Local pharmaceutical company restructures, gains strength in downturn
JILL BLACKFORD, Special to the Daily Transcript
The pharmaceutical industry is certainly one that puts San Diego on the map, and Ligand Pharmaceuticals has been a recent key player.
"In 2007 when I joined, I moved in and quickly started to get Ligand back to what it's good at, which is drug research," said John Higgins, president and CEO of Ligand Pharmaceuticals (Nasdaq: LGND). "We divested the commercial brands and downsized. It was an intense 12 to 18 months where we dramatically changed the business to really refocus on what it's good at."
Higgins believes this restructuring was in part what's led the company to its current strong position -- just as the financial markets and the economy fell apart, Higgins says, Ligand was extremely relevant and had a chance to shine because it had just finished rebuilding.
"Despite Ligand's history, we hit a difficult period in the mid-2000s where the business started to struggle. That's when the board recruited me," Higgins said. "One of the things I'm most proud of is that we have pulled off some very compelling, shrewd acquisitions. We aren't aware of any other company that has been able to assemble assets like we have. It took tremendous work, a good business philosophy and brilliant execution. And we managed to pull off very, very good transactions. We haven't received immediate gratification, but I feel very good about the deals because they are structured quite well, are attractively priced for us, and led us to pick up a tremendously exciting portfolio of assets."
Another success Higgins notes is the number of drugs Ligand has discovered that have made it to approval.
"Our success rate has been very good," he said. "We've been around for two decades and we've discovered five drugs that have made it all the way to approval. For a small company, that is a very, very successful track record."
Ligand works largely in drug discovery and then partners with larger drug companies who in turn take over the much more expensive and intensive human development side, including clinical research. Ligand now has around 50 employees, and it just announced that it believes it can turn profitable on an operations basis by next year, with the revenue it generates from partnerships to exceed expenses.
"We are excited about this, and next year we also expect that one of our largest programs with GlaxoSmithKline will have phase three data in development for a very significant indication. It could be a watershed for Ligand if that trial data are positive next year," Higgins said.
Higgins began his career on the other side of the industry as an investment banker in biotech. Instead of just working on transactions for several different companies, though, Higgins wanted to be a part of the executive leadership team that could drive a company forward -- and to be responsible for the business and strategy overall.
"I enjoyed the industry and thought it was an exciting mix of business and finance," Higgins said. "It's a chance to really make big gains from a business perspective but it's also an industry rooted in medical research. And like the old saying, 'doing well by doing good,' I found it exciting to participate in an industry focused on investing and growing young medical research companies."