Pradefovir Mesylate

2023 Financial Guidance Raised Conference Call Begins at 4:30 p.m. Eastern Time Today SAN DIEGO--(BUSINESS WIRE)-- Ligand Pharmaceuticals Inc. (NASDAQ: LGND) today reported financial results for the three and 12 months ended December 31, 2022, and provided an operating forecast and business updates. These financial results are presented on a continued operations basis as OmniAb was spun out on November 1, 2022 and is reported as discontinued operations. Ligand management will host a conference call today beginning at 4:30 p.m. Eastern time to discuss this announcement and answer questions. "2022 was a transformative year for Ligand, both operationally and financially. Following Ligand’s spin out of OmniAb, we believe we are well positioned to achieve significant revenue growth coupled with a lean cost structure," said Todd Davis, CEO of Ligand. "As we look to 2023 and beyond, we anticipate important clinical and regulatory events from our partners, along with the continued expansion of our portfolio through a focus on life sciences royalty opportunities." Fourth Quarter 2022 Financial Results Total revenues for the fourth quarter of 2022 were $50.4 million, compared with $56.4 million for the same period in 2021. Royalties for the fourth quarter of 2022 were $22.0 million, compared with $17.6 million for the same period in 2021, with the increase primarily attributable to the growth in sales of drugs using the Pelican platform. Core Captisol sales were $3.3 million for the fourth quarter of 2022, compared with $7.1 million for the same period in 2021. The difference in sales was due to the timing of customer orders. Captisol sales related to COVID-19 were $23.5 million for the fourth quarter of 2022, compared with $28.3 million for the same period in 2021. Contract revenue was $1.5 million for the fourth quarter of 2022, compared with $3.5 million for the same period in 2021. The difference was due to the timing of partner milestone events. Cost of Captisol was $21.6 million for the fourth quarter of 2022, compared with $12.0 million for the same period in 2021, with the increase primarily due to $9.8 million in accelerated depreciation on Captisol manufacturing equipment during the fourth quarter of 2022. Amortization of intangibles was $8.5 million, compared with $8.6 million for the same period in 2021. Research and development expense was $9.2 million, compared with $8.1 million for the same period in 2021, with the increase attributed to stock based compensation and an increase in facility related expenses in the fourth quarter of 2022. General and administrative expense was $31.1 million, compared with $12.6 million for the same period in 2021, with the increase primarily attributable to a one-time stock compensation expense associated with the retirement of our former CEO in the fourth quarter of 2022 and legal expenses incurred in connection with the OmniAb spin out. Net loss from continuing operations for the fourth quarter of 2022 was $14.5 million, or $0.86 per share, compared with $3.2 million, or $0.19 per share, for the same period in 2021. In addition to the aforementioned Captisol equipment accelerated depreciation and stock compensation expense, net loss for the fourth quarter of 2022 was also impacted by a $24.8 million deferred tax asset valuation allowance, offset by a non-cash gain of $44.2 million from the value of Ligand’s short-term investments. Net loss for the fourth quarter of 2021 was impacted by a non-cash loss of $13.4 million from the value of Ligand’s short-term investments. Adjusted net income from continuing operations for the fourth quarter of 2022 was $23.5 million, or $1.36 per diluted share, compared with $25.5 million, or $1.47 per diluted share, for the same period in 2021. Excluding the impact of gross profit, net of tax, for Captisol sales related to COVID-19, adjusted net income for the fourth quarter of 2022 was $13.0 million, or $0.75 per diluted share, compared with $10.7 million, or $0.62 per diluted share, for the same period in 2021. See the table below for a reconciliation of net income (loss) from continuing operations to adjusted net income from continuing operations. As of December 31, 2022, Ligand had cash, cash equivalents and short-term investments of $211.9 million. Full Year 2022 Financial Results Total revenues for 2022 were $196.2 million, compared with $241.5 million for 2021. Royalties for 2022 were $72.5 million, compared with $48.9 million for 2021, with the increase primarily attributable to the growth in sales of drugs using the Pelican platform. Core Captisol sales were $16.4 million for 2022, compared with $23.4 million for 2021. The difference in sales was due to the timing of customer orders. Captisol sales related to COVID-19 were $88.1 million for 2022, compared with $140.8 million for 2021. The lower sales are due to reduced demand for the pandemic-related treatment. Contract revenue for 2022 was $19.2 million, compared with $28.4 million for 2021, with the change due to the timing of partner milestone events. Cost of Captisol was $52.8 million for 2022, compared with $62.2 million for 2021, with the decrease due primarily to lower sales of Captisol, partially offset by $9.8 million in accelerated depreciation on Captisol manufacturing equipment during the year. Amortization of intangibles was $34.2 million for both 2022 and 2021. Research and development expense was $36.1 million for 2022, compared with $32.1 million for 2021, with the increase primarily attributed to higher employee-related expenses and increased facility related expenses. General and administrative expense was $70.1 million for 2022, compared with $46.8 million for 2021, with the increases primarily