Exhibit 99.1
Contact: Paul V. Maier
Senior VP and CFO
(858) 550-7573
LIGAND REPORTS RECORD REVENUES FOR SECOND QUARTER 2003:
NET PRODUCT SALES INCREASE 140%, TOTAL REVENUES UP 52%
-- AVINZA NET SALES HIT NEW HIGH OF $11.6 MILLION,
ONCOLOGY REVENUES GROW FOR FOURTH CONSECUTIVE QUARTER, LED BY ONTAK -
SAN DIEGO, CA - JULY 28, 2003 - Ligand Pharmaceuticals Incorporated
(Nasdaq: LGND) today reported record net product sales for the second quarter
ended June 30, 2003, of $25.2 million, compared to $10.5 million in the second
quarter of 2002, an increase of 140% driven by accelerating AVINZA(R) (morphine
sulfate extended-release capsules) net sales of $11.6 million, and record
ONTAK(R) (denileukin diftitox) sales.
Ligand's total revenues for the second quarter of 2003 were a record $29.1
million, compared to $19.2 million in the same period of 2002, an increase of
52%. Net loss for the second quarter of 2003 was $12.0 million ($0.17 per
share), comparable to a net loss of $12.2 million ($0.17 per share) in the same
period of 2002.
For the first half of 2003, net product sales were $44.1 million, compared
to $24.2 million in the same period of 2002, an increase of 82%. Total revenues
for the first half of 2003 were $52.3 million, compared to $44.1 million in the
same period of 2002, an increase of 19%. Net loss for the first half of 2003 was
$32.3 million ($0.46 per share), compared to $18.8 million ($0.28 per share) in
the same period of 2002, an increase of 72% (64% per share).
"Ligand's overall performance in the second quarter again met our
expectations, and at mid-year we are tracking in line with our annual financial
guidance," said Paul V. Maier, Ligand's senior vice president and chief
financial officer. "We are particularly pleased with the 140% growth in net
product sales and improved gross margins, which were driven both by our
co-promotion of AVINZA with Organon, and by record ONTAK sales."
In the second quarter and first half of 2003, net sales of individual
products were:
- --------------------------------- --------------- --------------- --------------- ---------------
2Q 2003 SALES 2Q 2002 SALES 1H 2003 SALES 1H 2002 SALES
(MILLION) (MILLION) (MILLION) (MILLION)
- --------------------------------- --------------- --------------- --------------- ---------------
AVINZA $11.6 $4.1 $18.3 $4.1
- --------------------------------- --------------- --------------- --------------- ---------------
ONTAK $9.2 $4.9 $16.4 $13.5
- --------------------------------- --------------- --------------- --------------- ---------------
Targretin(R)(bexarotene) capsules $2.8 $1.2 $6.4 $5.0
- --------------------------------- --------------- --------------- --------------- ---------------
Targretin gel and $1.5 $0.2 $3.0 $1.5
Panretin(R)(alitretinoin) gel
- --------------------------------- --------------- --------------- --------------- ---------------
TOTAL NET PRODUCT SALES $25.2 $10.5 $44.1 $24.2
- --------------------------------- --------------- --------------- --------------- ---------------
Gross margin on product sales was 69% in the second quarter of 2003,
compared to 55% in the same period of 2002. Cost of products sold for the
quarter includes approximately $2.7 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 the products' patent lives, their
gross margins will continue to improve in 2003 as sales volumes increase. For
the first half of 2003, gross margin was 67%, compared to 62% for the same
period of 2002.
Collaborative research and development and other revenues were $3.9 million
in the second quarter of 2003, compared to $8.7 million in the same period of
2002, a decrease of 55% that resulted from the timing of milestones and from the
absence of $3 million in revenue from a Royalty Pharma option exercise. In the
second quarter of last year, Royalty Pharma exercised its option to purchase
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. For the first half of
2003, collaborative research and development and other revenues were $8.1
million, compared to $19.9 million in the same period of 2002 (including $9.0
million from Royalty Pharma), a decrease of 59%. "Given the timing of Royalty
Pharma's options and potential product milestones, we expect other revenues to
grow significantly in the second half of 2003," Maier said.
