Okay, I think we're gonna get started. My name is Bob Yedid. I'm a Managing Director at LifeSci Advisors, happy to be working with Ligand. We're delighted that all of you are here today, both in person as well as on the webcast. We planned a full agenda for you, and the CEO, Todd Davis, who's sitting right here, is gonna be basically starting off today. If you could save your questions to the end, there will be a Q&A session. For those who are basically on the webcast, you know, you'll be able to submit your questions in the basic question box on the online call manager. Before we begin, there will be slides that we're using to guide our discussions. Today, we'll be using non-GAAP financial measures, and some of the statements will be forward-looking. We'll have a Q&A session to conclude our formal remarks, as I mentioned. Additional information regarding the risks and other matters concerning Ligand can be found in Ligand's summary press release that will be issued later today, along with the slides associated with this call and our periodic filings with the SEC. Ligand undertakes no obligation to revise or update any statements to reflect the events or circumstances after the date of this call. With that, one other reminder, please silence your cell phones or your laptops. With that said, it's my pleasure to turn it over to Todd Davis, CEO. Thank you, Bob. Okay. First of all, thank you, everybody, for coming today, and thank you to those who are attending online. We are very excited about what lies ahead of us over the next few years. Today I'm gonna cover the strategy, as well as some of the tactics that we use to employ the outcomes that we expect to achieve, or to achieve the outcomes that we desire. Tavo is then gonna step through the financials, and I believe for the first time ever, we're gonna lay out a five-year outlook today, with some numbers in it. Because we believe that what we have and what we're excited about here is a business model that is predictable, it's diversified, it's not dependent upon the flip of a single card or extreme singular binary events, but it is portfolio strategy, and we're doing it effectively through royalty aggregation and royalty investing. So we'll talk about that today at a high level from a strategy perspective, as well as the tactics we, as well as the tactics we're going to employ. One of the key things, for this strategy to work is a team, and this is the agenda that we have. Tavo, of course, our CFO, is going to present the numbers. We have a couple new presenters today. Lauren, Lauren Hay, who has a significant amount of experience in the royalty space and as well as in pharmaceutical analytics, business analytics, runs our diligence process as the Vice President of investments and business analysis. Paul Hadden will be, who is responsible for investments, runs our sourcing efforts, origination, negotiations, and the closing and selection of the deals, and that entire process. So he'll be talking about some of the new deals today, as well as that process. You need this type of experience to execute on this strategy. So these are important additions to our team. Matt, at the end of this, will be covering our overall portfolio. The portfolio is large, and it takes a lot of focus. You need to farm your own portfolio. There's a lot of opportunities within the in your own portfolio, and there's risk mitigants you can manage within your own portfolio as well. So that's a big and important job. Matt's gonna be covering the portfolio today, while Paul, as I said, will be covering primarily new investments in the process to achieve those. So that's the agenda for today. And we also, in addition to Lauren Hay, Paul, we've established a presence in Boston. We've hired a number of investment professionals, and we already have a board that has significant diversified skill sets in clinical, science, business, but we've added to that with the addition of Martine Zimmermann recently, who brings significant regulatory expertise to the table. It's important for us to have a sounding board in a disciplined investment process, and you really need multifunctional expertise to operate effectively in this space. So we've mirrored that on the board, and we're doing the same thing on the management team, and we'll continue to build that as we go. So Ligand today is an investable platform in that we have 25 commercial assets that are generating cash flows, eight, which are really driving our growth, and we'll focus our discussion on those. You really need assets, a very experienced team, and financial strength to execute on the strategy that we're undertaking. We have all three. I believe we're in a unique position, and we're focusing on a differentiated position in the market, which we will talk about. But our commercial assets will continue to drive our current performance, and just based upon those assets alone, we can achieve significant growth for multiple years. Behind that, we have a pipeline of over 75 partnerships where assets are under development with different partners. One of the key things in our strategy is partnering. We work with partners. They're investing their cash in the furtherance of those molecules within their pipeline. We have mitigated follow-on risk, follow-on investment risk, and it's not on our P&L after we make the initial investment. So that's a key part of