attributable to stock-compensation expenses, headcount-related expenses and legal expenses. There was no other operating income for 2022. Other operating income was $37.6 million for 2021, which represented a non-cash valuation adjustment related to eliminating the remaining Pfenex CVR liability. Net loss from continuing operations for 2022 was $5.2 million, or $0.31 per share, compared with net income from continuing operations of $76.4 million, or $4.43 per diluted share, for 2021. In addition to the aforementioned Captisol equipment accelerated depreciation and increased stock compensation expenses, net loss from continuing operations for 2022 was also impacted by a $24.8 million deferred tax asset valuation allowance, which was partially offset by a $28.8 million net non-cash gain from the value of Ligand’s short-term investments. Net income from continuing operations for 2021 included a net non-cash loss from the value of Ligand’s short-term investments of $10.6 million. Adjusted net income from continuing operations for 2022 was $82.2 million or $4.79 per diluted share, compared with $108.0 million, or $6.27 per diluted share, for 2021. Excluding the impact of gross profit, net of tax, for Captisol sales related to COVID-19, adjusted net income from continuing operations for 2022 was $41.9 million, or $2.44 per diluted share, compared with $40.5 million, or $2.35 per diluted share, for 2021. See the table below for a reconciliation of net income (loss) from continuing operations to adjusted net income from continuing operations. 2023 Financial Guidance Ligand is increasing 2023 financial guidance introduced at its Investor and Analyst Day held on December 13, 2022. We now expect 2023 royalties of $74 million to $78 million (previously $72 million to $76 million), sales of Captisol of $21 million (unchanged) and contract revenue of $25 million (unchanged). These revenue components result in total revenue of $120 million to $124 million (previously $118 million to $122 million). Ligand now expects 2023 cash operating expenses of $43 million (previously $46 million), which combined with the increased revenue outlook results in adjusted diluted EPS of $3.30 to $3.45 (previously $3.10 to $3.30). Due to the unpredictable nature of the pandemic and related Captisol sales, Ligand excludes Captisol for remdesivir from guidance and will update investors as orders are received and shipped each quarter. Fourth Quarter 2022 and Recent Business Highlights Travere Therapeutics received FDA accelerated approval for FILSPARI (sparsentan) for the treatment of IgA nephropathy (IgAN). FILSPARI is the first and only dual endothelin angiotensin receptor antagonist in development for rare kidney diseases and is the first non-immunosuppressive treatment indicated for IgAN. Travere anticipates a review decision by the EMA on the potential approval for sparsentan for the treatment of IgAN in Europe in the second half of 2023. Additionally, Travere announced that they expect to report top line results from the two-year confirmatory endpoints in the ongoing Phase 3 DUPLEX Study of sparsentan in focal segmental glomerulosclerosis (FSGS) in the second quarter of 2023, with anticipated submission for full approval in the second half of 2023 in both the U.S. and Europe. Travere reported that it ended 2022 with approximately $450 million in cash, cash equivalents and marketable securities, which would be available to support the commercial launch of sparsentan. Novan announced it has submitted an NDA to the FDA seeking marketing approval for berdazimer gel, 10.3% (SB206) for the topical treatment of molluscum contagiosum (MC). MC is an infection that causes skin lesions and affects approximately six million people in the U.S. annually. Novan anticipates a potential first quarter 2024 approval assuming the filing is accepted by the FDA and standard review timelines. Verona Pharma announced positive results of its Phase 3 ENHANCE-1 trial evaluating nebulized ensifentrine for the maintenance treatment of COPD. The ENHANCE-1 trial met its primary and key secondary endpoints demonstrating significant improvements in lung function, symptoms and quality of life measures. In addition, ensifentrine substantially reduced the rate and risk of COPD exacerbations. Ensifentrine was well tolerated over 24 and 48 weeks. In 2022 Verona announced that the Phase 3 ENHANCE-2 trial successfully met its primary endpoint and secondary endpoints evaluating lung function and symptoms, and also significantly reduced the rate and risk of COPD exacerbations. Verona plans to NDA for inhaled ensifentrine for the maintenance treatment of COPD with the FDA in the first half of 2023. Viking Therapeutics announced the completion of patient enrollment in its Phase 2b clinical trial of VK2809, a novel liver-selective thyroid hormone receptor beta agonist, in patients with biopsy-confirmed non-alcoholic steatohepatitis (NASH). Viking expects to report data for the study's primary endpoint in the first half of 2023. Palvella Therapeutics announced its initial closing of up to $37.7 million in financing with proceeds to be used to advance the development of QTORIN rapamycin for the treatment of pachyonychia congenita, microcystic lymphatic malformations (MLM), and for the prevention of basal cell carcinomas in Gorlin syndrome. Palvella expects top-line data in mid-2023 from the Phase 3 pivotal study evaluating QTORIN rapamycin in pachyonychia congenita. Palvella is currently enrolling patients in a multicenter Phase 2b clinical study in the U.S. and Europe for the prevention of basal cell carcinomas in patients with Gorlin syndrome, with data expected in the first half of 2023. Additionally, Palvella expects to report data in the