Ligand second-quarter net loss reduces to $0.3 million

Ligand PharmaceuticalsAug 5 2010

Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today announced financial results for the three and six months ended June 30, 2010 and provided an update on key programs.

“Ligand's second quarter results continued the trend of significantly cutting costs while building our asset base”

"Ligand's second quarter results continued the trend of significantly cutting costs while building our asset base," said John L. Higgins, President and Chief Executive Officer of Ligand. "We are encouraged by the meaningful progress in internal and partnership activities during the past several months that included the acquisition of milestone and royalty interest in the AstraZeneca IL-9 program, the approval of Revolade® (PROMACTA) in Europe, the approval of Viviant in Japan and the receipt of a $6.5 million milestone payment from Roche. Ligand remains committed to growing our business as we advance toward profitability."

Second Quarter Results

Total revenues from continuing operations for the three months ended June 30, 2010 were $5.8 million, compared with $7.6 million for the same period in 2009.

Operating costs and expenses from continuing operations in the second quarter of 2010 were $9.9 million, compared with $12.7 million in the second quarter of 2009. Research and development expenses decreased by $2.9 million compared with the second quarter of 2009, primarily due to lower headcount-related costs. General and administrative expenses increased by $0.5 million compared with the second quarter of 2009, primarily due to acquisition-related costs, partially offset by lower facilities costs and lower headcount. Additionally, other income increased by $3.8 million for the three months ended June 30, 2010 compared with the second quarter of 2009, primarily due to a $3.7 million decrease in liability for contingent value rights associated with the Metabasis acquisition, which are marked-to-market at each reporting period.

The net loss in the second quarter of 2010 was $0.3 million, or $0.00 per share, compared with a net loss of $1.7 million, or $0.01 per share, in the second quarter of 2009. The loss from continuing operations in the second quarter of 2010 was $0.3 million, or $0.00 per share, compared with a loss from continuing operations of $4.5 million, or $0.04 per share, in the second quarter of 2009. Income from discontinued operations in the second quarter of 2010 was $7,000, or $0.00 per share, compared with income from discontinued operations of $2.8 million, or $0.03 per share, in the second quarter of 2009.

As of June 30, 2010, Ligand had cash, cash equivalents, short-term investments and restricted investments of $33.6 million.

Year-to-Date Results

Total revenues for the six months ended June 30, 2010 were $11.8 million, compared with $17.1 million for the first six months of 2009. Operating costs and expenses for the first six months of 2010 were $20.3 million, compared with $30.0 for the first six months of 2009.

The net loss for the first six months of 2010 was $3.0 million, or $0.03 per share, compared with a net loss of $6.8 million, or $0.06 per share, for the first six months of 2009.

Second Quarter and Recent Highlights

• July 2010, Viviant was approved in Japan for the treatment of postmenopausal osteoporosis.
• July 2010, Almirall signed a co-promotion agreement with Pfizer to commercialize Conbriza (Viviant) in Spain.
• July 2010, Ligand launched a new Corporate Web site, www.ligand.com.
• July 2010, Ligand entered an asset purchase agreement with Wyeth (a subsidiary of Pfizer) for a JAK-3 research collaboration for a total of $3 million. This effectively terminates an original collaboration that was an early-stage drug discovery effort that originated at Pharmacopeia. In addition to Ligand collecting $3 million, the asset sale will permit Ligand to eliminate annual R&D costs associated with the program while retaining rights to develop selected compounds for topical and non-human uses.
• May 2010, Milestone and royalty interest acquired in the AstraZeneca IL-9 program for asthma.
• April 2010, Phase I/II PROMACTA® study was initiated in acute myelogenous leukemia (AML).
• April 2010, $6.5 million milestone payment was earned from Roche as a result of Roche progressing RG7348 into a Phase I clinical trial for the treatment of hepatitis C viral (HCV) infection.
• April 2010, First-in-Human Phase I data on Ligand's lead SARM molecule LGD-4033 was presented at the International Congress of Endocrinology. Completion and data for the Phase Ib multiple ascending dose trial is targeted by the end of the year.
• April 2010, Revolade (PROMACTA) was launched in a number of major markets such as Germany, Sweden and the United Kingdom

Upcoming Events

Ligand plans to present at the following investment conferences:

• BMO Capital Markets 10^th Annual Focus on Healthcare Conference, New York, August 5 at 3:30 p.m. Eastern time (12:30 p.m. Pacific time).
• Stifel Nicolaus 2010 Healthcare Conference, Boston, September 17 at 8:00 a.m. Eastern time (5:00 a.m. Pacific time).

Operating Forecast and Financial Outlook

Affirming its 2010 forecast, Ligand expects total revenues to be approximately $25 million and total operating expenses from continuing operations to be approximately $30 million. Additionally, the Company expects to finish 2010 with more than $30 million in cash and investments.

Ligand also affirmed its previously announced preliminary financial guidance for 2011. The Company expects operating expenses for 2011 to be in the range of $15 million to $18 million, which is approximately one-half of its expected operating expenses for 2010. The significant reduction in projected operating expenses is primarily due to eliminating non-recurring costs for terminated, early stage research collaborations and continued savings from the Company's restructuring initiated in 2007.