commission, our recent press releases and the
package inserts for products approved for sales and distribution in
the United States, is available at our website at
ligand.com. Full prescribing information for ONTAK and
Panretin gel may be obtained from Ligand Professional Services by
calling toll-free 800/964-5836.
Panretin(R) and Targretin(R) are registered trademarks of Ligand
Pharmaceuticals Incorporated, and ONTAK(R) is a registered trademark
of Seragen, Inc., a wholly owned subsidiary of Ligand.
Ligand Pharmaceuticals' releases are available via fax at no
charge by calling 888/329-9832 or on the World Wide Web at
www.businesswire.com/cnn/lgnd.htm.
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LIGAND PHARMACEUTICALS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
Three Months Ended
June 30,
1999 1998
Revenues:
Product sales $ 1,931 $ 87
Contract manufacturing sales 931 --
Collaborative research and
development
and other milestone revenues 5,559 4,300
Total revenues 8,421 4,387
Costs and expenses:
Cost of products and services sold 2,432 30
Research and development 14,612 17,302
Selling, general and administrative 8,167 3,330
Total costs and expenses 25,211 20,662
Loss from operations (16,790) (16,275)
Interest income 525 838
Interest expense (2,728) (1,973)
Net loss $(18,993) $ (17,410)
Basic and diluted net loss per
share $ (.40) $ (.45)
Shares used in computing net loss
per share 47,033 38,849
Six Months Ended
June 30,
1999 1998
Revenues:
Product sales $ 6,297 $ 179
Contract manufacturing sales 1,227 --
Collaborative research and
development
and other milestone revenues 11,178 9,273
Total revenues 18,702 9,452
Costs and expenses:
Cost of products and services sold 5,014 204
Research and development 29,082 32,033
Selling, general and administrative 14,042 6,100
Total costs and expenses 48,138 38,337
Loss from operations (29,436) (28,885)
Interest income 1,275 1,882
Interest expense (5,391) (3,948)
Net loss $ (33,552) $ (30,951)
Basic and diluted net loss per
share $ (.73) $ (.80)
Shares used in computing net loss
per share 46,129 38,708
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
1999 1998
Assets (Unaudited)
Current assets:
Cash, cash equivalents and
short-term investments $ 33,643 $ 69,967
Other current assets 10,525 8,026
Total current assets 44,168 77,993
Restricted short-term investments 2,286 2,554
Property and equipment, net 22,525 23,722
Acquired technology 39,640 40,312
Other assets 14,679 11,439
$ 123,298 $ 156,020
Liabilities and Stockholders'
Deficit
Current liabilities $ 20,816 $ 26,895
Accrued acquisition obligation 40,000 50,000
Long-term equipment financing
obligations 7,562 8,165
Convertible debentures and notes 85,192 82,322
Stockholders' deficit (30,272) (11,362)
$ 123,298 $ 156,020 |
