Nobody is interested in slow-growth or no-growth stocks, long term or short term, but everyone’s interested in fast-growing stocks.
Nobody is interested in slow-growth or no-growth stocks, long term or short term, but everyone’s interested in fast-growing stocks. Keith Speights, writing for The Motley Fool, was recently assigned to pick a long-term growth biotech stock. His choice—Ligand Pharmaceuticals.
Based in San Diego, Ligand developed a partnered portfolio for a diverse range of diseases. Its products include Captisol, Omniab, LTP Technology, HepDirect, and SUREtechnology Platform.
The company’s pipeline includes five late-stage programs, 22 mid-stage programs, and 25 early-stage programs. Speights adds, “In addition, the company awaits regulatory approvals for two other drugs. And yet Ligand’s market cap is less than $3 billion.”
The key to this is the “partnered portfolio.” Speights writes, “Ligand’s strategy is to partner with other drugmakers that can benefit from its technology platforms that help make their drugs work better. The company has over 90 partners and licensees, ranging from small clinical-stage biotechs to the biggest biopharmaceutical organizations on the planet.”
The company reported its third-quarter financials on Nov. 9. The company’s chief executive officer, John Higgins, said, “Ligand’s diversified business is performing well on all levels. In the third quarter, we posted strong financial results driven by royalties and significant contribution from Captisol. Of note, for the first nine months of 2017, royalties are more than 50 percent higher than those of the same period last year. This past quarter, we entered three new licensing deals and saw substantial news flow from our corporate partners as many pipeline programs advanced. We announced positive results for a major Phase II trial for our diabetes drug candidate and are in discussions with partners for potential licensing. Just after the quarter ended, we closed our acquisition of Crystal Bioscience providing a highly-complementary antibody technology to our OmniAb antibody drug discovery business. We now have three species for fully-humanized antibody discovery, four proprietary technology platforms driving licensing and more than 160 fully-funded Shots on Goal.”
Total nine-month revenues were $90.6 million, up from $70.8 million from the same period in 2016. Royalties were $60.4 million, up from $39.8 million from the nine-month period of 2016. Material sales were $14.3 million, up from $13.4 million for last year’s nine-month period. And license fees, milestones and other revenues were $15.9 million, down from $17.5 million for the nine-month period last year.
The company’s third-quarter financials also included numerous pipeline and partnership updates. For example, Sage Therapeutics provided positive top-line results from two Phase III trials of brexanolone in severe postpartum depression and plans to file with the U.S. Food and Drug Administration (FDA) in 2018. CASI Pharmaceuticals indicated that China’s Food and Drug Administration granted its import drug registration clinical trial application for Evomela priority review status. Zydus Cadila received approval to market its bevacizumab biosimilar in India and launched the drug as Bryxta. And, among many others, Exelixis announced that Daiichi Sankyo reported positive top-line data from a Phase III trial of esaxerenone in essential hypertension in Japan and they expect to submit their application for Japanese regulatory approval in the first quarter of 2018.
Speights writes, “Wall Street analysts project that Ligand will increase its earnings by nearly 32 percent annually over the next five years. I think Ligand’s longer-term future should be even brighter. Remember—the company has over nine times as many early- and mid-stage candidates that use its technology as it does late-stage candidates. It takes time for drugs to win approval then ramp up to peak sales. In my view, Ligand should be a big winner over the long run.”