our strategy. This is a broad and diversified pipeline. Many of our current assets, in fact, the main drivers like Kyprolis and Filspari, came, of course, out of our pipeline, originally. So that's important. We have a strong balance sheet, and we're now approaching $100 million in cash flow a year. We'll be exceeding that soon. That allows us to sustainably invest in the replenishment of our own pipeline, new deals, et cetera, and provides us the financial strength that you need to operate in this space. Finally, as I mentioned, we have a multifunctional, very experienced team. This is not our first rodeo. We've done this before. We've generated returns before, and we have science clinical experts around the table that we work with and experience on the deal front and origination as well, which you will see. So this has been a year of repositioning so we can focus on what we think is the most profitable elements of the market. As you may have noticed, as the years progressed, it's about a year ago, we had headcount of over 170 people and three platforms. Two of those platforms, we believe, carried a lot of intrinsic value, but also required a lot of investment and carried a lot of infrastructure. We made the strategic decision to spin out our infrastructure-heavy businesses while maintaining significant economic rights for our investors, and we've achieved that. Therefore, our headcount's gone down to about the mid-30s from 170. We've gone from three platforms down to one, while we've been growing royalty revenue and increasing our profitability significantly, as evidenced by our EPS growth here. So now we have financial strength and a very focused team that's already engaged in this market. There's a little bit of history here, so we should talk about how we ended up here. As many of you know, we've started out at Ligand here, it was founded, I think, in 1987, as a fully integrated pharma company. And in 2006, it had multiple products, one of which we actually developed and licensed to them from Elan Pharmaceuticals, where I was at the time. And we had development, research. There was over 600 employees. It was relatively inefficient, not profitable, and a large activist had showed up and was pushing for changes, and they weren't sure what changes to make. And one of our board members here was in meetings with them, actually invited me to one of the meetings, and they adopted the concept of aggregating royalties. So in 2006, late 2006, the beginning of 2007, Ligand was restructured as a royalty aggregator and proceeded down that path. So it went from over 600 employees, in that case, down to about 20 and focused primarily the tool of mergers and acquisitions as a tool to acquire companies that had good assets in them that they felt were broken or undervalued. And many of our current products, like Filspari, came from those M&A efforts in that first leg of our strategy, where we also had significant financial growth and financial success. The company migrated over time into the aggregation of platforms, the first of which was Captisol. We'll talk about Captisol today. That's probably one of the most prolific and successful drug delivery platforms of all time. I came out of drug delivery at Elan. That's where I got my experience. We had seven drug delivery platforms. This is one. It has 15 approved products. It generates new licenses every year. It generates significant cash flow, and these are the types of businesses we will look for in the future, as opposed to infrastructure-heavy businesses. And that is what this restructuring has been about, this last year, is to take everything and focus it down into a team that can attack the markets that we're interested in, get into a strong financial position, and leverage the cash flowing portion of our portfolio. So today, we have achieved that. We have a very high margin kind of P&L operation, and we're now focusing that on what we think is the biggest opportunity in the market. There's extremely high demand for capital in certain segments of the market and low availability of structured or royalty capital. We do this with significant advantage in information asymmetry, in that we're not, we're not buying equity in public companies, typically. What we're focused on is acquiring rights to economics in pharmaceutical products. All of those deals are done under a CDA. Lauren will talk about our diligence process today, but we go into incredible depth in reviewing the data, regulatory correspondence, CMC data, manufacturability, of course, along with analysis of the markets. And we do that all under CDA with confidential access to confidential information. So we believe that we can outperform the market based on that alone because we have significantly superior information. I would just point out one other thing, and that is that we use flexible structures with our partners. That does allow us to mitigate certain risks through structure, as well as optimize certain returns, but it also helps accommodate partners in certain circumstances so that it's win-win, and we can both get deals done that work for both of us. I think we use that very effectively. That's where the experience really comes in. in. I would just mention also that this is a very scalable strategy. The pharmaceutical industry, I think in 2022, was over $1.4 trillion in total sales, and, we're, you know, we