Exhibit 99.1
Contact: Paul V. Maier
Senior vice president and
chief financial officer
(858) 550-7573
LIGAND REPORTS FINANCIAL RESULTS FOR FIRST QUARTER 2003:
RECORD NET PRODUCT SALES UP 38% DRIVEN BY AVINZA CO-PROMOTION LAUNCH AND
SOLID ONCOLOGY REVENUES
-- AVINZA NET SALES HIT NEW HIGH OF $6.6 MILLION, ONCOLOGY REVENUES GROW FOR
THIRD CONSECUTIVE QUARTER -
SAN DIEGO, CA - APRIL 24, 2003 - Ligand Pharmaceuticals Incorporated
(Nasdaq: LGND) today reported total net product sales for the first quarter
ended March 31, 2003, of $18.9 million, compared to $13.7 million in the first
quarter of 2002, an increase of 38% driven by strong AVINZA(R) (morphine sulfate
extended-release capsules) sales of $6.6 million as part of its co-promotion
launch, and solid oncology revenues.
Ligand's total revenues for the first quarter of 2003 were $23.1 million,
compared to $24.9 million for the same period in 2002, a decrease of 7%. The
decrease in quarterly revenues resulted from variances in other revenue
(primarily a $6 million royalty sale recorded in the first quarter of last year)
offsetting increases in product sales. Not including this royalty sale, total
revenues for the first quarter of 2003 increased 22%.
Including a one-time, non-cash write-off of $5 million related to Ligand's
decision not to purchase X-Ceptor Therapeutics, net loss for the first quarter
was $20.3 million ($0.29 per share), compared to a net loss of $6.6 million
($0.10 per share) for the same period in 2002. Not including the one-time
charge, net loss for the first quarter was $15.3 million ($0.22 per share).
"Ligand's first-quarter performance excluding one-time, non-cash charges
was ahead of our business plan goals, and is tracking on or ahead of our annual
financial guidance," said Paul V. Maier, Ligand's senior vice president and
chief financial officer. "We were particularly pleased with the 38% growth in
product sales, which was driven by a strong AVINZA quarter as part of our
co-promotion launch with Organon. Now that there are more than 800 sales
representatives in the field and we have the ability to achieve the No. 2 share
of voice in a growing, $2.8 billion market, we expect the second and third
quarters to reflect significant additional market share growth of AVINZA."
In the first quarter of 2003, sales of individual products were:
- ------------------------------------------------ ----------------- ----------------
1Q 2003 Net 1Q 2002 Net
Sales (million) Sales (million)
- ------------------------------------------------ ----------------- ----------------
ONTAK(R)(denileukin diftitox) $7.1 $8.6
- ------------------------------------------------ ----------------- ----------------
AVINZA $6.6 0
- ------------------------------------------------ ----------------- ----------------
Targretin(R)(bexarotene) capsules $3.6 $3.8
- ------------------------------------------------ ----------------- ----------------
Targretin gel and Panretin(R)(alitretinoin) gel $1.5 $1.3
- ------------------------------------------------ ----------------- ----------------
TOTAL NET PRODUCT SALES $18.9 $13.7
- ------------------------------------------------ ----------------- ----------------
It is important to note that Ligand's first quarter product sales from a
year ago were favorably affected by the initial stocking of wholesalers to
support commencement of ONTAK distribution in early 2002.
Gross margin on product sales was 65% in the first quarter of 2003,
compared to 67% in the same period of 2002. Cost of products sold includes
approximately $2.8 million in non-cash expense primarily related to amortization
from the restructuring of the AVINZA license and supply agreement, and to ONTAK
technology amortization. Because the amounts of these quarterly, non-cash
expenses are fixed over AVINZA and ONTAK's patent lives, the products' gross
margins will continue to improve in 2003 as sales volumes increase.
Collaborative research and development and other revenues were $4.2 million
in the first quarter of 2003, compared to $11.2 million in the same period of
2002. This decrease in revenues resulted primarily from the absence of $6
million in revenue from Royalty Pharma. In the first quarter of last year,
Royalty Pharma purchased from Ligand the right to receive a portion of potential
future sales of three selective estrogen receptor modulators (SERMs) now in
Phase III development. Royalty Pharma's next purchase options - each for $12.5
million - are exercisable in the third and fourth quarters of 2003. "Given the
timing of Royalty Pharma's options as well as potential product milestones, we
expect that unlike 2002, other revenues for 2003 will grow going forward, with
more than two-thirds occurring in the third and fourth quarters," Maier said.
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Research and development expenses were $16.6 million in the first quarter
of 2003, in line with Ligand's annual financial outlook, compared to $13.1
million in the same period of 2002. The increase in R&D expenses resulted
primarily from accelerating patient accrual in the two pivotal Phase III studies
of Targretin capsules in non-small cell lung cancer. Enrollment of the 1,200
total patients required for the studies is now two-thirds complete and on track
to conclude this year. Enrollment of one study is expected to finish in the
third quarter, and the other in the fourth quarter.
