Ligand Pharmaceuticals Incorporated Price & Performance (LGND)

Or on the SEC's website at sec.gov. With that, I will now turn the call over to Todd.

Thank you, Melanie. Good morning, everyone, and thank you for joining our call. I'm delighted to report an outstanding quarter and full year results for Ligand. 2024 was a strong year of execution and performance for Ligand. We grew our top line, expanded our portfolio of commercial stage royalty assets an added to our pipeline of development stage royalty opportunities. Into a profitable, economically diversified Ligand infrastructure light organization. We remain focused on identifying and investing in highly differentiated royalty assets and operating our royalty generating platform technologies, that we believe will generate significant long term shareholder value. Our portfolio of major commercial programs delivers predictable and growing royalty revenue and is the foundation of our strong financial performance Slide three summarizes our financial and portfolio achievements in 2024. [indiscernible] over the same period in 2023. Which helped generate over $100,000,000 of operating cash flow in 2024. Ligand has over $250,000,000 of cash and investments, no debt and access to a $125,000,000 revolving credit facility which we can upsize to $175,000,000 We believe we are in a strong financial position to capitalize on our robust business development pipeline Lauren will provide more detail on our portfolio later on the call.

But I wanted to touch on a few of our key commercial stage assets. On our third quarter earnings call, we talked about two new commercial launches within our royalty portfolio during 2024. Verona Pharma's Otuver and Merck's CampaxiV. We are pleased to report that both products exceeded our product sales. Analysts estimate that both O2 Bear and KEPT Back Sieve have blockbuster sales potential and we believe these products will be meaningful contributors Another meaningful royalty contributor for us this quarter [indiscernible] which received full approval from the FDA in September. 40% in the fourth quarter and continue to exceed our expectations. Another exciting development this quarter Trevir provided following the Type C meeting held with the FDA for filsparin in focal segmental glomerulose or FSGS, It is a rare kidney disease that has a high risk of progression to kidney failure. There are currently no FDA approved therapies for FSGS. Travir announced its plans to file an sNDA in in FSGS by the end of the first quarter of twenty twenty five. Also in the portfolio, we are excited about our latest investment, Ligand led a $75,000,000 financing round with a $50,000,000 commitment to fund the Phase three study in Castle Creek's [indiscernible] DeFi is a Phase three gene modified autologous cell therapy for the treatment of rare orphan disease Dystrophic Epidermolysis Belocell, Paul will provide an update on the new investment in Castle Creek.

Turning to Slide four, over the last two years, we have restructured our business model into an operationally light, strategy focused on delivering profitable and compounding growth and we are now seeing the fruits of those efforts. We have grown our royalty revenue by nearly 50% and have reduced our cash operating expenses by over 50%. Headcount is less than a third of what it was in 2022. This is a significant accomplishment More importantly, it sets Ligand up for a very bright future. Turning to Slide five, I would like to remind our listeners about Ligand's Ligand strategic differentiation. We are a biopharmaceutical company that delivers profitable and compounding growth. Our diversified and growing portfolio of royalty assets generate consistent and predictable revenues. We acquire or generate royalty interest in late stage development assets and commercial assets where there is superior risk reward. Our highly qualified team brings decades of investing, clinical, operational and regulatory experience as well as a strong origination network throughout the industry, We continue to execute on our strategy of acquiring high growth, low OpEx assets plan we put in place nearly two years ago. There is a sizable demand and low supply for royalty capital in the life sciences industry, which allows us to invest selectively as we offer a differentiated capital [indiscernible] Our team works thoroughly to source diligence and negotiate investments with customized structures to create proprietary opportunities.

