Tuesday March 30, 5:25 pm Eastern Time
Company Press Release
Ligand Reports 1998 Results
Ends Year With Cash of $72.5 Million
A Year of Transition and Strategic
Accomplishments
Completed Seragen Merger, Elan Strategic Alliance; Received FDA
Approval of Panretin® gel and ONTAK(TM)
SAN DIEGO--(BW HealthWire)--March 30, 1999--Ligand Pharmaceuticals Incorporated
(Nasdaq: LGND - news; pronounced LY-gand) today reported revenues for the fourth quarter and
year ended December 31, 1998, were $4.3 million and $17.7 million, respectively, compared to
$21.8 million and $51.7 million for the same periods in 1997.
Excluding charges for acquired in-process technology, net losses for the fourth quarter and year
ended December 31, 1998, were $25.7 million ($0.59 per share) and $72.9 million ($1.80 per
share), respectively, compared to net losses of $3.1 million ($0.09 per share) and $35.2 million
($1.06 per share) for the same periods in 1997.
As of December 31, 1998, Ligand had cash, cash equivalents, short-term investments and restricted
cash of $72.5 million.
''Ligand's 1998 financial results reflect a year of peak losses prior to targeted profits and a year of
transition from the R&D- and strategic transaction-driven results of 1997 (when the ALRT R&D
agreement and Lilly diabetes alliance generated $38 million of revenues) to the product sales-driven
financial results of 1999,'' said Paul V. Maier, Ligand Senior Vice President and Chief Financial
Officer. ''The financial results for 1998 also reflect the accomplishment of a number of strategic and
commercial goals set in earlier years. The 1998 acquisition of ONTAK(TM) rights and licensing of
Morphelan(TM) in the U.S. and Canada extend our oncology product portfolio and allow us to
leverage the sales and marketing infrastructure we put in place in late 1998. As a result of the early
1999 approval and launch of both ONTAK and Panretin® gel, we are beginning to reap the rewards
of the work and investments undertaken in 1998 and earlier and, with reduced development
expenses coupled with tight expense controls, anticipate improved results as we move toward our
goal of profitability in 1999.
''Our fourth quarter revenues, and therefore total year revenues, were impacted by a delay until first
quarter 1999 of the Panretin gel and ONTAK launches and of the Lilly Targretin® diabetes
development decision, resulting in a loss of sales and milestone revenues and a corresponding delay
in executing licensing agreements on our oncology products. These were one-time events impacting
1998 results and have been taken into account in our forward plans for 1999. We closed the year
with cash of $72.5 million, and together with additional convertible note financing available to us
through our Elan strategic alliance, we are well positioned to execute our commercialization and
product acquisition strategy in 1999.''
Highlights of our accomplishments in 1998 and early 1999:
-Ligand and its wholly owned subsidiary, Seragen, filed two
applications for drug approval with the FDA, for Panretin gel
and ONTAK, which were both approved in February 1999.
-Ligand submitted its first application for drug approval in
Canada, for Panretin gel, in October 1998, and followed in
February 1999 with its first European application, also for
Panretin gel.
-Ligand launched its commercialization phase by putting in place
a 26-member cancer and HIV-center sales force in the U.S., and
in January 1999, established a subsidiary, Ligand
Pharmaceuticals International, Inc., to manage the company's
international operations.
-Ligand extended its oncology product portfolio by completing the
merger with Seragen, Inc. and acquiring the rights to ONTAK, and
by licensing exclusive rights in the U.S. and Canada and a
co-promotion option in continental Europe to Morphelan for pain
management in HIV and cancer patients.
-Ligand entered into its first financial and product based
strategic alliance with Elan Corporation, plc, which provided
financing for certain strategic transactions through 1999.
-Ligand completed pivotal clinical trials in 1998, which we
expect to be the basis for filing new drug applications for
Targretin capsules and Targretin gel for the treatment of
patients with CTCL, and initiated Phase II trials with Targretin
capsules in psoriasis and breast cancer, with results expected
in 1999.
According to David E. Robinson, Ligand Chairman, President and Chief Executive Officer, ''1998
will be recorded in our corporate history as one of our most challenging yet successful years to date,
with milestone accomplishments in many areas. As we look ahead, 1999 may eclipse 1998 in the
importance of milestones we achieve, as product sales of Panretin gel and ONTAK drive us toward
our goal of profitability in 1999. In 1999 and 2000, the management team will focus on additional
product registrations, expansion of commercial activity to Europe and Latin America, additional
indications and market expansion of our products, and opportunities for product acquisitions that
expand and diversify our pipeline in the U.S. and Europe.''
Comparison of 1998 versus 1997
Ligand reported revenues of $17.7 million for the year ended December 31, 1998, compared to
revenues of $51.7 million for the year ended December 31, 1997, a decrease of $34.0 million. For
the fourth quarter ended December 31, 1998, revenues were $4.3 million compared to $21.8 million
for the same quarter in 1997, a decrease of $17.5 million. Lower revenues for the year ended
December 31, 1998 versus the same period in 1997 were primarily attributable to five transactions:
the Allergan Ligand Retinoid Therapeutics, Inc. (ALRT) buyback, resulting in reduced revenues of
$19.0 million in 1998 compared to 1997; the completion of the Glaxo-Wellcome, plc and Sankyo
Company Ltd. collaborations, resulting in reduced revenues of $3.6 million in 1998 compared to
1997; the completion of the American Home Products Corporation collaboration, resulting in
reduced revenue of $2.7 million in 1998 compared to 1997; and a reduction in one-time up-front
revenue from Eli Lilly and Company of $18.8 million in 1998 compared to 1997.
