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Ligand Corporate PresentationSeptember 5, 2012
Safe Harbor StatementThe following presentation contains forward‐looking statements regarding Ligand’s prospects, plans and strategies, drug development programs and collaborations. Forward‐looking statements include financial projections, expectations regarding research and development programs, and other statements including words such as “will,“ “should,” “could,” “plan,” etc. Actual events or results may differ from Ligand’s expectations. For example, expense reductions and drug development programs may not be realized. In addition there can be no assurance that Ligand will achieve its guidance in 2012 or thereafter.
The forward‐looking statements made in the presentation are subject to several risk factors, including, but not limited to, statements regarding intent, belief, or current expectations of the Ligand, its internal and partnered programs, including Promacta, Kyprolis (Carfilzomib), Melphalan, Ligand’s reliance on collaborative partners for milestone and royalty payments, regulatory hurdles facing Ligand's and partner's product candidates, uncertainty regarding Ligand's and partner's product development costs, the possibility that Ligand's and partner's drug candidates might not be proved to be safe and efficacious and commercial performance of Ligand's and/or its partner's products. Additional risks may apply to forward‐looking statements made in this presentation.
The risk factors facing Ligand are explained in greater detail in Ligand’s filings with the SEC, including the most recently filed annual reports on Form 10‐K and quarterly reports on Form 10‐Q, as well as other public filings.
While forward‐looking statements reflect our good faith beliefs (or those of the indicated third parties), they are not guarantees of future performance. We disclaim any obligation to update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.
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Overview of Ligand
• Founded in 1987 in La Jolla, CA
• Rich heritage of drug discovery, development and partnering
• Contributed to the development of over 40 novel clinical candidates and a dozen approved medicines
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Heritage
Overview of Ligand
• Leveraged history into a new business model centered around partnering and acquisitions
• Large portfolio of over 60 partnered programs
• 5 acquisitions in last 4 years have added significantly to our portfolio and increased depth of partnerships with many
• Most recent acquisition (CyDex Pharmaceuticals) added enabling technology to our portfolio
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Today
3 Focus Points for Investors
Unprecedented Asset Portfolio
Revenue Expansion Potential
Investment Leverage
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Ligand’s Portfolio ‐ Partnered ProgramsOver 25 Different Partners
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Big Biotech
Big Pharma
Specialty Pharma
Biotech
Over 60 fully funded partnered programs Nearly 50% in Phase 2 or Later
Ligand’s Portfolio ‐ Partnered Programs
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Phase 230%
Carbamazepine‐IV (Captisol‐enabled carbamazepine)CNSPhase 3Est. Primary Completion Date: Dec. 20121
Among others, includes::
Aprela (SERM+Premarin)Menopause relatedEst. NDA 2012
Dinaciclib (CDK Inhibitor)Oncology, multipleEst. Phase 3 Initiation 2012
Delafloxacin (fluoroquinolone)InfectionEst. Phase 3 Initiation 2H 2012
1 http://clinicaltrials.gov/ct2/show/NCT01128959?term=Captisol&rank=7
Ligand’s Currently Unpartnered Projects
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Internal R&D Assets Muscle Wasting
Diabetes
Blood Disorders
Seizure
SARMPhase 2 Ready
Melphalan IVPivotal Trial 2012
Glucagon ReceptorAntagonistEst. IND 2013
Topiramate IVPreclinical
EPO Receptor AgonistPreclinicalGCSFPreclinical
Infectious Disease
Oncology
HepDirect® TechnologyEst. IND 2013
Illustrative Revenue Growth Potential
2015
2012
"Shots on Goal" Vision
Turning into Reality
Promacta ®Kyprolis ®Avinza ®Conbriza®Nexterone®Captisol Material SalesLicense/Milestone Fees
PromactaKyprolisConbrizaNexteroneAvinzaAprelaDinaciclibCE‐ClopidogrelCE‐MelphalanCE‐CarbamazepineLilly CE ProgramHospira CE ProgramCaptisol Material SalesLicense/Milestone Fees$30 million$150 million
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~ 50%Royalty
2012 Revenue Composition2012 Financial Guidance
~ 25%Material Sales
