Ligand Pharma Partners with Spectrum Pharma, Lifts Outlook

Andrew Klips  |

Ligand Pharmaceuticals (LGND) has signed global license and supply agreements with Spectrum Pharmaceuticals (SPPI) to develop and commercialize Ligand’s Catisol-enabled, propylene glycol-free melphalan, currently in Phase III clinical trials as a treatment for multiple myeloma patients before they receive an autologous stem cell transplant.

The deal could be valued in excess of $50 million for Ligand through future milestone payments in addition to royalties on sales should the therapy make it to market. Ligand is also entitled to a $3 million licensing fee.

With the agreements, Spectrum is to immediately assume all development of the program. The pivotal trial is aiming to confirm results from a Phase IIa study that showed the intravenous formulation of PG-free melphalan was safe, well tolerated and a bioequivalent of GlaxoSmithKline’s (GSK) Alkeran, the current commercial IV formulation of melphalan.

"Spectrum has an established oncology and hematology business, and this melphalan product is an ideal complement to their two commercial hematology products, Zevalin and Folotyn, including an expected high degree of commercial call overlap,” said John Higgins, President and Chief Executive Officer of Ligand Pharmaceuticals in a statement on Thursday.

Ligand also hiked its revenue and earnings guidance for the year and provided expectations for the first quarter.

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Instead of the prior estimate of 2013 revenue in the range of $41 to $44 million, the La Jolla, California-based company now sees full-year revenue between $43 million to $46 million. 2013 earnings outlook jumped from a range of $0.35 - $0.39 per share to a much higher range of $0.47 - $0.51 per share.

For Q1, Ligand said it sees revenue in the range of $10 million to $11 million and earnings per share between 10 cents and 13 cents.

Wall Street was expecting a loss of 1 cent per share on revenue of $8 million for the first quarter.

In February, Ligand reported revenue of $31.4 million for all of 2012 and a net loss of $500,000, or 3 cents per share. The fourth quarter brought FDA approval for partner GlaxoSmithKline’s Promacta for the treatment of thrombocytopenia in hepatitis C patients. The FDA also accepted for review Ligand partner Pfizer’s (PFE) New Drug Application for bazedoxifene/conjugated estrogens (BZA/CE), a drug candidate for non-hysterectomized women for the treatment of moderate-to-severe vasomotor symptoms and vulvar and vaginal atrophy associated with menopause, as well as the prevention of postmenopausal osteoporosis. The FDA Prescription Drug User Fee Act (PDUFA) date for a decision is October 3, 2013.

The news of the new agreement is helping shares of Spectrum Pharma make up some ground in pre-market activity Thursday after getting tattooed for a 37 percent share price dump on Wednesday following a reduced 2013 outlook late Tuesday.

Shares of LGND slipped lower by almost 3 percent on Wednesday to $21.86, but are still ahead about 35 percent in the past 52 weeks and have basically doubled in value form May lows of $11.21. Shares of Ligand are inactive in pre-market trading on Thursday.

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