Ligand Buys Pfenex in $516 Million Deal to Access Protein Production Platform
San Diego-based Ligand Pharmaceuticals is acquiring San Diego-based Pfenex for a total deal transaction of up to $516 million. Pfenex’ proprietary protein production platform, Pfenex Expression Technology, is used to improve existing treatments and create novel therapies. Ligand develops or acquires technologies to assist pharmaceutical companies in developing therapeutics. It notes that its business model is based on doing what it does best, such as drug discovery, early-stage drug development, product reformulation and partnering, while partnering with pharma companies for late-stage development, regulatory activities and commercialization.
Under the terms of the deal, Ligand is buying all outstanding Pfenex shares for $12 per share, or $438 million in equity value. It is also paying $2 per share, or $78 million, as a Contingent Value Right (CVR) related to a predefined regulatory milestone hit by December 31, 2021. The deal is expected to close in the fourth quarter.
Pfenex’s platform has been successfully utilized to produce enzymes, peptides, antibody derivatives and engineered non-natural proteins. It has extensive partnerships, including with Alvogen, Kangchen, Jazz Pharmaceuticals, Merck and the Serum Institute of India.
On June 26, Pfenex announced that its European commercialization partners, Theramex and Adalvo, had received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) for PF708 (Livogiva). Livogiva is a biosimilar candidate to Forsteo (teriparatide injection) for osteoporosis in postmenopausal women at high risk of bone fractures. Adalvo had also partnered with a large, unidentified multinational pharma company to commercialize the drug in Brazil, Columbia, Mexico, Ecuador, Paraguay and Peru.
Pfenex reported its second quarter 2020 results on August 6, noting a decrease of total revenue for the quarter of about $2 million to $0.8 million compared to $2.8 million in the same period in 2019. The decrease was mostly due to a decrease in revenue for services provided to BARDA and Arcelix and license revenue from the Jazz agreement.
Ligand reported its second quarter financial results on August 3. For the quarter, total revenues were $41.4 million, compared to $25 million in the same period in 2019. Royalties for the quarter were $7.2 million, up from $6.6 million in the same period.
“Outstanding second quarter financial results and operating execution have laid the foundation for our strong outlook for the rest of 2020 and beyond,” said John Higgins, Ligand’s chief executive officer. “We are exceeding our plans and expectations across the board, despite the challenges created by the pandemic. Our role in supporting treatments for COVID-19 includes numerous OmniAb, Captisol and Vernalis-based product candidates. In particular, sales of Captisol to partners advancing remdesivir for the treatment of COVID-19 are driving upside to the business, and we expect Captisol demand to increase significantly over the next couple of years.”
By acquiring Pfenex, Ligand gains access to Pfenex’s protein expression technology, access to licensing and royalty revenue from partners, a profitable, cash-flow business, numerous major collaborations, and even more potential for licensure in the future.
“The Ligand-Pfenex combination is an excellent strategic and cultural fit, presenting a unique opportunity to leverage the complementary strengths of robust platforms and rich pipelines, we expect it to position us even better to deliver on our joint vision to develop therapeutics that provide patients a better future,” said Eef Schimmelpennink, Pfenex’s chief executive officer. “I want to recognize and thank the Pfenex team, and express deep gratitude to each of you for your many contributions over the years, which have enabled us to reach this milestone.”