Our 2024 acquisition of OPIRON is a prime example of this approach. We can replicate this playbook while maintaining a low level of operating expenses. Royalty capital is a very small percentage of the total capital invested in life sciences today. We believe our model is differentiated scalable Ligand offers immense growth potential for years to come. Turning to Slide six, I would like to discuss our five year royalty receipts outlook. As we shared during our most recent Analyst and Investor Day, we believe our long term loyalty revenue growth is on pace to meet or exceed the 20% compound annual growth rate we initially outlined in December of twenty twenty three. The existing portfolio alone supports a royalty receipts CAGR of 18%. Which is above the previous estimate of 16%. Future investments should add at least 4% to this with potential upside on top of the current outlook. Our business development team is constantly developing a attractive new investment opportunities and we anticipate another productive year on the investment front. In conclusion, we are proud of all that we have accomplished since we began executing on our new strategy in the fourth quarter of twenty twenty We are highly optimistic about our future prospects I'll now turn it over to Paul Hadden, for an update on our recently announced royalty financing transaction with Castle Creek.

Thank you, Todd. In As we discussed at Investor Day last December, 2024 was a year of significant progress at YGANT. We remain excited by the opportunity to partner with companies both public and private, to provide creative non dilutive capital solutions as well as working with inventors In early January, we closed our final O2Verint Inventor royalty acquisition bringing our total royalty on Verona's O2 Verint to 3%. 2025 is shaping up to be an active year for us. Two days ago, Ligand announced the closing of a new $50,000,000 royalty investment with Capital Creek Biosciences a private company. We investment will go to fund a pivotal Phase III clinical trial for Castle Creek's lead program, Defy, an injectable gene modified autologous cell therapy that is Phase three ready. Defy, which has FDA orphan drug designation, targets a disease called dystrophic epidermolysis, [indiscernible] [indiscernible] DEB for short. DEB is a devastating and debilitating rare inherited skin disease. [indiscernible] DB is caused by mutations in the COL7A1 gene, leading to extreme skin fragility blistering from even minor friction. Majority of patients are at significant risk for a deadly form of skin cancer as such have an estimated lifespan of only thirty years.

For our investment, Ligand will receive a mid single digit royalty on global sales should DeFi receive regulatory approval. In May 2023, the DB landscape changed with the approval of Crystal Biotech's [indiscernible] A topical HSV vector based gene therapy administered weekly by healthcare providers in patients' homes. VIGUVIX approval marked a major breakthrough for DEV patients. 2024 U. S. Sales were nearly $300,000,000 and peak global sales are projected over 1,000,000,000 While VIGUMAK has delivered a much needed treatment option, it does have its limitations including restrictions on treatable body surface area, the need for weekly topical dosing. This means the DEB community is still eager for additional innovative solutions. The DeFi product profile is expected to be meaningful meaningfully differentiated and also complementary. Ligand's investment team sourced was joined by an additional $25,000,000 co investment by Castle Creek insiders and investors the toll financing to $75,000,000 for the combined syndicate. As highlighted in our press release, $75,000,000 syndicate is eligible for a high single digit royalty Ligand represents two thirds of the certificate Ligand as such, it eligible for a mid single digit royalty. This strategic collaboration with Castle Creek is a testament to our commitment to invest in potential breakthrough derisk therapies.

By partnering on DeFi's development, we now expand our diversified portfolio of potential revenue generating assets but also make a significant stride towards transforming lives of patients suffering from DUB. MYEGAN is excited to welcome this promising late stage clinical royalty investment to our Ligand's investment pipeline remains strong. As we continue to evaluate multiple proprietary opportunities like DeFi, that cannot be accessed through the public markets. With that, I'll turn the call over to Tavo. Thank you, Paul. First, I want to emphasize that I will be discussing non GAAP results which exclude certain items such as stock based compensation, amortization of intangible assets, amortization or impairment of financial assets, losses from derivative assets and expenses incurred to incubate the Peltos business amongst others. I encourage you to review the GAAP reconciliation of these non GAAP measures which can be found in today's release available on our website. I believe these adjusted measures provide valuable insight into our core operating performance both historically and moving forward. In 2024, we delivered strong financial results surpassing the high end of our guidance range with total revenue of $167,000,000 and core adjusted EBITDA of 100 and EPS of $5.74 We ended the year with $256,000,000 in cash and investments and when factoring in our credit facility that's expandable up to hundred and $75,000,000 we have more than $400,000,000 in deployable capital.