are a minuscule portion of that. This is a very large market, and there's not zero competition, but there's very few people doing what we're doing that I believe have our capabilities. So where are we focused? We're focused really in late-stage clinical development. As products move from left to right across this risk axis, products become more characterized. You get strong evidence of safety, you get strong evidence of efficacy, and the risk on the assets comes down. And so that's where we're focused, in the lower risk of the development cycle. It doesn't mean we won't do some commercial stage deals. In fact, we already have with Zealand, which Paul will talk about. But this is where there's very high demand for capital and very limited supply for what we do, and limited teams that can execute on this space as well. There is lots of capital available in general, of course, and that includes all kinds of equity capital, private equity, venture capital, sub-subsegment of private equity, debt. There is a lot of royalty capital as well, though most of that's focused on commercial stage assets, and there's very little royalty capital focused on late-stage clinical development. So from a supply and demand perspective, our competition really is the equity markets, and we price our deals accordingly. That's still, I think, a win-win opportunity for our partners. Investing in royalties offers significant advantages on its own. One of the things about royalties that's notable is that you're paid as a percentage of net sales. So you're really paid off the top line. You don't take a lot of the P&L risk. Launching products can be expensive. It can have a lot of twists and turns. Once we're through the approval, we have a percentage of the top line. That's an advantage. One of the biggest risks in biotech is financing risk. A lot of investors pick the right investments, just not the right time, and by the time the companies or products are successful, the dilution impairs the return significantly. Now, twists and turns that products have can be significant. Zealand itself has a long history of trials that didn't work, and it was repositioned ultimately to be approved as, you know, the first disease-modifying diabetes medication in a very long time, which should be a, a blockbuster. But it had a lot of twists and turns. It took a long time to get to the market, and that happens. If you own a royalty on a drug like that, if you have a 4% royalty, that's a 4% royalty when you finally get to the market. It affects your IRR, but ultimately, you avoid a lot of the risks of dilution. And then I would also just mention that royalties have special protection under the bankruptcy law. If you do a deal with a smaller company and it goes into financial distress or bankruptcy, you have a position that other bidders on those assets have to assume the contracts on. So that's a real advantage, and so it has many debt-like features. And, you know, one of my favorites, again, is, of course, to own a royalty, right? You either can start a biotech company, run it for years, finally have an approval, out-license it to a strong marketer, and own a royalty, or you can do what we do and own a royalty from the onset with de minimis infrastructure. So this lends itself to allowing us to be a highly profitable business model overall. So, so we're investing in royalties, and, that's what we're investing in. How do we do it? We'll talk about a little bit here today. As I mentioned before, historically, the companies had a lot of, M&A expertise. They used M&A as their primary tool. That's worked very well. The company has a very good track record. We've looked at the returns on that, and we'll keep doing that, and there are plenty of opportunities to do that. But it's better to have more than one tool in a toolkit. So we've brought enough expertise into the company at this point where we also know how to monetize royalties. Zealand was kind of a combination of that, right? It was. We acquired a company to get to a royalty, but that was the main asset. And so you can simply go to inventors, nonprofit institutions like universities or companies that have royalties and an existing royalty contract, which is part of the asset that you diligence, is that contract, and you can offer them money in return for a right to that royalty. And so we have an operation that can do that. There's M&A, as I mentioned, then there's project finance, where there's no existing royalty, but you can go to counterparties because we have a significant outbound origination effort, and we can say, "We believe this team really knows what they're doing. They know how to develop products. We really like your asset, and we wanna co-fund your phase III with you." So we write them a check for X amount, and in return for that, we create a royalty. So rather than the typical approach of getting equity or debt securities back, we're effectively creating a royalty. So you can buy a royalty, or you can create a royalty as a function of the financing. And And there's a whole set of tactics and experience required around that, and structural considerations that you have to think about. But we have a team that's done all that before and created results doing it. And then finally, I would just say we also have, you know, our platform, CyDex, which again, is very cash generative and creates new royalties