Ligand acquires CyDex Pharma for upfront $31 million; expects to be profitable this year

US drugmaker Ligand Pharmaceuticals (Nasdaq: LGND) has acquired privately-held CyDex Pharmaceuticals for a combination of cash and contingent payments, with $31.2 million in upfront cash and a $4.3 million cash payment on the one year anniversary of closing.

CyDex shareholders will also be entitled to contingent cash payments related to certain transactions and pursuant to a revenue share plan. In addition, Ligand paid approximately $800,000 at close for an adjustment for working capital. CyDex, based in Lenexa, Kansas, had 2010 revenue of $16.3 million and EBITDA of $7.6 million, and will operate as a wholly-owned subsidiary of Ligand.

“Transformational acquisition”

John Higgins, president and chief executive of Ligand, which has been unprofitable of late, said: “This transformational acquisition accelerates Ligand’s financial growth and provides a unique and broad basket of new assets to further expand our business and long-term potential. “Ligand will now combine the royalties from seven marketed drugs, along with the substantial revenue from the selling of Captisol [a polyanionic beta-cyclodextrin], to advance Ligand toward its goal of turning cash-flow positive with substantial future growth opportunities. This growth will be largely fueled by what Ligand believes is an industry unprecedented portfolio of more than 50 fully-funded partnered development programs, creating a myriad of new revenue stream possibilities.”