On Friday, H.C. Wainwright reaffirmed a positive outlook on Ligand Pharmaceuticals (NASDAQ:LGND) by maintaining a Buy rating and a price target of $144.00. The endorsement follows the recent FDA approval of Ohtuvayre, a drug developed by Ligand's partner Verona Pharma (NASDAQ:VRNA) for the treatment of chronic obstructive pulmonary disease (COPD).
The approval, announced on June 26, is based on data from the Phase 3 ENHANCE trials, which indicated that Ohtuvayre can provide clinical benefits both independently and alongside other maintenance therapies.
Ligand Pharmaceuticals is set to receive a $5.8 million milestone payment as a result of the FDA's approval and is expecting an additional $13.8 million upon the drug's commercial launch, anticipated in the third quarter of 2024.
Furthermore, the company is entitled to a low single-digit royalty on worldwide net sales of Ohtuvayre. With a large target market, including approximately 8.6 million maintenance-treated COPD patients in the U.S. and over 390 million people globally, the drug's approval could significantly enhance Ligand's revenue stream.
The recent FDA approval marks the second such achievement for Ligand's royalty portfolio in the past two weeks and the eighth since 2023. These consecutive regulatory successes underscore the company's strategy of developing a diverse portfolio of royalties, which has been instrumental in driving sustained growth. Ligand's royalty-based business model is bolstered by multiple sources of revenue, positioning the company to capitalize on the commercialization of Ohtuvayre and other products in its pipeline.
In other recent news, Ligand Pharmaceuticals has made significant strides in the healthcare sector. The U.S. Food and Drug Administration (FDA) has approved Ohtuvayre, a novel inhaled treatment for chronic obstructive pulmonary disease (COPD) developed in partnership with Verona Pharma plc.
This is the first new mechanism of action for an inhaled COPD therapy approved in more than two decades. Ligand is set to receive a $5.8 million milestone payment following the FDA's approval and an additional $13.8 million upon the product's commercial launch, anticipated in the third quarter of 2024.
In addition to this, Ligand reported a strong first quarter of 2024, with $311 million in cash and investments, and the expectation to generate an additional $60 million from operations throughout the year. The company has reaffirmed its financial guidance for 2024, projecting significant growth in royalty revenue and adjusted earnings per share over the next five years. Ligand also announced the creation of Pelthos Therapeutics and the FDA approval of ZELSUVMI and entered into a partnership with Agenus (NASDAQ:AGEN), investing $75 million with an option for an additional $25 million.
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