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March 7, 2018

Roivant's Newest Company to Develop Ligand's Diabetes Candidate LGD-6972

  • Roivant Sciences will partner with Ligand Pharmaceuticals to codevelop its type 2 diabetes candidate LGD-6972 through a collaboration that could generate up to $533.8 million for Ligand—and is aimed at developing the second pipeline candidate of Roivant’s new and seventh biotech spinout, focused on cardiometabolic drugs.

    LGD-6972—which Roivant plans to rename RVT-1502—is an oral, small-molecule glucagon receptor antagonist (GRA) that last year generated positive Phase II results as an adjunct to diet and exercise in participants with type 2 diabetes who were inadequately controlled on metformin monotherapy.

    In September 2017, Ligand reported topline results from a Phase II study showing that LGD-6972 met its primary endpoint of change from baseline in hemoglobin A1c (HbA1c) after 12 weeks of treatment at all doses tested. HbA1c reductions ranged from 0.90% at 5 mg of the treatment to 1.20% with 15 mg, compared to a 0.15% reduction with placebo.

    Full data from the Phase II trial has been submitted for presentation at the 78th annual Scientific Sessions of the American Diabetes Association, to be held in Orlando June 22–26, 2018. LGD-6972 has generated positive results in earlier preclinical and Phase I studies, according to Ligand.

    "This global license with Roivant for our diabetes program is another important deal in a long history of success converting our inventions, data, and intellectual property into licenses to advance promising medicines and deliver value to our shareholders," Ligand CEO John Higgins said yesterday in a statement.

    Ligand focuses on developing or acquiring technologies designed to enable biopharmas to discover and develop new treatments. The company specializes in drug discovery, early-stage drug development, product reformulation, and partnering, while relying on its partners to fund late-stage development and commercialization, in return for receiving royalties and milestone payments.

    Under the Ligand–Roivant collaboration, Roivant agreed to be responsible for research, development, manufacturing, and commercialization activities, including all regulatory filings, and has the right to sublicense its rights in certain circumstances.

  • Two Diabetes Candidates

    LGD-6972 is one of two development programs for Roivant’s new cardiometabolic spinout Metavant. The other is imeglimin, another oral type 2 diabetes treatment that is the Phase III-ready lead candidate of Poxel, a spinout of Merck KGaA. On February 12, Roivant and Poxel agreed to codevelop imeglimin (to be renamed RVT-1501) through an up-to-$650 million-plus licensing agreement covering the U.S., Europe, and elsewhere in the world, except 13 Asian nations.

    Metavant, joins a family of Roivant-launched companies focused on specific therapeutic areas that include neurology, dermatology, urology, endocrinology, women’s health, and rare diseases. Together with affiliated entities, Roivant said, it has raised more than $2.7 billion in capital to date to fund clinical programs and pursue business opportunities in healthcare.

    According to a regulatory filing yesterday, Roivant has agreed to pay Ligand $20 million upfront and up to $513.8 million in payments tied to achieving development, regulator, and sales milestones. Roivant also agreed to pay Ligand royalties on aggregate annual worldwide net sales of licensed products at tiered percentage rates ranging from low double digits to the mid teens, with the top tier applying to annual net sales above $3 billion.

    “If LGD-6972 is successfully developed, this license with Roivant has the potential to be Ligand's largest financial asset with the possibility of annual royalties into the late 2030s given current and pending IP,” Higgins added.

    Ligand said that as a result of the $20 million up-front payment from Roivant, 2018 total revenue is now projected at approximately $184 million with royalties of approximately $116 million, material sales of approximately $23 million, and license fees and milestones of at least $45 million—with the potential for up to an additional $20 million in license fees and milestones this year.

    The company has raised its forecast for adjusted earnings per diluted share to approximately $4.85. Previous guidance was for 2018 adjusted earnings per share to be approximately $4.22, based on a total revenue of approximately $164 million.

    LGD-6972 is the lead compound in the GRA program that Ligand acquired when it acquired Metabasis Therapeutics for $1.6 million, in a deal completed in January 2010. As part of that deal, Metabasis stockholders received four tradable Contingent Value Rights (CVRs), one CVR from each of four respective series of CVRs, for each Metabasis share.

    Holders of Glucagon CVRs are entitled to receive 20% of the net proceeds of the Roivant agreement as with “any license or sale of Metabasis’ glucagon receptor antagonist program in diabetes,” according to a 2010 regulatory filing by Ligand upon completing the purchase of Metabasis.

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