Ligand Pharmaceuticals Announces First Quarter Results.Conference call begins at 4:30 p.m. Eastern time today SAN DIEGO -- Ligand Pharmaceuticals Incorporated (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :LGND LGND Luminance Ground ) today announced financial results for the first quarter of 2007 and provided additional information concerning the Company's new business model. Financial Results The Company sold its commercial oncology products in October 2006 and AVINZA[R] in February 2007. The results of operations related to these products have been reflected as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for all reporting periods discussed below. Total revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the three months ended March 31, 2007, were $0.2 million compared with total revenues of $2.9 million for the same period in 2006. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. from continuing operations in the first quarter of 2007 were $29.8 million; compared with operating expenses of $17.2 million in the first quarter of 2006. Operating expenses in the first quarter of 2007 include one-time items of $10.2 million related to the Company's restructuring announced in January 2007 and approximately $1.0 million related to the write-off of certain assets either disposed of or no longer used in its ongoing operations. Additionally, the Company recorded stock compensation expense of approximately $1.8 million related to the lowering of the exercise price of outstanding stock options as an equitable adjustment in connection with and following the announcement of the dividend in March 2007. Net income in the first quarter of 2007 was $274.3 million, or $2.72 per share, compared with a net loss of $142.2 million, or $1.84 per share, in the comparable 2006 quarter. Loss from continuing operations in the first quarter of 2007 was $16.9 million, or $0.17 per share, compared with a loss from continuing operations of $13.7 million, or $0.18 per share, in the comparable 2006 quarter. Income from discontinued operations in the first quarter of 2007 was $291.2 million, or $2.89 per share, compared with loss from discontinued operations of $128.5 million, or $1.66 per share, in the comparable 2006 quarter. As of March 31, 2007, Ligand had cash, cash equivalents, short-term investments, and restricted investments of $412.1 million. In April, the Company paid a $2.50 per share dividend for a total of $252.7 million. Business Update and Highlights * April 30, 2007, named John P. Sharp, Chief Financial Officer. * April 19, 2007, completed the distribution of a one-time cash dividend of $2.50 per share to shareholders of record as of April 5, 2007. Following the payment of the dividend, the Company had approximately $155 million in cash, cash equivalents, short-term investments and restricted investments. Further, there is $25 million of cash held in escrow accounts following the sales of AVINZA and our oncology product line to support potential indemnification claims by the purchasers of those assets. In addition to the announcement of the dividend, the Company authorized a share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program of up to $100 million over 12 months. * March 2007, announced changes to the Board of Directors, John W. Kozarich appointed Chairman of the Board. John L. Higgins, David M. Knott, Elizabeth M. Greetham and Todd C. Davis replaced Irving S. Johnson, Carl C. Peck, M.D., John Groom, Daniel S. Loeb
Daniel Seth Loeb is an American hedge fund manager and founder of Third Point LLC, a New York based hedge fund managing over $3.5 billion in assets [1] [2]. and Brigette Roberts. * February 2007, announced restructuring of business and staff, redefined business focus as an R&D and royalty-driven biotech company, and implemented business strategy to create shareholder value by generating income from research, milestone, royalty and co-promotion revenues resulting from our collaborations with pharmaceutical partners. * February 2007, Ligand completed the sale of AVINZA (morphine sulfate morphine sulfate, n brand names: Duramorph PF, MS Contin, Roxanol; drug class: narcotic analgesic (Controlled Substance Schedule II); action: extended release capsules) and associated assets to King Pharmaceuticals, Inc. in exchange for cash and royalties. "Our progress since the beginning of 2007 has been extraordinary," said John L. Higgins, President and Chief Executive Officer. "We made significant organizational changes and financial decisions this quarter to enhance our performance and return value to shareholders. Ligand's new business model, including continuation of key partnerships, will enable us to leverage our research and development strengths, and focus on our programs that can provide the greatest return." 2007 Operational Forecast For the remaining three quarters of 2007, excluding stock-based compensation, the Company expects that research and development expenses will be $34 to $35 million and general and administrative expenses will be $12 to $13 million. The R&D expense outlook will fund the completion of our Phase I trial with LGD-4665; costs for preparing to initiate multiple Phase II trials with LGD-4665 in early 2008 including manufacture of drug supply; drug discovery and optimization for four research-stage programs; and preclinical studies preclinical studies, n.pl a term used to describe research done before a clinical study. May be laboratory or epidemiologic research. for LGD-3303. Royalty Programs The following table provides details of royalties owed to Ligand for its late-stage development or commercialization agreements. For bazedoxifene (Viviant) and bazedoxifene CE (Aprela), eltrombopag (Promacta) and lasofoxifene (Oporia), the Company will receive royalties only if and to the extent any such product candidate is ultimately approved by the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. (and/or foreign regulatory agency regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. ) and successfully marketed. [TABLE OMITTED] Program Update The Company also provided the following update on the status and outlook of its key partnered and internal programs: * TPO (Twisted Pair Only) Refers to the use of twisted pair wire when other options are available. For example, a TPO suffix at the end of 3com Ethernet adapter model numbers indicates the card has only an RJ45 connector. Mimetics: Ligand's partner GlaxoSmithKline initiated a Phase III trial with eltrombopag (Promacta) for immune thrombocytopenic purpura immune thrombocytopenic purpura n. See idiopathic thrombocytopenic purpura. immune thrombocytopenic