Pneumococcal 15-valent Conjugate Vaccine(Merck & Co.)

-- Company Expects to Announce Topline Safety, Tolerability and Immunogenicity Data from Primary Immunization Series by the End of the First Quarter of 2025, Followed by Topline Data from Booster Dose by the End of 2025 -- -- VAX-24, a 24-Valent Pneumococcal Conjugate Vaccine (PCV), is Designed to Cover More Serotypes Than Any Infant Pneumococcal Vaccine On-Market or in U.S. Clinics Today -- -- Company’s Potential Best-in-Class, Carrier-Sparing PCV Programs, VAX-24 and VAX-31, Intended to Deliver the Broadest-Spectrum of Coverage Against IPD -- SAN CARLOS, Calif., March 04, 2024 (GLOBE NEWSWIRE) --Vaxcyte, Inc. (Nasdaq: PCVX), a clinical-stage vaccine innovation company engineering high-fidelity vaccines to protect humankind from the consequences of bacterial diseases, today announced the completion of enrollment in its Phase 2 study evaluating VAX-24, a broad-spectrum, carrier-sparing 24-valent pneumococcal conjugate vaccine (PCV) candidate designed to prevent invasive pneumococcal disease (IPD), in healthy infants. Vaxcyte expects to announce topline safety, tolerability and immunogenicity data from the Phase 2 study primary three-dose immunization series by the end of the first quarter of 2025, followed by topline data from the booster dose by the end of 2025. “Completing enrollment of the VAX-24 study with more than 800 healthy infants demonstrates yet another significant milestone in the development of our VAX-24 and VAX-31 PCV candidates,” said Grant Pickering, Chief Executive Officer and Co-founder of Vaxcyte. “We believe VAX-24 has a potential best-in-class pro this vital population and is designed to cover more serotypes than any infant pneumococcal vaccine on-market or in U.S. clinics today. We look forward to announcing the expected topline safety, tolerability and immunogenicity data from the primary immunization series by the end of the first quarter of 2025, which will follow participants receiving all three doses in this series, as well as the serology and data analsysis.” “Despite the effectiveness of current vaccines, IPD, which includes meningitis and bacteremia, remains persistent in the first years of life and is a leading cause of invasive disease in children two years of age and under,” said Jim Wassil, Executive Vice President and Chief Operating Officer of Vaxcyte. “Given the significant burden of disease in young children, there remains a need for broader-spectrum vaccines like VAX-24 and VAX-31, our next-generation 31-valent PCV candidate, that are designed to provide greater protection than the current standard-of-care.” About the VAX-24 Infant Phase 2 Study The VAX-24 infant Phase 2 clinical study, which is now fully enrolled with 802 healthy infants, is a randomized, observer-blind, dose-finding two-stage clinical study evaluating the safety, tolerability and immunogenicity of VAX-24. The Stage 1 portion of the study evaluated the safety and tolerability of a single injection of VAX-24 at three dose levels (low dose/1.1mcg, middle dose/2.2mcg, mixed dose/2.2mcg or 4.4mcg) and compared to VAXNEUVANCE™ (PCV15), which was the broadest-spectrum PCV at the time of study initiation, in 48 infants. The Stage 2 portion is evaluating the safety, tolerability and immunogenicity of VAX-24 at the same three dose levels and compared to Prevnar 20® (PCV20), currently the broadest-spectrum PCV recommended by the Advisory Committee on Immunization Practices (ACIP), in 754 infants. Participants who received VAX-24 in Stage 1 will continue the standard dosing regimen as part of Stage 2 and will be included in the safety, tolerability and immunogenicity analysis of the study. In line with recommendations from the ACIP, the study design includes a primary immunization series consisting of three doses given at two months, four months and six months of age, followed by a subsequent booster dose at 12-15 months of age, in conjunction with the other routinely recommended non-PCV vaccines on the infant immunization schedule. The key prespecified immunogenicity study endpoints include an assessment of immune responses for all three VAX-24 doses and compared to PCV20 on the shared serotypes measured at 30 days post-dose three (PD3) and post-dose four (PD4). Immune responses will be assessed based on anti-pneumococcal polysaccharide serotype-specific immunoglobulin G (IgG) responses (proportion of participants achieving the accepted IgG threshold value of ≥0.35mcg/mL) at 30 days PD3 and IgG geometric mean titer ratios at 30 days PD4, among other immunogenicity endpoints. All participants in the study will be evaluated for safety through six months following the booster dose. The study is being conducted at 32 sites in the United States. Additional information about the study can be found at under the identifier NCT05844423. About Pneumococcal Disease Pneumococcal disease (PD) is an infection caused by Streptococcus pneumoniae (pneumococcus) bacteria. It can result in IPD, including meningitis and bacteremia, and non-invasive PD, including pneumonia, otitis media and sinusitis. In the United States, approximately 320,000 people get pneumococcal pneumonia each year, which is estimated to result in approximately 150,000 hospitalizations and 5,000 deaths. Pneumococci also cause over 50% of all cases of bacterial meningitis in the United States. Antibiotics are used to treat PD, but some strains of the bacteria have developed resistance to treatments. The morbidity and mortality due to PD are