Ligand Pharmaceuticals Inc (LGND) 2014 Q4 法說會逐字稿

Greetings, and welcome to the Ligand Pharmaceuticals Fourth Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

(Operator Instructions)

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Erika, with Investor Relations. Thank you, you may begin.

Thanks, Jesse. Welcome to Ligand's Fourth-quarter Financial Results for 2014 and Business Update Conference Call. Speaking today for Ligand are John Higgins, CEO; Matt Foehr, President and COO; and Nishan de Silva, VP of Finance and Strategy, and CFO.

As a reminder, today's call will contain forward-looking statements within the meaning of federal securities laws. These may include, but are not limited to, statements regarding intent, belief, or current expectations of the Company, its internal and partner programs including Promacta, Kyprolis, and Duavee, and its Management. These statements involve risks and uncertainties, and actual events or results may differ materially from the projections described in today's press release and this conference call. Additional information concerning risk factors and other matters concerning Ligand can be found in Ligand's public periodic filings with the SEC, which are available at www.sec.gov.

The information in this conference call related to projections or other forward-looking statements represent the company's best judgment based on information available and reviewed by the company as of today February 9 at www.sec.gov. The information in this conference call related to projections or other forward-looking statements represent the Company's best judgment based on information available and reviewed by the Company as of today February 9, 2015, and do not necessarily represent the views of GSK, Pfizer, Amgen, or any other partners. Ligand undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

At this time I will turn the call over to John.

Good morning. Thanks for joining us for our fourth-quarter 2014 earnings call. Strong quarter and strong year, and we see Ligand's financial growth accelerating over the next couple of years. So why will growth accelerate? There are three main reasons. One, because Promacta and Kyprolis are doing well, and we're stepping up to higher-royalty tiers. Two, our Captisol business is very strong; and three, we have the largest and latest-stage portfolio of partnered assets in our Company's history.

The likelihood of new approvals for revenue-generating assets is better than ever, given the portfolio size and stage of development. Plus, our current operations and cost structure will support a growing top line, meaning growth rates in cash flow and net income will far out-pace growth in revenues. We've been saying this for the last couple of quarters, and have published our view of cash flow and profit margins. Ligand's adjusted cash flow margin was over 50% in 2014, and we project it will move even higher in 2015.

First, I want to talk about our two main royalty assets, Promacta and Kyprolis. Promacta -- this is a great asset. It's a successful product pipeline in itself. The drug boosts platelets as a safe, once-a-day oral pill with many potential uses. It is now approved for three different indications, and GSK continues to roll out new markets globally. The large indications for boosting low platelets associated with cancer such as MDS are still in development, with regulatory filings expected within the next year.

In the fourth quarter, US prescriptions for Promacta as reported by Bloomberg hit all-time highs, and were up nicely over Q3. Total fourth-quarter revenue for Promacta as reported by GSK was $105 million, up slightly over Q3, even allowing for a big negative impact of currency exchange from European sales. Novartis is in the process of acquiring the Promacta product line from GSK, and we expect the deal to close in the next few months. Novartis has a much larger commercial platform for marketing Promacta, and we believe Novartis has the potential to drive sales growth, especially with the approval of new indications.

In 2015, Promacta sales should be about $0.5 billion, with new indications and geographies to come, and a long remaining patent life. On that level of sales in 2015, Ligand will for the first time achieve its highest royalty tier with Promacta, achieving a 10% gross royalty. This will further accelerate our revenue generated from Promacta.

Now, onto Kyprolis. We are very pleased with how Amgen is positioned with its major medical advancement at the start of 2015. Prescription growth the last two quarters has been very strong in the US, and Amgen is well situated with its recent clinical data announcement and regulatory filings. Throughout much of 2014, many of us were awaiting Kyprolis data from the major Phase III trial announced last summer, and at the end of the year at the ASH conference. There was a lot of uncertainty around what the trials would show, with some competitors and investors positioned to benefit should the data be negative or inconclusive.

Now, things have changed significantly, and the product is in a good situation. The trial data are out, EU regulatory submissions are in. Amgen and trial investigators have been publishing encouraging data. The product has been granted accelerated review in Europe, and Ligand sold a large quantity of Captisol to Amgen in 2014 to support their clinical trial and growing commercial needs. This is an important product that has been shown to extend the lifespan of terminally ill patients. Wall Street analysts widely believe the product will exceed $1 billion in annual sales, and numerous analysts project the product will exceed $2 billion in annual sales. As for this year, the product should achieve about $500 million in sales here in 2015.

When you look at our two largest programs that we earn royalties from combined, Promacta and Kyprolis, they should generate about $1 billion in sales in 2015. Again, keep in mind these are young brands with long remaining patent lives, and our royalty rates increase with higher sales.

Now, a comment about Duavee, a product launched in the US one year ago by Pfizer. It's a product for the prevention of osteoporosis and hot flash symptoms. US monthly prescriptions have doubled in the last several months, and now are on track to exceed 10,000 per month. The product was approved in Europe in December, and now Pfizer's working through pricing, with the goal to convince the regulatory bodies to approve premium pricing, not parity pricing. We are encouraged by that, as it indicates Pfizer's conviction for the product. On its Q4 earnings call last week, Pfizer called out Duavee in a list of products as one of its growth brands for 2015. Now, it is early days for this product, but the women's health category is changing. We believe Duavee has the potential to be an important drug in the new medical treatment paradigm.

We completed a major convertible debt financing in 2014, raising about $0.25 billion. Numerous bankers have told us that the terms to Ligand were the best obtained for an issuer of our size since 2007, highly efficient pricing for Ligand. The fact that we did a convert deal may not be a surprise, but the fact we did such a good deal is the take-away message. Ligand is building a record for good deal-making, and for this financing we had excellent market timing. Plus, the deal was astutely structured with a call spread whereby we invested in Ligand to stretch the conversion on the bond to $125 per share.

We finished 2014 with a substantial cash balance, about $168 million. Yes, we also have debt on the books, but now we are generating significant cash flows and profits. We have operating leverage, and a real capital position to go out and buy things if we see fit. These purchases could include our stock. In fact, we did meaningful share repurchases in the last five months of 2014, a total of $68 million, or 1.25 million shares. We bought back 6% of our outstanding stock, and nearly $30 million was repurchased during the fourth quarter alone. Ligand's performance has been strong, and we're confident in Ligand's growth prospects. That is why we re-purchased stock.

Last week we were pleased to announce that we promoted Matt to President. The work Matt and I do won't change, but with the promotion we wanted to acknowledged Max excellent contributions to the Company. Our team is doing great work. We are hungry and hard-working. Our focus is on superior execution, and when we see opportunities we take them. I want to thank our investors for their interest and commitment to Ligand. We are pleased with the business, and look forward to continuing to build value for our shareholders. Now I'll turn it over to Matt.

Thanks, John. Now, beyond the positive developments relating to Promacta and Kyprolis that John just discussed, our pipeline of assets is progressing incredibly well. Over the past few months, we've seen multiple partners discuss and highlight their regulatory and clinical progress, and also publicly discuss the significant market potential for some of our most valuable partnered assets. I'd like to highlight a few of those this morning.

Merck highlighted the importance and potential medical and economic impact of MK-8931 at this year's JPMorgan conference. MK-8931 is a novel base inhibitor under development as a potential treatment for Alzheimer's disease, and Merck is running a broad and global Phase III program in a range of patients with prodromal, mild, and moderate disease. Merck CEO Ken Frazier discussed the program at some length during his presentation at JPMorgan, pointing out that Alzheimer's is a critical issue for society, with the cost about Alzheimer's care expected to exceed $1 trillion in the US by the year 2050. He disclosed that they have had patients on 8931 for over two years now, and that the Data Safety Monitoring Boards responsible for trial oversight have recommended no changes to the study. He also stated that the current trials will be a definitive test of the amyloid hypothesis to understand if intervention at various stages of the disease can lead to benefits among patients suffering from, or at risk of, Alzheimer's disease.

Also at JPMorgan, TG Therapeutics announced their plans to start clinical development in oncology for the IRAK-4 inhibitor program in the second half of this year. We entered into the deal with TG for IRAK-4 less than eight months ago with a pre-clinical asset. Our partners at TG are now already positioning to get IRAK-4 into the clinic this year. We negotiated stock for the up-front payment for that deal, which I will note has appreciated nicely over the last couple of quarters.

Our partners at SAGE Therapeutics continue to make great progress in the development of a potential life-changing therapy to treat rare central nervous system diseases that represent and have huge un-met needs. What I'm referring to is Captisol-enabled SAGE-547. SAGE recently reported an update on data from their ongoing Phase I-II clinical trial, an emergency-use program of 547 in patients with super refractory status epilepticus, or as SRSE, showing a response rate of greater than 70% observed in two patient groups. Also, SAGE announced the initiation of a Phase II-a exploratory study of 547 in post-partum depression and essential tremor. I want to highlight for investors that SAGE completed their IPO in the middle of last year, and now has a market value of about $1 billion. The company is well-organized, and their success have captured investors' interest. We are pleased to know that SAGE's lead program is based on a license agreement with Ligand.

Spectrum Pharmaceuticals filed their NDA for Captisol-enabled melphalan in December, and are seeking approval for the drug as both a high-dose conditioning treatment prior to stem-cell transplantation in multiple myeloma, as well as for the treatment of patients with multiple myeloma where oral therapy is not appropriate. Spectrum expects the NDA review to take 10 months, which puts the potential action date in the later part of this year. Spectrum has also said that with approval, they plan to launch the drug this year with their existing sales force.

In early January, Melinta Therapeutics announced positive top-line results from a Phase III study of Captisol-enabled Delafloxacin IV in patients with acute bacterial skin and skin-structure infections. The study met its pre-specified primary end points required for both US and EU submissions. As the world knows, the health care system obviously needs more highly effective antibiotics capable of winning the fight against a broad spectrum of disease-resistant infections. We see Delafloxacin as playing an important role in what is a growing global and urgent medical need for new antibiotics. There is keen interest by government and regulatory bodies to ensure promising new products like Delafloxacin make it to patients, and I note that the FDA already granted qualified infectious disease product, or QDIP status, for the drug, which enables an additional five years of marketing exclusivity, priority review, and fast-track status eligibility.

Retrophin recently announced that they received orphan drug designation from the FDA for Sparsentan for Focal Segmental Glomerulosclerosis, or FSGS. Sparsentan is a selective dual-acting receptor antagonist, with an affinity for endothelin and angiotensin II receptors. This drug was originally developed as an anti-hypertensive, but its mechanisms of action have been shown to reduce Pronutria and end the properties that are the hallmarks of FSGS, which led Retrophin to start investigating it for this indication. A number of Phase I and Phase II studies have already shown Sparsentan to be safe and well tolerated. We see the drug as having the potential to be a significant medicine that could really transform the treatment of FSGS. Retrophin continues to move the program ahead, and expects to complete enrollment in a potentially pivotal trial later this year.

These programs I've discussed represent just a sub-set of the products that could be on the market in the next few years or so, and could begin to contribute materially to Ligand's future growth. Internally, here at Ligand, our R&D team continues to advance our glucagon-receptor antagonist, LGD-6972 for type II diabetes, among other programs. Our multi-center Phase I-b multiple ascending dose trial for 6972 is progressing very well and according to plan. We continue to believe that we have a potential for a best-in-class compound with a new mechanism to treat diabetes, and we look forward to having the clinical data in the second quarter.

I'm going to finish by touching briefly on our Captisol technology. Captisol created a number of new shots on goal in 2014, and the in-bound interest in the technology continues to grow significantly. We have more partners now than ever, and more partners are using the technology in new ways -- using it with new classes of novel compounds, and in topical and oral formats, in addition to the well-established IV route. We continue to invest in the technology, and have been and will continue to expand the content and geographic footprint of our drug master files, as well as in new intellectual property related to the technology.

We also invest in the manufacturing and technical support of Captisol, and I'll note that we get new insights on the value and promise of Captisol not only through our internal technical work, but also through the dialogue with our commercial and clinical partners. We see a great future for the technology. I note also that Q4 material sales of Captisol were the most ever in a single quarter in the history of the technology, something that is certainly worth noting.

With that, I'll turn the call over to Nishan to talk through the financials.

Thanks, Matt. 2014 was our second full year of profitability, and the business is performing just as we expected from a financial perspective. We continue to see growing total revenues, coupled with relatively flat cash operating costs, providing tremendous earnings leverage to the P&L. We saw impressive year-over-year growth in royalty revenues from our key commercial-stage assets Promacta and Kyprolis, and a significant increase in demand for Captisol from our customers. We continue to execute on our strategy of early-stage R&D, and out-licensing at the earliest-value inflection point. Our partners continue to execute well on late-stage R&D and commercialization, which is borne out by our growing revenue and profitability.

To recap a few highlights from our earnings release issued earlier today, total revenues for the fourth quarter were $23 million, up $8.3 million compared to the same quarter last year, driven primarily by a 90% increase in Captisol material sales, and a 32% increase in royalty revenues, with collaborative R&D and other revenues essentially flat. Our cost of goods sold for the quarter was $4 million, resulting in a gross margin on material sales of 69%, and a total gross margin taking into account all revenues of 83%.

For the quarter, we reported non-GAAP income from continuing operations of $12.5 million, or $0.60 per diluted share, compared with $7.5 million, or $0.35 per diluted share, for the same period last year. For the full year, we reported revenues of $64.5 million, and gross margin including all revenues of 86%. Non-GAAP income from continuing operations was $32.6 million, or $1.52 per diluted share, which is up from $19 million, or $0.92 per diluted share for 2013. The increase in non-GAAP income was driven by a 27% increase in royalty revenue and a 49% increase in Captisol material sales, and only a slight year-over-year increase in cash operating expenses to approximately $20 million.

On the cash side, we ended the year with $168.6 billion of cash, short-term investments, and restricted cash. This was ahead of our plan, due to the $245-million, five-year convertible note we closed in August, offset by the use of these proceeds for stock repurchases. During the year we repurchased approximately 1.25 million shares of our common stock at a total cost of approximately $68 million as part of our Board-authorized $200-million stock repurchase program.

Looking forward to 2015, we affirm our previous guidance of total revenues between $81 million and $83 million, and non-GAAP earnings per diluted share between $2.14 and $2.18. For the first quarter, we expect total revenues to be between $13 million and $13.5 million, non-GAAP earnings per diluted share to be between $0.25 and $0.27. As a reminder, our non-GAAP earnings per share guidance for both the full year and the first quarter do not include the effects of changing contingent liabilities, marked-to-market adjustment for investments owed to licensors, stock-based compensation expense, and non-cash, debt-related cost.

For 2015, approximately half our revenue was derived from royalties, mostly from Promacta and Kyprolis. One year ago we reported that a generic product entered the market for Pfizer's Avinza. Pfizer recently notified us that as of last month they have stopped selling Avinza to wholesalers. Avinza's been a small royalty line for Ligand, and our financial guidance is unchanged.

We will continue to see the quarterly revenue patterns we have previously highlighted. Q2 is typically the lowest quarter of the year for royalty revenue, given the escalading royally tiers have reset annually, and that are paid on a one-quarter lag; and Q4 is also the largest quarter of the year for capital material sales, due to the timing of commercial orders. Overall, however, we expect to see a quarter-over-quarter increase in total revenues as we progress through the quarters during the year. Finally on the expense side, we continue to run the Ligand business with $20 million to $22 million of annual cash expenses.

With that, I will turn the call over to the operator and open it up for questions.

(Operator Instructions)

Greg Frazier, Deutsche Bank

Good morning, guys. It's Greg Frazier on for Greg Gilbert. Question for Matt or Nishan. Are there any important factors to consider that will influence 1Q revenue, such as seasonality or expected differences in customer ordering patterns, et cetera? The 13% to 13.5% seemed a little bit lower than what was expected?

Yes Greg, this is Matt. I'll comment. Obviously, Nishan can comment on the royalties and how they tiered throughout the year. That's one element that certainly we call investors' attention to and to be aware of. Traditionally, Q4 we've seen with Captisol, has been a larger quarter for Captisol. There's generally a lumpiness associated with Captisol orders, but just given the way production planning occurs with our partners, we've seen this in the last few years where Q4 can be a very large quarter for Captisol.

I noted earlier it was actually the largest quarter ever in the history of the technology. We kind of knew that leading into the quarter, and expected that based on the dialogue we'd had with our partners. But there is something of a general seasonality, I'll say, to Captisol orders at the end of the year. I don't know, Nishan may want to add more color there.

Yes, thanks Matt. Greg, thanks for the question. As you look at Q1, talk about royalties for example. They're based on a one-quarter lag. Our Q1 royalties are now based on the Q4 Promacta Kyprolis numbers which are out there, so those are relatively fixed. Those are our biggest component of our royalty line.

Beyond that, I think your question of Q1 and why the 13% to 13.5%, it's just a matter of timing of when the materials bills come in, and the various milestones that we see hitting throughout the year. We're comfortable with the overall guidance we gave of $81 million to $83 million, and getting there, as I mentioned, year over year -- sorry, quarter over quarter increases in total revenue. That as we look at the timing of the material sales and milestones. That's just how that shakes out for Q1.

Greg, this is John. I'll add another comment. As Nishan was saying, this actually is very much in line with our expectation, and some analysts or investors who followed us know how first and second quarter work out. We saw after we issued 2015 guidance -- about two months ago we give full-year guidance. It seems many of the publishing analysts simply took our number and mostly divided by four to hit a flat average revenue per quarter.

Since we had not given any quarterly information, we didn't have a basis to get out there and start giving more granular information. I think if there's any consensus valuation, I think that may have been what was going on. Our low $80 in million revenue divided by four, about $20 million a quarter in revenue. That's what we saw, but in fact what we're guiding to for Q1 and obviously how we see the year shaking out is very much in line with our overall picture.

Great, that's helpful color, thank you for that. On material sales, can you say how much of the $13 million was clinical use versus commercial, and remind us what the differences are in price versus -- or in price and gross margin for sales for commercial versus clinical use?

Yes, it was a mix, Greg, between commercial and clinical. I'll let Nishan talk you through the gross margin. There was a large amount of commercial, I will say, in the fourth quarter, like the majority there on the commercial side. But Nishan, you can probably comment on the margins in the structure

Yes. Greg, it's a mix between, as you highlight, commercial and clinical. On the commercial side, our margin is about 50%, and on the clinical side it's about 80%. For the quarter, as I mentioned in my comments, we came out about 69%. It's a mix of those two.

Okay. Last question on business development. Can you give us some qualitative color on the types of assets you're looking at that are perhaps the most ripe? And just comment on the overall environment for the things you're interested in. Are you seeing more competition for assets than you have in the past? How are valuations looking? Some type of color like that? Thank you.

Yes, good Greg. Well, the Company, our business model, and all our team is definitely geared toward deal-making. We've done a number of deals, but we want to be disciplined partly in looking at assets that really are a fit with the business, but also disciplined in terms of structure and value.

What we want to buy -- obviously revenue, things that can be accretive on the top and bottom line -- fully funded partnered assets. We value these to have economics back and want these tied to funded collaborations is a priority for us. Also technology, like we have Captisol or LDP, other platform technologies where we can use our deep Rolodex of pharma partners to push out technologies that make drugs possible. Those are the three things we're looking to buy.

The industry has changed a lot. Obviously the valuations are up, properties are a lot more expensive now. We're realistic about that. Again, we're going to be disciplined and not look to chase high-value assets. Having said that, we believe there are situations where there are always sellers, private or public companies, that need to either divest an asset or possibly sell a company. There are also companies that may have had negative news or had a compression of value. We are looking.

What we want to do on the deal sides beyond just buying these focused two or three priorities, but look at businesses that have low operating costs, our businesses that can be restructured, where we can cut costs or divest assets that are non-core within about a 12-month window. As an operating Company, unlike other financial investors, private equity, or the [royalty] fund, we are as an operating Company able to get in and do the hard work, the restructuring. That we think creates some competitive advantage, being able to move in with our research team and operators to fix or restructure companies. But again, that's the general overview. We talk about our outlook for M&A, but we don't give specific guidance for any targets or timing.

Matt Tiampo, Craig-Hallum.

Good morning, gentlemen. I was just -- around Captisol and the seasonality of Captisol, and the seasonality of Q1 and Q2 in particular, we would normally look for I think some step-down in Captisol in Q1; but it seems like you're guiding toward something maybe more drastic then we on the street might have modeled. I was wondering if you had any additional color? Was there some pull-forward into Q4, something that got accelerated maybe, or some things that are getting pushed into Q2 this year? Any color would be really helpful, thanks.

Sure, Matt. Thanks for the question. I think there is the -- what we saw coming out of fourth quarter was, I'll say the very positive growth and development of the business. In our opinion it's not so much a Q1 issue as much as a Q4 reflection of the large ordering for commercial supply. As Matt indicated, in the middle of 2014 all of our commercial customers -- these are Captisol partners who are now launching or currently selling commercial products. All of our customers middle of 2014 had indicated increased ordering by the end of 2014.

Part of this -- again, we don't control this, of course, but part of this is driven by the calendar, annual budgeting, and planning. Most of our partners are required to give us a rolling forecast of need, et cetera. I think we saw ordering in anticipation of commercial stocking in the fourth quarter. We also saw number of companies running Phase III trials, large trials that again were gearing up for trial launch. That is the business.

As we look to 2015, I think the take-away, as Nishan said, is we've got very good information around our royalty revenue. We've got some sense of what the milestone and license revenue will be for first quarter. Ordering for Captisol is typically a little lower in the first half of our calendar years, and we've seen that the last several years. But having said that, we do have orders already on the books, and we've got a preview of what 2015 should bring us for Captisol, and we feel very good about our outlook right now.

Okay, sure, yes. I guess, John, what I'm trying to get to is it doesn't appear -- I'm glad you said royalties are pretty visible, and probably roughly $10 million in Q1. I think that leaves -- your guidance leaves, then, about $3 million between milestones and materials, which is a little bit on the light end of what it's been historically. Again, like I said, maybe it's just a fluke of the calendar.

Anyway, can you guys give us a little bit of color on how your glucogon program has progressed recently?

Yes, thanks Matt, I'll take that. As I said, the trial is progressing very well. We started the trial in October of last year. Enrollment has gone very well, we've got three sites enrolling, and the trial's moving along exactly as we would want it to. We expect to have data in the second quarter, and we're very much on track to be able to present that data and have that data in the second quarter.

I want to call out obviously diabetes is a huge area, an area that is really heating up -- a lot more interest in it. It's a global epidemic. There are not very many novel mechanisms in development. Specifically for glucogon-receptor antagonists, there are really only a couple of others. We feel like we've got really a best-in-class compound from a number of perspectives that can really be highly differentiated in a very partnerable asset. There's a big fight ongoing out there in terms of the players that have diabetes assets in their bags, and there's only -- there are not very many novel mechanisms. We feel like this is going to be a very partnerable asset for us.

Great. Thanks, Matt. Last question for me. Any update on your Captisol-enabled program that is I think with the FDA currently through Hospira?

Yes, Matt. Hospira, that's an undisclosed program. Hospira is very tight-lipped about their pipeline for competitive reasons. There's really no further update I can offer at this point, unfortunately.

Fair enough. Thanks very much.

Irina Koffler, Cantor Fitzgerald

Hi, good morning. Can you hear me?

Yes.

Okay, great. I wanted to dive into the 100-asset partnered portfolio. Is there any way you could give us a little bit more color as to the progression of these assets; for example, how many you now have in Phase II? I noticed, for example, there is this Ritter Pharma press release this morning that list a couple of compounds I've never heard of on dyslipidemia and asthma, so maybe you can address those? Thanks.

Sure, Irina, thanks for the question. I'll defer to Matt to give a little more detail. Later today I'm presenting at the BIO CEO conference. We have some more information at our Analyst Day in November, we had a chart that showed the programs by stage of development. I don't have that chart in front of me right now, but in our published investor materials we do describe stage of development by -- or program by stage of development. Matt, you may want to comment generally how the pipeline has progressed?

Yes. First just to clarify, Irina, we do not have -- Ligand doesn't have a partnership with Ritter Pharma. It's a private company, and we're not associated with their products. One way to look at this, and I think it's a way to step back and look at the maturation of the pipeline, this year in 2015 we estimate our partners are going to spend over $1.1 billion advancing programs that we are partnered on, right? That's advancing the 100 programs or so. A whole host of trials, 13 Phase III trials, 38 Phase IIs, a number of Phase Is, over 50 Phase Is. So, a lot of work. Those numbers have really -- you can really see the evolution in the maturation of the pipeline by looking at those metrics.

We get a variety of updates in different forms from our partner, so we can see it there. For the Captisol partners we obviously are working with them in providing technical support and helping them through development, so we get a lot of information there. But I think a good way to look at it really is that overall investment and the overall progression.

Okay, that's helpful. Separately, just a macro question on the Captisol business. I've been looking at some other companies that also manufacture cyclodextrin for the pharma and industrial market. A couple companies like Roquette Pharma and Wacker Chemie, they seem to have pretty big businesses. Wondering how Ligand views the competitive landscape, and if you could share with us your position within that whole category, and where you see opportunities for growth?

Yes, thanks. Great question, Irina. We really -- one area we feel like we differentiate ourselves -- one, the technology is proven. Cyclodextrins, I should say in general, have of course been around a very long time. Now Captisol is a specifically engineered and patented circular cyclodextrin that was designed specifically to [sub cellubalize] a broad swath of active ingredients that have pharmaceutical applicability. Obviously our intellectual property portfolio definitely differentiates us as it relates to Captisol.

I'll also say we're quite proud of the technical support and the reputation that we've built up over time, in terms of providing technical support associated with Captisol, and as well is our drug master file. We've got a vast drug master file that our partners get to cross-reference when they enter into a license with us. That is a big differentiating factor, helps significantly in the FDA interaction as they progress through development. I think a lot of the recent approvals that we've enjoyed and the visibility for some pretty high-profile Captisol-enabled product certainly helps that, as well. We're seeing that real time with the metrics that we monitor.

The in-bound interest on Captisol, the sample requests grew significantly again in 2014 over 2013. We were I think in 2013 we had just north of 400 in-bound requests for samples of Captisol from new partners. In 2014 that number ballooned to near 600. That's a metric that we follow, but you get a real good sense of how much the interest in the technology is growing. But I will say I think we differentiate ourselves not only with the intellectual property portfolio, the cross-reference ability of the drug master file, and then the technical support that we offer, as well as the scale. We are with our partners at Hovione, we're now at a scale where we can manufacture up to 100 metric tons of Captisol. That means a lot, especially to our commercial partners who are growing and to partners who are just -- that we're just entering into relationships now, and want to be sure they've got plenty of capacity to go forward with.

All right, thank you very much.

Thank you. It appears there are no further questions at this time. I would like to give the floor back to Mr. Higgins for any additional concluding comments.

Thank you, and again, thanks to everybody for joining our call today. We are pleased with our progress, and look forward to executing again here in 2015. Later today I'm presenting at the BIO CEO conference in New York City. That is 11 a.m. East Coast time. If you can join in person, please do. If not, perhaps you can join us by webcast. Thank you.