purpura Idiopathic thrombocytopenic purpura, see there (ITP ITP - Intent to Package ) in December 2006. In the first quarter 2007, GlaxoSmithKiline initiated the REPEAT trial, (Repeat ExPosure to Eltrombopag in Adults with Idiopathic Thrombocytopenic Purpura Idiopathic Thrombocytopenic Purpura Definition Idiopathic thrombocytopenic purpura, or ITP, is a bleeding disorder caused by an abnormally low level of platelets in the patient's blood. ) to evaluate a repeated dosing schedule of three six-week cycles of eltrombopag (Promacta) treatment in patients with chronic ITP. GlaxoSmithKline plans to initiate a Phase III trial in 2007 for hepatitis C Hepatitis C Definition Hepatitis C is a form of liver inflammation that causes primarily a long-lasting (chronic) disease. Acute (newly developed) hepatitis C is rarely observed as the early disease is generally quite mild. . * SERMs (selective estrogen receptor modulators): In April 2007, Ligand's partner Wyeth announced that the FDA issued an approvable letter for bazedoxifene (Viviant) for the prevention of postmenopausal post·men·o·paus·al adj. Of or occurring in the time following menopause. postmenopausal Change of life Gynecology adjective Referring to the time in ♀ when menstrual periods stop for ≥ 1 yr osteoporosis. In addition, by the end of 2007, Wyeth plans to file an NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any for bazedoxifene (Viviant) for the treatment of osteoporosis and an NDA for bazedoxifene CE (Aprela) for menopausal symptoms. * SERMs (selective estrogen receptor modulators): Ligand's partner Pfizer announced plans to refile an NDA for lasofoxifene (Oporia) by the end of 2007. Pfizer expects the results from the PEARL study, (Postmenopausal Evaluation and Risk Reduction with Lasofoxifene), will address the FDA's requirements in terms of its safety and benefits. * SARMs (selective androgen receptor modulators Selective androgen receptor modulators or SARMs are a novel class of androgen receptor ligands. (The name follows the terminology currently used for similar molecules targeting the estrogen receptor, "selective estrogen receptor modulators," such as Tamoxifen. ): Ligand's partner TAP is continuing its Phase I trial with the LGD-2941 program for osteoporosis and frailty. * LGD-4665: Ligand continues to advance LGD-4665 (TPO mimetic mimetic /mi·met·ic/ (mi-met´ik) pertaining to or exhibiting imitation or simulation, as of one disease for another. mi·met·ic adj. 1. Of or exhibiting mimicry. 2. ) through its Phase I dose escalation study. The Company expects to complete the Phase I study by the end of 2007; to initiate chronic, long-term animal toxicity studies by the end of 2007; and to initiate multiple Phase II trials for different indications in early 2008. * LGD-3303: Ligand is conducting preclinical studies to prepare LGD-3303 (SARM SARM Saskatchewan Association of Rural Municipalities SARM Selective Androgen Receptor Modulator SARM Department for Standardization, Metrology and Certification (Armenia) SARM Set Asynchronous Response Mode (HDLC) product candidate) for an IND filing and the initiation of clinical trials in 2008. Conference Call Ligand management will host a conference call today to discuss this announcement and answer questions; the call will begin at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). To participate via telephone, please dial (877) 356-5578 from the U.S. or (706) 679-0565 from outside the U.S. A replay of the call will be available until June 10, 2007 at 5:30 p.m. Eastern time by dialing (800) 642-1687 from the U.S. or (706) 645-9291 from outside the U.S., and entering passcode 7612775. Individual investors can access the Webcast through Ligand's web site at www.ligand.com. About Ligand Pharmaceuticals Ligand discovers and develops new drugs that address critical unmet medical needs of patients in the areas of thrombocytopenia Thrombocytopenia Definition Thrombocytopenia is an abnormal drop in the number of blood cells involved in forming blood clots. These cells are called platelets. , hepatitis C, cancer, hormone-related diseases, osteoporosis and inflammatory diseases. Ligand's proprietary drug discovery and development programs are based on its leadership position in gene transcription Gene transcription The process by which genetic information is copied from DNA to RNA, resulting in a specific protein formation. Mentioned in: Gene Therapy technology, primarily related to intracellular receptors. Forward-Looking Statements This news release contains certain forward-looking statements by Ligand that involve risks and uncertainties and reflect Ligand's judgment as of the date of this release. Actual events or results may differ from Ligand's expectations. For example, we may not be able to meet the 2007 operational forecast set forth herein. We also may not receive expected royalties on AVINZA([R]) from King Pharmaceuticals or any other partnered products or from research and development milestones. In addition, our partners may change their plans or timetables regarding our partnered products. Any payments expected from third parties may not be received by us due to third party intellectual property or contract restrictions and any amounts received by us may be subject to third party claims. We may not be able to timely or successfully transform the Company or advance any product(s) in our pipeline, for example, LGD-4665 and LGD-3303. In addition, we may have indemnification obligations to King Pharmaceuticals or Eisai in connection with the sales of the AVINZA and oncology product lines. Further, we may not be able to fully complete our reductions in workforce on any particular or expected timeframe, we may not realize the expected operating savings due to our restructuring, we may not be able to successfully or timely complete a transformation of the company, our early stage programs or any specific business or research initiative(s). In addition, we may not be able to successfully implement our strategy, and continue the development of our proprietary programs. The failure to meet expectations with respect to any of the foregoing matters may reduce our stock price. Additional information concerning these and other risk factors affecting Ligand's business can be found in prior press releases available via www.ligand.com as well as in Ligand's public periodic filings with the Securities and Exchange Commission at www.sec.gov including our form 10-Q Form 10-Q See 10-Q. filed with the SEC on May 10, 2007. Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. [TABLE OMITTED] [TABLE OMITTED] |
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