Demand for a key ingredient in a sought-after Covid-19 treatment drove a busy year for Ligand Pharmaceuticals. The biopharma maker was also active on the deal front, continuing a recent spate of transactions. In October, Ligand Pharmaceuticals Inc. (Nasdq: LGND) completed its acquisition of Pfenex Inc. for $437.5 million in cash, plus a contingent payment of $78 million in cash if milestones are met. Pfenex owns a proprietary technology used to produce enzymes, peptides, antibody derivatives and engineered non-natural proteins.
Remdesivir in Demand
The Covid-19 pandemic made the need for and importance of fast, scalable and innovative approaches to vaccine and therapeutics development very plainly apparent. Ligand was in a financial position to make the acquisition in part because of the recent demand for its treatment technologies, according to the William Blair bankers who worked on the deal. Ligand’s solubility technology, Captisol, is a key ingredient in Gilead’s antiviral drug Remdesivir, which became the first new drug authorized as a treatment for Covid-19 in May 2020. Ligand drastically increased Captisol production to meet the supply needs of pharmaceutical companies producing the drug.
“Our recent deals give you a sense for where we see major future opportunity,” said Ligand CEO John Higgins in a fourth quarter 2020 earnings call in February. “We are doubling down on the antibody space, with two more tuck-in OmniAb acquisitions this past year, and we bought Icagen and Pfenex, giving us a premier position in the ion channel space and a proprietary protein expression platform.”
“The fourth quarter of 2020 was a fantastic end to another strong year from Ligand,” said Matthew Korenberg, CFO, on the earnings call. “Robust top-line growth driven by our Captisol material sales led the way in Q4 with strong financial results across the business. In addition, after closing the Pfenex transaction on the first day of the quarter, we spent the final months of the year integrating that business and team into Ligand capping off a very busy strategic agenda for the year that included four corporate acquisitions and the sale of our Vernalis business.”