significant, particularly for young children and older adults, underscoring the need for a more broad-spectrum vaccine. About Vaxcyte’s PCV Franchise Candidates: VAX-24 and VAX-31 Vaxcyte’s carrier-sparing PCV franchise candidates, including VAX-24, a Phase 3-ready 24-valent PCV, and VAX-31, the Company’s next-generation 31-valent PCV currently being evaluated in a Phase 1/2 study, are being studied for the prevention of IPD. The public health community continues to affirm the need for vaccines that offer broader protection to prevent IPD, which can be most serious for infants, young children, older adults and those with immune deficiencies or certain chronic health conditions. Both VAX-24 and VAX-31 are designed to improve upon the standard-of-care PCVs for both children and adults by covering the serotypes that are responsible for a significant portion of IPD in circulation and are associated with high case-fatality rates, antibiotic resistance and meningitis, while maintaining coverage of previously circulating strains that are currently contained through continued vaccination practice. Vaxcyte aims to efficiently create and deliver high-fidelity, broad-spectrum carrier-sparing conjugate vaccines in order to add coverage without compromising overall immune responses by using modern synthetic techniques, including advanced chemistry and the XpressCF™ cell-free protein synthesis platform. Vaxcyte is deploying this approach with VAX-24 and VAX-31, the latter of which has the potential to provide the broadest coverage of any PCV to reach the clinic with approximately 95 percent coverage of circulating IPD strains in the U.S. adult population. In January 2023, Vaxcyte announced that the U.S. Food and Drug Administration granted Breakthrough Therapy designation to VAX-24 for the prevention of IPD in adults based on positive topline results from the Phase 1/2 proof-of-concept study, which evaluated the safety, tolerability and immunogenicity of VAX-24 in adults 18 to 64 years of age. The Breakthrough Therapy designation process is designed to expedite the development and review of drugs and biologics that are intended to treat a serious or life-threatening condition, where preliminary clinical evidence indicates that the drug or biologic may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. About Vaxcyte Vaxcyte is a vaccine innovation company engineering high-fidelity vaccines to protect humankind from the consequences of bacterial diseases. The Company is developing broad-spectrum conjugate and novel protein vaccines to prevent or treat bacterial infectious diseases. Vaxcyte’s lead candidate, VAX-24, is a Phase 3-ready 24-valent, broad-spectrum, carrier-sparing PCV being developed for the prevention of IPD. VAX-31, the Company’s next-generation 31-valent PCV, is the broadest-spectrum PCV candidate in the clinic today. Vaxcyte is re-engineering the way highly complex vaccines are made through modern synthetic techniques, including advanced chemistry and the XpressCF™ cell-free protein synthesis platform, exclusively licensed from Sutro Biopharma, Inc. Unlike conventional cell-based approaches, the Company’s system for producing difficult-to-make proteins and antigens is intended to accelerate its ability to efficiently create and deliver high-fidelity vaccines with enhanced immunological benefits. Vaxcyte’s pipeline also includes VAX-A1, a prophylactic vaccine candidate designed to prevent Group A Strep infections; VAX-PG, a therapeutic vaccine candidate designed to slow or stop the progression of periodontal disease; and VAX-GI, a vaccine candidate designed to prevent Shigella. Vaxcyte is driven to eradicate or treat invasive bacterial infections, which have serious and costly health consequences when left unchecked. For more information, visit . Forward-Looking Statements This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to the potential benefits of VAX-24 and VAX-31, including breadth of coverage, the ability to deliver a potentially best-in-class PCV franchise and the improvement upon the standard-of-care; the timing and availability of data for the VAX-24 infant Phase 2 study; the demand for Vaxcyte’s vaccine candidates; the potential benefits and opportunities available as a result of the Breakthrough Therapy designation for VAX-24 in adults; and other statements that are not historical fact. The words “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “on track,” “potential,” “should,” “would” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) convey uncertainty of future events or outcomes and are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are based on Vaxcyte’s current expectations and actual results and timing of events could differ materially from those anticipated in such forward-looking statements as a result of risks and uncertainties, including, without limitation, risks related to Vaxcyte’s product development programs, including development timelines, success and timing of chemistry, manufacturing and controls and related manufacturing activities, potential delays or inability to obtain and maintain required regulatory approvals for its vaccine candidates, and the risks and uncertainties inherent with preclinical and clinical development processes; the success, cost and timing of all development activities and clinical trials; and sufficiency of cash and other funding to support Vaxcyte’s development programs and other operating expenses. These and other risks are described more fully in Vaxcyte’s filings with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K filed with the SEC on February 27, 2024 or in other documents Vaxcyte subsequently files with or furnishes to the SEC. All forward-looking statements contained in this press release speak only as of the date on which they were made and are based on management’s assumptions and estimates as of such date, and readers should not rely upon the information in this press release as current or accurate after its publication date. Vaxcyte undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations. Readers should not rely upon the information in this press release as current or accurate after its publication date. Contacts: Janet Graesser, Vice President, Corporate Communications and Investor Relations Vaxcyte, Inc. 917-685-8799 media@vaxcyte.com Jennifer Zibuda, Senior Director, Investor Relations Vaxcyte, Inc. 860-729-8902 investors@vaxcyte.com

Conference Call and Webcast at 8:30 a.m. Eastern Time Today SAN DIEGO--(BUSINESS WIRE)-- Ligand Pharmaceuticals Inc. (Nasdaq: LGND) today reported financial results for the three and twelve months ended December 31, 2023, and provided an operating forecast and business updates. Ligand management will host a conference call and webcast today beginning at 8:30 a.m. Eastern time to discuss this announcement and answer questions. “2023 was a transformative year for Ligand, both operationally and financially. We refocused the company to be a lean-infrastructure, high-margin business,” said Todd Davis, CEO of Ligand. “We enhanced our deal making capabilities with the strengthening of our senior team and opening of a Boston office. These initiatives will help us execute on a larger scale and continue to expand our portfolio through a focus on life science royalty opportunities. We are now well positioned and resourced to close on multiple new investments. We also saw important clinical and regulatory events across our existing partnered assets and expect this momentum will continue in 2024 and beyond.” Fourth Quarter 2023 Financial Results Total revenues for the fourth quarter of 2023 were $28.1 million. Revenues for the same period in 2022 excluding sales related to COVID-19 were to $26.8 million. Total revenues for the fourth quarter of 2022 including COVID-19 related sales were $50.4 million. Royalties for the fourth quarter of 2023 were $22.5 million, compared with $22.0 million for the same period in 2022. Core Captisol® sales (excluding sales of Captisol related to COVID-19) were $3.9 million for the fourth quarter of 2023, compared with $3.3 million for the same period in 2022. There were no Captisol sales related to treatments for COVID-19 for the fourth quarter of 2023, compared with $23.5 million for the same period in 2022. Contract revenue was $1.7 million for the fourth quarter of 2023, compared with $1.5 million for the same period in 2022, with the difference due to the timing of partner milestone events. Costs of Captisol sales were $1.6 million for the fourth quarter of 2023, compared with $21.6 million for the same period in 2022, with the decrease due to lower total Captisol sales during the fourth quarter of 2023 and $9.8 million in accelerated depreciation on Captisol manufacturing equipment during the fourth quarter of 2022. Amortization of intangibles was $8.3 million for the fourth quarter of 2023, compared with $8.5 million for the same period in 2022. Research and development expenses were $5.5 million for the fourth quarter of 2023, compared with $9.2 million for the same period in 2022, with the decrease attributed to lower stock-based compensation, employee related expenses and lab supply expenses. General and administrative expenses were $16.0 million for the fourth quarter of 2023, compared with $31.1 million for the same period in 2022, with the decrease primarily attributed to lower stock-based compensation and employee related expenses for the fourth quarter of 2023 and a one-time stock compensation expense associated with the retirement of our former CEO in the fourth quarter of 2022. Net income from continuing operations for the fourth quarter of 2023 was $18.2 million, or $1.03 per diluted share, compared to a net loss of $14.5 million, or $0.86 per share, for the same period in 2022. Net income from continuing operations for the fourth quarter of 2023 included a $16.0 million gain in short term investment primarily driven by an increase in the value of our holdings in Viking Therapeutics (Nasdaq: VKTX) stock. The net loss for the fourth quarter of 2022 was impacted by the aforementioned Captisol equipment accelerated depreciation, a one-time stock compensation expense and a $24.8 million deferred tax asset valuation allowance during the fourth quarter of 2022, which was partially offset by a non-cash gain of $44.2 million from the value of Ligand's short-term investments. Adjusted net income from continuing operations for the fourth quarter of 2023 was $24.4 million, or $1.38 per diluted share, compared to $23.5 million, or $1.36 per diluted share, for the same period in 2022. Excluding the impact of gains from sales of Viking Therapeutics stock and gross profit from Captisol sales related to COVID-19, core adjusted net income for the fourth quarter of 2023 was $18.6 million, or $1.05 per diluted share, compared with $13.0 million, or $0.75 per diluted share, for the same period in 2022. The table below shows a reconciliation of net income (loss) from continuing operations to adjusted net income from continuing operations. As of December 31, 2023, Ligand had cash, cash equivalents and short-term investments of $170.3 million. Full Year 2023 Financial Results Total revenues for 2023 were $131.3 million. Revenues for 2022, excluding Captisol sales related to COVID-19, were $108.2 million. Total revenues for 2022 including COVID-19 related sales were $196.2 million. Royalties for 2023 were $83.9 million, compared with $72.5 million for 2022, with the increase primarily attributable to the increase in sales of Kyprolis®, Rylaze®, Vaxneuvance™ and Pneumosil®. Core Captisol sales were $28.4 million for 2023, compared with $16.4 million for 2022. The difference in sales was due to the timing of customer orders. There were no Captisol sales related to COVID-19 in 2023, compared with $88.1 million in 2022. Contract revenue for 2023 was $19.0 million, compared to $19.2 million for 2022. Cost of Captisol sales were $10.5 million for 2023, compared to $52.8 million for 2022, with the decrease due to lower total sales of Captisol during 2023 and $9.8 million in accelerated depreciation on Captisol manufacturing equipment during 2022. Amortization of intangibles was $33.7 million for 2023, compared with $34.2 million for 2022. Research and development expenses were $24.5 million for 2023, compared with $36.1 million for 2022, with the decrease primarily attributed to lower share-based compensation and employee-related expenses, partially offset by an increase in R&D expenses due to the Novan acquisition. General and administrative expenses were $52.8 million for 2023, compared with $70.1 million for 2022, with the decrease primarily attributable to decreases in share-based compensation expenses including a one-time charge associated with the retirement of our former CEO in the fourth quarter of 2022, and employee-related expenses. In September 2023, Ligand spun out its Pelican subsidiary through a merger with Primordial Genetics, to form a privately held company, Primrose Bio, which resulted in a gain on the sale of Pelican in the amount of $2.1 million for 2023. Net income from continuing operations for 2023 was $53.8 million, or $3.03 per diluted share, compared to a net loss from continuing operations of $5.2 million, or $0.31 per share for 2022. The increase in net income from the prior year is due primarily to the aforementioned Captisol equipment accelerated depreciation in 2022, a one-time stock compensation expense and a $24.8 million deferred tax asset valuation allowance during 2022; partially offset by an increase in gain from short-term investments which increased to $46.4 million in 2023 from $28.5 million in 2022. Adjusted net income from continuing operations for 2023 was $107.4 million or $6.09 per diluted share, compared with $82.2 million, or $4.79 per diluted share for 2022. Excluding the impact of gains from sales of Viking Therapeutics stock and gross profit from Captisol sales related to COVID-19, core adjusted net income for 2023 was $71.7 million, or $4.06 per diluted share, compared with $41.9 million, or $2.44 per diluted share, for 2022. The table below shows a reconciliation of net income (loss) from continuing operations to adjusted net income from continuing operations. 2024 Financial Guidance Ligand is reaffirming 2024 financial guidance introduced at its Investor and Analyst Day held on December 12, 2023. The Company expects 2024 royalties ranging from $90 million to $95 million, sales of Captisol ranging from $25 million to $27 million and contract revenue ranging from $15 million to $20 million. These revenue components result in total revenue forecast of $130 million to $142 million. Ligand notes that with total revenue of $130 million to $142 million, adjusted earnings per diluted share are expected to range from approximately $4.25 to $4.75. Fourth Quarter 2023 and Recent Business Highlights On January 5, 2024, the U.S. Food and Drug Administration (FDA) approved ZELSUVMI™ (berdazimer topical gel, 10.3%) as a first-in-class medication for the treatment of molluscum contagiosum in adults and pediatric patients one year of age or older. Ligand acquired ZELSUVMI through its acquisition of assets from Novan, along with other assets. ZELSUVMI is the first and only topical prescription medication that can be applied by patients, parents, or caregivers at home to treat this highly contagious viral skin infection. Merck (NYSE: MRK) announced the FDA accepted for priority review a new BLA for V116, its investigational 21-valent pneumococcal conjugate vaccine specifically designed to help prevent invasive pneumococcal disease and pneumonia in adults. The FDA grants priority review to medicines and vaccines that, if approved, would provide a significant improvement in the safety or effectiveness of the treatment or prevention of a serious condition. The FDA has set a Prescription Drug User Fee Act (PDUFA) target action date of June 17, 2024. If approved, Ligand is entitled to a low single digit royalty on worldwide net sales. Sermonix Pharmaceuticals (private) announced it entered into a strategic collaboration and exclusive license agreement with Henlius for the rights to develop, manufacture and commercialize Sermonix's lead investigational drug, lasofoxifene, in China. Under the terms of the agreement, Henlius will receive exclusive rights and sublicenses to lasofoxifene for at least two estrogen receptor-positive (ER+)/HER2- breast cancer indications in the territory, with Sermonix retaining all other global rights. Sermonix plans to work with Henlius to accelerate the clinical development of the Phase 3 ELAINE-3 multi-regional clinical trial in China, making lasofoxifene available to Chinese patients as soon as possible. Travere Therapeutics (Nasdaq: TVTX) announced a successful pre-NDA meeting for FILSPARI® in IgA Nephropathy (IgAN). After meeting with the FDA, Travere plans to submit a supplemental New Drug Application (sNDA) in the first quarter of 2024 for conversion of the existing U.S. Accelerated Approval of FILSPARI to full approval. Travere also completed regulatory engagement on focal segmental glomerulosclerosis (FSGS) in which the FDA communicated that the Phase 3 DUPLEX study results alone are not sufficient to support an sNDA submission for an FSGS indication for FILSPARI. As a result, Travere plans to conduct additional analyses of FSGS data with plans to re-engage the FDA in 2024 and is implementing a strategic reorganization to focus near-term resources on the ongoing FILSPARI launch in IgAN. Travere also announced fourth quarter 2023 results reporting that it received 459 new patient start forms for FILSPARI in the fourth quarter of 2023 and net product sales of $14.9 million for the fourth quarter. Eisai Co., Ltd. has obtained marketing authorization approval from the Japanese Ministry of Health, Labour and Welfare for the Captisol-enabled™ injection formulation of its antiepileptic drug (AED) Fycompa® (perampanel) in Japan as an alternative therapy when oral administration is temporarily not possible. Fycompa is a first-in-class AED discovered and developed by Eisai. Aldeyra Therapeutics (Nasdaq: ALDX) announced receipt of a Complete Response Letter (CRL) from the FDA for the NDA of reproxalap, an investigational drug candidate, for the treatment of dry eye disease. The potential NDA resubmission is anticipated in the first half of 2024, pending FDA special protocol assessment (SPA) feedback and positive results from the proposed trial. Aldeyra intends to include in the potential NDA resubmission a draft label describing chronic and acute symptomatic benefit, in addition to acute reduction in ocular redness of reproxalap. The review period for the potential NDA resubmission is expected to be six months. Palvella Therapeutics (private) announced that the FDA has granted Breakthrough Therapy Designation to QTORIN rapamycin™ for the treatment of microcystic lymphatic malformations (Microcystic LMs). Microcystic LMs is a chronically debilitating and lifelong genetic disease affecting an estimated more than 30,000 patients in the U.S. There are currently no FDA-approved treatments for Microcystic LMs. In November, Viking Therapeutics, Inc. (Nasdaq: VKTX) announced the presentation of new results from the ongoing Phase 2b clinical trial of VK2809, a novel liver-selective thyroid hormone receptor beta agonist, in patients with biopsy-confirmed non-alcoholic steatohepatitis (NASH). The latest findings from the VOYAGE study were featured in a late breaking poster presentation at the Liver Meeting® 2023, the annual meeting of the American Association for the Study of Liver Diseases (AASLD). The newly reported findings demonstrated robust and comparable liver fat reductions among patients with or without Type 2 diabetes, as well as patients with either F2 or F3 fibrosis. Verona Pharma (Nasdaq: VRNA) announced they have entered into a debt financing facility providing the company with access to up to $400 million from funds managed by Oxford Finance LLC and Hercules Capital, Inc. The debt facility provides non-dilutive capital and further financial flexibility to support Verona Pharma’s continued growth, including the planned commercial launch of ensifentrine. The debt facility replaces the existing facility of up to $150 million with an affiliate of Oxford. Adjusted Financial Measures Ligand reports adjusted net income and adjusted net income per diluted share in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company’s financial measures under GAAP include share-based compensation expense, amortization of debt-related costs, amortization related to acquisitions and intangible assets, changes in contingent liabilities, mark-to-market adjustments for amounts relating to its equity investments in public companies, excess tax benefit from share-based compensation, transaction costs, income tax affect of adjusted reconciling items and others that are listed in the itemized reconciliations between GAAP and adjusted financial measures included at the end of this press release. However, the Company does not provide reconciliations of such forward-looking adjusted measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for changes in contingent liabilities, changes in the market value of its investments in public companies, share-based compensation expense and the effects of any discrete income tax items. Management has excluded the effects of these items in its adjusted measures to assist investors in analyzing and assessing the Company’s past and future core operating performance. Additionally, adjusted earnings per diluted share is a key component of the financial metrics utilized by the Company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation. Conference Call Ligand management will host a conference call and webcast today beginning at 8:30 a.m. Eastern time (5:30 a.m. Pacific time) to discuss this announcement and answer questions. To participate via telephone, please dial (800) 715-9871 (North America toll-free number) using the conference ID 875533. International participants outside of Canada may use the toll number (647) 932-3411 and use the same conference ID. To participate via live or replay webcast, a link is available at . About Ligand Pharmaceuticals Ligand is a biopharmaceutical company enabling scientific advancement through supporting the clinical development of high-value medicines. Ligand does this by providing financing, licensing our technologies or both. Our business model seeks to generate value for stockholders by creating a diversified portfolio of biotech and pharmaceutical product revenue streams that are supported by an efficient and low corporate cost structure. Our goal is to offer investors an opportunity to participate in the promise of the biotech industry in a profitable and diversified manner. Our business model is based on funding programs in mid- to late-stage drug development in return for economic rights and licensing our technology to help partners discover and develop medicines. We partner with other pharmaceutical companies to attempt to leverage what they do best (late-stage development, regulatory management and commercialization) in order to generate our revenue. Our Captisol® platform technology is a chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. We have established multiple alliances, licenses and other business relationships with the world’s leading pharmaceutical companies including Amgen, Merck, Pfizer, Jazz, Takeda, Gilead Sciences and Baxter International. For more information, please visit . Follow Ligand on X (f/k/a Twitter) @Ligand_LGND. We use our investor relations website and X as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Investors should monitor our website and our X account, in addition to following our press releases, SEC filings, public conference calls and webcasts. Forward-Looking Statements This news release contains forward-looking statements by Ligand that involve risks and uncertainties and reflect Ligand's judgment as of the date of this release. Words such as “plans,” “believes,” “expects,” “anticipates,” and “will,” and similar expressions, are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements regarding: Ligand’s ability to expand its portfolio with life sciences royalty opportunities; the timing of clinical and regulatory events of Ligand’s partners; the timing of the initiation or completion of preclinical studies and clinical trials by Ligand and its partners; the timing of product launches by Ligand or its partners; and guidance regarding the full-year 2024 financial results. Actual events or results may differ from Ligand's expectations due to risks and uncertainties inherent in Ligand’s business, including, without limitation: Ligand relies on collaborative partners for milestone payments, royalties, materials revenue, contract payments and other revenue projections and may not receive expected revenue; Ligand may not receive expected revenue from Captisol material sales; Ligand and its partners may not be able to timely or successfully advance any product(s) in its internal or partnered pipeline or receive regulatory approval and there may not be a market for the product(s) even if successfully developed and approved; Ligand may not achieve its guidance for 2024; Ligand faces competition in acquiring royalties and locating suitable royalties to acquire; Ligand may not be able to create future revenues and cash flows through the acquisition of royalties or by developing innovative therapeutics; products under development by Ligand or its partners may not receive regulatory approval; the total addressable market for our partners’ products may be smaller than estimated; Ligand faces competition with respect to its technology platforms which may demonstrate greater market acceptance or superiority; Ligand is currently dependent on a single source sole supplier for Captisol and failures by such supplier may result in delays or inability to meet the Captisol demands of its partners; Ligand’s partners may change their development focus and may not execute on their sales and marketing plans for marketed products for which Ligand has an economic interest; Ligand’s and its partners’ products may not be proved to be safe and efficacious and may not perform as expected and uncertainty regarding the commercial performance of such products; Ligand or its partners may not be able to protect their intellectual property and patents covering certain products and technologies may be challenged or invalidated; Ligand's partners may terminate any of its agreements or development or commercialization of any of its products; Ligand and its partners may experience delays in the commencement, enrollment, completion or analysis of clinical testing for its product candidates, or significant issues regarding the adequacy of its clinical trial designs or the execution of its clinical trials, challenges, costs and charges associated with integrating acquisitions with Ligand’s existing businesses; Ligand may not be able to successfully commercialize Novan's berdazimer program and may not be able to outlicense or sell Novan's programs or assets; Ligand may not be able to successfully implement its strategic growth plan and continue the development of its proprietary programs; restrictions under Ligand's credit agreement may limit its flexibility in operating its business and a default under the agreement could result in a foreclosure of the collateral securing such obligations; changes in general economic conditions, including as a result of war, conflict or epidemic diseases and ongoing or future litigation could expose Ligand to significant liabilities and have a material adverse effect on the company. The failure to meet expectations with respect to any of the foregoing matters may reduce Ligand's stock price. Additional information concerning these and other risk factors affecting Ligand can be found in prior press releases available at as well as in Ligand's public periodic filings with the Securities and Exchange Commission available at . Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release, including the possibility of additional license fees and milestone revenues we may receive. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Other Disclaimers and Trademarks The information in this press release regarding certain third-party products and programs, including V116, a Merck product candidate, FILSPARI, a Travere Therapeutics product, Fycompa, an Eisai Co. Ltd., product, reproxalap, an Aldeyra Therapeutics product candidate, and QTORIN, a Palvella Therapeutics product candidate, comes from information publicly released by the owners of such products and programs. Ligand is not responsible for, and has no role in, the development of such products or programs. Ligand owns or has rights to trademarks and copyrights that it uses in connection with the operation of its business including its corporate name, logos and websites. Other trademarks and copyrights appearing in this press release are the property of their respective owners. The trademarks Ligand owns include Ligand®, Captisol® , and ZELSUVMI, a Novan product. Solely for convenience, some of the trademarks and copyrights referred to in this press release are listed without the ®, © and ™ symbols, but Ligand will assert, to the fullest extent under applicable law, its rights to its trademarks and copyrights. LIGAND PHARMACEUTICALS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share amounts) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Revenues: Royalties $ 22,463 $ 22,019 $ 83,910 $ 72,527 Captisol - Core 3,922 3,347 28,372 16,429 Captisol - COVID — 23,533 — 88,066 Contract revenue 1,716 1,483 19,032 19,223 Total revenues 28,101 50,382 131,314 196,245 Operating costs and expenses: Cost of Captisol 1,641 21,614 10,512 52,827 Amortization of intangibles 8,338 8,539 33,654 34,237 Research and development 5,488 9,197 24,537 36,082 General and administrative 15,992 31,131 52,790 70,062 Total operating costs and expenses 31,459 70,481 121,493 193,208 Gain on sale of Pelican — — (2,121 ) — (Loss) income from operations (3,358 ) (20,099 ) 11,942 3,037 Gain from short-term investments 16,025 44,248 46,365 28,540 Interest income, net 1,562 783 7,055 247 Gain on derivative instruments 250 — 250 — Other income (expense), net 2,618 (792 ) (1,952 ) 4,187 Total other income, net 20,455 44,239 51,718 32,974 Income before income taxes 17,097 24,140 63,660 36,011 Income tax benefit (expense) 1,091 (38,674 ) (9,841 ) (41,230 ) Net income (loss) from continuing operations 18,188 (14,534 ) 53,819 (5,219 ) Net loss from discontinued operations — (2,951 ) (1,665 ) (28,142 ) Net income (loss): $ 18,188 $ (17,485 ) $ 52,154 $ (33,361 ) Basic net income (loss) from continuing operations per share $ 1.04 $ (0.86 ) $ 3.11 $ (0.31 ) Basic net loss from discontinued operations per share $ — $ (0.17 ) $ (0.10 ) $ (1.67 ) Basic net income (loss) per share $ 1.04 $ (1.04 ) $ 3.02 $ (1.98 ) Shares used in basic per share calculation 17,466 16,890 17,298 16,868 Diluted net income (loss) from continuing operations per share $ 1.03 $ (0.86 ) $ 3.03 $ (0.31 ) Diluted net loss from discontinued operations per share $ — $ (0.17 ) $ (0.09 ) $ (1.67 ) Diluted net income (loss) per share $ 1.03 $ (1.04 ) $ 2.94 $ (1.98 ) Shares used in diluted per share calculation 17,676 16,890 17,757 16,868 LIGAND PHARMACEUTICALS INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) December 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 22,954 $ 45,006 Short-term investments 147,355 166,864 Accounts receivable, net 32,917 30,424 Inventory 23,969 13,294 Income tax receivable 6,395 4,614 Prepaid expenses 1,182 1,132 Other current assets 2,657 2,267 Total current assets 237,429 263,601 Deferred income taxes, net 46,062 8,530 Goodwill and other identifiable intangible assets, net 402,976 448,128 Commercial license and other economic rights, net 67,291 10,182 Operating lease right-of-use assets 6,062 10,914 Finance lease 3,393 4,095 Equity method investment in Primrose Bio 12,595 — Other investments 35,726 3,000 Other assets 21,530 14,218 Total assets $ 833,064 $ 762,668 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 14,894 $ 20,988 Current contingent liabilities 256 57 Current operating lease liabilities 403 670 Current finance lease liabilities 7 45 Deferred revenue 1,222 355 2023 convertible senior notes, net — 76,695 Total current liabilities 16,782 98,810 Long-term contingent liabilities 2,942 3,456 Long-term operating lease liabilities 5,755 10,336 Long-term deferred revenue 1,444 44 Deferred income taxes, net 77,470 30,615 Other long-term liabilities 27,758 21,922 Total liabilities 132,151 165,183 Total stockholders' equity 700,913 597,485 Total liabilities and stockholders' equity $ 833,064 $ 762,668 LIGAND PHARMACEUTICALS INCORPORATED ADJUSTED FINANCIAL MEASURES (Unaudited, in thousands, except per share amounts) Three months ended December 31, Year ended December 31, 2023 2022 2023 2022 Net income (loss) from continuing operations $ 18,188 $ (14,534 ) $ 53,819 $ (5,219 ) Adjustments: Share-based compensation expense 5,721 27,664 25,743 50,881 Finance lease impairment charge and other — 10,821 — 10,821 Non-cash interest expense (1) 81 95 240 734 Amortization related to acquisitions and intangible assets 8,338 8,539 33,654 34,237 Amortization of commercial license and other economic rights (2) (23 ) (32 ) (1,049 ) (355 ) Change in contingent liabilities (3) (397 ) 698 (265 ) (144 ) Novan operating loss 5,183 — 5,520 — Transaction costs (210 ) — 3,078 — Gain from short-term investments (16,025 ) (44,248 ) (46,365 ) (28,540 ) Realized gain (loss) from short-term investments 7,180 — 44,377 (288 ) Gain on sale of Pelican — — (2,121 ) — Credit losses and impairment charges for commercial license rights 405 — 4,519 — Loss from equity method investment in Primrose Bio 1,761 1,829 Other (4) (156 ) 1,904 530 (34 ) Income tax effect of adjusted reconciling items above 816 8,093 (9,144 ) (4,561 ) Tax benefit related to decrease in unrecognized tax benefits (5) (7,206 ) — (7,206 ) — Tax expense related to increase in valuation allowance (6) — 24,799 — 24,799 Excess tax benefit (shortfall) from share-based compensation (7) 757 (267 ) 228 (138 ) Adjusted net income from continuing operations $ 24,413 $ 23,532 $ 107,387 $ 82,193 Realized gains from sales of VKTX stock, net of tax (5,780 ) — (35,720 ) — Captisol - COVID gross profit, net of tax (8) — (10,514 ) — (40,268 ) Core adjusted net income from continuing operations $ 18,633 $ 13,018 $ 71,667 $ 41,925 Diluted per-share amounts attributable to common shareholders: Diluted net income (loss) per share from continuing operations $ 1.03 $ (0.86 ) $ 3.03 $ (0.31 ) Adjustments: Share-based compensation expense 0.32 1.60 1.46 2.96 Finance lease impairment charge and other — 0.63 — 0.63 Non-cash interest expense (1) — 0.01 0.01 0.04 Amortization related to acquisitions and intangible assets 0.47 0.49 1.91 1.99 Amortization of commercial license and other economic rights (2) — — (0.06 ) (0.02 ) Change in contingent liabilities (3) (0.02 ) 0.04 (0.02 ) (0.01 ) Novan operating loss 0.29 0.31 Transaction costs (0.01 ) — 0.17 — Loss (gain) from short-term investments (0.91 ) (2.56 ) (2.63 ) (1.66 ) Realized gain from short-term investments 0.41 — 2.52 (0.02 ) Gain on sale of Pelican — — (0.12 ) — Credit losses and impairment charges for commercial license rights 0.02 — 0.26 — Loss from equity method investment in Primrose Bio 0.10 — 0.10 — Other (4) — 0.10 0.04 0.01 Income tax effect of adjusted reconciling items above 0.05 0.48 (0.49 ) (0.27 ) Tax benefit related to decrease in unrecognized tax benefits (5) (0.41 ) — (0.41 ) — Tax expense related to increase in valuation allowance (6) — 1.44 — 1.44 Excess tax benefit (shortfall) from share-based compensation (7) 0.04 (0.02 ) 0.01 (0.01 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net loss — 0.01 — 0.02 Adjusted diluted net income per share from continuing operations $ 1.38 $ 1.36 $ 6.09 $ 4.79 Realized gains from sales of VKTX stock, net of tax (0.33 ) — (2.03 ) — Captisol - COVID gross profit, net of tax (8) — (0.61 ) — (2.35 ) Core adjusted diluted net income per share from continuing operations $ 1.05 $ 0.75 $ 4.06 $ 2.44 GAAP - weighted average number of common shares - diluted 17,676 16,890 17,757 16,868 Shares excluded due to anti-dilutive effect on GAAP net loss — 390 — 298 Diluted effect of the 2023 Notes (9) — — (119 ) — Adjusted weighted average number of common shares - diluted 17,676 17,280 17,638 17,166 (1) Amounts represent non-cash debt related costs that are calculated in accordance with the authoritative accounting guidance for convertible debt instruments that may be settled in cash and for revolving credit facility. (2) Amounts represent the amortization of commercial license and other economic rights to revenue. (3) Amounts represent changes in fair value of contingent consideration related to CyDex and Metabasis transactions. (4) Amounts primarily relate to restructuring costs, losses associated with our equity investment in Nucorion, gain or loss from change in fair value or derivative assets as well as gain on debt extinguishment in the prior year period. (5) Amounts represent discrete tax benefit related to the release of FIN48 reserves associated with certain R&D tax credits during the fourth quarter of 2023 due to the lapse of applicable statute of limitation. (6) Amounts represent discrete tax expense related to the valuation allowance established during the fourth quarter of 2022 against deferred tax asset for California research and development credits and net operating losses. (7) Excess tax benefits from share-based compensation are recorded as a discrete item within the provision for income taxes on the consolidated statements of operations as a result of the adoption of an accounting pronouncement (ASU 2016-09) on January 1, 2017. Prior to the adoption, the amount was recognized in additional paid-in capital on the consolidated statement of stockholders' equity. (8) Captisol - COVID gross profit, net of tax, represents gross profit, net of tax, for Captisol supplied for use in formulation with remdesivir, an antiviral treatment for COVID-19. (9) Excluding the impact from the adoption of accounting pronouncement (ASU 2020-06) on January 1, 2022, as the Company has intended to settle the principal balance in cash. Under the standard, the Company is required to reflect the dilutive effect of the 2023 Notes by application of the if-converted method, The 2023 Notes were fully paid off on May 15, 2023, the debt maturity date.