first quarter of 2023 from a multicenter Phase 2 study in the U.S. investigating QTORIN rapamycin for the treatment of MLM. In 2022, Jazz Pharmaceuticals announced FDA approval of Monday/Wednesday/Friday intramuscular dosing of Rylaze (asparaginase erwinia chrysanthemi (recombinant)-rywn) and submission of a supplemental BLA under the Real-time Oncology Review Program seeking approval for IV administration. Jazz also completed the Marketing Authorization Application submission to the EMA for both IV and IM administration, with a potential approval in 2023. Jazz is also advancing the program for potential submission, approval and launch in Japan. Xi'an Xintong Pharmaceuticals announced pradefovir reached the primary and secondary endpoints in its Phase 3 clinical trial in China for the treatment of chronic hepatitis B. The 48-week statistical analysis showed that pradefovir was comparable to the first-line drug, tenofovir disoproxil fumarate, with a better safety profile. Xi'an Xintong has submitted a pre-NDA conference communication application with China’s National Medical Products Administration (NMPA) and expects to submit an NDA in the first quarter of 2023. China Resources Double-Crane Pharmaceuticals announced the IND for CX2101A, a small molecule, RNA-dependent RNA polymerase inhibitor of SARS-CoV-2 that utilizes Ligand's proprietary BEPro prodrug technology, was approved by the NMPA for use in clinical trials for the treatment of novel coronavirus pneumonia in China. Aldeyra announced the submission of an NDA to the FDA for topical ocular reproxalap for the treatment of signs and symptoms of dry eye disease. Reproxalap is a small-molecule modulator of RASP (reactive aldehyde species), which are elevated in ocular and systemic inflammatory disease. Arcellx initiated a Phase 1 study of ARCL-002 in acute myeloid leukemia and myelodysplastic syndromes. ARCL-002 utilizes the Pelican Expression Technology. Adjusted Financial Measures Ligand reports adjusted net income and adjusted net income per diluted share in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company’s financial measures under GAAP include share-based compensation expense, amortization of debt-related costs, amortization related to acquisitions and intangible assets, changes in contingent liabilities, mark-to-market adjustments for amounts relating to its equity investments in public companies, excess tax benefit from share-based compensation, transaction costs, income tax affect of adjusted reconciling items and others that are listed in the itemized reconciliations between GAAP and adjusted financial measures included at the end of this press release. However, the Company does not provide reconciliations of such forward-looking adjusted measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for changes in contingent liabilities, changes in the market value of its investments in public companies, share-based compensation expense and the effects of any discrete income tax items. Management has excluded the effects of these items in its adjusted measures to assist investors in analyzing and assessing the Company’s past and future core operating performance. Additionally, adjusted earnings per diluted share is a key component of the financial metrics utilized by the Company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation. Conference Call Ligand management will host a conference call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss this announcement and answer questions. To participate via telephone, please dial (888) 350-3452 using the conference ID 6501694. To participate via live or replay webcast, a link is available at . About Captisol® Captisol is a patent-protected, chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. Captisol was invented and initially developed by scientists in the laboratories of Dr. Valentino Stella, University Distinguished Professor at the University of Kansas’ Higuchi Biosciences Center for specific use in drug development and formulation. This unique technology has enabled several FDA-approved products, including Gilead Sciences' VEKLURY®, Amgen’s KYPROLIS®, Baxter International’s NEXTERONE®, Acrotech Biopharma L.L.C.’s and CASI Pharmaceuticals’ EVOMELA®, Melinta Therapeutics’ BAXDELA™ and Sage Therapeutics’ ZULRESSO™. There are many Captisol-enabled products currently in various stages of development. Ligand maintains a broad global patent portfolio for Captisol with approximately 390 issued patents worldwide relating to the technology (including over 40 in the U.S.) and with the latest expiration date in 2033. Other patent applications covering methods of making Captisol, if issued, extend to 2040. About the Pelican Expression Technology™ Platform Pelican is a robust, validated, cost-effective and scalable platform for recombinant protein production that is especially well-suited for complex, large-scale protein production where traditional systems are not. Multiple global manufacturers have demonstrated consistent success with the platform and the technology is currently out-licensed for numerous commercial and development-stage programs. The versatility of the platform has been demonstrated in the production of enzymes, peptides, antibody derivatives and engineered non-natural proteins. Partners seek the platform as it can contribute significant value to biopharmaceutical development programs by reducing development timelines and costs for manufacturing therapeutics and vaccines. Given pharmaceutical industry trends toward large molecules with increasing structural complexities, Pelican is well positioned to meet these growing needs as one of the most comprehensive broadly available protein production platforms in the industry. About