Ligand Pharmaceuticals Incorporated
Q2 2017 Earnings Call Transcript

Published: 8 Aug 2017

[Todd Pettingill:]

Welcome to Ligand’s second quarter of 2017 financial results and business update conference call. Speaking today for Ligand are John Higgins, CEO, Matt Foehr, President and COO and Matt Korenberg, CFO. As a reminder, today’s call will contain forward-looking statements within the meaning of Federal Securities Laws. These may include but are not limited to statements regarding intent, belief or current expectations of the company and its management regarding its internal and partnered programs. These statements involve risks and uncertainties and actual events or results may differ materially from the projections described in today’s press release and this conference call. Additional information concerning risk factors and other matters concerning Ligand can be found in Ligand’s earnings press release and public periodic filings with the Securities and Exchange Commission which are available at web www.sec.gov. The information on this conference call is related to projections or other forward-looking statements represents the company’s best judgment based on information available and reviewed by the company as of today, August 7, 2017 and do not necessarily represent the views of any other party. Ligand undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. At this time, I’ll turn the call over to John Higgins.

[John Higgins:]

Thank you, good afternoon and welcome to our call. The second quarter of 2017 was very strong operationally and financially. And we are enjoying good momentum in all elements of our business. Our partnership reported numerous positive developments recently, we entered into three new deals in the second quarter, and we are raising our financial outlook for full year revenue and earnings given the momentum we see from the business at this time. First, I want to comment on the revenue performance of our three main royalty assets Promacta, Kyprolis and EVOMELA. All three products had excellent sales in the second quarter. Novartis reported $210 million for second quarter revenue for Promacta, that is the largest dollar increase over the prior quarter ever for the product gapping up $35 million from the first quarter 2017 sales of $175. Now compared to one year ago, Promacta revenues were up $52 million over Q2, 2016. Novartis is doing an excellent job managing the global clinical and commercial progress and we are more confident than ever the product is on track to exceed $1 billion in annual sales in the future. In addition to strong sales performance, Novartis reported that Promacta was approved in Canada for the treatment of pediatric chronic ITT and Novartis now its publication of study conducted by National Institute of Health, demonstrating that 58% of patients with treatment, naïve, severe, aplastic anemia achieved complete response at six months when treated with the products. The data are published in the latest issue of New England Journal of Medicine. Another product we are in royalty is Amgen's Kyprolis which incorporates Captisol. Kyprolis continues to perform well commercially and Amgen posted the highest quarterly sales ever with the product as well as the largest dollar increase over the prior quarter. Amgen reported $211 million in Q2 Kyprolis sales up significantly over Q2, 2016 sales of $172 million. We also earned royalty on ONO sales for Kyprolis in Japan and ONO announced last week they've recorded approximately $10.8 million in Q2 sales for Kyprolis. So combined Kyprolis’ worldwide Q2 sales that we earned royalties on were approximately $222 