Selling, general and administrative expenses were $12.4 million in the
first quarter of 2003, compared to $9.7 million in the same period of 2002. The
increase in S,G&A expenses was due to the co-promotion launch of AVINZA, and to
an increase in medical marketing costs to expand use of ONTAK and Targretin.
Loss from operations was $12.6 million in the first quarter of 2003,
compared to $2.3 million in the same period of 2002. Loss from operations is
expected to decrease substantially as product sales and other revenue continue
to grow.
As of March 31, 2003, Ligand had cash, cash equivalents, short-term
investments and restricted cash of $44.7 million, compared to $74.9 million at
the end of 2002. In February 2003, Ligand completed its previously announced $20
million repurchase of approximately 2.2 million Ligand shares owned by Elan.
Ligand used $9.7 million of cash for operational activities in the first quarter
of 2003.
AVINZA UPDATE
"Weekly AVINZA prescriptions continued to grow steadily in the first
quarter prior to initiation of full co-promotion with Organon," Maier said.
"Based on IMS NPA data, Ligand broke through 1,000 weekly prescriptions in the
first week of March, the last week our growing specialty pain sales force of
nearly 70 representatives promoted the product on their own. Since then, weekly
prescriptions have increased to 1,421, and this number reflects only one week of
co-promotion by Organon's 700-plus sales representatives. Increasing AVINZA
prescription demand and wholesaler re-stocking to support expanded co-promotion
resulted in strong quarterly sales of $6.6 million. In addition, we estimate
that as of February, AVINZA was stocked in approximately 6,000 retail
pharmacies, and our goal with Organon is to increase this to 15,000 pharmacies
in the second quarter by working with wholesalers, pharmacy chains, and hospital
and independent retail pharmacies."
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UPDATE ON IN-LINE ONCOLOGY PRODUCTS
"For the third consecutive quarter, in-line oncology product sales
increased compared to the previous quarter, reflecting steadily increasing
end-user demand driven by our efforts to increase physician interest and expand
use of ONTAK and Targretin," Maier said. "Sales of ONTAK met or exceeded our
expectations in the first quarter of 2003. However, comparisons to the first
quarter of 2002 reflect the initiation a year ago of wholesale distribution of
the product."
End-user demand for ONTAK and Targretin in the United States remained
strong in the first quarter of 2003. Unit shipments of ONTAK to end users
increased 18% compared to the first quarter of 2002.
In the first two months of 2003, prescriptions for Targretin capsules
increased 34% compared to the same period of 2002, based on IMS data. European
distributor purchases of Targretin capsules were noteworthy in the quarter, and
demand is growing rapidly in the European Union, particularly Germany.
In the first two months of 2003, prescriptions for Targretin gel increased
18% compared to the same period of 2002, based on IMS data.
RECENT LIGAND HIGHLIGHTS
o ORGANON, LIGAND BEGIN FULL AVINZA CO-PROMOTION. Organon's hospital
representatives and national accounts team began promoting AVINZA on March
10. The company's primary care and specialty sales forces began promotion
on April 7. In addition, Ligand is promoting AVINZA with its expanding
specialty pain sales force of nearly 70 representatives. Organon and
Ligand's combined sales force effort is approximately 12-fold greater than
what Ligand alone could dedicate to the product.
o LIGAND EARNS $1.5 MILLION MILESTONE PAYMENT AS LILLY ADVANCES LY818, FIRST
IN A SERIES OF DISTINCT PPAR MODULATORS, INTO PHASE II STUDIES. LY818 is a
novel, potent, oral, once-daily peroxisome proliferation activated receptor
(PPAR) modulator for the treatment of type II diabetes and metabolic
diseases. LY818 was discovered through the ongoing research collaboration
between Lilly and Ligand. PPARs are a subfamily of intracellular receptors
that regulate glucose and lipid homeostasis. They play a key role in
enhancing cellular responses to insulin, and in fat tissue stores and
metabolism.
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o LIGAND ELECTS NOT TO EXERCISE OPTION TO PURCHASE X-CEPTOR THERAPEUTICS.
Ligand will continue to own approximately 17% of X-Ceptor's stock. Ligand
has been a minority equity investor in X-Ceptor since 1999, when Ligand and
a group of private investors formed the private company to further the
development of orphan nuclear receptor technology to identify new drugs.
Ligand decided not to purchase X-Ceptor in order to focus on its priorities
for increasing shareholder value in 2003, such as accelerating revenue
growth from AVINZA and the company's in-line oncology products, and
completing patient enrollment in the pivotal Phase III studies of Targretin
capsules in non-small cell lung cancer.
o FOUR CLINICAL TRIALS PRESENTED AT AMERICAN ACADEMY OF DERMATOLOGY MEETING
SHOW TARGRETIN, PANRETIN DEMONSTRATE PROMISING ACTIVITY IN RANGE OF
DERMATOLOGIC DISORDERS. The studies indicated that activating retinoid X
receptors plays a key role in treating hand dermatitis, psoriasis,
cutaneous T-cell lymphoma and photoaging. In one 55-patient, randomized
phase I/II study, nearly 40% of patients with chronic severe hand
dermatitis who were treated with Targretin gel 1% experienced clinical
improvement of 90% or more, and almost 80% of patients improved by at least
50%. Ligand plans to begin a Phase II/III registration track program for
Targretin gel this year.
