December 18, 2015
By Alex Keown, BioSpace.com Breaking News Staff
SAN DIEGO -- Ligand Pharmaceuticals Incorporated struck a $178 million deal to acquire Palo Alto, CA-based genetic-engineering company OMT, Inc. (Open Monoclonal Technology) for its antibody drug discovery platform, a deal the company says will generate “substantial revenues for decades to come.”
John Higgins, chief executive officer of Ligand Pharmaceuticals, said in a statement release this morning that the move was a “strategic fit” for Ligand’s business, with its antibody platform supporting Ligand’s Captisol in “terms of opportunity for partner events, new licensing transactions and financial contribution.” Ligand’s Captisol is a chemically modified cyclodextrin designed to optimize the solubility and stability of drugs. Higgins said the deal “holds potential to have a profoundly positive impact on our business over the long term.” One of those impacts is revenue generation. Ligand is projecting the addition of OMT to add 7 to 10 percent growth annually over the next 10 years.
“This transaction is a major addition to what Ligand believes is an unprecedented portfolio of more than 140 fully-funded partnered programs,” Higgins said.
OMT’s animal-based antibody platforms are used to manufacture human antibodies with “high affinity, specificity, expression, solubility and stability.” OMT has leading antibody drug discovery technology and is believed to be the only company in the world offering three transgenic animal platforms for license. Its license agreements with biotechnology partners will initially add 16 shots on goal to Ligand, as well as future potential licensing deals and additional compounds generated from existing partnerships. OMT has existing licenses with Amgen , Celgene , GenmabGenmab , Janssen, Merck KgaA , Pfizer , Seattle Genetics , Five Prime , Symphogen and various other biotechnology and pharmaceutical companies. OMT is privately held and is majority owned by Essex Woodlands.
Under the terms of the transaction, Ligand will pay OMT shareholders approximately $178 million, including $92.6 million in cash and $85.4 million in Ligand common stock. The addition of OMT to Ligand is expected to add $6 million to Ligand‘s top line in 2016 and $12 million the year after, the company announced. Ligand projects 2016 total revenues to be between $113 million and $117 million, which includes the projected $6 million from OMT. For 2017, Ligand projects revenues to increase to $158 million.
Roland Buelow, chief executive officer of OMT, said his colleagues were impressed with Ligand’s business model and “commitment to continue driving the OMT business to even greater success.” Buelow is expected to join Ligand as vice president of antibody technologies and continue working with Ligand on advancing the OMT business.
Ligand is trading at $108.32 per share this morning.
