Ligand Pharmaceuticals to buy Pfenex for up to $516m

Under the deal, Ligand Pharmaceuticals will purchase all outstanding shares of Pfenex for $12 per share in cash or $438m in equity value on a fully diluted basis.

Pfenex will also secure $2 per share or $78m as a contingent value right (CVR) from Ligand, based on the achievement of a predefined regulatory milestone by 31 December 2021.

Pfenex CEO Eef Schimmelpennink said: “The Ligand-Pfenex combination is an excellent strategic and cultural fit, presenting a unique opportunity to leverage the complementary strengths of robust platforms and rich pipelines, we expect it to position us even better to deliver on our joint vision to develop therapeutics that provide patients a better future.”

Pfenex is said to focus on leveraging its advanced Pfenex Expression Technology, which provides a validated, cost-effective and scalable approach to recombinant protein production.

The technology is more useful for complex, large-scale protein production, which cannot be made by more traditional systems.

At present, the technology is out-licensed for multiple commercial and development-stage programmes. Pfenex is also using the technology in the development of an early-stage product pipeline and nanobody discovery and development capability.

According to the company, the platform has shown consistent success in the production of enzymes, peptides, antibody derivatives and engineered non-natural proteins.

Pfenex’s expertise in the expression of complex proteins will complement Ligand’s antibody and drug enabling technologies, which is based on a comprehensive discovery and early-stage platform.

Teriparatide Injection, a lead product of Pfenex, is a therapeutic equivalent candidate to Forteo exclusively licenced to Alvogen. It has been commercialised in the US to treat osteoporosis in certain patients at high risk for fracture.

In October 2019, Pfenex secured approval for PF708, a biosimilar of Forteo, from the US Food and Drug Administration (FDA) for the treatment of osteoporosis in certain patients who are highly prone to fracture.

The acquisition of Pfenex will allow Ligand to access a protein expression technology that is used in different commercial and development-stage biopharmaceutical programmes.

Other benefits of the acquisition will include major collaborations with pharmaceutical companies for treatments and vaccines, including Merck, Jazz Pharmaceuticals, Serum Institute of India and Alvogen, as well as advanced process development operation situated in San Diego with scalable equipment and engineering capabilities will help serve the world’s largest pharmaceutical companies.

Ligand CEO John Higgins said: “Pfenex is an ideal strategic, business and cultural fit with Ligand. The acquisition holds the potential to have a significantly positive scientific and financial impact on our business in the short and long term, similar to how our Captisol and OmniAb acquisitions have played out.”

Subject to customary conditions, the deal is expected to be completed in the fourth quarter of this year.

William Blair & Company acted as Pfenex’s exclusive financial advisor on the transaction, while Barclays Capital acted as Ligand’s exclusive financial advisor. Latham & Watkins acted as legal counsel to Ligand.