JUPITER, Fla. and LEXINGTON, Mass. - Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) has entered into a royalty financing agreement with Agenus Inc . (NASDAQ:AGEN), providing a $75 million investment to support the clinical development of Agenus's cancer therapies botensilimab and balstilimab, often referred to as BOT/BAL.
This investment aims to advance BOT/BAL through a confirmatory Phase 3 trial for certain colorectal cancer patients and prepare for potential commercial launch.
The agreement, announced today, entitles Ligand to an 18.75% share of future royalties and 31.875% of future milestone payments from six Agenus-partnered oncology programs. These programs include collaborations with notable biopharmaceutical companies such as Bristol Myers (NYSE:BMY) Squibb, Gilead Sciences (NASDAQ:GILD), Incyte (NASDAQ:INCY), Merck, and UroGen Pharma. Ligand's portion of the milestones from these programs could surpass $400 million, with royalties in the low single digits.
Furthermore, Ligand will receive a 2.625% royalty on future global net sales generated by BOT/BAL. The financial terms of the royalties and milestone payments are subject to adjustment based on the achievement of certain pre-determined future events and milestones.
The partnership reflects confidence in Agenus's BOT/BAL program, which has shown promise in treating a range of solid tumor cancers and has been granted Fast Track Designation by the FDA for r/r MSS CRC NLM, a form of metastatic, refractory colorectal cancer.
The agreement also includes provisions for Agenus to syndicate up to an additional $125 million in capital, potentially increasing the total investment to $200 million.
Over 900 patients have participated in BOT/BAL clinical trials across nine different solid tumor cancers. The therapy has demonstrated potential for use in combination with chemotherapy and other standard care therapies, as well as an immunotherapy-only combo in colorectal cancer.
The investment by Ligand underscores its strategy to support the development of high-value medicines through financing and technology licensing, aiming to create a diversified portfolio of biopharmaceutical product revenue streams.
This news is based on a press release statement and does not constitute an endorsement of claims or a prediction of future success. The information herein should be considered in the context of potential risks and uncertainties that could affect actual results.
InvestingPro Insights
Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) has made a strategic move by investing in Agenus Inc.'s cancer therapies, with expectations of significant future royalties and milestone payments. As investors consider the implications of this deal, certain financial metrics and insights from InvestingPro are particularly noteworthy.
Firstly, Ligand's market capitalization stands at $1.31 billion, reflecting the company's size and market value. The P/E ratio, a measure of the company's current share price relative to its per-share earnings, is 24.22, suggesting investors are willing to pay a higher price for Ligand's earnings potential. However, when adjusted for the last twelve months as of Q4 2023, the P/E ratio spikes to 96.36, indicating a premium valuation that may factor in future growth expectations.
Despite recent revenue challenges, with a decline of 33.09% in the last twelve months as of Q4 2023, Ligand's gross profit margin remains robust at 73.31%, underscoring the company's ability to maintain profitability amid revenue fluctuations. This financial health is further bolstered by the company's liquidity position, indicated by the InvestingPro Tips that highlight Ligand's ability to cover its short-term obligations with liquid assets and manage interest payments with its cash flows.
InvestingPro Tips also reveal that Ligand is trading at a high EBITDA valuation multiple, which could be a point of consideration for investors looking at the company's valuation in relation to its earnings before interest, taxes, depreciation, and amortization. Additionally, analysts predict the company will be profitable this year, and Ligand has been profitable over the last twelve months, reinforcing the company's strong financial performance.
For investors seeking a deeper dive into Ligand's financials and future outlook, InvestingPro offers additional insights. There are 6 more InvestingPro Tips available for LGND, which can be accessed at Investing.com/pro/LGND. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing you with an even more comprehensive financial analysis toolkit.
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