SAN DIEGO, CA – Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) announced today that its partner, Verona Pharma (NASDAQ:VRNA) plc, has received U.S. Food and Drug Administration (FDA) approval for OhtuvayreTM (ensifentrine), a novel inhaled treatment for chronic obstructive pulmonary disease (COPD) in adults. This marks the first new mechanism of action for an inhaled COPD therapy approved in over two decades.
The company has secured a $5.8 million milestone payment following the FDA's approval and is set to receive an additional $13.8 million upon the product's commercial launch, anticipated in the third quarter of 2024. Ligand is also entitled to a low single-digit royalty on potential global net sales of Ohtuvayre.
COPD represents a significant market in the United States, and the approval of Ohtuvayre introduces a new option for the maintenance treatment of this condition. The financial implications for Ligand include the immediate milestone payment and future royalties tied to the sales performance of Ohtuvayre.
Ligand's reliance on Verona Pharma for the successful commercialization of Ohtuvayre is also noted as a potential risk.
Today's announcement is based on a press release statement.
In other recent news, Ligand has reported a strong first quarter of 2024, highlighted by strategic growth and a robust pipeline of medicines. The company started the year with $311 million in cash and investments and expects to generate an additional $60 million from operations throughout the year. Ligand has reaffirmed its financial guidance for 2024, projecting significant growth in royalty revenue and adjusted earnings per share over the next five years.
Moreover, Ligand announced the creation of Pelthos Therapeutics and the FDA approval of ZELSUVMI. It also entered into a partnership with Agenus (NASDAQ:AGEN), investing $75 million with an option for an additional $25 million.
InvestingPro Insights
As Ligand Pharmaceuticals (NASDAQ:LGND) celebrates the FDA approval for Ohtuvayre, a novel COPD treatment, investors may find it valuable to consider the financial health and market performance of the company. Ligand's strong balance sheet is reflected in the fact that it holds more cash than debt, and its liquid assets exceed short-term obligations, providing financial stability as it enters this new phase of commercialization. Additionally, analysts are optimistic about the company's profitability, projecting that Ligand will be profitable this year, which is notable considering the recent approval could bolster future earnings.
From a market perspective, Ligand's market capitalization stands at $1.42 billion, with a notable gross profit margin over the last twelve months as of Q1 2024 at 71.67%. While the company is trading at a high EBITDA valuation multiple, the PEG ratio suggests potential for growth at a rate that could justify the valuation. It's worth mentioning that Ligand does not pay a dividend, indicating that it may be reinvesting earnings back into the company to fuel growth and development.
For those interested in further insights, there are additional InvestingPro Tips available that could help inform investment decisions regarding Ligand Pharmaceuticals. For instance, while the company's revenue has seen a decline over the last twelve months as of Q1 2024, the approval of Ohtuvayre could contribute to a turnaround in sales performance. Investors can use the promo code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to these valuable tips and more.
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