In an Aug. 31 research note, H.C. Wainwright & Co. analyst Joseph Pantginis reported that Ligand Pharmaceuticals Inc.'s (LGND:NASDAQ) zimberelimab was approved by China's National Medical Products Administration (NMPA) as a treatment for recurrent or refractory classic Hodgkin's lymphoma. The NMPA granted approval for this OmniAb-derived anti-PD-1 monoclonal antibody to one of Ligand's partners, Gloria Pharmaceuticals, in China.
"This marks the first regulatory approval of an OmniAb antibody discovery engine-derived antibody since Ligand first acquired the technology in 2016," wrote Pantginis.
Also regarding zimberelimab in China, Pantginis indicated, the antibody is being evaluated there as a treatment for advanced solid tumors, too. Already, the NMPA designated it as a breakthrough therapy for recurrent or metastatic cervical cancer.
Ligand's partner, Gloria Pharmaceuticals, has development and commercialization rights to zimberelimab in China via its sublicensing agreement with Ligand's trustee, WuXi Biologics Ireland. As for the Ligand-WuXi agreement, WuXi is to pay Ligand low single-digit royalties on future zimberelimab sales.
Pantginis indicated that zimberelimab is being developed outside of China as well, specifically in North America, Japan and Europe by another Ligand partner, Arcus Bioscience.
"The OmniAb platform continues to present an attractive service to companies," Pantginis wrote. "And with several OmniAb programs under development, we expect a substantial growth trajectory for OmniAb platform-derived business."
In other news, Pantginis relayed, Ligand received a $2-million milestone payment when, in July, the U.S. Food and Drug Administration (FDA) approved Merck's Vaxneuvance, a pneumococcal vaccine using Ligand's CRM197 vaccine carrier protein. Going forward, Ligand will receive a low-single-digit royalty on net Vaxneuvance sales. Pantginis noted that Vaxneuvance's competitor, Pfizer's Prevnar, generated $1.75 billion in sales in 2020.
Vaxneuvance is being advanced, by Merck, for infants as well, given that children under age 2 are particularly at risk for pneumococcal infection. Recent results from Merck's Phase 3 PNEU-PED clinical trial in healthy infants showed Vaxneuvance to meet primary and secondary endpoints, which Pantginis summarized.
When compared to a currently available, 13-valent pneumococcal vaccine, PCV13, Vaxneuvance showed a comparable safety profile. Vaxneuvance also demonstrated noninferiority to PCV13 for all 13 shared serotypes, based on serotype-specific response rates at 30 days following the third dose and at 30 days following the fourth. Vaxneuvance showed immune response superiority over PCV13 for shared serotype 3 and unique serotypes 22F and 33F.
Merck is expected to present, at an upcoming medical conference, complete data from this PNEU-PED trial and from the PNEU-LINK study that is comparing the safety and tolerability of Vaxneuvance and Prevnar in healthy infants.
"With these latest data on hand, along with the recently granted U.S. Food and Drug Administration (FDA) approval [for adults], [Merck] expects to submit a supplementary application to the FDA for the use of Vaxneuvance in children, by year-end 2021," noted Pantginis.
The analyst also pointed out that Ligand's shares are still undervalued despite the company's business model continuing to deliver. Ligand's current share price is about $121.14 whereas H.C. Wainwright & Co.'s target price is $310 per share.
"Ligand's assets, both in house and from partners, are positively advancing towards the clinic and pivotal inflection points and may reach a certain investment verdict promptly," he added.
H.C. Wainwright & Co. rates Ligand Buy.
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Disclosures from H. C. Wainwright, Ligand Pharmaceuticals, Inc., First Take, August 31, 2021
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Joseph Pantginis, Ph.D. and Emanuela Branchetti, Ph.D., certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of Ligand Pharmaceuticals, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of July 31, 2021 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Ligand Pharmaceuticals, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The firm or its affiliates received compensation from Ligand Pharmaceuticals, Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from Ligand Pharmaceuticals, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in Ligand Pharmaceuticals, Inc. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.