WEB CAST CONFERENCE CALL
Ligand will host a live web cast, open to all interested parties, of a
conference call during which Ligand management will discuss this news release.
The web cast will be available at HTTP://WWW.STREETEVENTS.COM and at
HTTP://WWW.LIGAND.COM (investor relations page) on Thursday, April 24 at 8:30
a.m. Eastern Time (5:30 a.m. Pacific), and will be archived for 30 days.
ABOUT LIGAND
Ligand discovers, develops and markets new drugs that address critical
unmet medical needs of patients in the areas of cancer, pain, skin diseases,
men's and women's hormone-related diseases, osteoporosis, metabolic disorders,
and cardiovascular and inflammatory diseases. Ligand's proprietary drug
discovery and development programs are based on its leadership position in gene
transcription technology, primarily related to Intracellular Receptors (IRs) and
Signal Transducers and Activators of Transcription (STATs). For more
information, go to www.ligand.com.
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CAUTION REGARDING 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. These statements include those related to Ligand's
financial outlook and guidance for 2003; profitability; top-line (revenue)
growth; product sales and margins; operating expenses and losses; AVINZA market
share, co-promotion and commercialization; clinical studies; and the exercise of
options by Royalty Pharma. Actual events or results may differ from Ligand's
expectations. There can be no assurance that Ligand will increase revenues or
margins from currently marketed products or reduce operating losses; that Ligand
will be able to achieve its operating profitability or market share goals; that
the results from the periods discussed in this release will be indicative of
results for future periods; that results of any clinical study will be confirmed
by later studies; that products under development by us or our collaborators
will receive marketing approval or that there will be a market for these drugs;
that our collaborations will be successful or continued; that Royalty Pharma
will exercise any future options; or that Ligand will receive any milestone
payments for the discovery and/or development of any compounds. Additional
information concerning these and other risk factors affecting Ligand's business
can be found in prior press releases as well as in Ligand's public periodic
filings with the Securities and Exchange Commission, available via Ligand's web
site at HTTP://WWW.LIGAND.COM. 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 of 1995.
NOTE: Ligand(R), Targretin(R), Panretin(R), AVINZA(R) and ONTAK(R) are
trademarks of Ligand. Full prescribing information for Ligand's products may be
obtained in the U.S. from Ligand Professional Services by calling toll free
800-964-5836 or on Ligand's web site at HTTP://WWW.LIGAND.COM..
# # #
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LIGAND PHARMACEUTICALS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
THREE MONTHS ENDED
MARCH 31,
----------------------------------
2003 2002
---------------- ----------------
REVENUES:
Product sales $ 18,928 $ 13,696
Collaborative research and
development and other revenues 4,195 11,190
---------------- ----------------
Total revenues 23,123 24,886
---------------- ----------------
OPERATING COSTS AND EXPENSES:
Cost of products sold 6,620 4,460
Research and development 16,640 13,115
Selling, general and administrative 12,426 9,658
---------------- ----------------
Total operating costs and expenses 35,686 27,233
---------------- ----------------
Loss from operations (12,563) (2,347)
---------------- ----------------
OTHER EXPENSE:
Interest expense, net (2,439) (1,961)
Write-off of X-Ceptor purchase right (5,000) --
Debt conversion expense -- (2,015)
Other, net (318) (252)
Total other expense, net (7,757) (4,228)
Net loss $ (20,320) $ (6,575)
================ ================
BASIC AND DILUTED PER SHARE AMOUNTS:
Net loss $ (0.29) $ (0.10)
================ ================
Weighted average number of common
shares outstanding 70,238,438 63,122,905
================ ================
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LIGAND PHARMACEUTICALS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands)
MARCH 31, DECEMBER 31,
2003 2002 (1)
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $ 33,983 $ 64,248
($9,069 and $8,998 restricted
at March 31, 2003, and
December 31, 2002, respectively)
Other current assets 29,028 24,325
------------- -------------
Total current assets 63,011 88,573
Restricted investments 10,741 10,646
Property and equipment, net 9,229 9,672
Acquired technology and product rights, net 145,862 148,546
Other assets 12,333 17,992
------------- -------------
$ 241,176 $ 275,429
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 37,823 $ 35,355
Long-term debt 155,250 155,250
Other long-term liabilities 10,080 10,809
Stockholders' equity 38,023 74,015
------------- -------------
$ 241,176 $ 275,429
============= =============
(1) Certain amounts at December 31, 2002, have been reclassified to conform
to the current period presentation.
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