virtually every year. We will look for other assets like that. I call that a licensable excipient. We're really managing intellectual property there and out licensing the IP. It's a very efficient operation. It's run with a relatively small amount of people, and that's the kind of platform we like, and we will look for more of those. I don't, I don't expect to do one of those deals every year. If you get one CyDex every five years, that's a big win, but we will keep looking for those. And so in comparison, our business model, we believe, is very attractive. We have very low infrastructure requirements, which allow us to have very high operating margins overall as a company. We have broad therapeutic focus. We can dial in the size of our investments, which allows us to control our portfolio and control the risk within our portfolio, and allow us to predictably grow this over time by having multiple shots on goal, which statistically, some of them won't work, for sure, when you're investing at development stage, but statistically, and as evidenced by our past, many of them will. And so that's what we're doing here, and this eliminates the high volatility and significant exposure to a single asset event. So we really like this business model, and I'm excited about what we can do over the coming years. So it's about a year ago that I stepped into an executive position here at the company, and I was excited to do so because I saw this opportunity, and I don't believe we've fully realized the vision here at Ligand in terms of what can be achieved. But we were talking about concepts last year. That's not where we are now. We spent the first half of the year turning this company into a more efficient platform, hiring in expertise, and we've achieved that, and already in the second half of the year, we've closed on five deals. So we have, we believe, an excellent set of current assets to invest in, as well as demonstration that we know how to add assets rapidly into that portfolio. So this is happening, it's not a pipe dream, and we're doing it with streamlined and highly profitable operations. And what we are trying to deliver is this: Tavo is going to go into this in some detail, but if you just take our—just our commercial assets that we have today, we believe we're going to deliver, over multiple years here, growth in excess of 10%. When you add in, risk-adjusted returns from some of our late-stage clinical pipelines, we believe we're going to deliver a CAGR of over 16%. And if you give us some credit for achieving new deals, which we've already demonstrated we're doing, and if you like those assets, we certainly are gonna be redeploying capital to accelerate this growth, and we believe we can accelerate the growth to over 20%. So that's our goal, that's what we want to achieve, and we really look forward to continuing this discussion today. And with that, I would like to have Tavo come up and focus on our financial operation. Thanks, Tavo. Thanks, Todd. Good morning. It's good to be here with you today. I'm Tavo Espinoza, CFO. I will be highlighting a bit of what we've done in the last year. I'll be touching on this year's financial results. I'll also provide, for the first time, 2024 financial guidance, and also go out a little further and preview our longer-term outlook into 2028. We were here in New York City for our 2022 Investor Day, just about a year ago, I believe tomorrow, and I think it's safe to say that we've come a long way since then. As some of you may recall, we were just coming off the transformative transaction last year with the OmniAb spin-off, which was our antibody discovery business. It was a big event in the history of Ligand, and also, I believe, kicked off a new chapter for the company. 10 months later, we further transformed the business and improved our financial profile with the spin-out of Pelican, which was our protein expression technology that came to us as a result of the Pfenex acquisition in 2020. Today, we have a more streamlined business, laser focused on acquiring high-margin royalty assets that we think will provide shareholders with above-market returns. Our financial profile really is rather simple. It's centered around a lean corporate cost structure, which means that we partner with other biopharma companies to leverage what they do best, which means regulatory management, late-stage development and commercialization of drugs. It is also centered around... Oh, thank you. Up there. Yep. It's also centered around having a clear line of sight to expanding and predictable royalty streams that result in positive cash flows that are growing meaningfully for years to come. And today, we're positioned, positioned favorably in this market with a clean and strong balance sheet. So yes, today we think we find ourselves, we are in a position of strength, and I think we can say that we are where we wanna be. A year ago, at Analyst Day, we told you that we'd get back to growing our high-value royalty assets, all while leveraging a lean corporate cost structure. A year ago, our cash operating expenses were above $90 million, and we've made some important strategic decisions since then, have brought that down significantly, by 58% to just below $40 million, as we're projecting here for this year. And more importantly, on a go-forward basis, on an annualized basis, that run rate is in the