Notably, our continued growth in royalty revenue reinforces our confidence in meeting or exceeding the long term outlook we shared at our December 2024 Investor Day. Slide 11 provides a more detailed breakdown of our financial results for both the fourth quarter and the full year. Starting with our full year performance, total 2024 revenue grew 27% to $167,100,000 from 131,300,000.0 in 2023. Royalties increased 28 percent $108,800,000 from $85,000,000 in 2023. Primarily driven by Fulspari and CARZYVA, which we acquired through the recent Apeiron acquisition in July of twenty twenty four. Career ended 2024 on a strong note with total filsparri sales of $132,000,000 generating approximately $12,000,000 in royalty proceeds for Ligand Ligand.

We expect filspari to be a key driver of royalty revenue growth and anticipate that twenty twenty five royalties from filsparri will approximately double compared to 2024 levels. Other key contributors to our 2024 revenue include the Kapital business, which generated $30,900,000 in material sales up from $28,400,000 in 2023. And contract revenue totaled $27,500,000 in 2024, primarily driven by milestones earned upon the approval and commercial launch of Varonis OTUVAIR. In 2023, contract revenue was 18,000,000 largely from the approval of TAVIRUS filspari.

Total R and D and G and A operating expenses increased 29% in 2024 due primarily to higher non cash stock based compensation expenses as a result of executive departures as well as an increase in cost incurred incubate the Peltos business.

Combined G and A and R and D expenses were $100,100,000 for the full year and $30,000,000 for the fourth quarter of twenty twenty four versus seventy seven point three We expect that cost to incubate the Peltos business to seize in 2025 upon the execution of a Peltos strategic transaction. GAAP net loss in 2024 was $4,000,000 dollars or $0.22 per share versus GAAP net income of $53,800,000 or $3.03 per diluted share in 2023. The decline in GAAP net income is driven by non cash items including a financial royalty asset impairment, value adjustments to certain partner programs and losses from our equity method investment in Primrose Bio. Adjusted net income for 2024 was $156,000,000 or $8.25 per diluted share compared with $107,400,000 or $6.09 per diluted share in 2023.

To highlight our core earnings, we exclude gains from sales of Viking Therapeutics Ligand, which totaled $47,600,000 in 2024 and $35,700,000 in 2023 net of tax. Excluding these gains, core adjusted net income was 108,000,000 or $5.74 per diluted share in 2024 versus $71,700,000 or $4.06 per diluted share in 2023. Now focusing on the quarter, total revenue for Q4 twenty twenty four increased 52 percent 42,800,000.0 primarily driven by a 55% increase in royalties to $34,800,000 up from $22,500,000 in the prior year quarter. The key drivers of royalty growth were FILFRI and CARZYBA. Total operating expenses increased compared to the prior year's quarter due to higher headcount related costs [indiscernible] stock based compensation and continued investment in the Peltos business.

GAAP net loss for Q4 twenty twenty was $31,100,000 or dollars or $1.64 per share compared to GAAP net income of $18,200,000 or $1.03 per diluted share in Q4 twenty twenty three. This decline was largely due to volatility in the price of Viking Therapeutic stock. As a reminder, we own 1,000,000 shares of Viking stock Core adjusted net income for Q4 'twenty four was $25,200,000 or $1.27 per share compared to $18,600,000 or $1.05 per share in Q4 Moving on to the next slide. And turning to guidance, we are reaffirming our 2025 financial outlook introduced at our Investor Day in December. We expect royalty revenue to be between $135,000,000 to $140,000,000 Captisol sales to range from $35,000,000 to $40,000,000 and contract revenue between $10,000,000 and $20,000,000 These components result in total revenue guidance of $180,000,000 to $200,000,000 an adjusted earnings per diluted share forecast of $6 to $6.25 Additionally, we reiterate our long term outlook projecting royalty receipts at a compound annual growth rate of 22% or greater from 2024 through 2029. Finally, turning to our balance sheet. Of 12/31/2024, we had $256,000,000 in cash and short term investments which includes $40,000,000 in Viking common stock. We believe that our existing cash combined with ongoing cash flow generation In closing, I'd like to direct listeners to our fourth quarter earnings press release available on our website for a reconciliation of our adjusted non GAAP financial results to the GAAP results discussed today.