Research and development expenses were $70.7 million for the year ended December 31, 1998
compared to $72.4 million for the year ended December 31, 1997, a decrease of 2.3%. For the
fourth quarter ended December 31, 1998, research and development expenses were $21.5 million
compared to $21.1 million in the same period in 1997. Decreased research and development
expenses are primarily due to initial drug validation costs incurred in 1997, the closure of Glycomed's
Alameda facility and completion of the research portion of the Sankyo collaboration in October
1997. These costs were offset by increased expenses in 1998 related to completion of Phase III
trials and new drug application (NDA) preparation and submission for our lead product candidates.
Selling, general and administrative expenses were $16.6 million for the year ended December 31,
1998, compared to $10.1 million in the same period in 1997, an increase of $6.5 million. For the
fourth quarter ended December 31, 1998, selling, general and administrative expenses were $6.6
million compared to $2.7 million in the same period in 1997. The increases reflect additions in
marketing and sales personnel and increased expenses in preparation for the launch and
commercialization of Ligand's first two approved products, Panretin gel and ONTAK. General and
administrative expenses, separate from selling expenses, grew by $1.1 million during 1998, with $0.7
million of the increase occurring in the fourth quarter 1998 versus the same period in 1997, largely to
support commercial efforts.
The net losses for the fourth quarter and year ended December 31, 1998, including the write-off of
$45.0 million related to the Seragen and Elan transactions, were $40.7 million ($0.93 per share) and
$117.9 million ($2.92 per share), respectively, compared to net losses, including the write-off of
$65.0 million related to the buyout of ALRT, of $68.0 million ($1.93 per share) and $100.2 million
($3.02 per share) in the same period in 1997.
Since 1989, Ligand Pharmaceuticals Incorporated has established a leadership position in gene
transcription technology, particularly intracellular receptor (IR) technology and Signal Transducers
and Activators of Transcription (STATs) technology. Ligand has applied IR and STATs technology
to the discovery and development of small molecule drugs to enhance therapeutic and safety profiles,
and to address unmet patient needs in cancer, women's and men's health and skin diseases, as well
as osteoporosis, metabolic, cardiovascular and inflammatory diseases.
This news 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 Ligand will achieve profitability in 1999, if at all, that approved
products will be commercially successful, that any product in Ligand's or any partner's pipeline will
be successfully developed, that regulatory approvals will be granted in a timely manner or at all, that
patient and/or physician's acceptance of these products will be achieved, that results of human clinical
trials will be consistent with any pre-clinical results, or that any results will be supportive of regulatory
approvals required to market products. 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.
Panretin® and Targretin® are registered trademarks of Ligand Pharmaceuticals Incorporated, and
ONTAK(TM) is a 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 INFORMATION
(Dollars in Thousands, Except Per Share Data)
Three Months Ended Years Ended
December 31, December 31,
(Unaudited)
1998 1997 1998 1997
Revenues:
Collaborative
research and
development $ 4,150 $ 21,706 $ 17,267 $ 51,281
Other 124 93 406 418
Total revenue 4,274 21,799 17,673 51,699
Costs and expenses:
Research and
development 21,518 21,073 70,739 72,426
Selling, general
and administrative 6,642 2,729 16,568 10,108
Total operating
expenses 28,160 23,802 87,307 82,534
Loss from operations
before one time (23,886) (2,003) (69,634) (30,835)
Charges
One time charges:
Write-off of
in-process
technology (15,000) (64,970) (45,000) (64,970)
Loss from
operations (38,886) (66,973) (114,634) (95,805)
Interest income/
(expense) - net (1,773) (1,060) (5,252) (4,345)
Realized gain on
sale of investments -- -- 2,000 --
Net loss $(40,659) $(68,033) $(117,886) $(100,150)
Net loss before
one time Charges $(25,659) $ (3,063) $ (72,886) $ (35,180)
Net loss per share
before one time
charges $ (.59) $ (.09) $ (1.80) $ (1.06)
Net loss per share $ (.93) $ (1.93) $ (2.92) $ (3.02)
Shares used in
computing net
loss per share 43,774,143 35,165,802 40,392,421 33,128,372
CONSOLIDATED BALANCE SHEETS INFORMATION
(Dollars in Thousands)
December 31,
1998 1997
Assets
Current assets:
Cash, cash equivalents
and short term investments $ 69,967 $ 83,230
Other current assets 8,026 864
Total current assets 77,993 84,094
Restricted short-term
investments 2,554 3,057
Property and equipment,
net 23,722 14,853
Acquired technology 40,312 --
Other assets 11,439 5,419
$ 156,020 $ 107,423
Liabilities and Stockholders'
Equity
Current liabilities $ 26,895 $ 21,695
Long-term debt 51,185 14,751
Convertible subordinated
debentures 39,302 36,628
Accrued acquisition
obligation 50,000 --
Stockholders' equity (11,362) 34,349
$ 156,020 $ 107,423
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Contact:
Ligand Pharmaceuticals Incorporated
Paul V. Maier,619/550-7573 |