~ 25%License FeesNOLs exceed $450 million
19.9 million shares outstanding
• $30M in total revenue• $25M in operating expenses
Includes $6M non‐cash expense
Projected Financial Highlights
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Promacta and Kyprolis
• Ligand has valuable partnerships with GSK and Onyx for two potential blockbuster drugs
• Estimated peak sales for Promacta and Kyprolis combined could achieve $4 billion annually
• Annual royalty revenue for these two products could approach $200 million combined
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Primetime
Promacta
Promacta
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• Marketed by GSK for ITP
• Significant royalty interest
• Major upcoming 2012 catalysts
• Long patent protection through 2027
• Potential for major label expansion
• Strong partner significantly investing, 25+ active clinical trials
A Potential Blockbuster Driver for Ligand Growth
Oral Medicine that Boosts Platelets to Treat Thrombocytopenia
The Blood Business has Three Main Markets
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Disease Main Products 2011 ~Revenues
Red Blood Cells Anemia Epogen® Aranesp®Procrit®
$9 Billion
White Blood Cells Neutropenia Neupogen®Neulasta®
$5.8 Billion
Platelets Thrombocytopenia Promacta® Nplate®
$0.4 Billion
Blood Market Overview
• Anemia and Neutropenia markets have been well served by blockbuster drugs for about 20 years. These are large, will established markets
• Thrombocytopenia is a very young high‐growth market with the introduction of two medicines approximately 3 years ago
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$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
Anemia Neutropenia Thrombocytopenia
$9 Billion
$5.8 Billion
$0.4 Billion
$ Billion
s
Markets have been around ~20 years
Infant market, huge growth potential
2011 ~Revenues
Thrombocytopenia contains a number of “sub‐markets” of rarethrombocytopenia‐inducing diseases, similar to anemia, neutropenia markets
Medical Need is Real, Life Threatening, and Unmet
Thrombocytopenia: Major Need & Opportunity
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120
0
200
400
600
800
1000
1200
1400
1600
1800
Patie
nt #s (000s)
Patients needed to potentiallyreach $1B
in sales
1505
35120 20
140 20 15
250120
60
340
400
Sources: Aplastic Anemia (<1000 patients): (N Engl J Med 2012; 367:11‐19)
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Promacta Market Opportunity
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ITP
HCV
HORT and other
Marketed
sNDA Submitted
Phase 2
Estimated Peak Annual Revenue Potential
$500 Million
$1.5 Billion
$2.0 Billion
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• Currently approved in 89 countries
• 39 new countries on‐line in last 18 months
• Continuing review in ~ 12 others
• GSK investing significant global resource
Promacta/RevoladeGlobal brand with significant momentum
Promacta/Revolade
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Global brand with significant momentum
Approvals as of June 2012
Promacta
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Annual ITP Sales ($M)
$‐
$20
$40
$60
$80
$100
$120
$140
2009 2010 2011
USEUOther
• Dramatic Revenue Acceleration252% growth in 2011
• Promacta is Gaining ITP Market Share vs. Nplate19% in 4Q1033% in 4Q11
• Ligand is entitled to a net 8.3% royaltyon $1 billion in annual sales
$ millions
A Potential Blockbuster Driver for Ligand Growth
2009 2010 2011 2012
Current Niche Indication: ITP
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• Product in infancy – patents and royalties through 2027
• With higher sales, Ligand earns higherroyalty rates
• Multiple major indications still indevelopment
Strong Quarterly Revenue Growth for Ligand
Ligand
Promacta Reven
ue ($
millions)
$2.5
$2.0
$1.5
$1.0
$0.5
$0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Promacta
• Next big potential indication for Promacta is thrombocytopenia in Hep C patients
• GSK submitted sNDA for US and Europe in May on basis of positive Phase 3 trials
• Granted 6‐month accelerated review period (PDUFA date November 2012)
• Potential blockbuster market opportunity for Hep C indication alone
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Hepatitis C‐related Thrombocytopenia
HCV: Significant Promacta Opportunity Before AND After "All‐Oral” Regimens Arrive
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• Alpha interferon and Ribavirin are still mainstay of HCV treatment. "All Oral" has not become a commercial reality yet.