I'll now turn the call over to Lauren for a portfolio update. Thank you, Tabo. I'm pleased to provide some important updates on Ligand's portfolio. 2024 was a year of significant achievement across our partnered programs with the approval of four products, Varonis O2Veir, Merck's CapEx and full FDA approval of TAVIRUS FILSparri. In addition, we added RECORDADI's CARCEBA to our commercial portfolio through the acquisition of OPIRON Biologics. Brings us to 12 major commercial revenue drivers with I will review updates on our major commercial partnered products, followed by key pipeline updates.

First, on the commercial portfolio, CARCEPA demonstrated strong growth in 2024. Recordati reported that sales its oncology franchise, which comprises CARCEVA and one other main product, were €227,000,000 in 2024, an increase of 13% as compared to 2023. As a result, Recordotti has increased its peak sales guidance for the franchise by €50,000,000 an increase of 20%. Our partner, Recordati, has a broad international foot [indiscernible] seeking U. S. Approval for CARCEVA. Following an encouraging meeting with FDA in 2024, Recordati plans its next engagement with FDA in mid-twenty twenty five details surrounding a potential BLA filing, for CARCEVA in The U. S. Ligand's royalty rights extend globally and would include sales in The U. S. If approved. In addition, at the JPMorgan conference, Recordati shared plans to work to and an important milestone for patients and their families. Next, Filspari continues to show tremendous progress in treating rare progressive kidney diseases. In September, Filsbary received full FDA approval and a label expansion which is estimated to expand the total addressable population from 30 to 50,000 patients to over 70,000 patients. Our partner, Trevier Therapeutics, reported Q4 twenty twenty four Filspari sales of $50,000,000 a remarkable 40% increase as compared to Q3 twenty twenty four.

This robust performance demonstrates that Filsparia is becoming well established as a Filspari will be a significant driver of revenue growth for Ligand in the coming years contributing meaningfully to our financial performance. Analyst consensus for peak filtration sales is estimated at $1,000,000,000 in iGAN alone which if achieved would translate to $90,000,000 in annual royalty revenue to iGand.

Moving on, the June approval of O2Vir marks the first inhaled COPD treatment with a novel mechanism of action approved in over two decades. This important achievement also delivered a milestone payment of $5,800,000 to Ligand Ligand. In its short time on the market, O2Ver has demonstrated impressive commercial success. This underscores the significant unmet need for novel therapeutics Ligand COPD, as well as the value Ocevera is delivering to patients. In Q4, sales of OTIVRA were $36,000,000 far surpassing consensus estimates. Our partner, Verona Pharma, reports that pulmonologists are prescribing OTIvera to a broad range of patient types, highlighting its expansive real world utilization. Additionally, Varona reports that to date over eighty percent of treated patients have a co pay of $10 or less facilitating extremely strong market access. The maintenance COPD market is enormous and Varona estimates that every one percentage would translate into over $1,000,000,000 in sales. Consensus estimates for peak O2Bacteria sales are in the range of $2,000,000,000 which would result in annual royalty of $60,000,000 payable to Ligand.

Early prescription trends and patient experience has been overwhelmingly we are excited about what 2025 has in store. Next, Merck's Cataxis. Cataxis achieved nearly $100,000,000 in just two quarters in 2024 Ligand is off to a very strong early launch trajectory. Capaxxie has a compelling competitive value proposition Because of this, Merck is optimistic about CapExave's potential and expect it to gain majority market share in the adult setting. We expect strong performance from CAPAXAVE in 2025, the first full year of launch for this innovative vaccine. Our fourth approval of 2024 was ZILSUVME, a topical treatment for meloscom contagiosum. Ligand gained rights to Zaluzumi through its special situations investment with Novan in 2023, and achieved FDA approval of ZILSUVME in 2024. Yigand then launched PELSO Therapeutics, a wholly owned subsidiary to prepare for launch. Velsuvnia is the first and only at home treatment for meluscom. A highly contagious viral skin disease. Commercial launch is expected by mid year and Ligand is in the final stages of launch the asset. Next, I'd like to focus on key developments in our pipeline. Building upon filsparate success in IgA nephropathy, Travir is planning to submit an sNDA for Filspari for the treatment of FSGS another serious rare kidney disease by the end of Q1.

