Home Most Popular Investing Ligand (LGND) to Spin Out Pelican Subsidiary, Updates ’23 View

Ligand (LGND) to Spin Out Pelican Subsidiary, Updates ’23 View

Ligand (LGND) to Spin Out Pelican Subsidiary, Updates ’23 View

Ligand Pharmaceuticals, a leading biopharmaceutical company, has announced a strategic move in which its subsidiary Pelican Technology Holdings, Inc. will merge with Primordial Genetics to establish a new independent company focused on synthetic biology. The newly merged entity will be named ‘Primrose Bio’.

Under the terms of the agreement, Ligand will retain 49.9% ownership in the new company and will continue to receive all existing commercial royalties associated with Pelican Expression technology. Ligand has also agreed to contribute $15 million to Primrose Bio as part of a purchase and sale agreement, which will entitle Ligand to certain economic rights and interests in two contracts and potential future revenues of PeliCRM197, a carrier protein used in conjugate vaccines.

This strategic transaction is expected to accelerate Ligand’s profitability and provide new opportunities for royalty revenues while reducing infrastructure costs. In recent months, Ligand’s shares have faced a small decline compared to the overall industry performance.

In addition to the merger, Ligand has revised its financial guidance for 2023. The company now anticipates total revenue in the range of $124-$126 million, with royalty revenue projected to be between $82-$84 million. Ligand expects Captisol sales to generate $25 million and contract revenue to reach $17 million. The adjusted diluted EPS is now forecasted to be in the range of $5.10-$5.25.

It is worth noting that Ligand acquired the Pelican technology through its acquisition of Pfenex in 2020. Since then, Ligand has successfully developed and commercialized several medicines utilizing the Pelican technology, including Jazz Pharmaceuticals’ Rylaze and Merck’s Vaxneuvance and V116 vaccines.

Jazz Pharmaceuticals’ Rylaze is approved by the FDA to treat acute lymphoblastic leukemia (ALL) and lymphoblastic lymphoma (LBL) in patients aged one month and older. Sales of Rylaze have been steadily increasing due to high demand, and Jazz Pharmaceuticals recently received a positive recommendation from the EMA for its regulatory filing in ALL and LBL indications.

Merck’s Vaxneuvance is a pneumococcal conjugate vaccine approved for individuals six weeks and older in the United States and Europe. Merck has reported positive results from late-stage studies evaluating V116, an investigational 21-valent pneumococcal conjugate vaccine.

Ligand currently holds a Zacks Rank #3 (Hold). To stay updated on the latest stock recommendations and trends, feel free to check out Zacks’ list of today’s top-ranked stocks.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Nasdaq, Inc.