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JUPITER, Fla. – Ligand Pharmaceuticals Incorporated (NASDAQ:LGND), a biopharmaceutical company with a market capitalization of $2.2 billion and strong financial health according to InvestingPro analysis, has entered into a royalty financing agreement with Castle Creek Biosciences, Inc., providing $75 million to fund the Phase 3 clinical trial of D-Fi, Castle Creek’s investigational gene therapy for dystrophic epidermolysis bullosa (DEB). The agreement, announced today, includes a $50 million investment from Ligand and an additional $25 million from a syndicate of co-investors, in exchange for a high-single digit royalty on global sales of D-Fi.
D-Fi (FCX-007) is a gene-modified cell therapy designed to treat DEB, a rare and severe genetic skin disorder characterized by the lack of type VII collagen (COL7) that connects the epidermis to the dermis. The treatment involves using a patient’s own cells, modified outside the body with a lentiviral vector to produce COL7, and then injected into the patient’s chronic wounds to aid skin healing.
The funding will support the final-stage testing of D-Fi through to the anticipated topline data results. Ligand’s CEO Todd Davis expressed excitement about partnering with Castle Creek to advance this orphan drug-designated gene therapy, emphasizing the potential to transform patient lives while expanding Ligand’s portfolio of revenue-generating assets.
Castle Creek’s President and CEO, Matthew Gantz, welcomed the investment, highlighting the significance of D-Fi as a potential breakthrough for patients living with DEB. The clinical studies conducted so far have indicated that D-Fi is generally well tolerated, with primarily injection site reactions reported as adverse effects. Ligand’s strong financial position, with more cash than debt on its balance sheet and a healthy current ratio of 12.49 according to InvestingPro data, positions it well for such strategic investments.
D-Fi has received Orphan Drug Designation for DEB treatment and additional designations from the FDA for recessive dystrophic epidermolysis bullosa (RDEB) including Rare Pediatric Disease, Fast Track, and Regenerative Medicine Advanced Therapy.
Castle Creek Biosciences focuses on developing redosable gene therapies and is currently conducting pivotal clinical trials for its lead candidate. Ligand Pharmaceuticals is a biopharmaceutical company that supports clinical development of high-value medicines through financing and licensing. The company has demonstrated strong market performance with a 54.3% return over the past year, though InvestingPro analysis suggests the stock is currently trading above its Fair Value. Investors can access detailed financial analysis, including 8 additional ProTips and comprehensive valuation metrics, through InvestingPro’s detailed research report.
The information in this article is based on a press release statement from Ligand Pharmaceuticals.
In other recent news, Ligand Pharmaceuticals has confirmed its financial guidance for the full year of 2024, projecting a 39% increase in fourth-quarter revenue to $39 million and adjusted earnings of $1.05 per share. For 2025, Ligand forecasts revenue growth between 10% and 20%, with expected sales of $192.5 million and adjusted earnings per share of $6.05. RBC Capital Markets has raised its price target for Ligand to $143 from $141, maintaining an Outperform rating, following the company’s Investor Day where management presented financial guidance for 2025. Oppenheimer also increased its price target to $150 from $135, citing the potential of Zelsuvmi, a drug in Ligand’s pipeline, as an underappreciated opportunity.
Ligand’s management anticipates a compound annual growth rate of about 22% in royalty receipts, with projections reaching approximately $285 million by 2029, surpassing RBC’s earlier estimate. The company expects royalty revenue to contribute significantly in 2025, with forecasts ranging from $135 million to $140 million. During the Investor Day, Ligand also outlined plans to leverage its Captisol and NITRICIL technology platforms for revenue growth. The company’s strategic initiatives and financial outlook have prompted analysts to maintain or upgrade their ratings, reflecting confidence in Ligand’s growth potential.
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