FSGS is a leading cause of kidney failure Ligand there are no approved medicines for patients living with this progressive disease. Earlier this month, Travir shared that the company held an encouraging Type C meeting with FDA to align on the content of a potential submission in FSGS integrating Silspari's Phase Ligand Phase III data as well as feedback from the Paracel working group. If the sNDA is accepted and Silsparia is granted priority review, this critically important medication could become available to to patients by the end of this year marking what could be the first FDA approved treatment in FSGS. Travir has guided this good commercial opportunity in FSGS is at least as large as in Ligand an approval would mark an important accomplishment in our commercial portfolio. In terms of additional pipeline updates, Agenas presented compelling data in several colorectal cancer treatment settings at the recent ASCO GI conference Their efforts to secure a development and commercial partner remain ongoing. Palbella recently initiated clinical studies of keytarin rapamycin in two serious rare dermatological conditions Ligand: First, the company started dosing patients in the Phase three Selva trial in microsiss lymphatic malformation, Additionally, last month, Talvella began dosing patients in the Phase two TOYVA trial in cutaneous venous malformation.

We look forward to the results of these studies in early twenty twenty six. And finally, last month, Takeda announced full discontinuation of the ceticlastat program. If relicensed, Lydan's royalty economics would remain intact. In closing, the success we achieved in our [indiscernible] and generate long term predictable revenue streams for Ligand. With that, I will turn the call back over to Todd for closing remarks. Thank you, Lauren.

To sum up, we are very pleased with our 2024 financial results as well as the progress we've made over the last year in improving our investment capabilities and growing our asset portfolio. Our diversified portfolio including our major commercial royalty generating programs and the late stage pipeline form the foundation of our growing success. On its own, the commercial portfolio should drive growth in the mid teens through the early 2030s. When you add our development stage portfolio including but not limited to Palvallo's Cutorn MLM asset Travir's FSGS sNDA submission, and our recent investment in DeFi we continue to expect EPS growth in excess of 20%. Through investing, will continue to add to our commercial and late stage clinical assets as this portfolio provides us with substantial cash flow to reinvest in new high value enhancing royalty opportunities. We are well positioned to execute against our goals in 2025 and deliver attractive growth in shareholder returns over the long term. Thank you, everyone, for joining us on today's earnings call We will now pass it back to the operator and open it up for questions.

First question comes from the line of Matt Hewitt from Craig Hallum. Your line is open.

Good morning. Congratulations on the strong year and looking forward to another strong year in 2025. Maybe first up, this recent acquisition or recent investment into Castle Creek, If I'm not mistaken, that might be your first move into cell and gene therapies Can you confirm if that was the case? And number two, are you looking at others? How does the risk profile change for that type of a program versus maybe a large or small molecule? Any color on that, please. Yes. So great question. This is Paul Hatton. I think you are correct that is our first cell and gene therapy.

We're excited about the program. It's a very focused program. It's derisked in a sense that the targets going after is already established with the approved Crystal Biotech product.

We're seeing cell and gene therapy, but we're not actively pursuing that as a particular sector, but we will be opportunistic where we find good risk reward opportunities like the Castle Creek investment.

That's great. And then maybe a question on Captisol in the maybe two parts, but the SQ Innovations, Lasix, is that with that launch potentially coming later this year, Is that a big user of Captisol? I'm trying to think of magnitude what that could mean for your Captisol sales. Obviously, there was a nice step up with your $25,000,000 guidance for that. Segment to begin with on the Gilead news, but would this create another potential step up later this year into fiscal twenty six? [indiscernible] Hey, Matt. Tava here. Yes. So first of all, that we're looking forward to that eventual approval later in 2025. And just as a reminder to our audience, we we are doing relatively modest milestones and royalties on that product. But then again to your question, will be selling material capitalized product to S2 innovation. But it's not a it's not a it's going to be one of the major contributors to the overall commercial cycle there. But it's it'll be I would say more in the minor contributor.

