Ligand Pharmaceuticals Incorporated announces that its acquisition of Vernalis plc has successfully closed and Vernalis will now operate as a subsidiary of Ligand. Vernalis is a structure-based drug discovery biotechnology company with a broad pipeline of partnered programs and ongoing collaborations. In conjunction with this event, Ligand announced that its portfolio now contains more than 178 shots on goal.
‘We welcome the Vernalis team into the Ligand family and are pleased to add its expertise in structure-based drug discovery to our discovery technology platforms that we offer partners. The Vernalis team has proven its ability to generate novel drug candidates for its partners, including the leading partnerships with Verona and Corvus for COPD and oncology,’ said John Higgins, Chief Executive Officer of Ligand. ‘As we advance the Ligand business model, we will continue to evaluate a variety of business, royalty and technology acquisitions, all with the objective of adding shots on goal to our portfolio and creating potential for long-term, diversified and sustainable cash flows for our investors.’
Under the terms of the acquisition, Ligand paid Vernalis shareholders approximately $42.3 million, offset by approximately $32 million of net cash on hand at Vernalis, after deal costs.
As previously announced, the acquisition of Vernalis provides Ligand with the following:
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A portfolio of more than 8 fully-funded partnered programs, or shots on goal, including:
RPL554, a Phase 2, novel treatment for COPD, which is partnered with Verona Pharma;
CPI-444, a Phase 1, adenosine A2A receptor antagonist for treatment of solid tumors, which is partnered with Corvus Pharmaceuticals.
A 70-person R&D team based in Cambridge, England focused on fragment- and structure-based drug discovery and partnering, with an active portfolio of collaboration agreements generating over $8 million per year of service revenue matched by a comparable level of costs, and partnerships that have the potential to generate additional near-term shots on goal. Ongoing collaboration partners include Servier, Daiichi Sankyo, Asahi Kasei and others.
An established compound library and additional early-stage, unpartnered programs in oncology, CNS and other areas that will provide business development out-licensing and corporate formation opportunities.
England-based operations that provide a platform to more efficiently pursue investment and acquisition opportunities in Europe and the United Kingdom.
Ligand 2018 Financial Outlook
As previously announced, revenue and operating expense impact from Vernalis in 2018 is currently expected to be small and mostly offset each other. Beyond 2018, research business revenue is expected to approximate expenses with longer-term milestones and royalties being accretive to future Ligand earnings.
Advisors
MTS Securities, LLC and finnCap Ltd. served as financial advisors and Latham Watkins LLP served as legal advisor to Ligand in this transaction.
Date: October 15, 2018
Source: Public.
