Ligand Pharmaceuticals pays $18m for CorMatrix assets

Ligand Pharmaceuticals (NSDQ:LGND) said this week that it’s getting into the medical device arena with the nearly $18 million acquisition of multiple tissue repair assets from CorMatrix.

San Diego-based Ligand said it paid $17.5 million for synthetic royalties on existing extracellular matrix products, including the CanGaroo ECM envelope for implantable electronic devices, and the right to royalties on future products. The CorMatrix ECM is designed to stimulate tissue repair in heart and blood vessel tissues.

Ligand said the deal guarantees a minimum annual payment of $2.75 million and estimated that the CorMatrix products will deliver about that in the near term “but has the potential to double over time based on the commercial success of the programs.” A mid-single digit royalty could also come from CorMatrix’s micronized ECM product and replacement valve products, the pharma company said.

“This transaction further diversifies Ligand’s revenue and expands our portfolio to now include economic rights on unique and innovative medical devices that have already begun to prove their utility in the market today,” Ligand CEO John Higgins said in prepared remarks. “The opportunity is an excellent fit for Ligand as it is financially accretive, does not require increased operating expenses and enables Ligand to begin to participate in the highly lucrative and growing medical device industry. We are very impressed with CorMatrix’s technology and operating team, and look forward to further development and expansion of their product line.”

Ligand said it expects the deal to add about $1 million in sales this year, or 4¢ to adjusted earnings per share, with CorMatrix product sales rising to $2 million in 2017, adding 8¢ to adjusted EPS.

Ligand’s Captisol^® platform technology is a patent-protected, chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. OmniAb^® is a patent-protected transgenic animal platform used in the discovery of fully human mono- and bispecific therapeutic antibodies.

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