Ligand to Acquire APEIRON Biologics AG for $100 Million
Ligand Pharmaceuticals (Nasdaq: LGND) will acquire APEIRON Biologics AG for $100 million in cash, gaining royalty rights to QARZIBA®, an oncology drug for high-risk neuroblastoma marketed in 35 countries.
This acquisition will immediately increase Ligand's EPS by $1.00 annually and increase 2024 adjusted EPS guidance by 17% to $5.00-$5.50. Additional consideration up to $28 million may be paid to APEIRON based on future QARZIBA royalties by 2030 or 2034.
Ligand's 2024 revenue guidance is raised to $140 million-$157 million, and royalties expected to range from $100 million-$105 million. The transaction, approved by both companies' boards, is expected to close in July 2024.
- Immediate EPS increase by $1.00 annually.
- 2024 adjusted EPS guidance raised by 17% to $5.00-$5.50.
- Revenue guidance for 2024 increased to $140 million-$157 million.
- Royalty revenue expected to range from $100 million-$105 million.
- The transaction subject to a 30-day shareholder objection period and other customary closing conditions.
Insights
Ligand's acquisition of APEIRON Biologics AG brings immediate value through increased
Royalty revenue from QARZIBA, driven by its established presence in over 35 countries, is a substantial asset. With Recordati's
However, it's important to consider the investment's risk. The additional consideration hinges on reaching specific sales thresholds, potentially impacted by market competition, regulatory changes, or shifts in medical practice. Therefore, while the current financial snapshot is positive, investors should be mindful of these variables when evaluating long-term returns.
QARZIBA® is a notable medication for treating high-risk neuroblastoma, a rare pediatric cancer. Its uniqueness lies in being the only approved immunotherapy for this condition, offering a targeted treatment approach. Immunotherapies like QARZIBA harness the body's immune system to combat cancer cells, which can lead to effective results with potentially fewer side effects compared to traditional chemotherapy.
Given its approval by the European Medicines Agency and its presence in over 35 countries, QARZIBA has demonstrated clinical efficacy and regulatory acceptance. For investors, this underscores the drug's established market credibility and potential for stable revenue generation through royalty rights.
However, the reliance on a single drug for significant revenue may introduce risk if new competing therapies emerge. Continuous monitoring of advancements in oncology, particularly in neuroblastoma treatments, will be important for assessing the sustainability of QARZIBA's market position.
Ligand's strategic focus on expanding its royalty portfolio through high-value acquisitions like APEIRON positions it favorably in the biotechnology market. By acquiring multiple key assets within a year, Ligand diversifies its revenue streams, reducing reliance on any single product. This strategy mitigates risk and promotes long-term stability.
The commitment to invest up to
Nonetheless, market dynamics and competitive pressures must be considered. The biotechnology sector is highly volatile, with rapid advancements and frequent new entrants. Continuous innovation and strategic adaptability will be key for Ligand to maintain its competitive edge and deliver consistent returns.
Acquisition provides Ligand with the royalty rights to QARZIBA®, a highly differentiated, commercial oncology drug marketed in 35 countries by global pharmaceutical company Recordati S.p.A.
QARZIBA is the sixth key asset added to Ligand’s commercial stage portfolio since the beginning of 2023
Transaction will be immediately accretive to Ligand EPS by an estimated
Ligand increases 2024 adjusted EPS guidance range by
APEIRON is a private biopharmaceutical company based in
“The addition of QARZIBA to our commercial royalty portfolio further supports our growth strategy to invest in high-value medicines that deliver significant clinical value and generate predictable and long-term revenue streams for our investors,” said Todd Davis, CEO of Ligand. “QARZIBA is the only immunotherapy for high-risk neuroblastoma marketed across
Peter Llewellyn-Davies, CEO of APEIRON commented, “This transaction is an important milestone for our company and shareholders. We have spent more than 20 years translating academic research into therapeutic products for diseases with high unmet needs. Our team was honored to help bring QARZIBA to the young patients who need it. We appreciate that Ligand recognizes the long-term potential of this critical drug for a rare pediatric cancer.”
Transaction Terms
Under the terms of the agreement, which has been unanimously approved by both the Board of Directors at Ligand and APEIRON’s Supervisory Board, Ligand will acquire all the outstanding shares of APEIRON for
Concurrently, Ligand is also entering into a stock purchase agreement whereby it has committed to investing up to
Financial Guidance Update
The APEIRON acquisition will be immediately accretive to Ligand’s earnings per share (EPS) by approximately
McDermott Will & Emery and E+H Rechtsanwälte GmbH served as Ligand’s legal counsel. Baker McKenzie and DORDA served as APEIRON’s legal counsel.