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Research and development expenses were $16.9 million in the second quarter
of 2003, compared to $13.7 million in the same period of 2002, an increase of
23%. 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 (NSCLC). Enrollment of the first 600-patient study is nearly
complete and is expected to conclude by the middle of the third quarter of 2003.
Enrollment of the second 600-patient study is on track to conclude in the middle
of the fourth quarter. For the first half of 2003, R&D expenses were $33.5
million, compared to $26.8 million in the same period of 2002, an increase of
25% that was in line with Ligand's expectations.
Selling, general and administrative expenses were $13.6 million in the
second quarter of 2003, compared to $10.3 million in the same period of 2002, an
increase of 32%. Ligand's second-quarter SG&A expenses include the 50-50 sharing
of AVINZA's advertising, medical affairs and clinical trials costs with Organon.
The increase in SG&A expenses was due primarily to the expansion of Ligand's
pain sales force to approximately 70 representatives, and to increased medical
marketing costs to expand use of ONTAK and Targretin. For the first half of
2003, SG&A expenses were $26.0 million, compared to $19.9 million in the same
period of 2002, an increase of 31%.
"Our R&D and SG&A expenses in the second quarter and first half were in
line with our expectations and are tracking within the range of our annual
guidance," Maier said.
Loss from operations was $9.1 million in the second quarter of 2003,
compared to $9.5 million in the same period of 2002, a decrease of 4%. For the
first half of 2003, loss from operations was $21.6 million, compared to $11.8
million in the same period of 2002, an increase of 83%. Loss from operations is
expected to be eliminated in the second half of 2003 as product sales and other
revenue grow, and as expenses track within Ligand's guidance range.
As of June 30, 2003, Ligand had cash, cash equivalents, short-term
investments and restricted investments of $48.0 million, compared to $44.7
million at the end of the first quarter, an increase of 7%.
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AVINZA UPDATE
"AVINZA's second-quarter performance met or exceeded our expectations,"
Maier said. "Weekly prescriptions more than doubled over the course of the
quarter, reflecting very early results from our co-promotion with Organon. In
addition, our current weekly prescription market share of 1.3% is in line with
our goal to achieve at least a 3% market share `run rate' as we exit 2003."
Ligand estimates that AVINZA retail pharmacy stocking expanded to
approximately 12,000-13,000 pharmacies at the end of the second quarter,
consistent with the company's quarterly goal and roughly double the 5,000-6,000
pharmacies stocked at the end of February. "We estimate that about half of
AVINZA's second quarter sales of $11.6 million were covered by prescription
demand across all segments (with the balance related to expanding retail
pharmacy and wholesaler distribution) and expect this percentage to increase
steadily over the next several quarters," Maier said. "We will continue working
to increase patient access to AVINZA by facilitating stocking in an additional
6,000-8,000 pharmacies by year-end."
Ligand and Organon also have made substantial progress in increasing access
to AVINZA in managed care and long-term care. AVINZA now enjoys preferred
national formulary status with pharmacy benefits managers that cover more than
100 million lives. Ligand also has agreements in place or being finalized with
the top eight group purchasing organizations, which cover an estimated 80% or
more of America's hospitals. In addition, 39 state Medicaid programs now cover
AVINZA without restriction, including five states that have placed AVINZA in a
preferred position relative to market leaders.
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UPDATE ON IN-LINE ONCOLOGY PRODUCTS
"For the fourth 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. "We are pleased with sales of ONTAK,
which hit a new quarterly record of $9.2 million based on increasing use in
chronic lymphocytic leukemia, non-Hodgkin's lymphoma and graft-versus-host
disease." Demand for ONTAK also established an all-time quarterly high in the
second quarter, with unit shipments to end users increasing 35% compared to the
same period of 2002. This growth in demand is increasingly being translated into
wholesaler purchases.
In the second quarter of 2003, prescriptions for Targretin capsules
increased 24% compared to the same period of 2002, based on IMS NPA data (not
including institutional use in hospitals, Federal facilities and other
non-retail outlets). Ligand expects prescription growth for Targretin to
accelerate in the second half of 2003, and for this demand growth to be
increasingly reflected in wholesaler purchases, as is now occurring with ONTAK.