low- to mid-$30 million. I'm pleased to say that today our operating margins have expanded, and we did that all while building up our deal-making capabilities. At the end of the day, this means that we have more cash to deploy and a very capable, focused, and disciplined team looking at the many interesting investment opportunities that are coming our way. So now I'd like to highlight some of the headline financial results for 2023. It's been a very good year for us financially. We've increased guidance 4x due to strength in royalty revenue and Captisol material sales. At last year's Investor Day, when we provided our initial guidance numbers, we guided 2023 royalty revenue of $74 million. Well, we told you at our third quarter earnings release that we expect 2023 royalty revenue to come in between $82 million and $84 million. Today, we're reiterating the 2023 guidance numbers that we gave you at our third quarter earnings release. We tend to take a prudent and conservative approach to guidance. I'm old enough to know that it's better to underpromise and overdeliver when it comes to most things. So, looking at the numbers on the top line, we see total revenue approaching $130 million, and on the bottom line, we've guided adjusted EPS to just under $5.50, but approximately $1.50 of that is due to realized gains from the sales of Viking stock. So our core business adjusted earnings per share is just, is approaching $4, which is almost 60%--a 60% increase over 2022. As mentioned, we have a strong balance sheet with no debt and $191 million in cash and investments as of our last quarter. So now moving into next year, today, we're providing 2024 financial guidance for the first time. Here are the headline numbers: total revenue of $130 million-$142 million, with the components being Captisol sales of $25 million-$27 million, contract revenue of $15 million-$20 million, and royalty revenue of $90 million-$95 million, which is an 11% increase over the midpoint of our 2023 royalty revenue guidance. We've said that our annual cash operating expense run rate is in the mid- to low 30 millions. So when you subtract that, along with an assumed profit margin of 66% on Captisol material sales, a tax rate of 21%, and divide that by approximately 18 million shares outstanding, you arrive at our core adjusted diluted earnings per share of $4.25-$4.75, which is an 18% increase over 2023 when you, when you use the midpoint of the range. I want to point out that it's early in the cycle for us, and we'll still learn quite a bit in the coming weeks, about our partner sales figures as they close out the year, and also, more importantly, how the sales side analyst community updates their forecasted sales estimates for next year, which is what largely informs our royalty revenue forecast. I guess what I'm saying is that we continue to take a prudent and conservative approach to guidance, and we'll have a better sense for 2024 when we get into January. So we like this slide so much that we thought we'd put it up here twice. So I'd like to go beyond next year and share now how we see royalty revenue growing over the next five years. First, let me say that our current portfolio of growing and predictable royalty revenue streams. Every layer you see in this chart, with the exception of the top dark blue layer, represents royalty revenue that will come from our existing programs. We expect that Kyprolis, our largest commercial program, will drop off after 2027, when the generic competition enters the market. It's important to highlight that even with the expected drop-off, we see royalty revenue growing sequentially and beyond the cliff year of 2027. Big picture, what this tells us is that royalty revenue will grow at a compound annual growth rate of 16%, just based on the royalty assets that we own today. And when you layer in the royalty revenues that we expect to generate from the investments we make over the next eighteen months, we see the growth rate going to 22%, meaning our outlook for royalty revenue in 2028 is $235 million. It's important to highlight that, a key input to this model is the estimated product sales, which we pull from consensus, sell-side analyst estimates, and also that these programs are with our partners, and we're passive participants, which is at the heart of our low-cost, high-margin business model. You'll hear more about the specific programs from Matt and Paul, including Filspari, Ensifentrine, and Tzield, as well as those that make up the farm team or our pipeline, which includes mid- to late development stage programs, including Berdazimer Gel, which we acquired recently from Novan, V116 with Merck, Soticlestat, which came to us recently as part of the Ovid transaction, Palvella's QTORIN, and Viking's NASH program amongst many others. Here we can visually compare 2022 to 2023 and 2024, and then five years out to 2028. Focusing on the 2028 column, we see royalty revenue of, excuse me, $235 million, as I mentioned on the last slide. We see both Captisol sales and contract revenue growing modestly to $30 million to $25 million, which gives us total revenue of $290 million projected for 2028. We expect to grow our revenues much faster than our cash operating expenses and assume profit margins on Captisol and tax rates to be consistent with what we see today. When you take that and assume approximately 19 million