Ligand Pharmaceuticals Ligand is a biopharmaceutical company focused on funding, enabling and supporting clinical development that allows pharmaceutical companies to create high impact medicines. Ligand does this by licensing our platform technologies, providing project financing or both. Our business model creates value for stockholders by providing a diversified portfolio of biotech and pharmaceutical product revenue streams that are supported by an efficient and low corporate cost structure. Our goal is to offer investors an opportunity to participate in the promise of the biotech industry in a profitable and diversified manner while mitigating the binary clinical risk associated with developing a single program. Our business model is based on funding mid to late-stage drug development in return for economic rights and licensing our technology platforms to help partners discover and develop medicines. We partner with other pharmaceutical companies to leverage what they do best (late-stage development, regulatory management and commercialization) ultimately to generate our revenue. Our Captisol platform technology is a chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. For our Captisol partners, our team supplies our Captisol material needed for their programs. Our Pelican Expression Technology is a robust, validated, cost-effective and scalable platform for recombinant protein production that is especially well-suited for complex, large-scale protein production where traditional systems are not. We have established multiple alliances, licenses and other business relationships with the world’s leading pharmaceutical companies including Amgen, Merck, Pfizer, Jazz, Takeda, Gilead Sciences and Baxter International. For more information, please visit . Follow Ligand on Twitter @Ligand_LGND. We use Twitter and our investor relations website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Investors should monitor our Twitter account and our website, in addition to following our press releases, SEC filings, public conference calls and webcasts. Forward-Looking Statements This news release contains forward-looking statements by Ligand that involve risks and uncertainties and reflect Ligand's judgment as of the date of this release. Words such as “plans,” “believes,” “expects,” “anticipates,” and “will,” and similar expressions, are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements regarding: Ligand’s ability to achieve significant revenue growth; the timing of clinical and regulatory events of Ligand’s partners; the expansion of Ligand’s portfolio with life sciences royalty opportunities; the timing of the initiation or completion of preclinical studies and clinical trials by Ligand and its partners; the timing of product launches by Ligand or its partners; and guidance regarding the full-year 2023 financial results. Actual events or results may differ from Ligand's expectations due to risks and uncertainties inherent in Ligand’s business, including, without limitation: Ligand may not receive expected revenue from royalties, Captisol material sales and license fees and milestone revenue; Ligand and its partners may not be able to timely or successfully advance any product(s) in its internal or partnered pipeline; Ligand may not achieve its guidance for 2023; Ligand may not be able to create future revenues and cash flows by developing innovative therapeutics; results of any clinical study may not be timely, favorable or confirmed by later studies; products under development by Ligand or its partners may not receive regulatory approval; the total addressable market for our partners’ products may be smaller than estimated; Ligand faces competition with respect to its technology platforms which may demonstrate greater market acceptance or superiority; remdesivir may be later shown to not be effective or safe for the treatment of COVID-19 and could materially and adversely affect the commercial opportunity for remdesivir; additional alternative COVID-19 therapies or vaccines may be approved, along with the risk of coronavirus infection continuing to diminish, any of which could materially and adversely affect the commercial opportunity for remdesivir; Gilead may develop an alternative formulation of remdesivir that does not incorporate Captisol or uses less Captisol in such formulation; Ligand is currently dependent on a single source sole supplier for Captisol and failures by such supplier may result in delays or inability to meet the Captisol demands of its partners; there may not be a market for the product(s) even if successfully developed and approved; Ligand’s partners may not execute on their sales and marketing plans for marketed products for which Ligand has an economic interest; Ligand’s and its partners’ products may not be proved to be safe and efficacious and may not perform as expected and uncertainty regarding the commercial performance of such products; Ligand relies on collaborative partners for milestone payments, royalties, materials revenue, contract payments and other revenue projections; Ligand or its partners may not be able to protect their intellectual property and patents covering certain products and technologies may be challenged or invalidated; Ligand's partners may terminate any of its agreements or development or commercialization of any of its products; Ligand may not generate expected revenues under its existing license agreements and may experience significant costs as the result of potential delays under its supply agreements; Ligand and its partners may experience delays in the commencement, enrollment, completion or analysis of clinical testing for its product candidates, or significant issues regarding the adequacy of