Ligand Inks Oncology Drug Discovery Deal With PhoreMost

Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) announced that its subsidiary, Vernalis has signed a research collaboration agreement with privately-held PhoreMost Limited for an undisclosed novel oncology target.

We remind investors that Ligand completed the acquisition of UK-based biotechnology company, Vernalis, for $43 million in October 2018. Vernalis has expertise in structure-based drug discovery.

Per this agreement, Ligand will apply Vernalis Design Platform (“VDP”) for designing small molecule inhibitors for the undisclosed oncology target. PhoreMost has identified and validated the target using its next-generation phenotypic screening technology, SITESEEKER. The use of VDP is expected to accelerate the discovery and design of compounds for the target cancer indication. The companies are looking to out-license the resulting compounds for further development.

Per the terms of the agreement, Vernalis and PhoreMost will share any future revenues from the compounds including upfront payments, milestone fees and royalties. Ligand will be eligible to receive scaling interest in license economics based on its contribution and stage of development at the time of licensing related to the compounds.

Ligand’s shares have declined 18.7% so far this year against the industry’s increase of 1.2%.

Please note that Vernalis has a broad pipeline of partnered programs and ongoing collaborations. The acquisition of Vernalis has added eight fully-funded partnered programs including pipeline products for respiratory, oncology and CNS indications to Ligand’s portfolio. The latestagreement demonstrates the potential of Vernalis acquisition for successful integration with Ligand’s business. Ligand expects Vernalis’ technology to boost the company’s long-term milestones and royalties potential.

Last month, Ligand out-licensed a novel, oral, selective, Chk1 kinase inhibitor — VER250840 — discovered using VDP. Rights to the pre-clinical candidate was granted to privately-held UK-based Cumulus Oncology for an undisclosed upfront payment. It is also expected to bring more than $76 million in milestone payments and tiered royalties.

Ligand is focused on strengthening and broadening its technology platform through agreements and acquisitions. Ligand’s Captisol technology is the key revenue generator for the company. Key drugs developed using this technology include Novartis’ (NYSE:NVS) Promacta, Amgen’s (NASDAQ:AMGN) Kyprolis, Spectrum’s (NASDAQ:SPPI) Evomela and Merck’s Noxafil IV. In March 2019, Ligand sold all rights to blockbuster drug, Promacta, to privately-held Royalty Pharma for $827 million.

Ligand had acquired OMT, Inc. in 2016, which added an antibody-generating platform, OmniAb, to its technology portfolio. The acquisition of Crystal Bioscience in 2017 added a highly-complementary antibody technology to Ligand’s OmniAb platform. Ligand anticipates its technology platform to generate more than $3.5 billion in potential contract payments.

Zacks Rank

Ligand currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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