Got it. All right. Thank you very much. Your next question comes from the line of Joe Pantginis from H. C. Wainwright.

Line is open.

Everybody, good morning. Thanks for taking the question. So very nice with the DeFi deal. And I'm just curious, as you're looking forward with regard to all the kinds of creative deals that you're looking at, how does this deal signal your desire and ability to do even more syndicated deals?

Yes. So we love syndicate deals when necessary. That's often driven, Joe, by our discipline around size. There are certain size limitations. That we want to observe so that we can create a diversified risk diversified portfolio. And so opportunistic we will syndicate these deals. There are a number of other folks that are interested in them. But as you know, our typical deal size, especially on development stage assets, is $20,000,000 to $50,000,000 Ligand we're selecting things that have significant evidence of safety and efficacy as was the case with DeFi. And that is kind of the major risk parameter that we observe when we're analyzing these assets. And then on top of that, we kind of limit our ourselves at $50,000,000 on development stage products. That number will increase over time as size of our portfolio increases on a proportional basis.

No, that's helpful. Thank you. And then I guess two financial related questions. Can you discuss any potential with your growing cash balance of thoughtful share buybacks that I know could potentially be available? And then maybe Tavo, can you just discuss the asset impairment charge? Thanks.

Joe, we continue to believe that the best the best use of our capital is to continue look for high value royalty assets. At some we do have a stock buyback program in place. We don't we'll be opportunistic there, but we don't have any any plans to put that in real plan to use the capital to buy back stock today. But [indiscernible] the paticlostat asset that's with Takeda, they discontinued that. And so we did have we did have an asset balance carrying value on the balance sheet that we wrote off in Q4.

Great.

Your next question comes from the line of Doug Meacham from RBC Capital Markets. Your line is open.

Yes. Thank you. The first question just has to do with the DeFi deal.

I know that you expect this to be used in combination therapy, but perhaps you can walk us through how you see it being used that way Ligand that we do have that Cristal product on the market today.

Hi, Doug. This is Paul again. Great question. First off, I think there's a couple of important points to note. I think the DeFi product is an injectable product. So you can imagine that from a patient perspective, you have these breaks in the skin in different places. And one could envision where an injectable product would be much more advantageous for delivery versus a topical product. That's one piece. The other piece is obviously potential frequency of dosing The Crystal product is weekly. Expect the D5 product to be much less than that. And then additionally, the surface area that you're allowed to to treat in any given treatment course, could also be different. So that those coupled together, you can see how these products could be complementary And so from that perspective, we envision that it would be a welcome addition if it's approved.

Okay, excellent. Second question has just have to do with the potential deals that you're working on. And maybe Todd, you could speak to what proportion of the deals would be synthetic versus actual royalties that you're contemplating on buying or even companies like you did last year. And then finally, maybe you could expand on potential strategic transaction as well in any way that you can. I'll leave it there. Thank you.

Sure. Yes. So we don't discriminate or favor royalty monetizations or also known as royalty acquisitions project finance or special situations. We do observe quite often in special situations such as our our PELFO setup that we've been working on this year, that the potential returns can be very significant and they need to be significant because they do require more bandwidth from the team. And so that is just an observation that we make. When we're stepping into these things. So we need the technologies that we do this with or the products that we do special situations with to be potentially very highly valuable. And in that case, just for example, as you know, we paid just a little bit over $12,000,000 to buy those assets out of bankruptcy. We already have an approved product. ZILSUVME is not launched yet, of course, because there's a number of things you have to do to set up for a launch when you're buying something out of a bankruptcy. But it's very promising Ligand on top of that, there's an underlying Nitrocell platform that is potentially usable in many, many different areas. The potential returns on that are significant. But you've got to work that long term.

So that's really the key observation. Between royalty monetizations and project finance or project finance being synthetic royalties that you create, We're really mostly focused on the S diligence and how promising the asset is. And the key criteria around that in addition to strong evidence of safety and efficacy is high unmet clinical need. That's your ultimate and best protection against payers and payer pressure And it's the factor that we think is the most important development stage S, You don't have a label yet. So you really kind of have to forecast the probability of success in that arena by the value that you're adding to patients and the clinical treatment. So that's how we view it. So far, I would say, it's been around forty, forty and twenty if I had to divide it up. 40% royalty monetizations, 40% project finance, and about 20% special situations.