its clinical trial designs or the execution of its clinical trials, which could result in increased costs and delays, or limit Ligand's ability to obtain regulatory approval; unexpected adverse side effects or inadequate therapeutic efficacy of Ligand's or its partners’ product(s) could delay or prevent regulatory approval or commercialization; challenges, costs and charges associated with integrating recently completed acquisitions with Ligand’s existing businesses; risks associated with management changes; Ligand may not be able to successfully implement its strategic growth plan and continue the development of its proprietary programs; the COVID-19 pandemic and any future epidemic diseases could adversely impact the business of Ligand and its partners and impair global economic activity; changes in general economic conditions, including as a result of the war between Russia and Ukraine; the spin-off of OmniAb may not achieve the intended strategic, operational and financial benefits; and ongoing or future litigation could expose Ligand to significant liabilities and have a material adverse effect on the company. . The failure to meet expectations with respect to any of the foregoing matters may reduce Ligand's stock price. Additional information concerning these and other risk factors affecting Ligand can be found in prior press releases available at as well as in Ligand's public periodic filings with the Securities and Exchange Commission available at . Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release, including the possibility of additional license fees and milestone revenues we may receive. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Other Disclaimers and Trademarks The information in this press release regarding certain third-party products and programs, including Kyprolis, an Amgen product, Rylaze, a Jazz Pharmaceuticals product, FILSPARI, a Travere Therapeutics product, EVOMELA, an Acrotech Biopharma and CASI Pharmaceuticals product, and ZULRESSO, a Sage Therapeutics product, comes from information publicly released by the owners of such products and programs. Ligand is not responsible for, and has no role in, the development of such products or programs. Ligand owns or has rights to trademarks and copyrights that it uses in connection with the operation of its business including its corporate name, logos and websites. Other trademarks and copyrights appearing in this press release are the property of their respective owners. The trademarks Ligand owns include Ligand®, Captisol® and Pelican Expression Technology™ Solely for convenience, some of the trademarks and copyrights referred to in this press release are listed without the ®, © and ™ symbols, but Ligand will assert, to the fullest extent under applicable law, its rights to its trademarks and copyrights. LIGAND PHARMACEUTICALS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share amounts) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Revenues: Royalties $ 22,019 $ 17,551 $ 72,527 $ 48,927 Captisol - Core 3,347 7,112 16,429 23,423 Captisol - COVID 23,533 28,263 88,066 140,827 Contract revenue 1,483 3,478 19,223 28,367 Total revenues 50,382 56,404 196,245 241,544 Operating costs and expenses: Cost of Captisol 21,614 11,984 52,827 62,176 Amortization of intangibles 8,539 8,553 34,237 34,222 Research and development 9,197 8,147 36,082 32,105 General and administrative 31,131 12,596 70,062 46,790 Other operating income — — — (37,600 ) Total operating costs and expenses 70,481 41,280 193,208 137,693 Income from operations (20,099 ) 15,124 3,037 103,851 Gain (loss) from short-term investments 44,248 (13,398 ) 28,540 (5,263 ) Interest income (expense), net 783 (4,283 ) 247 (18,733 ) Other income (expense), net (792 ) (1,589 ) 4,187 (7,650 ) Total other income (expense), net 44,239 (19,270 ) 32,974 (31,646 ) Income (loss) before income taxes 24,140 (4,146 ) 36,011 72,205 Income tax benefit (expense) (38,674 ) 952 (41,230 ) 4,148 Net income (loss) from continuing operations (14,534 ) (3,194 ) (5,219 ) 76,353 Net loss from discontinued operations (2,951 ) (2,223 ) (28,142 ) (19,215 ) Net income (loss): $ (17,485 ) $ (5,417 ) $ (33,361 ) $ 57,138 Basic net income (loss) from continuing operations per share $ (0.86 ) $ (0.19 ) $ (0.31 ) $ 4.59 Basic net loss from discontinued operations per share $ (0.17 ) $ (0.13 ) $ (1.67 ) $ (1.16 ) Basic net income (loss) per share $ (1.04 ) $ (0.32 ) $ (1.98 ) $ 3.44 Shares used in basic per share calculation 16,890 16,733 16,868 16,630 Diluted net income (loss) from continuing operations per share $ (0.86 ) $ (0.19 ) $ (0.31 ) $ 4.43 Diluted net loss from discontinued operations per share $ (0.17 ) $ (0.13 ) $ (1.67 ) $ (1.11 ) Diluted net income (loss) per share $ (1.04 ) $ (0.32 ) $ (1.98 ) $ 3.31 Shares used in diluted per share calculation 16,890 16,733 16,868 17,246 LIGAND PHARMACEUTICALS INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) December 31, 2022 December 31, 2021 Assets Current assets: Cash, cash equivalents and short-term investments $ 211,870 $ 341,108 Accounts receivable, net 30,424 85,453 Inventory 13,294 27,326 Income tax receivable 4,614 6,193 Other current assets 3,399 3,571 Current assets of discontinued operations — 1,100 Total current assets 263,601 464,751 Deferred income taxes, net 8,530 35,729 Goodwill and other identifiable intangible assets, net 448,128 482,364 Commercial license and other economic rights, net 10,182 10,110 Operating lease right-of-use assets 10,914 3,210 Finance lease 4,095 16,201 Other assets 17,218 14,442 Non-current assets of discontinued operations — 270,783 Total assets $ 762,668 $ 1,297,590 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 20,988 $ 25,982 Current contingent liabilities 