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IBD 50: Ligand Pharma Beats Q1 Estimates, Buys Device Royalties

Ligand Pharmaceuticals ( LGND ), an  IBD 50 stock, rose early Wednesday after the small biopharma beat Q1 estimates and announced an acquisition that helped lift its guidance. Ligand reported earnings  excluding one-time items of 97 cents a share, more than triple the year-earlier number, beating analysts’ consensus by 30 cents, according to Thomson Reuters. Revenue rose 103% to $29.6 million, topping consensus by about $3 million. As described in a recent IBD  New America  story, Ligand’s business model is based on developing or acquiring technologies used in drug development and partnering with larger biotechs and pharmas that can make them into commercial products. Much of the growth in Q1 revenue came from the timing of milestone payments, along with the January acquisition of Open Monoclonal Technology, which licenses its biotech platform to drug developers. Ligand’s royalty payments grew thanks to the continued ramp of Amgen ’s ( AMGN ) blood-cancer drug Kyprolis and Novartis ’ ( NVS ) low-platelet treatment Promacta. Ligand also said it had agreed to pay $17.5 million for royalties on multiple programs from CorMatrix Cardiovascular, a privately held company that sells devices that help regrow human tissue. Ligand is guaranteed a minimum payment of $2.75 million annually, but says this is expected to double over time as CorMatrix rolls out new products. “CorMatrix’s existing and pipeline medical devices address market opportunities estimated to exceed $1 billion annually,” Ligand said in its press release . Ligand added $2 million to its 2016 revenue guidance, of which $1 million was expected to come from CorMatrix, bringing the range to $115 million to $119 million. That was still on the low side of Wall Street’s average estimate of $118.5 million, but EPS guidance beat Wall Street, at $3.41 to $3.46. Last year, the company made $3.37 a share on $71.9 million in revenue. It also guided 2017 slightly below consensus, with $160 million and EPS of $5.03. Ligand stock was up 2% in early trading on the stock market today , near 122. The stock is No. 18 on the current IBD 50 list of top-performing names over the past 12 months, with a strong Composite Rating of 93 despite somewhat light trading volume.

How Regeneron’s Eylea Growth, Amgen, Sanofi Deal Figure In Stock

Biotech Regeneron Pharmaceuticals ’ ( REGN ) core ophthalmology business still has huge upside as its Eylea sales grow in treating a variety of eye diseases, says RBC Capital. RBC also says that a legal settlement with Amgen ( AMGN ) over Praluent, a drug intended to lower bad LDL cholesterol, would be a positive. Most of Regeneron’s sales come from Eylea, launched in 2011 to treat age-related vision loss in the elderly. Regeneron aims to build sales of Eylea in the market for treating diabetic macular edema (DME), a cause of blindness in working-age people, as well as a related eye disease affecting older people. “Turning DME into a $2 billion to $3 billion market opportunity is important and likely,” Adnan Butt, an RBC Capital analyst, said in a research report Tuesday. In DME, Eylea competes with Roche Holding ’s ( RHHBY ) Lucentis. Regeneron typically reports earnings in early May. Roche, Novartis ( NVS ) and Bayer ( BAYRY ) report earnings on April 19, 21 and 26, respectively, and their commentary could provide insights into Eylea’s growth, says RBC’s Butt. He says that consensus expectations for the recently launched cholesterol drug Praluent, which had only $7 million in December-quarter sales, still need to come down. Amgen makes a rival drug called Repatha. In March, a federal jury upheld the validity of two Amgen patents related to the cholesterol drug, dealing a blow to Regeneron and partner Sanofi ( SNY ). “A settlement with Amgen could be a positive,” Butt said in the report. He rates Regeneron stock outperform, with a price target of 668. Regeneron stock was up more than 1.5% in early afternoon trading in the stock market today , near 402.50. Amgen reports earnings on April 28, followed by Sanofi on April 29. Their earnings calls could provide reads on the status of Praluent litigation, says Butt. Regeneron stock has plunged 26% in 2016 amid a broad sell-off in biotech stocks, including Celgene ( CELG ) and Gilead Sciences ( GILD ). Regeneron shares touched a six-month low below 349 last month but jumped on April 1 after the company announced strong phase three clinical results for dupilumab, a drug for eczema, an itchy skin condition. Regeneron is developing that drug with Sanofi. “The landmark deal with Sanofi provides $160 million per year to fund antibody discovery for eight years, gives Regeneron 50% of the profit and defers all development costs until the partnership is profitable,” added Butts. Startup Intellia Therapeutics late Monday announced a licensing deal with Regeneron. Cambridge, Mass.-based Intellia has developed “gene editing” technology to treat liver and blood diseases. It plans to go public. Regeneron has an IBD composite rating of 58 out of a possible 99, lower than both Celgene and Gilead. IBD’s Medical-Biomed/Biotech group ranks just No. 108 out of 197 industry groups. That’s down from No. 39 six months ago.  But it’s up 9.8% the past four weeks, 10th best in that span. Anika Therapeutics ( ANIK ), Supernus Pharmaceuticals ( SUPN ) and Ligand Pharmaceuticals ( LGND ) have the highest IBD Composite Ratings within the biotech group.

5 Big-Name Medical Stocks Show Notable Chart Action

Loading the player… There’s a lot of news breaking in the medical sector today. Let’s take a look at five medical-related stocks with notable charts: Valeant Pharmaceuticals ( VRX ), Eli Lilly ( LLY ), Teva Pharmaceuticals ( TEVA ), Inogen ( INGN ) and Ligand Pharmaceuticals ( LGND ). Valeant Plunges On Results Valeant reported preliminary fourth-quarter earnings that missed expectations and slashed its guidance. The specialty drugmaker warned that it could potentially default if it doesn’t file its annual report by an April deadline. Valeant’s financials are under an ongoing review after a scandal broke out last fall. Shares plunged more than 50% in giant volume, hitting their lowest level in four years. The stock is now trading at 86% below its all-time high reached last August. Late-Stage Trial Change Hits Lilly Eli Lilly crumbled as much as 6% after announcing it’s changing the goal of the phase-three clinical trial for its Alzheimer’s treatment, signaling that the drug can only treat cognitive capabilities and not functional capabilities as well. The decline came in big turnover, and sent shares to a one-year low in intraday trade. Lilly is now 23% below its high reached in September. Teva’s Acquisition Delayed Teva Pharma’s $40.5 billion acquisition of Allergan’s generics unit has been delayed until June as it works to get regulators’ approval. Shares dropped more than 5% in intraday trade. Volume was heavy. Shares are now trading 14% below a consolidation buy point and 21% below their July high. Inogen Beats Views Inogen reported better-than-expected quarterly results on Tuesday. The company makes oxygen tanks for chronic respiratory conditions. The gap-up put shares above their 200-day line in intraday trade, but the stock was struggling to hold above that level as it pared some of its gains. Inogen was able to retake the 50-day line in Monday’s session. It’s now about 27% below its September peak. IBD 50’s Ligand Basing Meanwhile, IBD 50 stock Ligand Pharma is working on a double-bottom base with a potential buy point at 106.08. Shares are currently trading about 7% below the pivot.