Ligand Pharma to Acquire APEIRON Biologics AG for $100M, Expects 2024 Revenue of $140M-$157M (Prior $130M-$142M) Vs $137.79M Est, 2024 Adj EPS of $5.00-$5.50 (Prior $4.25-$4.75) Vs $4.64 Est

Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) today announced that it has entered into a definitive agreement to acquire APEIRON Biologics AG, which holds royalty rights to QARZIBA® (dinutuximab beta) for the treatment of high-risk neuroblastoma, for $100 million in cash. In addition, Ligand will pay APEIRON shareholders additional consideration based on future commercial and regulatory events, including up to $28 million if QARZIBA royalties exceed certain predetermined thresholds by either 2030 or 2034, respectively.

APEIRON is a private biopharmaceutical company based in Vienna, Austria. The company co-developed QARZIBA for the treatment of high-risk neuroblastoma in patients aged 12 months and above. QARZIBA was approved by the European Medicines Agency in 2017 and is commercially available today in more than 35 countries. APEIRON receives an undisclosed royalty on net sales of QARZIBA outside of mainland China from Recordati S.p.A, a leading global pharmaceutical company with a presence in over 150 countries and sales of more than $2.2 billion,2 and on net sales of QARZIBA within mainland China from BeiGene, Ltd.

"The addition of QARZIBAto our commercial royalty portfolio further supports our growth strategy to invest in high-value medicines that deliver significant clinical value and generate predictable and long-term revenue streams for our investors," said Todd Davis, CEO of Ligand. "QARZIBA is the only immunotherapy for high-risk neuroblastoma marketed across Europe and in other parts of the world. We believe this drug will be a meaningful contributor to our royalty revenue, which is now driven by a diversified portfolio of 12 key commercial-stage products."

Peter Llewellyn-Davies, CEO of APEIRON commented, "This transaction is an important milestone for our company and shareholders. We have spent more than 20 years translating academic research into therapeutic products for diseases with high unmet needs. Our team was honored to help bring QARZIBA to the young patients who need it. We appreciate that Ligand recognizes the long-term potential of this critical drug for a rare pediatric cancer."

Transaction Terms

Under the terms of the agreement, which has been unanimously approved by both theBoard of Directors at Ligand and APEIRON's Supervisory Board, Ligand will acquire all the outstanding shares ofAPEIRON for $100 million in cash at closing. Ligand will also pay APEIRON shareholders additional consideration based on future commercial and regulatory events, including up to $28 million if QARZIBA royalties exceed certain predetermined thresholds by either 2030 or 2034, respectively. The transaction is subject to a 30-day shareholder objection period and other customary closing conditions and is expected to close in July 2024.

Concurrently, Ligand is also entering into a stock purchase agreement whereby it has committed to investing up to $4 million in invIOs Holding AG, a privately held spin-off of APEIRON. The proceeds will help finance the research and development of three innovative early-stage immuno-oncology assets. APEIRON is entitled to royalties and milestone payments on these assets which will further expand Ligand's development stage portfolio. This transaction is expected to close in July 2024.

Financial Guidance Update

The APEIRON acquisition will be immediately accretive to Ligand's earnings per share (EPS) by approximately $1.00 on an annualized basis. Ligand is increasing its 2024 revenue guidance to be in the range of $140 million to $157 million (previously $130 million to $142 million) and is raising core adjusted EPS guidance to $5.00 to $5.50 (previously $4.25 to $4.75). Royalties are now expected to range from $100 million to $105 million (previously $90 million to $95 million). Guidance for sales of Captisol® is unchanged at $25 million to $27 million and contract revenue is now expected to range from $15 million to $25 million (previously $15 million to $20 million).