RECENT LIGAND HIGHLIGHTS
o PATIENT ACCRUALS ACCELERATE IN PHASE III TARGRETIN NSCLC STUDIES. To date,
96% of the required patients have enrolled in the 600-patient Phase III
study of Targretin capsules in combination with cisplatin and vinorelbine
as first-line therapy for NSCLC. In the 600-patient study of Targretin in
combination with carboplatin and paclitaxel, 80% of the required patients
have enrolled. Ligand expects to have survival data from each study within
about 12 months of full patient accrual.
o LIGAND, LILLY EXTEND R&D COLLABORATION UNTIL NOVEMBER 2004. This is the
second extension of the collaboration, which is focused on discovering
novel drugs for type II diabetes and cardiovascular disorders. The
collaboration, which began in 1997, already has advanced three peroxisome
proliferation activated receptor (PPAR) modulators into clinical studies.
The most advanced product, LY818, is a novel, potent, oral, once-daily PPAR
modulator in Phase II studies for the treatment of type II diabetes and
metabolic disorders.
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o ONTAK DEMONSTRATES ACTIVITY AGAINST CLL AND NHL. Two Phase II studies
presented at the recent American Society of Clinical Oncology meeting by
independent researchers show that ONTAK may benefit patients with
fludarabine-refractory chronic lymphocytic leukemia (CLL) and relapsed or
refractory B- and T-cell non-Hodgkin's lymphoma (NHL). In the 18-patient
CLL study, ONTAK reduced disease markers in blood, lymph nodes and bone
marrow in most evaluable patients. In the 41-patient NHL study, nearly half
of evaluable patients benefited with objective responses or stable disease.
o LIGAND EARNS $1 MILLION MILESTONE FROM GLAXOSMITHKLINE. GSK is continuing
development of 501516, a novel PPAR modulator for the treatment of
dyslipidemias.
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.LIGAND.COM (investor relations
page) and at HTTP://WWW.STREETEVENTS.COM on July 28, 2003, 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; revenue growth; product
demand, sales and margins; operating expenses and losses; AVINZA stocking,
market share, co-promotion and commercialization; clinical studies and patient
enrollment; 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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
REVENUES:
Product sales $ 25,187 $ 10,465 $ 44,115 $ 24,160
Collaborative research and development
and other revenues 3,939 8,701 8,135 19,891
---------- ---------- ---------- ----------
Total revenues 29,126 19,166 52,250 44,051
---------- ---------- ---------- ----------
OPERATING COSTS AND EXPENSES:
Cost of products sold 7,766 4,681 14,386 9,141
Research and development 16,859 13,681 33,499 26,797
Selling, general and administrative 13,571 10,279 25,998 19,935
---------- ---------- ---------- ----------
Total operating costs and expenses 38,196 28,641 73,883 55,873
---------- ---------- ---------- ----------
Loss from operations (9,070) (9,475) (21,633) (11,822)
Other expense, net (2,927) (2,771) (10,684) (6,999)
---------- ---------- ---------- ----------
Net loss $ (11,997) $ (12,246) $ (32,317) $ (18,821)
========== ========== ========== ==========
BASIC AND DILUTED PER SHARE AMOUNTS:
Net loss $ (0.17) $ (0.17) $ (0.46) $ (0.28)
========== ========== ========== ==========
Weighted average number of common shares outstanding 69,275 70,413 69,754 68,196
========== ========== ========== ==========
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LIGAND PHARMACEUTICALS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands)
DECEMBER 31,
JUNE 30, 2003 2002 (1)
------------- ------------
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short-term investments
($9,275 and $8,998 restricted at June 30,
2003, and December 31, 2002, respectively) $ 41,843 $ 64,248
Other current assets 15,130 24,325
--------- ---------
Total current assets 56,973 88,573
Restricted investments 6,204 10,646
Property and equipment, net 8,843 9,672
Acquired technology and product rights, net 143,194 148,546
Other assets 11,718 17,992
--------- ---------
$ 226,932 $ 275,429
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 35,154 $ 35,355
Long-term debt 155,250 155,250
Other long-term liabilities 9,471 10,809
Stockholders' equity 27,057 74,015
--------- ---------
$ 226,932 $ 275,429
========= =========
(1) Certain amounts at December 31, 2002, have been reclassified to conform to
the current period presentation.
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