million. About a month ago Amgen announced positive results from the final analysis of the phase 3 aspire trial with Kyprolis and following that, Amgen commented about that trial outcome on their earnings call saying that "in each case Kyprolis reduced the risk of death by 21% and improved survival by approximately 8 months, a very meaningful clinical result that reinforces the role for Kyprolis in driving deep and durable responses". And Amgen said the completed study has under scored their confidence in this molecule as the new standard of care for these patients. They went on to say they've already submitted the endeavor overall survival data to regulators for inclusion in the product labels and that they're preparing the aspired data for submission as well. Amgen also commented on their recent earnings call that their phase 3 study in combination with [indiscernible] in relapsed or refractory multiple myeloma begin enrolling patients in the second quarter. Another product we earn royalties from is EVOMELA, it's a significant royalty rate of 20% the highest rate of all of our royalty bearing products. Spectrum Pharmaceuticals is our partner for this drug and they announced Q2 sales last week of $10.1 million. The product has been on the market for about a year and this is the highest quarterly revenue ever. On their Q2 call last week Spectrum's executives commented that they estimate EVOMELA has an approximate 50% market share and that it is increasing its share despite growing competition in the market. Spectrum believes this shows that the market is recognizing the benefits to caregivers in patient. As for other revenue, this past quarter we posted a strong quarter for Captisol sales up over the preceding quarter and the same period last year due to the timing of the clinical and commercial orders and milestone and contract revenue also was substantial during Q2 driven in part by OmniAb relative revenue in a milestone for a new product approval last quarter. Now in regards to the new product approval, on June 19, our partners at Melinta Therapeutics announced approval of Baxdela resulting in a $1.5 million payment to Ligand. Baxdela uses our Captisol technology in it IV formulation and represents a new option for treatment of acute bacterial skin and skin structure infections also known ADFFFI including hospital treated skin infections. Approximately 3 million people are hospitalized each year in US alone with ADFFFI and they can present significant treatment challenges because of underlying medical conditions, which also makes optimal antibiotic selection difficult. Antibiotic resistance obviously continues to be a growing health concern globally driving a need for more tools to fight it, so we are pleased on many levels to see Baxdela approval. Subsequent to the approval our partners at Melinta announced completion of a $90 million financing to fund commercial activities as well as to fund Baxdela's expansion in the further indications. Finally a comment about our OmniAb antibody discovery technology, we've been delighted to see the pace with which OmniAb partners are progressing, which leave you not only as a testament to the value of the OmniAb technology and what it brings to those that license it from us but also as a sign of the commitment by our partners to the projects themselves and more broadly as a representation of the importance of antibodies to the industry overall in addressing some of the most important and urgent unmet medical needs in areas like cancer, inflammation and infectious diseases. With that I’ll turn the call over to Matt Foehr to provide more portfolio updates.

[Matt Foehr:]

Thanks John. I’ll start with a brief review of some recent developments with our partner programs and I will touch on licensing activities for our two primary technology platforms Captisol and OmniAb. I’ll also review the upcoming events for our Phase II Glucagon Receptor Antagonist or GRA program. Our partners at Eli Lilly recently highlighted Captisol enabled Prexasertib as a priority internal development program at Lilly. This a new program designation that Lilly has given to a small group of assets where they are now focusing what they describe as "the vast majority of their internal R&D dollars". By focusing on assets like Prexasertib Lilly has indicated that they are betting more aggressively on their portfolio assets that have what they call the highest foundational potential. As background, Prexasertib is a potent small molecule inhibitor of checkpoint kinase 1. CHK1 has emerged as an interesting target in cancers with D&A repair defects. Prexsertib is described as a first-in-class agent as Lilly has reported clinical responses in monotherapy settings in both platinum sensitive and platinum resistant ovarian cancer. In addition to monotherapy use in ovarian cancer Lilly indicates that they see possibilities for Prexasertib in other tumors as well and I note that clinicaltrials.gov currently lists eight actively recruiting clinical studies for Prexasertib in a variety of cancer settings. Prexasertib is an asset we previously highlighted in our partner pipeline, first as a next 12 assets back in 2015 and then again as a bay 6 asset earlier this year as part of the Captisol technology platform license agreement that we did with Lilly back in 2011. Lilly has also been recently highlighting the Captisol enabled merestinib program which is a multi-kinase inhibitor currently in a registrational phase 2 study in [indiscernible] cancer. It's also part of the platform Captisol license agreement with Lilly from 2011. Lilly recently indicated that its merestinib current registrational Phase 2 trial meets its primary end point, it would then be classified as a priority internal development program like Prexasertib. Phase Therapeutics announced last week that they recently completed enrollment in the Phase 3 status trial of Brexanolone. The status trial is the first ever global randomized double-blind placebo control trial in super refractory status epilepticus or SRSE. Phase announced last week that it continues to expect to report top line results from the status trial in the third quarter of 2017 following completion of all study follow up periods and data analysis. We look forward to these and other mid and late stage Captisol enabled clinical program read outs that are expected in the coming months. Turning now to our OmniAb technology platform. With multiple OmniAb derived antibodies now in the clinic in a number of other partners quickly approaching the clinic, we continue to be very pleased with the progress being made and with the reports we received from our partners about the high-quality antibodies that are discovered with our OmniAb technology. J&J Janssen recently highlighted and disclosed OmniAb derived J&J 6400-7957. It’s an anti-DCMA and CD3 biospecific antibody being developed by J&J from multiples myeloma. DCMA which stand for D-cell maturation antigen is a tumor necrosis factor super family member that’s highly expressed on the surface of myeloma cells. J&J 7957 binds BCMA on the plasma cell as well as CD3 on T-Cells and has shown potent activity in multiple myeloma models. The Phase 1 study begin recruiting patients in June and data is expected late next year according to postings on clinicaltrials.gov. Additionally, we're pleased that CStone, Gloria Pharmaceuticals, Hanall BioPharma and Activo all have antibody programs discovered with OmniAb that are in or are approaching the clinic or are being broadly highlighted by our partners with data at scientific conferences. Servicing our partners and alliances have an important part of what we do at Ligand. And our team also continues to innovate with the OmniAb technology as we recently launched additional versions of OmniRab, OmniMouse and OmniFlic with extended genetic diversity. These next generation animals allow our partners to interrogate an even broader antibody diversity to isolate the best therapeutic leads. Due to first six months of 2017, our vendors have fulfilled requests for nearly the same number of OmniAb animals to Ligand partners as they did in the full year of 2016. We see this as a clear indication of increased use by our partners, use that should continue to feed the pipeline of OmniAb related antibodies approaching or entering the clinic. We continue to create new fully funded shots on goal via our licensing efforts, driven largely by our Captisol and OmniAb technologies. We recently entered into new Captisol agreements with Amgen for AMG330 with [indiscernible] for an IV formulation of ganaxolone and with interventional analgesics for a currently undisclosed compound. We also entered into new OmniAb platform license agreements with Surface Oncology and [indiscernible] Biosciences. As part of those agreements, we're eligible to receive annual access payments, milestone payments and royalties on future sales of antibodies discovered using our platform. I also mentioned one other partner program Viking Therapeutics announced a few weeks ago, that they completed enrollment of a Phase 2 study of VK-5211 in patients recovering from hip fracture. VK-5211 is Viking's lead program for muscle and bone disorders and it's an orally available non-steroidal selective antigen receptor modulator or SARM that's designed to selectively stimulate muscle and bone formation with reduced activity in peripheral tissues such as skin and prostate. We look forward to the phase 2 data report from Viking in the fourth quarter of this year. And I'll conclude with a brief remark about our Glucagon Receptor Antagonist or GRA program also known as a LGD-6972. Our team remains on track to have top-line data from our Phase 2 trial of LGD-6972 in patients with Type 2 diabetes in September. Also, we will be presenting clinical data from an earlier crossover study comparing bioavailability of a Captisol formulation of LGD-6972 to an oral solution formulation at the European Association for the Study of Diabetes or EASD meeting September 11 through the 15 in Lisbon. And with that, I'll turn the call over to Matt Korenberg to discuss some financials.

[Matt Korenberg:]

Thanks, Matt. I'll start my remarks with some financial highlights from our earnings release issued earlier today. Total revenues for the second quarter of 2017 were $28 million which is up from $19.5 million a year ago. Royalty revenue increased 46% to $14.2 million from $9.8 million a year ago and this increase primarily reflects higher from acting Kyprolis royalties in the addition of the EVOMELA royalty. For both Promacta and Kyprolis the higher underlying revenue reached a more royalty derived from our higher royalty tiers earlier in the year. Captisol material sales for Q2 were $5.6 million versus $3.9 million last year and license the milestones for Q2 were $8.2 million versus $5.9 million last year. Our corporate gross margin was over 96% this quarter, which is in line with our guidance for gross margin to be in the mid-90s for year. For the balance of 2017 we expect material sales to represent a larger portion of the revenue mix and as a result we see corporate gross margin lower than the first of the year although still in line with our guidance. On the expense side, our cash R&D and G&A expenses were $6.7 million in this quarter. For GAAP, the combined R&D and G&A total was $11.4 million, for the balance of the year we expect these amounts to be relatives consistent with approximately $11 million in combined GAAP expense per quarter and little $6 million per quarter in combined cash expenses. This gets you to the full year cash expenses of $28 million to $30 million as we signaled at the start of the year. Turning to cash flow, our cash flow from operations for the quarter was $10.4 million and assuming our updated guidance for revenue we’re on track for a full year EBITDA to exceed $100 million for the first time in our company's history. Our cash flow and EBITDA are driven by our continued robust royalty milestone and Captisol revenue paired with our low cost operative structure. We also continue to pay less than 9% in cash taxes but for both GAAP and adjusted income purposes we show a fully tax net income. For the quarter, we reported adjusted net income of $14.9 million or $0.67 per diluted share. We had GAAP net income of $6.1 million or $0.26 per diluted share. And on the balance sheet we ended the quarter with just over $172 million of cash and investments. Now turning to guidance, we’re updating our total revenue guidance to be at least $133 million, broken down we assume about $87 million of royalties, about $23 million of material sales and at least $23 million of milestones and license fees. For the second half of the year, we saw some of the our Q3 expected sales shift in the Q2 and as result we'd expect the Q3 and Q4 breakdown to the further weighted to Q4. For royalties, our guidance incorporates lower CorMatrix royalties than estimated at the start of the year as a result of our marketing partners choice to exercise royalty a buy down in exchange for $10 million to be paid to Ligand. The buy down was exercised in connection with CorMatrix's sale of its commercial assets to Aziyo and 5 million was paid at closing and an additional 5 million will paid later on the year. Captisol continues to be on track towards our original estimate of $23 million for the year and with respect to the milestone up side we currently see about $9 of potential upside for the balance of the year. The running upside milestone events are principally tied to clinical trial progress and as a result the timing is uncertain. We do expect that most of these events will happen but our best estimate of timing now puts them in late Q4 of this year or in the first half of 2018. Adjusted earnings per diluted share at $133 million revenue level is projected to be at least $2.93. Finally as a remainder our adjusted diluted EPS guidance excludes stock based compensation expense, non-cash debt related costs, changes in contingent liabilities, transaction related purchase pricing amortization, our pro rata net losses of Viking Therapeutics as well as the fair value adjustments to our holdings in their common stock in the convertible note receivable and warrants, our mark-to-market adjustments for amounts owed to licensers, the excess convert shares covered by the bond hedge and certain one-time non-recurring items. With that I will turn the call back over to the operator and open it up for questions.

[Operator:]

[Operator Instructions]. Your first question comes Drew Jones.

[Drew Jones:]

Good performance in licensing revenues, it sounds like you guys are very pleased with OmniAb momentum, I think at the start of the year you guys had guided towards maybe four programs hitting clinical. Can you give us an update on where we are and maybe how many are on the cusp of hitting clinical?

[John Higgins:]

Sure, I think the guidance we gave originally, I think it was three programs that would hit the clinic on the OmniAb side, and we obviously saw the Janssen program hit the clinic this year and generate a milestone. Matt's mentioned a few of the others that are in or approaching the clinic and so I think we’re on track there for that.

[Matt Foehr:]

Yes, and I’ll just add a little more color from a technical perspective Drew. As Matt said very much on track, the Janssen program is in a Phase 1 now that started in June, but in addition to that we see partners that are either in the clinic or very quickly approaching the clinic based on the reports we are getting and we will continue to see news flow coming out of those but CStone, Gloria, Hanall, Activo, all of which are highlighting named OmniAb programs publicly. So, very much on track and we continue to be pleased with the progress of the partners, the commitments are showing the investment around antibodies that are being discovered with OmniAb and just the quality of those antibodies from the data they are sharing with us and presenting.

[Drew Jones:]

Great. And then a really nice sequential uptick for Captisol. How is that going to be split over the last two quarters to get to the $23 million guide for the year and also can you give us a little feel for clinical versus commercial split?

[Matt Korenberg:]

Sure, I’ll give first. Just overall big picture for the balance of the year if you just do the math from the $133 million guidance from what we have recorded so far. You will see that that is about $75 million to $76 million of revenue left for the rest of the year and then just doing math if you breakdown the royalties that everybody didn’t calculate based off of the Q2 partner revenue, you will see that royalty is going to be more heavily or more evenly split between Q2 and Q3. Overall, we see about a one-third, two-third ratio as we've guided in the past for the different quarters. But if overall about a third is going to come -- of revenue is going to come in of the balance of the revenue is going to come in Q3 and more than a third is going to come on royalties you can cut it back into some math that will give you the milestone in Captisol revenue will face a little heavier weighted to Q4 than Q3.

[Matt Foehr:]

Yes, and just in terms of buying patterns on the commercial side, generally we have seen that Q4 is a larger quarter for commercial buyers, just given the cycle to and especially for some of our larger partners in terms of when they buy Captisol.

[Operator:]

And your next question comes from Scott Henry.

[Scott Henry:]

Thank you and good afternoon. Couple of questions, first one and I don't know if you are going to have a lot of color on this, but I thought I asked how you think about it. EVOMELA has been a little choppy, great quarter in second quarter great quarter in fourth quarter Q1 was down a little bit. Are there chunky buying patterns here, obviously things are going well with the market share increase, just trying to get a sense of how representative 2Q is?

[John Higgins:]

Yeah, well Scott good question. First generally speaking, we're really pleased with what Spectrum is doing. Many of our investors know Spectrum they're specialty oncology company and the product even at the time of the license three years ago we knew was a the good fit with their clinical focus. But clearly, we think they've done a very expert job of placing the product commercially. So just generally wanted to give that overview. You're right about the quarterly trends, we only have five quarters, we have the first quarter a little more than a year ago was one-month sales. So, we don't have a lot of history so far. We do know from what Spectrum has commented publicly that in the fourth quarter they had one or two specialty channels that were new customers and they did sell into the channel an extra that's maybe $2 million to $3 million, so that may have increased Q4 revenues by that amount and then could have pulled a little bit out of what have been the Q1 sales. So, I think as they're signing up new customers, signing new contracts, they're really driving the commercial channels. But having said as much, their market share growth is impressive. In the first six months, they reported 30% to 35% share. And now they believe they are commanding about half of the market share in just a years' time. So, we don't give projections by product. We make estimates based on sale side and another analyst they cover the product, we haven't heard projections specifically for the products from Spectrum this year. But on balance the trends look good and the market share gains particularly are very impressive.

[Scott Henry:]

Okay great. Thanks for that color. And when I look at your royalty generating products, they've all done very well in this quarter. And I guess the question is, the $87 million guidance doesn't really change. Do you feel really good about that number now? Do you feel better about it now than you did a quarter ago? Or just trying to get a sense of how much of this strength you expected versus whether it's been surprising one?

[John Higgins:]

Yeah good perspective in terms of the timing and how all three of the products have come in really very strong. The Q2 revenues for each one was impressive and as investors know this year we are still booking royalties on a one quarter lag. So, what our Q2 revenues for the underlying product, we book as our royalty in the third quarter. What is interesting is last quarter we had one of our partners CorMatrix exercised a royalty buydown. They had a predefined right to buydown a royalty, it required $10 million payment we received 5 we'll get another $5 million at year end. But by buying that royalty rate down, our royalties for that specific product will be potentially $1 million to $3 million lower, of course it’s all set by this very large upfront milestone we got. So, what’s interesting is just by circumstance that corporate financing and restructuring happened last quarter, we’re doing very well on royalties and we’re making up revenue in milestone and contract payments with CorMatrix, that’s part of the reason why we’re able to raise guidance, but royalties so far, they haven’t taken a debt at all because of the strong performance by these other products. So, we see feel good about the royalty we feel very good about these underlying three royalty assets but really would want to see another quarter through 2017 before revisit the royalty numbers for 2017.

[Scott Henry:]

Thanks for that color. And then on the pipeline or I guess soon to be launched product, what is this timing around the Baxdela launch, how should be think about that and will that be a lag as well?

[Matt Foehr:]

Scott, this is Matt Foehr, they haven’t giving specifics on exactly when they’re launched. Generally speaking we expect it will be sometime in the next couple of months here, that is usually what it takes -- they’ve been building up, they built up their commercial organization and contracting and getting ready for lunch etcetera so, we’re keeping our eye out for that but we generate expect in the next couple of months.

[John Higgins:]

Yes, and we will book that on a one-quarter lag to the extent they generate any sales in Q3 we'll book it in Q4 but if they generate sales in Q4 it will be a 2018?

[Operator:]

The next comes from Matt Hewitt.

[Unidentified Analyst:]

Just one from me. On the four new licensing deals, how many of those were Q2 versus Q3 as far as initial payments are concerned?

[Matt Foehr:]

So, in Q2 we did a new, so in May we did a new Captisol license agreement with analgesic, interventional analgesic also May we did a deal with xCella bio for OmniAb and then in June surface oncology more recently July, which is a Q3, we did the AMG 330 deal, with Amgen, which is also Captisol deal for AMG 330 which is an anti-CD3, anti-CD3 bispecific antibody that they’re developing for acute myeloid leukemia.

[Operator:]

The next question comes from Larry [indiscernible].

[Unidentified Analyst:]

Few follow up, most of my questions were answered but I could probably follow up on questions on a bunch. Just on the guidance so, just to clarify it looks like from the last time you guys updated. You’ve essentially [indiscernible] revenue up $1 million and EPS of $0.03.

[Matt Foehr:]

Yes. That’s right, $1 million on the revenue side recently after tax.

[Unidentified Analyst:]

Right, you had said that the royalties would be a little less than 87 because the CorMatrix and it looks like now you have reaffirmed that 87 number so you sort of that in that blank, so perhaps that’s $1 million, although you are not actually saying that, but you can roll with that. Just on OmniAb on the OMT, obviously great progress there. I know when you acquired you had expected that $12 million of revenue this year, you haven’t really broken out guidance on that, I don’t know why but are we still close to that number, or is it fair to assume we are above that?

[Matt Foehr:]

Yes, good question Larry and I think generally your sense of the guidance is right. We overall and OmniAb on the OmniAb specifically the best way, we haven’t seen specific numbers but the best way that we’ve guided investors and analysts to focus on this from the milestone charts that we showed earlier on in the year at analyst day and otherwise that that show that we had about $6 million to $7 million of annual license excess fees or annual fees that we said was majority of that was all OmniAb related. And then top of that we said that we give milestones when they go into the clinic and so we announced the Janssen milestone earlier this year for million dollars as we couple of these others go into the clinic we may realize milestone from those as well. And so long-winded way of saying yes, we are still on track for roughly those numbers, it might be a little more, might be a little less, but generally speaking we are right on track there.

[Unidentified Analyst:]

Okay and then on [indiscernible] I don’t know how much you can count, but the $10 million, the Q2 number or I guess maybe that was growing as part of that, -- itself equates to 30% share but does that suggest that the markets are only $80 million, $90 million and not maybe -- that was more likely $120 or something?

[Matt Foehr:]

Yes, the market size is really a factor of pricing and at the time of launch where pricing was, I think Spectrum and others and we had quoted numbers between a $100 and $130 million and I think they used the word approximate but if you were exactly then yes of course your calculations are right at this price and that share. It's about a $100 million market.

[Unidentified Analyst:]

Okay. And then just lastly on the LGD 6972, on what forums, -- is that just going to come on the press release and I guess you have full data at some future conference or is that actually going to be at the EFDA as well?

[Matt Foehr:]

Yes, great question Larry. So, we would generally expect -- once we have the topline data, we would expect to release the top line data in a press release. We'll aim to present the data at a scientific conference in the future, we already know we will not make the late breakers or ability to get a podium presentation at the EASD because we are already past. It would be in the future meetings but we will announce the data at the press release.

[Operator:]

[Operator Instructions]. Your next question comes from [indiscernible].

[Unidentified Analyst:]

Hi, this is [indiscernible] thanks for taking my question. I wanted to know your EPS guidance, does that incorporate potential start of the Phase 3 GRA trials in 2017?

[Matt Foehr:]

Thanks for the question, good question. What we said pretty consistently is that once we see the data for the Phase 2 trial, we'll evaluate the best next steps. We've been pretty clear though that we aren't planning to start a Phase 3 trial immediately. We're digesting data and consider our partnering alternatives and internal alternatives et cetera. And so, the guidance in any event it wouldn't happen this year if we did start a phase 3 trial. And so, it incorporates all the expense related to GRA for this year.

[Matt Korenberg:]

Yeah and then just generally with GRA, we feel like with the program we have a highly differentiated molecule, we're excited to see the data we'll see the data here in the September and then announce it when we have it. And consistent with our model we'd generally look to partner the program of course. So, we're anticipating and looking forward to seeing the data and we'll share it when we have it.

[Unidentified Analyst:]

Got it. And then have you guys started this partnership discussion? Or are you going to wait for the data to start initiating these conversations?

[Matt Korenberg:]

Yeah, generally we don't provide details on kind of partnering dialog. I'll say the players that are the global players that are in diabetes are aware of the program and I think we've screened the data events as a value driving event, which is why we invested in the phase 2 trial. So, once we have the data, once we're able to present it we would expect to be progressing with dialog. But again, we're always careful to not promise any timelines around deals or anything like that.

[Unidentified Analyst:]

Got it, yeah. And then on the [indiscernible] the $90 million financing agreement that you'd mentioned. I just want to confirm that that has no implication for your relationship with them for your agreements with them?

[Matt Korenberg:]

No, there has no implications for our relationship with them.

[Unidentified Analyst:]

Got it, okay. And then maybe can you just talk -- I know we talked a lot about Captisol, but can you maybe talk about the changes and the pace of the partnerships relative to last year? Has that increased or stayed the same? Where are you in terms of the numbers partnerships and [indiscernible]?

[Matt Korenberg:]

The inbound interest in Captisol continues to be extremely strong. Our sampling numbers over prior periods are well over 20% right, so we're seeing inbound sample requests continue to grow. And I think that's one really a representation of recent validation of the technology with recent approvals like [indiscernible] with global expansion by a number of our partners into new countries where they're racking up additional regulatory approvals in added markets. All of those things really start to create a lot more momentum around the technology. And I'll say probably more importantly to a lot of partners is a continued expansion of our drug master file or safety database. We continue to add new tox studies to our safety database that our partners get to reference as they move drugs through development. So, we'll continue to see growth in the inbound interest. We've announced a few deals this year, clinical stage deal with -- we've referenced the commercial deal with [indiscernible] for IV ganaxolone. Also, commercial deal with interventional analgesics for an undisclosed compound. So, we continue to see inbound interest and later stage licensing deals and growth in our research deals as well which are kind of earlier stage precursor to downstream type commercial deals.

[John Higgins:]

Well thank you everyone good turnout by the callers and questions, appreciate that. There is no other follow up. I just want to conclude by commenting, while the year's been good, we’ve had 5 months left and we expect to have a very busy and productive fall. Coming off Labor Day we have three conferences, we'll be at the City Conference in Boston, September 6th and 7th it’s the first time we had an invitation to that conference so we're pleased to be there. Rob and [indiscernible] will be in New York city September 10th and 12th and then we’re pleased to be Stephens Conference also in New York in early November, so will be on the road a fair amount and we look forward to further update. Thank you for time this afternoon.

[Operator:]

This concludes today's call. You may disconnect your lines.