57 50 Current operating lease liabilities 670 1,368 Current finance lease liabilities 45 45 Deferred revenue 355 654 2023 convertible senior notes, net 76,695 — Current liabilities of discontinued operations — 13,566 Total current liabilities 98,810 41,665 2023 convertible senior notes, net — 320,717 Long-term contingent liabilities 3,456 3,657 Long-term operating lease liabilities 10,336 2,256 Deferred income taxes, net 30,615 30,856 Other long-term liabilities 21,966 21,752 Non-current liabilities of discontinued operations — 55,528 Total liabilities 165,183 476,431 Total stockholders' equity 597,485 821,159 Total liabilities and stockholders' equity $ 762,668 $ 1,297,590 LIGAND PHARMACEUTICALS INCORPORATED ADJUSTED FINANCIAL MEASURES (Unaudited, in thousands, except per share amounts) Three months ended December 31, Year ended December 31, 2022 2021 2022 2021 Net income (loss) from continuing operations $ (14,534 ) $ (3,194 ) $ (5,219 ) $ 76,353 Adjustments: Share-based compensation expense 27,664 8,304 50,881 29,326 Finance lease impairment charge and other 10,821 — 10,821 — Non-cash interest expense (1) 95 3,828 734 16,692 Amortization related to acquisitions and intangible assets 8,539 8,553 34,237 34,222 Amortization of commercial license and other economic rights (2) (32 ) (72 ) (355 ) 79 Change in contingent liabilities (3) 698 660 (144 ) (38,170 ) Acquisition and integrations costs (4) — 105 — 472 Loss (gain) from short-term investments (44,248 ) 13,398 (28,540 ) 5,263 Realized gain from short-term investments — 1 (288 ) 5,382 Other (5) 1,904 929 (34 ) 8,218 Income tax effect of adjusted reconciling items above 8,093 (6,309 ) (4,561 ) (19,520 ) Tax expense related to increase in valuation allowance (6) 24,799 — 24,799 — Excess tax benefit from share-based compensation (7) (267 ) (706 ) (138 ) (10,309 ) Adjusted net income from continuing operations $ 23,532 $ 25,497 $ 82,193 $ 108,008 Captisol - COVID gross profit, net of tax (8) (10,514 ) (14,771 ) (40,268 ) (67,551 ) Adjusted net income from continuing operations excluding Captisol - COVID $ 13,018 $ 10,726 $ 41,925 $ 40,457 Diluted per-share amounts attributable to common shareholders: Diluted net income (loss) per share from continuing operations $ (0.86 ) $ (0.19 ) $ (0.31 ) $ 4.43 Adjustments: Share-based compensation expense 1.60 0.48 2.96 1.70 Finance lease impairment charge and other 0.63 — 0.63 — Non-cash interest expense (1) 0.01 0.22 0.04 0.97 Amortization related to acquisitions and intangible assets 0.49 0.49 1.99 1.98 Amortization of commercial license and other economic rights (2) — — (0.02 ) — Change in contingent liabilities (3) 0.04 0.04 (0.01 ) (2.21 ) Acquisition and integrations costs (4) — 0.01 — 0.03 (Gain)/Loss from short-term investments (2.56 ) 0.77 (1.66 ) 0.31 Realized gain from short-term investments — — (0.02 ) 0.31 Other (5) 0.10 0.05 0.01 0.48 Income tax effect of adjusted reconciling items above 0.48 (0.36 ) (0.27 ) (1.13 ) Tax expense related to increase in valuation allowance (6) 1.44 — 1.44 — Excess tax benefit from share-based compensation (7) (0.02 ) (0.04 ) (0.01 ) (0.60 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net loss 0.01 — 0.02 — Adjusted diluted net income per share from continuing operations $ 1.36 $ 1.47 $ 4.79 $ 6.27 Captisol - COVID gross profit, net of tax (8) (0.61 ) (0.85 ) (2.35 ) (3.92 ) Adjusted diluted net income per share from continuing operations excluding Captisol - COVID $ 0.75 $ 0.62 $ 2.44 $ 2.35 GAAP - weighted average number of common shares - diluted 16,890 16,733 16,868 17,246 Shares excluded due to anti-dilutive effect on GAAP net loss (9) 390 688 298 — Adjusted weighted average number of common shares - diluted 17,280 17,421 17,166 17,246 (1) Amounts represent non-cash debt related costs that are calculated in accordance with the authoritative accounting guidance for convertible debt instruments that may be settled in cash. (2) Amounts represent the amortization of commercial license and other economic rights to revenue and research and development expenses. (3) Amounts represent changes in fair value of contingent consideration related to Pfenex, CyDex and Metabasis transactions. (4) Amounts represent severance costs, legal fees, and certain contract termination costs in connection with the acquisitions. (5) Amounts primarily relate to restructuring costs, loss on debt extinguishment and adjustments associated with our equity investment in Nucorion. (6) Amounts represent discrete tax expense related to the valuation allowance established during the fourth quarter of 2022 against deferred tax asset for California research and development credits and net operating losses. (7) Excess tax benefits from share-based compensation are recorded as a discrete item within the provision for income taxes on the consolidated statements of operations as a result of the adoption of an accounting pronouncement (ASU 2016-09) on January 1, 2017. Prior to the adoption, the amount was recognized in additional paid-in capital on the consolidated statement of stockholders' equity. (8) Captisol - COVID gross profit, net of tax, represents gross profit, net of tax, for Captisol supplied for use in formulation with remdesivir, an antiviral treatment for COVID-19. Prior period adjusted net income and adjusted net income per diluted share amount have been adjusted to exclude the impact of COVID-related Captisol gross profit, net of tax, to conform to the current period presentation. Certain commission cost included in the general and administrative expenses that were related to the Gilead Consortium sales were included in the calculation for the twelve months ended December 31, 2021. (9) Excluding the impact from the adoption of accounting pronouncement (ASU 2020-06) on January 1, 2022 as the Company intends to settle the principal balance in cash. Under the new standard, the Company is required to reflect the dilutive effect of the 2023 Notes by application of the if-converted method, which resulted an additional 452,905 and 1,847,893 potentially dilutive shares for the three and twelve months ended December 31, 2022, respectively.