• If “All Oral" regimens are approved, timing outlook by third parties is between two to four years
• "All Oral" regimens treat HCV, but they do not boost platelets or treat thrombocytopenia. The sickest HCV patients with cirrhosis may still require platelet intervention during treatment
• Developing countries have a higher rate of HCV genotypes other than genotype 1. Due to lower cost and the disease strain, interferon‐based regimens may still be a treatment standard in the large markets in the developing countries
Oncology‐related ThrombocytopeniaSignificant unmet medical need
Worldwide patient population of ~100,000 annually
MyelodysplasticSyndrome (MDS)
Bone MarrowSuppression
1 Expert Opinion: Thrombocytopenia & Myelodysplastic Syndrome http://www.medscape.org/viewarticle/565023
Patients develop severe cytopenia, require frequent transfusions
Excess bleeding results in major complications or
death for nearly 25% of patients1
Damage to platelet forming cells in bone
marrow
Can limit treatment
Leads to transfusions and transplants
PromactaDevelopment in Oncology‐related Thrombocytopenia
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Chemotherapy‐induced (CIT)
Acute MyeloidLeukemia (AML)
Fast‐growing cancer
Abnormal red blood cells and platelets can quickly crowd out normal cells
Cancers of the Blood
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Jefferies Published Revenue Outlook for Promacta/Revolade
Jefferies Equity Research Report for GSK dated May 3, 2012 BUY rating, sales figures converted from GBP to US Dollars
$ millions
• If Promacta revenue reaches $667 million in 2016, Ligand will earn approximately $50 million in royalties
The Need for an Enabling Solubility Technology
27Sources: Chemical & Engineering News, 2010, American Pharmaceutical Review ‐ Solubility Roundtable, 2011
4 out of 5 Drug candidateshave poor solubility
The Need for an Enabling Solubility Technology
28Sources: Chemical & Engineering News, 2010, American Pharmaceutical Review ‐ Solubility Roundtable, 2011
4 out of 5
2 out of 5
Drug candidateshave poor solubility
Marketed drugshave poor solubility
The Need for an Enabling Solubility Technology
29Sources: Chemical & Engineering News, 2010, American Pharmaceutical Review ‐ Solubility Roundtable, 2011
4 out of 5
2 out of 5
Drug candidateshave poor solubility
Marketed drugshave poor solubility
Kyprolis™
Primetime HighlightKyprolis™ for Multiple Myeloma
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• Kyprolis (carfilzomib) is formulated with Ligand’s Captisol
• Improved solubility with Captisol enabled significantly reduced drug load
• Kyprolis™ has shown compelling efficacy data
• 20%‐range response rates across patients resistant/not responsive to 5 classes of currently approved multiple myeloma drugs
• Strong potential for improvements over Velcade® forms
• Despite important strides in the last decade, multiple myeloma remains uniformly fatal
Primetime HighlightKyprolis™ ‐ How did we get here?
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Primetime HighlightKyprolis™ ‐ How did we get here?
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2005
+ CarfilzomibCollaboration
Primetime HighlightKyprolis™ ‐ How did we get here?
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+ CarfilzomibCollaboration
Primetime HighlightKyprolis™ ‐ How did we get here?
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+ CarfilzomibCollaboration
Primetime HighlightKyprolis™ ‐ How did we get here?
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Kyprolis™
Primetime HighlightKyprolis™ for Multiple Myeloma – Detailed History
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2005
2008
2009
2011
2012
Proteolix signs Collaboration Agreement for Captisol‐enabled® IV formulation of Carfilzomib
Carfilzomib Phase 2 study initiation
Onyx acquires Proteolix ‐ $851 million total potential payments
Ligand acquires Captisol® through CyDex acquisition
Kyprolis NDA approved
Primetime HighlightKyprolis™ for Multiple Myeloma ‐ Opportunity
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• Multiple myeloma market expected to exceed $8 billion by 2016
• Clear view of Kyprolis’ potential contribution and significance to multiple myeloma treatment
• Analyst projects Kyprolis generating: $1b ‐ 2016$2b ‐ 2020
Sources: EvaluatePharma and Decision Resources, Sanford Bernstein
• Ligand entitled to receive milestones, royalties and Captisol materials sales
CDK Inhibitor
• Merck has studied dinaciclib in multiple Phase 2 studies for cancer
• Dinaciclib is cyclin dependent kinase (CDK) inhibitor‐ inhibiting CDK blocks cell‐cycle progression and promotes apoptosis
• Merck is making a significant commitment to increase its oncology presence
• Ligand is entitled to receive milestones and royalties from the dinaciclib program
12 in 2012 Highlight
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Dinaciclib for Oncology
• What is CDK and why is it important?• Family of kinases that are critical regulators of cell
cycle Progression• Cell cycle dysregulation is hallmark of cancer
inhibiting CDK should block cell‐cycle progression and promote apoptosis
• Dinaciclib inhibits CDK‐1, ‐2, ‐5 and ‐9
• In what diseases has Dinaciclib been studied?• Phase II studies have been completed in ALL/AML,
CLL/CML, lymphoma, advanced breast/lung cancer and mantle cell lymphoma/B‐cell CLL
• NCI conducting studies in Stage IV melanoma and multiple myeloma
• Why is Dinaciclib interesting?• Novel kinase inhibitors are the next wave of
therapeutics in the oncology space• Novel NME with strong patent protection
Dinaciclib (CDK Inhibitor)
CDK Control of the Cell Cycle(sandwalk.blogspot.com‐2009)
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Carbamazapine
Partnership HighlightIV Carbamazepine for Epilepsy
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• I.V. carbamazepine is formulated with Ligand’s Captisol
• Carbamazepine used in:• Management of complex partial seizures• Treatment of generalized tonic‐clonic seizures (the
most common type of generalized seizure) • Adjunct in patients with secondary or partial epilepsy
• Captisol enabled the IV form of widely used oral sodium channel blocker
• IV improvement in onset of action• Ideal for hospital/emergency settings
• Currently in Phase 3 development by Lundbeck• Estimated primary completion date December 2012