Great. Thank you. Your next question comes from the line of Trevor O'Rourke from Oppenheimer.

Line is open.

Hey, good morning, everybody. My congrats on the great quarter as well. Just looking for some additional color around DeFi. I mean, can you guys tell us a little bit about how large the population is maybe how readily identifiable the condition is And given that it's a cell therapy area, are you expecting any limitations to scale? Yes. So, Trevor, Paul again. Great questions. Estimates in The U. S. Are a few thousand patients. If you go globally, it's going to be a multiple of that. In terms of readily identifiable, I think if you look up this condition, DEV on the worldwide web, you'll see the picture of these patients.

And you'll understand how devastating and debilitating this condition is. Mean, literally these patients are missing a gene that codes for the collagen that connects the skin tissue. So you really have what looks like second and third degree burns on these patients.

So they are readily identifiable, especially in the severe populations. And then in terms of scale, all I can tell you is because we were dealing directly with Castle Creek, we went very deep from a diligence perspective. Which included the CMC. We got very comfortable with their ability to supply the product.

Obviously, that's one of the benefits of dealing synthetic royalties. You have the ability to go under confidentiality do site visits, with the company directly to see everything that they know and ultimately get comfortable around an investment from the M and A level due diligence. So hopefully that answers your questions. But if I miss anything, just please let me know. Yes, no, that's helpful. Ligand can you also give a sense of how much revenue that Drewvac is generating Ligand any potential population differences between the two of those?

Yes. So I think, VITUVIQ last year clocked in at just shy of $300,000,000 Ligand obviously that's about eighteen months into a launch, so on a really good ramp rate. And from a more global perspective, that should continue to grow As I mentioned on the earlier question, there is a complementary factor in terms of what DeFi could do.

And so from that perspective, we're pretty bullish about the opportunity overall.

Okay, great. Thanks. Thanks for taking questions. Your next question comes from the line of Bhushan Prasad from Barclays.

Line is open. Good morning. This is Xiao on for Balaji. Thanks for taking our questions.

So just a quick one on our Throughware.

Seems like the uptake has been nicely in the first two product launch even without the J code.

And the equity market was reacting positively towards the initial traction. So can you discuss some of your expectations you have around inside Feng Shui? Growth and your view of the overall maintenance therapy for COPD Ligand what's your view of the impact of the overall COPD market in the times of the biologic interest such as Dupixent.

Thank you so much.

Yes. So this is Lauren. Hey, We're really pleased to see the very early success of O2Bare. The launch trajectory looks to be very strong. We haven't even yet seen the impact from the permanent J code, which became effective to your point. January one. So that should further catalyze a strong first quarter of sales in our view. As I shared during my prepared remarks, the COPD market is quite large. There are 8,600,000 maintenance treated patients according to Varona, half of whom remain symptomatic despite treatment. And so there's a very large addressable pie [indiscernible] [indiscernible] They have shared that about half of the treated population at this point has been on triple therapy, so Llama Llama ICS. So if you look kind of at the total addressable population, it is much larger than the eligible population for Dupixent Ligand they probably kind of target a different type of patient. So we continue to be very optimistic about the launch. Varon is doing a fantastic job and we'll look forward to continued progress later this year.

Great. Thank you so much.

Thank you.

Your next Your next question comes from the line of Larry Sullow from CJS Securities.

Great. Thanks. Good morning. Congrats on a exciting year and lots of business development and things moving forward.

I guess question for TAVO, first question would just be I know you on the guidance you provided at the Analyst Day, you spoke about just some increased investment in that cash expenses into business development team in 2025. Could you just give us a little more color on how 2024 kind of struck out on the expense Ligand and what you're looking for incorporated into your outlook in '20 Yes.

No, we like we said previously at Investor Day, 2024 was a year of investment largely in building up the investment business development team Ligand standing up our Boston office there.

