Ligand Pharmaceuticals’s (LGND) Captisol technology platform is used with carfilzomib to formulate Kyprolis. The drug is developed and marketed by Amgen (AMGN). Kyprolis is indicated for use in multiple myeloma (or MM).
Amgen is investing in the label expansion opportunities of the drug by conducting CLARION and ARROW clinical studies.
Wall Street analysts projected Kyprolis to earn about $766.9 million in 2016. The drug faces stiff competition from Celgene’s (CELG) Pomalyst, Johnson & Johnson’s (JNJ) Darzalexand, and Novartis’s (NVS) Farydak. For details on the drug, please refer to Kyprolis: Amgen’s Innovative Drug in Oncology Segment.
Multiple myeloma market
Kyprolis holds a significant 16% market share in proteasome inhibitor–type drugs. To understand the MM market and the types of drugs for treating it, please read Celgene Targets Multiple Myeloma Opportunities for Growth in 2016.
Kyprolis’s revenue growth would fetch higher royalties for Ligand Pharmaceuticals (LGND). According to the tiered royalty agreement with Amgen, LGND will receive a 3% royalty of the net sales of Kyprolis if the drug’s sales exceed $750 million. Similarly, it receives revenue from the sale of Captisol technology to Amgen for clinical and commercial use.
For broad-based exposure to pharmaceutical and biotechnology companies, you can choose to invest in the iShares Russell 2000 ETF (IWM). IWM holds 0.14% of its total holdings in Ligand Pharmaceuticals.
Continue to the next part for a look at the factors behind Ligand Pharmaceuticals’s attractive margins.