About QARZIBA®
QARZIBA is a monoclonal antibody that is specifically directed against the carbohydrate moiety of disialoganglioside 2 (GD2), which is overexpressed on neuroblastoma cells. Dinutuximab beta was approved by the European Medicines Agency in 2017 for the treatment of high-risk neuroblastoma in patients aged 12 months and above, who have previously received induction chemotherapy and achieved at least a partial response, followed by myeloablative therapy and stem cell transplantation, as well as patients with history of relapsed or refractory neuroblastoma, with or without residual disease.
Dinutuximab beta was originally discovered by EMD Lexigen Research Center and ultimately developed by the Children’s Cancer Research Center (CCRI) and European Neuroblastoma Research Network (SIOPEN) for the treatment of high-risk neuroblastoma. APEIRON in-licensed dinutuximab beta from CCRI and SIOPEN in 2011, and upon completing the clinical development, out-licensed the exclusive global commercialization rights to EUSA Pharma (
About APEIRON Biologics AG
APEIRON Biologics is a private biopharmaceutical company based in
About Ligand Pharmaceuticals
Ligand is a biopharmaceutical company enabling scientific advancement through supporting the clinical development of high-value medicines. Ligand does this by providing financing, licensing our technologies or both. Its business model seeks to generate value for stockholders by creating a diversified portfolio of biopharmaceutical product revenue streams that are supported by an efficient and low corporate cost structure. Ligand’s goal is to offer investors an opportunity to participate in the promise of the biotech industry in a profitable and diversified manner. Its business model focuses on funding programs in mid- to late-stage drug development in return for economic rights, purchasing royalty rights in development stage or commercial biopharmaceutical products and licensing its technology to help partners discover and develop medicines. Ligand partners with other pharmaceutical companies to leverage what they do best (late-stage development, regulatory management and commercialization) in order to generate its revenue. Ligand’s Captisol® platform technology is a chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. Ligand has established multiple alliances, licenses and other business relationships with the world’s leading biopharmaceutical companies including Amgen, Merck, Pfizer, Jazz, Takeda, Gilead Sciences and Baxter International. For more information, please visit www.ligand.com. Follow Ligand on X @Ligand_LGND.
We use our investor relations website and X as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Investors should monitor our website and our X account, in addition to following our press releases, SEC filings, public conference calls and webcasts.
Adjusted Financial Measures
Ligand reports adjusted earnings per share in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Ligand’s financial measures under GAAP include share-based earnings expense, amortization of debt-related costs, amortization related to acquisitions and intangible assets, changes in contingent liabilities, mark-to-market adjustments for amounts relating to its equity investments in public companies, excess tax benefit from share-based earnings, income tax effect of adjusted reconciling items and others. However, Ligand does not provide reconciliations of such forward-looking adjusted measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for changes in contingent liabilities, changes in the market value of its investments in public companies, share-based compensation expense and the effects of any discrete income tax items. Management has excluded the effects of these items in its adjusted measures to assist investors in analyzing and assessing Ligand’s past and future core operating performance. Additionally, adjusted earnings per diluted share is a key component of the financial metrics utilized by Ligand’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.
Forward-Looking Statements
This news release contains forward-looking statements by Ligand that involve risks and uncertainties and reflect Ligand's judgment as of the date of this release. Words such as “plans,” “believes,” “expects,” “anticipates,” and “will,” and similar expressions, are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements regarding: the timing of the anticipated acquisition and when and whether the anticipated acquisition ultimately will close; the potential contributions the acquisition is expected to bring to Ligand, including technologies, collaborations and revenue streams, the potential to secure additional licenses, and development operations; and the expected impact on Ligand’s future financial and operating results. Actual events or results may differ from Ligand’s expectations due to risks and uncertainties inherent in Ligand’s business, including, without limitation: the risk that the conditions to the closing of the transaction are not satisfied; litigation relating to the transaction; uncertainties as to the timing of the consummation of the transaction and the ability of each of Ligand or APEIRON to consummate the transaction; risks that the proposed transaction disrupts the current and future plans and operations of Ligand or APEIRON; whether the acquisition will be immediately accretive to Ligand’s earnings per share; whether Ligand’s adjusted 2024 guidance comes to fruition; the success of Ligand’s investment in invIOs Holding AG; competitive responses to the proposed transaction; unexpected costs, charges or expenses resulting from the transaction; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; legislative, regulatory and economic developments; and other risks described in Ligand’s prior press releases and filings with the SEC. The failure to meet expectations with respect to any of the foregoing matters may reduce Ligand's stock price. Ligand disclaims any intent or obligation to update these forward-looking statements after the date hereof. Additional information concerning these and other risk factors affecting Ligand can be found in prior press releases available at www.ligand.com as well as in Ligand's public periodic filings with the Securities and Exchange Commission available at www.sec.gov. Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release, including the possibility of additional license fees and milestone revenues we may receive. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
1 Based on midpoint of revised and prior EPS range.
2 Based on 2023 reported financials.
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For Ligand:
Investors:
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investors@ligand.com
(561) 214-4232
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Media:
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Source: Ligand Pharmaceuticals Incorporated
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