money Ligand Q2 earnings and revenue beat estimates, driven by Remdesivir drug
John Higgins, Ligand Pharmaceuticals CEO joins Yahoo Finance to discuss the companies Q2 earnings beat and the company's Captisol sales, a key ingredient in Remdesivir, leading growth.
Video Transcript
ADAM SHAPIRO: Want to talk about a company that reported earnings this morning and beat on both the top and bottom lines, Ligand Pharmaceuticals. The CEO John Higgins is joining us now. And if you don't know this company, you know different pharmaceutical products into which Ligand's products are used as some of the ingredients. Good to have you here. And one of those ingredients would be this-- this, I guess you call it the drug Captisol, which goes into remdesivir, is that correct?
JOHN HIGGINS: That is correct, yes.
ADAM SHAPIRO: How important is Captisol not only to that drug, but to other drugs, and as we look for treatments for COVID-19?
JOHN HIGGINS: Yeah, well, it's-- it's very important. The technology's been around for about 20 years, discovered in a period when the industry realized there are a lot of good drugs out there, but many are not soluble. They do not dissolve in water, which makes them very difficult to use for human treatment. So our scientists engineered this ingredient that is like a donut. It's-- it's a sugar ring, and active ingredients like remdesivir hide within the-- the hole, the donut hole, if you will.
It helps solubilize or dissolve drugs or help stabilize drugs. So it's been around for a long time. It's used for cancer medicines, for medicines to aid depression. And now, of course, the significant headline is it's being used in this global pandemic to formulate remdesivir.
JULIE HYMAN: So, John, it's Julie here. Thanks for joining us. So you saw a boost in revenues in part because of Captisol, and Adam was asking how reliant a number of different drugs on it. But how reliant are you on Captisol? In other words, I believe about 2/3 of your revenue comes from that single product. So how concerned are you about diversification? And what other drugs do you have that you're developing that you expect to perhaps round out the portfolio and make you less reliant on that single product?
JOHN HIGGINS: Yes. Well, it's interesting. Investors who know Ligand know we're a technology company. We invest in the tools and the technology to help enable drugs, help make them possible. We're highly diversified. We have over 200 partnered programs with over 120 different drug companies. So across the spectrum, highly diversified.
In this case, given the nature of the global need, you're right, remdesivir in the capsule business is-- is growing significantly. It's going to have a big impact on us this year, and we forecast going forward. But the revenue base is highly diversified. We have royalties off of multiple other products. We have service revenue with companies away from Gilead, and very significant milestone payments as well.
EMILY MCCORMICK: John, just taking a look at your results, one of the things that I've been noticing with health care companies and other pharmaceutical companies that they've pointed out is outside of these COVID-19-related prescriptions and treatments, they've actually been seeing a lower number of sales for some of their products because of the fact that in-person meetings with prescribers and restrictions on patient movements because of stay-in-place orders have been having an impact on results. So outside of Captisol, are you seeing that negative impact on demand for other products because of that patient dynamic?
JOHN HIGGINS: Well, it's certainly a reasonable theory that the industry had about four months ago, and-- and there was a fall off in patient access-- access to-- to diagnosis and doctor visits, and also access to medicine. Generally, it seems that the-- the industry is coming back, though. We're working with telemedicine, able to treat or diagnose patients remotely. But also, we're finding ways to get drugs distributed to patients even if they don't have the regular access to doctors. So where the industry and Ligand, to a small extent, saw some weakness in late Q1, early Q2, we see a recovery of that now into the second half of 2020.