SAN DIEGO, May 11 /PRNewswire-FirstCall/ -- Metabasis Therapeutics, Inc. announced today financial results for the first quarter ended March 31, 2006 and commented on first quarter achievements. Revenue for the first quarter of 2006 was $973,000 compared to $397,000 for the first quarter of 2005. The $576,000 increase was primarily due to increased sponsored research and license fees from our metabolic disease collaboration with Merck. Net loss for the first quarter of 2006 was $7.5 million or $0.30 per share compared to a net loss of $6.2 million or $0.35 per share in the first quarter of 2005. Research and development expenses for the first quarter of 2006 increased to $7.2 million from $5.4 million in the 2005 comparable period due mainly to preclinical and clinical trial costs for the three product candidates Metabasis is developing internally -- MB07133, MB07803 and MB07811, as well as increased stock-based compensation due to the implementation of Statement of Financial Accounting Standards (SFAS) No. 123R. General and administrative expenses increased from $1.4 million for the first quarter of 2005 to $1.8 million for the first quarter of 2006 due to the aforementioned stock-based compensation expense as well the addition of personnel. Compensation expense related to the implementation of SFAS No. 123R included in research and development and general and administrative expenses during the first quarter of 2006 was $426,000 and $261,000, respectively. The total incremental increase in stock-based compensation expense due to the implementation of SFAS No. 123R was $269,000, or $0.01 per share, for the first quarter of 2006 as compared to stock compensation expense recorded for the first quarter of 2005 where the accounting guidelines previous to the SFAS No. 123R standard were used. As of March 31, 2006, Metabasis had $96.9 million in cash, cash equivalents and securities available-for-sale compared to $66.9 million as of December 31, 2005, an increase of $30 million. The increase is primarily attributable to the gross proceeds to the Company as a result of the completion of a $40 million registered direct stock offering in March 2006. "This year is shaping up to be another very busy and exciting one for Metabasis, as evidenced by progress made in the clinical trials of our product candidates in this first quarter," stated Paul Laikind, chairman, president and chief executive officer. "The initiation of a Phase IIb clinical trial for CS-917 by Daiichi Sankyo was crucial because we believe this product candidate could potentially be an important first-in-class agent for type 2 diabetes. The 48-week results of the Phase IIb clinical trial of pradefovir conducted by Valeant showed that with its safety, efficacy and tolerability profile, this could be a best-in-class drug for the treatment of hepatitis B. And, with the continued progress of MB07803, MB07133 and MB07811, we are positioned to have a total of five novel product candidates at various stages of clinical development by the end of the year." First Quarter Highlights * Metabasis' partner, Daiichi Sankyo, initiated a multi-center, double-blind, placebo controlled Phase IIb clinical trial to evaluate the safety and efficacy of CS-917 for the treatment of patients with type 2 diabetes. CS-917, a first-in-class, orally active inhibitor of FBPase, an enzyme that regulates production of glucose in the liver (known as the gluconeogenesis pathway), has shown promise as a treatment for diabetes in preclinical studies and early clinical trials. The Phase IIb trial is designed to evaluate the effect of CS-917 on HbA1c, an important measure of glucose control, after three months of drug administration. If successful, this could lead to selection of a dose for, and initiation of, a Phase III clinical trial. * Metabasis initiated a Phase I human clinical trial of MB07803, a potential treatment for patients with type 2 diabetes. MB07803 is a second generation product candidate from the new class of drug candidates discovered by Metabasis that includes CS-917. Metabasis retains all of the rights to develop and market this product candidate. * The results of a Phase IIb clinical trial reported by Valeant showed that pradefovir demonstrated robust efficacy and was safe and well tolerated after 48 weeks of administration. For instance, in 71% of patients treated with the dose of pradefovir that is expected to be used in a Phase III clinical trial, viral DNA levels, a measure of viral load, were reduced to undetectable levels. This is approximately double the 36% of patients that had undetectable viral DNA levels treated with the highest approved dose of the marketed hepatitis B drug Hepsera which was also evaluated in the study. * Early in the year, Metabasis added three key positions to the development team, a vice president of clinical development, a vice president of regulatory affairs and quality assurance and a senior director of clinical operations. These positions illustrate progress toward its goal of more direct participation in the clinical development of product candidates allowing the Company to build more value and potentially retain the rights for direct commercialization of our product candidates. In addition, the Company hired a vice president of investor relations and corporate communications to manage its investor