Ligand Pharma dives after out-licensed drug misses study goal

Ligand Pharmaceuticals (LGND) fell double-digits Tuesday after Amgen (AMGN) said the multiple myeloma therapy Kyprolis, which it licenses from Ligand, failed to show superiority against a rival drug. TIES BETWEEN LIGAND, AMGEN: Amgen licenses Kyprolis from Ligand and, according to Ligand's most recent annual report, pays royalties which range 1.5%-3% depending on certain sales objectives. In Amgen's second quarter report issued late July, the company reported $172M in revenue from Kyprolis. Ligand, meanwhile, reported that Q2 royalty payments comprised more than 50% of its total incoming revenue, with the company specifically highlighting the positive contribution of Kyprolis. KYPROLIS MISSES STUDY GOAL: Before Tuesday's market open, Amgen announced top-line results from its Phase 3 "CLARION" trial, which evaluated Kyprolis in combination with melphalan and prednisone versus Takeda's (TKPYY) Velcade with the same two chemotherapy drugs in patients with newly diagnosed multiple myeloma. The trial did not meet the primary endpoint of superiority in progression-free survival, with median PFS reaching 22.3 months for Kyprolis against 22.1 months for Velcade. Data for overall survival, a secondary endpoint in the trial, were not yet mature as of Tuesday, but the observed hazard ratio was a nonsignificant 1.21. Fatal treatment-emergent adverse events occurred in 6.5% of Kyprolis patients and 4.3% of Velcade patients. Commenting on the results, Amgen R&D chief Sean Harper emphasized that "the myeloma landscape has changed dramatically since the design of the CLARION study with very few newly diagnosed patients treated with melphalan-based regimens, particularly in the U.S. We remain committed to exploring Kyprolis in combination with other agents to advance the treatment of multiple myeloma." PRICE ACTION: Ligand shares fell 11.89% to $99.64 in the regular session before losing an additional 0.89% in after-hours trading. Amgen declined 1.09% to $171.63.