We closed out the year with approximately $38,000,000 in cash and going into 2025, we're growing that at about 4% and we expect that to be kind of the steady state going forward what we've kind of signaled to investors roughly at the rate of inflation.

Okay. It's like a $40,000,000 plus or minus number in '25?

That's correct.

That's correct.

And it sounds like the file opportunities continues to expand, Todd. It doesn't feel like you I know you don't time per year. Of course not, it's more opportunistic, but it doesn't feel like there's any hesitancy there like we could sound like we could have another big year after 2024.

Larry, I think that's right. I mean, the number of opportunities that are out there far exceed what we can execute on. So kind of the supply Ligand relationship, if you will, between capital and the types of things we're looking for is very favorable. The key issue therefore is what we spend our time Ligand we've really never been busier, so we really have to triage to what we think are the highest clinical value products Ligand that's really what we're focused on seeking out.

Got you. And if I just last follow-up, just on Xelsuzimab and pelvis. So it sounds like you guys are doing a lot of strategic planning and stuff ahead of actually announcing a partner. So it feels like you'll be able to hit the ground running at some point once that partner comes in. I'm just trying to figure out this partner, is it just going to be an investment partner or is it someone who's going to be the marketer just trying to how that shakes out and the launch plans?

Thanks.

Yes. I mean, I can only go into a certain level of detail right now, Larry. However, yes, we have as you know, we've put kind of the brains of a commercial operation in place with the head of marketing, potential CEO, etcetera. They've been making significant launch preparations so that we will be ready to go. There was a significant amount to do in terms of things like running validation batches and preparing the manufacturing, which they've been executing on And so all of that is on schedule. It is still our intent to launch the product in the first half of the year. There are some risks there. These things are not easy Ligand you want to do them right, not fast. But we have we think the bones of of a deal in sight here. And the key is that we finance this. We're not going to forward integrate into and become a sales and marketing company. We need partners to do that. That's why we created Peltos Ligand we need to get Peltos financed through a strategic transaction Ligand that's what we're focused on right now.

Got it. Great.

Thanks, Todd.

Appreciate that call. You bet. Your next question comes from the line of John Vadimorsten from ZAP. Your line is open.

Thank Ligand good morning.

Regarding, Defiant and Castle Creek, does the opportunity here assume similar pricing and penetration as Vigeevecta's?

Yes, John, great question. This is Paul. I think it's fair to use that as an analog Ligand that it's out there. Obviously, as per my earlier comments, there is some opportunity to to be complementary in terms of being used in the same patient. So a penetration perspective, there can be some overlap, but we feel comfortable with the analogs that are out there and also with the opportunity that we invested in. So it's a fair assumption.

Okay. And what's the expected financial impact of that termination letter to Kasey on Ligand? Hey, John. I'll take that one.

Tahoe here. So it's a two year termination term. We don't expect it to have a material impact for 2025 The generic implications to the China market do not change. That's been in place. We've talked about that in the past. But Acrotech, who's the who we have the direct license agreement with, our understanding is that they intend to have a marketing partner in China Ligand are licensed [indiscernible] secured answer is no short term impact in 2025.

But longer term we expect to still benefit from the China market be our direct licensing arrangement with Acrotech.

Okay.

And on your opportunity set, I seem to remember at one of the events that 200 opportunities were mentioned, I guess, the kind of they're waiting to be acted upon.

How has that changed in terms of new additions and then ones that you said will pass out? I guess I'm wondering about kind of the flow rate there Ligand has it increased since that last update? I think that was possibly at the Investor Day when you had Ligand that number. Go ahead, Paul.

Yes, it's a great question, John. I would say that we've seen an uptick in our pipeline. There is some week to week and month to month churn To Todd's earlier point, we're constantly trying to assess where we want to apply our team's time and resources. But his comment is spot on earlier about how we've never been busier. So we're excited about the opportunity set.

Obviously, we have to maintain a very disciplined approach and be judicious about where we spend our time. But we're excited about what we're seeing. And I think this this call is evidence of being off to a good start, if you will. So we're excited.

Okay. Thank you.

As there are no further questions, I would like to thank our speakers for today's presentation. Thank you all for joining us. This now concludes today's conference.

You may now disconnect.