Ligand Pharmaceuticals Incorporated

Good day, and thank you for standing by, and welcome to the Legan Pharmaceuticals Q4 earnings call. At this time, our participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that this call is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your host today, Simon Latimer, Head of Investor Relations. You may begin.

Thank you, Justin. Welcome to Ligon's fourth quarter of 2021 Financial Results and Business Update conference call. Our speakers for today's call are in separate locations. Speaking today for Ligon will be John Higgins, CEO, Matt Foer, COO, and Matt Kornberg, CFO. We will use non-GAAP financial measures, and some of our statements will be forward-looking, including those related to our financial condition results of operations, financial guidance, the impact of the COVID-19 pandemic, and plans for OmniAd to become a standalone public company. Additional information concerning risk factors and other matters concerning Ligon can be found in our earnings press release and our periodic filings with the SEC. We undertake no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. A reconciliation between the non-GAAP financial measures we discuss and the closest GAAP financial measures can be found in our earnings release issued earlier today. With that, I'd like to now turn over the call to John Higgins.

Simon, thank you. And good afternoon. Thanks for joining our fourth quarter 2021 earnings call. 2021 finished strong financially and operationally. We are very pleased with our report to shareholders today and our progress and momentum in all areas of the business today. reinforces our plans to split Ligand into two separate public companies. First, as for our financial performance, 2021 was our best year ever in terms of top line performance. Revenues of $277 million were driven by robust cap to sell sales, along with strong growth in both royalties and contract payments. Record revenues produced significant earnings in cash flow per share, And we are pleased to see a substantial number of late stage and commercial events highlighting the progress by our partners. The business today is at a special inflection point. We have more partners, more programs under development, and more diversity to our business than ever before, as well as tremendous financial momentum. It is from this position of strength and knowing the needs of the business and how to keep driving success that motivates us to split the company into two businesses. As I said on our call in November, when we introduced the topic of splitting the company, given our success, the growth, and the evolution of the business, it has become increasingly clear that Ligand would be better positioned to drive value for partners and our shareholders by operating as two separate independent companies. Our core business model at Ligand is built around technology licensing, coupled with sharing in the success of our partners through royalties. We are now at the point where we anticipate significant top-line growth by existing and new royalty streams that should fuel superior bottom-line results and cash flow as we manage a lean operating structure. At the same time, progress and success with our OmniApp platform has far exceeded our expectations. OmniApp is now a substantial established technology leader in antibody discovery with a strong and well-earned reputation within the industry. OmniAB is performing at a level well beyond our expectations just a few years ago. The opportunity to further invest in and expand the business is clear, and the potential for investors to realize value will be better served with a focused business and investment narrative. Now, in terms of the separation process, we initially outlined plans that favored pursuing an OmniAB IPO, while also evaluating other listing alternatives. We made a lot of progress over the past several months exploring those paths and engaged with dozens of high-quality investors. Both existing Ligand holders and potentially new investors have shown strong interest in our plan to operate two independent public companies. Given our confidence in Omni's ability to thrive as an independent publicly traded company and Ligand remaining company's current trajectory, The positive feedback we've received from investors, as well as the volatility in the markets over the past several months, we've decided to move down a direct spin-out path that will result in the separation occurring in the soonest possible execution window as compared to other alternatives, as indicated by our advisors. Our plan now is for Ligand to directly fund the Omnia business with $70 million at the time of the spin-out. We are confident this investment along with the financial outlook for OmniAb, will provide a secure capitalization for OmniAb. The path we're on for a direct spin-out requires a Form 10 filing with the SEC, which we anticipate will be made in the coming weeks. Our goal is to complete the spin-out and distribute the shares to Ligian stockholders during the second quarter of 2022. There's still considerable work to be done, including full SEC review and final board approvals. but we are outlining our current thinking so our shareholders have a basic understanding of how the process is evolving. The businesses are well-suited to be run as two separate companies. OmniAd will be led by Matt Fore as CEO, and I will continue as CEO of Ligand. I've worked with Matt for over 20 years and have no doubt he will make a fantastic CEO. As shareholders, you know Matt. He is a dynamic, inspirational leader, He capably manages any level of detail and also sees the big picture and has a good instinct for strategy and investment. More information will be made public soon about the board of directors and how the current LIGAN board will split, as well as new directors who have signed on to join the OmniAB board. The executive leadership of OmniAB is nearly fully built out and there will be a comprehensive transition service agreement to facilitate a smooth transition to getting everything up and running. While we are pursuing the path to spin out the OmniAb antibody business from a position of strength, it's equally clear the remaining company has never been better positioned to thrive given our product roster, the revenue diversity, and portfolio. We had a well-timed major acquisition of Phoenix, and we have seen a steady flow of partner data readouts and product approvals. The culmination of these developments positions PostSpin Ligand to have a highly diverse set of assets and programs to drive financial growth. We look forward to serving our partners, customers, and investors under two separate companies. I will now turn the call over to Matt Kornberg for a review of our financials and more discussions about the plans underway. Matt?