and public relations initiatives, working to raise awareness and visibility of Metabasis with the Wall Street community and media. * The Company completed a registered direct offering, raising approximately $40 million in gross proceeds through the sale of roughly 4.9 million shares of common stock, thereby strengthening the balance sheet and providing additional capital for Metabasis' internally developed programs. Conference Call: The Metabasis management team will host a conference call and live webcast to discuss first quarter 2006 financial results at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) today. Individuals interested in participating in the call may do so by dialing 800-638-4817 for domestic callers and 617-614-3943 for international callers. Please specify to the operator that you would like to join the "Metabasis First Quarter 2006 Financial Results Conference Call." The conference call will be webcast live on the Metabasis website at , under the Investors section, and will be archived there for 30 days following the call. Please connect to Metabasis' website several minutes prior to the start of the call to ensure adequate time for any software download that may be necessary. About Metabasis ( ): Metabasis Therapeutics is a biopharmaceutical company focused on the discovery, development and commercialization of novel drugs to address some of the world's most widespread and costly chronic diseases involving pathways in the liver. The Company has established a pipeline that includes clinical stage and preclinical product candidates targeting major diseases with significant unmet medical needs. Targeted diseases include metabolic diseases such as diabetes, hyperlipidemia and obesity as well as liver diseases such as hepatitis and primary liver cancer. Metabasis has developed several proprietary technologies for use in discovering and optimizing drugs, including the NuMimetic(TM) and HepDirect(R) technologies. Metabasis is continuing to identify and develop new product candidates using its proprietary technologies and expertise. Forward-Looking Statements: Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, references to Metabasis' progress on its strategic goals and pursuit of its corporate objectives; the initiation, progress and completion of clinical trials for Metabasis' product candidates, including the expected initiation of clinical trials for pradefovir, CS-917, MB07803, MB07133 and MB07811; and the potential efficacy, use and advantages of pradefovir, CS-917 and MB07803 (despite the initial efficacy of CS-917, which has the same mechanism of action as MB07803). Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Metabasis' actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to the progress and timing of clinical trials for Metabasis' product candidates; the fact that positive results from pre-clinical studies and early clinical trials does not necessarily mean later clinical trials will succeed; difficulties or delays in development, testing, obtaining regulatory approval, producing and marketing Metabasis' product candidates; serious adverse side effects or inadequate efficacy of, or serious adverse events related to, Metabasis' product candidates or proprietary technologies; the risk that Metabasis will not be able to build more value or retain rights for direct commercialization of it's product candidates; Metabasis' dependence on its licensees and collaborators for the clinical development and registration of certain of its product candidates, among other things; the risk that any future sub-license of pradefovir will not occur on favorable terms to Metabasis, if at all; the scope and validity of intellectual property protection for Metabasis' product candidates, proprietary technologies and their uses; competition from other pharmaceutical or biotechnology companies; Metabasis' ability to obtain additional financing to support its operations; and other factors discussed in the "Risk Factors" section of Metabasis' Annual Report on Form 10-K for the year ended December 31, 2005 and in Metabasis' other filings with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement. Metabasis is providing this information as of this date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise. Metabasis Therapeutics, Inc. Condensed Balance Sheets (in thousands) March 31, December 31, 2006 2005 (unaudited) Assets: Current assets: Cash and securities available-for-sale $96,900 $66,893 Other current assets 1,988 2,169 Total current assets 98,888 69,062 Property and equipment, net 5,738 4,664 Other assets 152 152 Total assets $104,778 $73,878 Liabilities and stockholders' equity: Current liabilities: Accounts payable and accrued liabilities $5,079 $6,137 Other current liabilities 3,515 3,234 Total current liabilities 8,594 9,371 Long-term liabilities 5,989 4,925 Stockholders' equity 90,195 59,582 Total liabilities and stockholders' equity $104,778 $73,878 Metabasis Therapeutics, Inc. Condensed Statements of Operations (in thousands, except per share amounts) Three months ended March 31, 2006 2005 (unaudited) (unaudited) Revenues: Sponsored research $525 $344 License fees 417 -- Other revenue 31 53 Total revenues 973 397 Operating expenses: Research and development 7,221 5,394 General and administrative 1,818 1,443 Total operating expenses 9,039 6,837 Loss from operations (8,066) (6,440) Total other income 600 205 Net loss $(7,466) $(6,235) Basic and diluted net loss per share $(0.30) $(0.35) Shares used to compute basic and diluted net loss per share 25,250 17,843 Metabasis Therapeutics Inc. CONTACT: Constance C. Bienfait, Vice President Investor Relations &Corporate Communications of Metabasis Therapeutics, Inc., +1-858-622-5575 Web site: