Ligand Pharmaceuticals Incorporated
Q3 2014 Earnings Call Transcript

Published: 27 Oct 2014

[Operator:]

Greetings and welcome to the Ligand Pharmaceuticals Third Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-answer-session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Erika of Investor Relations. Thank you. Please begin.

[Erika Luib:]

Thanks, Jesse. Welcome to Ligand's third quarter financial results for 2014 and business update conference call. Speaking today for Ligand are John Higgins, President and CEO; Matt Foehr, Executive VP and COO; and Nishan DeSilva, VP of Finance and Strategy and CFO. As a reminder, today's call will contain forward-looking statements within the meaning of our federal securities laws. These may include, but are not limited to, statements regarding intents, belief or current expectations of the company, its internal and partner programs, including Promacta, Kyprolis and Duavee and its management. These statements involve risks and uncertainties and actual events or results may differ materially from the projections described in today's press release and its conference call. Additional information concerning risk factors and other matters concerning Ligand can be found on Ligand's public periodic filings with the Securities and Exchange Commission, which are available at www.sec.gov. The information in this conference call 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, October 27, 2014, and do not necessarily represent the views of GSK, Pfizer, Amgen or any of our other partners. 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:]

Good morning. Thanks for joining us for our third quarter call. Well into 2014, Ligand's cash flow generation and growth potential is becoming increasingly clear. Our primary wealthy assets are doing well in the commercial marketplace and the Captisol business is thriving. We continue to enter new deal to expand our portfolio of partner programs and we are advancing our internal pipeline with new data. And with that productivity, cash expenses are essentially flat. Now as evidence of our financial growth and increasing cash flow, I would like to point out how the nine months year-to-date have changed over the past few years. For the first nine months of 2012, we had $17.8 million in revenue and had an operating cash loss. Now two years later, for the first nine months of this year, we posted $41 million in revenue and generated $0.93 in adjusted EPS, which essentially reflects operating cash flow per share. That is well more than a doubling of revenue in two years for the comparative period and we moved from losing money to generating significant cash flow from operations. And 2014 is not over. As investors who follow us closely well know, our business drives big fourth quarters financially, given the tiering in our royalty contracts and the ordering patterns of Captisol for commercial use. As such, we are facing our biggest quarter of 2014 by far with revenue projected to be nearly $22.5 million to $24.5 million or more than 50% higher than Q3, with a strong outlook for both GAAP and non-GAAP earnings. Our revenues come from three sources, royalty, Captisol and licensing fees. I want to talk about all three right now and explain some of the positive dynamics that are forming around our revenue. In regards to royalty, our lead program is Promacta. GSK just announced a strong third quarter with global Promacta product sales of $104 million. Now I remember six years ago when the product launched, it did $3 million per quarter. Now it is doing over $100 million. Asset level at $104 million this past quarter, that is $12 million increase over the prior quarter or 13%. Compared to prior year, it is up 37%. And all territories reported by GSK are growing. So why is Promacta doing so well and continuing to grow? Because Promacta is a great medicine that plays a vital role as a supportive care treatment for a life-endangering conditions. It's a once-a-day oral pill that boosts platelets in blood to help blood clotting, oftentimes eliminating the need for patients to take other toxic blood defective medicine or patients need to get blood platelet transfusion which are expensive and can be risky. It is now approved for three indications with numerous other indications in development for potential further expansion of its use. The majority of sales for the use are ITP or idiopathic thrombocytopenia. And other indications it has more recently been approved for are to boost platelets in very sick ACD patients for severe aplastic anemia. We've been projecting for this year that Promacta would exceed $100 million in quarterly sales and were pleased to that projection has come true. And investors should keep in mind that on higher revenue, we also enjoy higher royalty. At the current revenue level, we are now well into the third tier of annual royalties with a royalty of 7.5%. And we are now projecting that next year we'll begin to earn royalty on Promacta at our top tier rate of 9.4%. Another product we earn royalties on is Amgen's product Kyprolis. Now Amgen will report their financial results after market today. The product currently is only approved in the US. In the third quarter, there were significant new safety and efficacy data for Kyprolis from Phase III trials and Amgen is publicly reporting they intent to initiate filing for product approval worldwide starting the first half of 2015. DUAVEE is a new product Pfizer launched in the US about six months ago. Now it is very early days, but what is significant is that monthly prescriptions were essentially zero six months ago, and now prescriptions in the US are picking up nicely at over 5,000 per month. Pfizer has just recently launched a robust direct-to-consumer campaign. We believe this shows their willingness to invest heavily into the brand commercially with the goal to grow the product. Plus, we expect European approval within the coming weeks and other territories could come online next year as well. As for Captisol, that business is thriving. And here is why. First, we have new customers buying Captisol due to recent and expanded deals. Secondly, we have a number of supply contracts to support large late-stage trials. And thirdly, multiple new partners are gearing up for potential commercial launch in 2015. Now to keep up with demand, we are now increasing production at our two contract manufacturing locations in Ireland and Portugal and we are considering scaling up manufacturing at our third contracted site in China. In addition, we are increasing our stockpile of Captisol that we hold in reserve in the US to ensure a reliable supply to our growing customer needs. In the fourth quarter, we expect Captisol orders to make up approximately half of our total revenue or roughly in the $12 million range. We project the fourth quarter will be the largest quarter for Captisol material sales so far. As for licensing fees, we continue to sign more deals oftentimes with upfront payment and we have a growing schedule of potential milestone payments due to us from our partners based on future events. As we move into 2015, there are a number of late-stage clinical events and regulatory milestones that if achieved will catalyze payments to Ligand. Our financial growth is real and substantial and it is driving increased profits and cash flow for Ligand. It is also garnering the attention of investors and major financial journals. With our financial growth and operational success, we are pleased to see Ligand made it on to Fortune Magazine's list of their 100 Fastest Growing Companies. In September, the report was issued and Ligand was ranked an impressive number 13 on Fortune's list of the Fastest Growing Companies as measured by EPS and revenue growth rate as well as annualized total returns over the past three years. In August, we closed a convertible debt financing, raising $245 million. Ligand's timing was ideal for an issuer of a convert as interest rates were at all time lows, the stock market was at all time highs and with good volatility, and there were significant amount of capital and funds available for investment in convertible bonds. This was a very strong environment for us to close the convert and it resulted in highly favorable terms to Ligand. Following the deal, investment banks told us that no company with a market cap under $1.5 billion has priced a convertible with a cash coupon below 1% since 2007, and that's across all industry. It was also reported that Ligand received the highest premium on our conversion price for any convert issued since 2008. Bottomline, this was a smart and well executed deal. We're pleased to diversify our capital base and have new institutional investors in Ligand. Given our current outlook, we are confident in Ligand's cash flow generation, so we elected to repay the principal of the convertible bonds in cash instead of settling the bonds by converting into equity, which is more often the case for biotech companies. This is important as these bonds will be much more like debt than equity in that regard. As for the use of proceeds, first we purchased what is called a call spread option for about $36 million to increase the conversion price of the bonds from $75 a share to $125 a share. By making that investment, we will potentially save over $160 million in consideration that otherwise would have been needed to settle the convert. Given our outlook for the business, we believe that was a prudent investment. The second thing we did with some of the proceeds was to immediately deploy $38 million to buy back our stock. Given what we know about our business and portfolio of assets, we think reducing our share count by buying back stock at these levels is a good investment and will have the effect of increasing the profits and cash flow per share in the future. Even after purchasing the call spread option and undertaking a sizeable share repurchase, we ended the third quarter with over $187 million in cash and securities. Before I turn the call over to Matt, I'd like you to know that we are having an Analyst Day November 18th at 10 AM in New York City, and we invite you to attend live or via the webcast. If you want to attend live, please send us an email. In addition, we have been invited to present at [ph] Gary Research Partners Hidden Gems Conference on November 20th also in New York City. This is a conference where company presenters are selected to present by experienced institutional small cap investors. The presenting companies are nominated based on companies whose stocks are "under the radar", but whose investment merits high conviction. On behalf of our employees, I'm very proud of the excellent work our team is doing and our continued achievement building long-term value for Ligand shareholders. We are executing well and delivering on our plans and vision for the company. Matt, I'll turn it over to you now.

[Matt Foehr:]

Q3 was a great quarter for the growth and progress of Ligand's portfolio of assets. I'm pleased with the work our team is doing here on our internal programs as well as the work relating to some R&D collaborations we've recently put into place with newer partners. And importantly, our existing partners continue their significant and growing investment into our partner portfolio, and we continue to see the benefits to our business from that investment. I'm going to start off first by touching on our Captisol technology. Captisol continues to be a highly valued solution to partner solubility and stability challenges. It's enabling new formulations of existing drugs and is being expanded from a use perspective in use in topical or transdermal programs as well as in oral programs. The AAPS meeting is coming up here in San Diego next week and we and some of our Captisol partners will be presenting data on Captisol use and its value in a number of new and important formulation settings like orals and topicals. The work being presented sets the stage likely for further expansion of this technology into these new areas. We entered into a number of new deals for Captisol this past quarter, including ones with and Marinus Pharmaceuticals and Boston Strategics and one for a new additional Captisol-enabled program with Amgen. Captisol has enabled the development of a number of commercial programs in our portfolio as well. And some of those programs have had important data read-outs and events recently. Late last month, our partners at Merck received European approval for Noxafil IV. This approval was Captisol-enabled Noxafil IV in a total of 29 countries. And as John mentioned, our partners at Amgen also announced Phase III data for Kyprolis last quarter and publicly shared their plan for global regulatory filings for Kyprolis in 2015. We noted the news on Friday that Lundbeck received a Complete Response Letter for its NDA filing for Carbella in the US. The CRL only requested additional CMC information and Lundbeck remains committed to making Carbella available in 2015 ending FDA approval. Sage Therapeutics continues to do very good work on SAGE-547. SAGE-547 is a program that is beginning to become more visible to some investors after Sage's successful IPO earlier this year. It received both orphan drug and fast-track designation for the program and as background, the drug itself is an allosteric modulator of GABAA receptors and is in development at Sage initially for the treatment of adult patients with super-refractory status epilepticus who have not responded to standard regimens. Super-refractory status epilepticus is also referred to as SRSE. Sage is currently evaluating SAGE-547 in a Phase I/II clinical trial for the treatment of SRSE and we look forward to seeing that data in the coming months. Also, just last week, they announced the start of an exploratory study in an additional essential tremor indication. We also have two new R&D collaboration agreements that we are moving forward as well. Last quarter, we announced our first deal for our internally developed LTP PLATFORM technology with Omthera, AstraZeneca. Following that deal, we entered into and are now progressing a separate R&D collaboration agreement with our new colleagues at AZ. We also now have an R&D collaboration active with TG Therapeutics relating to the IRAK4 inhibitor program. We are receiving R&D service statements associated with both the AZ and TG agreements. DUAVEE, which Pfizer launched earlier this year in the US is becoming far more visible in what we see as a major medical market. As John mentioned, Pfizer launched a national direct-to-consumer campaign last month and that's bringing significant visibility to the brand. There's been national print ads in Good Housekeeping and People Magazine, in Redbook, Martha Stewart Living, Better Homes and Gardens and some national newspapers in major areas. Pfizer has also teamed up with Golden Globe winning actor, Kim Cattrall, which starred in the Sex in the City television show and movies, launched the "Tune In To Menopause" campaign, which is designed to bring the conversation of menopause front and center and motivate women to learn more about the condition. We've recently seen medical representatives from Pfizer discussing menopause on the Dr. Phil show and a number of new shows as well. Importantly, every day an estimated 6,000 women in the United States reach menopause, and that gives us a sense of the general size and importance of this market. In addition to their efforts in the US, Pfizer is also making progress outside of the US, and we expect EU regulator action by the end of the year. Pfizer intends to bring DUAVEE as DUAVEVE in many markets outside the US. And just last Friday, the CHMP issued a positive opinion for DUAVEE. Before touching our internal programs, I will also mention some other partnerships in our portfolio. As a bit of recent history, about 18 months back, we entered into a licensing deal with a private European company called Selexis and acquired financial rights for more than 15 fully funded programs. Those programs have progressed nicely since that time and are beginning to pay us milestone as the programs successfully progress through development. Recently, Merrimack announced the initiation of their HERMIONE trial, which is a randomized trial of MM-302 in patients with advanced HER2-positive breast cancer. As Merrimack has discussed publicly, the trial is designed to support an application for accelerated approval in this indication. For those that may not be following the program, MM-302 is a novel antibody-drug conjugated liposomal doxorubicin that specifically targets cancer cells overexpressing the HER2 receptor. As a liposomal encapsulation of doxorubicin, MM-302 is designed to allow for the selective uptake of drug into tumor cells while limiting exposure to healthy tissues. Switching gears now to our internal programs, we continue to make progress with our small molecule small molecule G-CSF and our Glucagon Receptor Antagonist for Type 2 diabetes. Right now, we are in the process of initiating a multi-center Phase I multiple ascending dose or MAD trial for our Glucagon Receptor Antagonist LGD-6972. This MAD trial initiation follows our successful Phase I single ascending dose trial and we presented data for it in June at the American Diabetes Association meeting. That trial demonstrated favorable safety, tolerability, pharmacokinetics in normal healthy volunteers and in subjects with Type 2 diabetes and also demonstrated a robust response on fasting plasma glucose after just a single dose. We expect data from the MAD trial in the second quarter of next year. We're continuing to progress our oral G-CSF LGD-7455, which is our granulocyte colony stimulating factor preceptor agonist program. Last year, we presented data showing that LGD-7455 activates the receptor in a manner distinct from native G-CSF and we also showed that our compound significantly increases peripheral blood neutrophils, demonstrating the first report, a proof-of-concept for a small molecule G-CSF in a primate model. We are continuing free clinical work for this program and also see this program like Glucagon as a promising and potentially partnerable asset. In terms of upcoming data and presentations, in addition to AAPS, which I mentioned, we'll be here next week in San Diego. The ASH meeting coming in December in San Francisco. And like the last couple of years, we generally expect to see data there for a number of partner programs including both Promacta and Kyprolis. And with that, I will turn it over to Nishan to review Q3's financial details. Nishan?

[Nishan DeSilva:]

Thanks, Matt. I'll recap just a few of the highlights from our earnings news release issued earlier today. Total revenues for the quarter was $15.0 million, up $2.0 million compared to the same quarter last year, driven primarily by an increase in royalty revenues of $1.8 million. Total gross margin taking into account all revenues was 90% for the quarter. Our cost of goods sold for Captisol for the quarter was $1.5 million, resulting in a gross margin on Captisol material sales of 76%, driven by a higher proportion of material sales for use in clinical products. In addition, our cash G&A and R&D expenses, backing out the non-cash impact of stock-based compensation expense and depreciation and amortization, were $5.4 million, virtually flat compared to the same quarter last year. For the quarter, we reported non-GAAP net income from continuing operations of $7.6 million or $0.36 per diluted share compared to $4.2 million or $0.20 per diluted share for the same period last year. On the cash side, we ended the quarter with $187.8 million of cash, short-term investments and restricted cash. We paid off our $27.5 million loan with Oxford at the end of July. In August, we closed the $245 million five-year convertible note with 0.75% coupon. From an accounting perspective, the convertible note is considered to have two components. The first is straight debt and the second is the conversion feature. We had an independent valuation performed by PricewaterhouseCoopers to determine the allocation of the $245 million between the debt and the conversion feature. PWC determined that the initial value of the debt was approximately $192 million at closing, which will accrete over time at what they determined to be a market interest rate of 5.8% to reach the $245 million in face value at the end of the five-year term. Including the impact of the debt issuance costs, which are amortized over the five-year term of the note, the expected interest rate from accounting perspective is 6.3%. It is very important to note, though, that while this interest expense flows through our interest expense line item on our income statement, our cash interest expense is only the 0.75% coupon or $1.8 million per year. We are very pleased with the terms of this financing as it shows that given the health and success of our business, our cost of capital is coming down. As comparison, the debt we fully paid off in July had an annual effective cash interest rate of nearly 11%. Finally, in conjunction with the convertible note offering in August, we announced that our Board of Directors authorized a share repurchase program of up to $200 million over the next year and we repurchased 692,800 shares during the quarter at an average price of $55.60 per share. Given the significant non-cash expense associated with the convertible note, beginning this quarter, we're including that among the items we add back the GAAP EPS to derive non-GAAP EPS. All four items we add back, namely change in contingent liabilities, mark-to-market adjustment for investments owed to licensors, stock-based compensation expense, and non-cash debt-related costs, are all non-cash expenses. We believe non-GAAP EPS provides useful supplementary information to investors and reflects amounts that are more closely aligned with the cash profits for the period. With regards to stock-based compensation, it is higher this quarter because the pre-specified business goal was achieved earlier than expected. And accordingly, options that were granted early this year that were tied to the achievement of this goal fully vested were expensed in Q3. The event released a significant amount of new shots on goal that have been added to the portfolio through licensing deal. As Matt generally described and as stated in our earnings press release, over nine new shots on goal were added this quarter and over 14 have been added for the year-to-date. It's important to note that stock-based compensation expenses are non-cash charge and based on a Black-Scholes valuation for what the stock options might be worst at the time of grant. And I want to point out that we currently project stock-based compensation for the fourth quarter will be considerably lower, approximately one-third lower than the third quarter amount. Looking forward, we remain annual guidance for total revenues to be between $64 million and $66 million for the year and non-GAAP earnings per diluted share to be between $1.50 and $1.55. As John mentioned, our business has shown a quarterly revenue pattern with the fourth quarter particularly strong in the past couple of years. We expect the same in 2014. And for the fourth quarter, we expect total revenues to between $22.5 million and $24.5 million and non-GAAP EPS to be between $0.57 and $0.62. We estimate that approximately half of Q4 revenues will come from Captisol material sales, but the gross margin on material sales for the quarter being in the 58% to 62% range. Our non-GAAP earnings per share guidance for both the full year and the fourth quarter include the same four items I previously mentioned, namely changes in contingent liabilities, mark-to-market adjustment for investments owed to licensors, stock-based compensation expense, and non-cash debt-related costs. Ligand's GAAP net income and EPS accounting is based in part on items that fluctuated value based on market valuations, which are unknown and unknowable at the time of issuing guidance. Accordingly, we do not provide GAAP EPS guidance. However, given the meaningfully higher revenues projected for the fourth quarter and essentially flat expenses, we expect GAAP net income to be significantly higher in Q4 as compared with Q3. For the full year revenue outlook, we continue to forecast that approximately 45% of revenue will be from royalties. The other revenue will be in mix of Captisol material sales and licensing fees. Royalties and licensing fees carry 100% gross margin and Captisol revenue carries approximately 60% gross margin. Finally, on the expense side, we continue to run the Ligand business with approximately $20 million in cash expenses this year, which are broken down as roughly one-third R&D and two-thirds G&A. With that, I will turn the call over to the operator and open it up for questions.

[Operator:]

(Operator Instructions) Our first question is coming from the line of Joe Pantginis with ROTH Capital Partners.

[Joe Pantginis:]

First, maybe for Nishan, with regard to Captisol material sales, I know you mentioned something earlier with regards to the margins for Captisol and thank you for that, how the margins really differ between, say, commercial margins and the research margins before you can actually get to getting royalties from potential commercial sales?

[Nishan DeSilva:]

As I just mentioned, I guess for Q4, we expect the range will be 58% to 62%. And in general, we say the range for material sales, gross margin is about 60%. And as you pointed out, that's driven by a mix between what proportion of the sales is coming from commercial sales and clinical or research sales. Generally speaking, we've guided to our margins on commercial sales that are about 50% and our margins on clinical or research sales are about 80%. So depending on how that mix comes out, we think that ends up around 60% level overall.

[Joe Pantginis:]

And then maybe a question for Matt. I know as you mentioned and thanks for the detail on DUAVEE. Can you maybe just go back a little bit and discuss some of the differentiation that DUAVEE is potentially bringing to the market, especially on the cardiovascular front?

[Matt Foehr:]

Obviously this was a program that was in development at Pfizer, a very large development program, some of the largest studies ever done in this space. This was one of the largest pharmaceutical spaces for a long time prior to the women's health initiative. And Pfizer did a great job sticking with the development and designing really stellar studies and put together a very nice label for DUAVEE. Right now just in terms of size, it's about 33 million women in the US between the ages of 45 and 59 and the average age of menopause is 51. So essentially, there are estimates of about 50% of post-menopausal women experience moderate to severe motor symptoms, what we call hot flashes, and that's what the label obviously is centered around here in the US. The studies that were done were very large, obviously created very nice efficacy and safety database for DUAVEE. And I think we're starting to see some of the impact of that now, and that's one of the reasons that Pfizer is investing so much in the education to get that large safety and efficacy database out in front of people.

[Joe Pantginis:]

And then I guess just quickly with the Glucagon asset, do you believe that once you finish the MAD study that that would be sufficient to be able to then partner the asset?

[Matt Foehr:]

For any asset, we always look at what are the key questions that we want to answer that will drive partnering, and that helps define what work we prioritize in R&D and what work we do. So we do feel like the multiple ascending dose trial is an important element to help drive partnering and that's why we're focused on it. The trial we're doing now or gearing up for now is a randomized double-blind placebo-controlled trial. It's a multicenter trial on three sites. It's in two parts, with normal healthy volunteers, dose for 14 days; and then Type 2 diabetics, dose for 28 days. And we're testing three different doses. So we do feel like this is going to be an interesting set of data. We're very encouraged with the data that we saw out of the single ascending dose study and we're looking forward to seeing data in the second quarter.

[Operator:]

Our next question is coming from the line of Matt Hewitt with Craig-Hallum Capital Group.

[Matt Hewitt:]

First question, I guess, a little bit on Captisol. So you have had a couple of quarters in a row where you've seen very strong interest or demand, and a lot of that demand is new. Customers are new biotech entrants into the market that are just starting to do some work. How quickly in your history have you seen where someone comes in, orders may be an initial order, how quickly does that typically translate into a partner program? Are we talking about a year's time? Is it longer, shorter? Just some clarity here would be helpful.

[Matt Foehr:]

It varies depending on the program, depending on the development and regulatory strategy of the partner. But in general, they tend to follow kind of a similar flow. It's difficult to put a hard timeline on when a customer comes in and orders the initial R&D supply to when that translates into, let's say, a launch commercial product or a full commercial license. And it varies depending on what they're using Captisol for. As you know and as those that follow the Captisol technology know, we have some partners that are using it for, say, reformulation of an active that may already be on the market or a new delivery mechanism. Maybe that follows the 505(b)(2) path, having more accelerated development pathway. And then now we got some partners using it in new delivery mechanism, transdermals, topicals, orals, where it hasn't been used before. So that landscape is a little different in terms of the amount of Captisol that they use and their timeframe for doing it. So it's difficult to put a hard line on it. But in general, the ordering patterns shows as we work with partners, how far they're progressing and when they're progressing and what we're seeing now really encourage us that this technology is doing very well.

[Matt Hewitt:]

DUAVEE obviously, it's great for investors to see that commitment by Pfizer. But what have you seen or what can you tell us about the script volume? Have you seen an uptick in the purchasing post the kick-off of that campaign?

[Matt Foehr:]

Yeah, Matt, we have. More than six months ago, really zero for that. Now it's doing about 5,000 prescriptions a month in the US. Admittedly, these are still low level. It's very early days. The financial contribution for the product really is still to come in the future. But I think it's important for investors to keep in perspective what this actually represents. You've got the world's largest drug company in Pfizer with the world's largest women's health franchise that has just launched really what is a breakthrough medicine. It's a combination drug with really the best safety and efficacy profile of the entire class of medicines. The other thing environmentally, the landscape for menopause, the perception, the perspective on how to treat or intervene in the indication has changed dramatically in the last decade. And so this is just an example of research at Ligand, where could research at Ligand take this business. This was a deal based from mid-90s. It was a very long development cycle. But here we are on the back-end. We have an approved drug with a great partner and a very large consumer health category. And we're just pleased to see what Pfizer is doing and investing with it. It is not trivial. There is no way investors should discount or trivialize what is going on with DUAVEE right now. I think what's important for us is to just report out the facts what we're seeing and to talk about the new regulatory events. We think Europe will come online by end of the year, possibly Canada and other territories. And then it's a matter of really seeing how this category evolves over the next couple of years. This is a product that we believe that the low-end could do $10 million in revenue to Ligand. It could do as much as $40 million to $50 million in royalty revenue to Ligand. And that's again royalty revenue to Ligand. But again, the product has to launch and obviously be successful under Pfizer.

[Matt Hewitt:]

Any update on the Hospira launch? Do you guys have a sense if that's going to still hit before the end of the year or where that sits would be helpful?

[Matt Foehr:]

That's an undisclosed program and we can't disclose the target or the therapy area. So there's really not much more color we can add to that program at this point.

[Operator:]

Our next question is coming from the line of Irina Koffler with Cantor Fitzgerald.

[Irina Koffler:]

I just wanted to ask about what timeframe you're thinking about deploying your newly raised cash in? And is Ligand thinking about buybacks still as the primary use of this cash or have you had any different ideas?

[John Higgins:]

With the remaining proceeds, over $187 million of cash, our objective really is two-fold, without priorities, is to pursue optimal investment. And one is looking at acquisition and the second are share repurchases. Now repurchases, we've already invested more than $40 million on repurchases to date. So we act upon that. And as far as acquisitions, as you well know, we've had five or six acquisitions for the last several years of varying sizes. Now with our cash war chest and with our growing financials, cash flow and the like, frankly we're able to do larger deal. However, I think a hallmark of this game is deal discipline. Not every company is a fit for us either because of value or because of cost structure. So we're constantly evaluating opportunities and options. It's a very fluid market environment. And what we've seen in the last year is a chance to participate in is private companies, investing in some other assets. We're looking at some acquisitions that could be bolt-on for the shots on goal portfolio, possibly a way to buy additional revenue streams. But that's the general business outlook. We don't get into specific initiatives we're working on and we don't guide to specific timing, given how fluid our investment options are.

[Irina Koffler:]

And then on SAGE-547, I think there's some data that are expected fairly soon. And what was the program to develop this thing further market look like and what's the timeframe around that?

[Matt Foehr:]

Any detailed questions we obviously direct to Sage in terms of the development path. They've announced that they expect data in their super-refractory status epilepticus trial in the next couple of months. Through the course of their IPO, they disclosed some very promising patient-level data in super-refractory status epilepticus where they were essentially showing, in a layman's way of saying, reversible coma in some patients. But again, any detailed question upon their development or their timeline should obviously be directed to Sage. But we think they're doing a great job with the program. They're a fabulous partner, a highly qualified team.

[Irina Koffler:]

And then I have one last one, which is, as you move forward with these alternative Captisol forms, transdermal, oral, how should we think about the volume of Captisol used in the programs? When you do an injectable partnership, does that mean that there is a lot more products sold for those than there is for an oral? Can you just help us quantitatively get our arms around that?

[Matt Foehr:]

The answer on that is not so precise, because it varies, much like it does on the injectible side where we may have on per vial basis a partner using, say, 3,000 milligrams per vial for one product and other partner is using 7,000 or 11,000 milligrams per vial for another product. We do see varying amounts used in the topical or oral space. We have some oral partners that look to be very heavy users should those programs progress through late-stage development and on to the market. But again, it varies, much like it does on the injectible side.

[Operator:]

Our next question is coming from the line of Christopher James with Brinson Patrick Securities.

[Christopher James:]

Most of my questions have been asked. Just quickly on the Phase I multiple ascending dose study with the Glucagon Receptor Antagonist, can you give a little bit more about the size of this study, maybe number of clinical sites and what patient types you're going to be looking, particularly the Type 2 diabetes?

[Matt Foehr:]

As I think I mentioned, it's a randomized double-blind placebo-controlled sequential multiple oral dose study. It's in two parts that will be conducted in two parts. The first part in normal healthy volunteers that will be dosed for 14 days and the second will be Type 2 diabetics dose for 28 days. We're going to set three doses of LGD-6972 5 milligrams, 15 milligrams and 30 milligrams a day. There'll be 12 subjects per group, nine active and three placebo. And the primary endpoints obviously in a Phase I multiple ascending dose trial are for safety and tolerability. There'll also be a PK and PD assessment on fasting plasma glucose, Glucagon GLP-1 and insulin measured over 24 hours. And then we'll also likely look at HbA1c at 28 days. So in terms of the range, we're looking at patients with an HbA1c between 6.5% and 10.5% and BLI between 20 and 45 kilograms per liter square.

[Christopher James:]

And then on the Promacta program, can you help us maybe understand the size of the opportunity in severe aplastic anemia and when could we get a better sense of what the launch looks like there?

[Matt Foehr:]

It's a new approval that GSK just announced last quarter. They've obviously filed for aplastic anemia outside the US. You see varying numbers out there for aplastic anemia. It's in the tens of thousands of patients. But I think important to note, this is a major medical advancement for these patients that have not only low platelets, but low red blood cells and low white blood cells as well. So as John was mentioning, this I think really speaks to Promacta really going after a disease that has major unmet medical need and that is a very serious debilitating and fatal disease. So we're excited to see it out there. Obviously it's a third indication of Promacta and a lot of the focus now moving forward is with the oncology indication. Obviously there are late-stage trials running their plans to file an MVS next year. So we continue to see the scientific data for Promacta expand and build for future potential for the brand.

[Operator:]

It appears we have no further questions at this time. I would now like to turn the floor back over to Mr. Higgins for any additional or concluding comments.

[John Higgins:]

Thank you. I appreciate everybody's attendance and questions here this morning. Again, we're pleased with the business. We're executing well and I look forward to our Analyst Day in about three weeks. We'll see you on the road. Thank you.

[Operator:]

Thank you. Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time.