shares outstanding, you arrive at adjusted earnings per share above $10, which represents a compound annual growth rate of 27% when you compare that to the $2.44 we reported last year. I'm gonna grab some water because I'm losing my voice. So just to summarize and put a finer point on our long-term outlook, by 2028, we expect royalty revenue to exceed $230 million, EBITDA margins to exceed 80%, and adjusted earnings per share to exceed $10. And I think, what I think is the most important point here, and something I think investors should get excited about, is that I see us generating more than $1 billion in free cash flow between now and the end of this decade. Okay, so now before I turn this over to Lauren, I just want to highlight a couple more things here. A major assumption in the guidance numbers I've given is that we accomplish those financial outcomes with no additional financings, meaning no debt and no selling of our shares. With that said, there are additional sources of capital available to us that would provide potential additional upside to our forecast, as that capital would be used to acquire more royalty-generating assets. That includes some of the items listed here, including taking on more debt or taking on debt to begin with and/or selling shares, as well as sales of Captisol to Gilead for their COVID-19 drug, Veklury, and sales of Viking Therapeutics stock, which, by the way, has been performing well, given all the interest in the obesity drugs out there. That concludes my portion of the presentation, and I'll pass it over to Lauren. Thanks, Tavo. Good morning. My name is Lauren Hay, and I joined Ligand this summer as the Vice President of Strategic Planning and Investment Analytics. By way of background, I have over 15 years of experience in the life sciences sector, spanning both commercial stage royalty monetization as well as consulting. At Ligand, my role is to oversee the due diligence process on the investments that we make, and I look forward to sharing a little bit more with you about the type of assets that we're looking for, and then ultimately, how we evaluate those assets. We have five key investment criteria at Ligand. The first is time to cash flow. We're looking for assets that are no more than a few years away from approval and sales. Generally, this means that we're looking for opportunities that are in phase III clinical development. However, depending on the program and the indication, we may look also at assets that are in phase II. The second criteria is clinical differentiation. Here, we're looking for assets that have a really strong demonstrated safety profile and efficacy profile, and that ultimately are gonna be products that deliver significant value to patients in areas of high unmet medical need. I think the recent investments that we've made in soticlestat and Tzield both clearly illustrate the type of strong value propositions that we're looking for on clinical differentiation. The third criteria is exclusivity. We want favorable market exclusivity for the investments that we make, and that can be through a combination of intellectual property protection, as well as various regulatory protections that are offered in specific jurisdictions. The fourth criteria is structural alignment. We want a strong deal counterparty that has alignment to Ligand, and then finally, a favorable risk-reward profile. Ultimately, our strategy is to look for assets that are above average in terms of the probability of technical and regulatory success, or PTRS, when compared to other assets in the category. So ultimately, our team needs to get conviction in the ultimate success anticipated in terms of clinical development and then subsequent regulatory approval. At a high level, our diligence process spans four main phases. In the first stage, or prospecting, we may be in this stage for weeks or months, depending on the specific deal counterparty and the transaction situation. Here, what we're trying to do is leverage our team's extensive depth and breadth of expertise across therapeutic categories, across different technology types, to ultimately help us quickly prioritize the investments that we're looking at and get to a shortlist that we can then move forward into subsequent diligence. From there, we move on to term sheet discussions, generally around a 1-2-week process, where we're creating an investment memo to deliver to the team, and then in parallel, creating a robust valuation model to support term sheet discussions. From here, we move forward into full diligence, where the bulk of our team's work takes place. Generally around 60 days in nature, however, it can be shorter, depending on the specific transaction. We're looking really in-depth under CDA, at confidential material, typically related to clinical development, CMC or manufacturing, and commercial criteria. In parallel, we're also creating a very robust, patient-based, epi-based forecast model that we use to ultimately support our confirmatory diligence. Finally, assuming that the confirmatory diligence pans out, everything looks great, our team has strong conviction in the asset and the investment, we move into final approval. We create a very robust, investment memo to deliver to the team and ultimately look at some scenario planning, and fully execute the transaction. So in that category of full diligence, I wanted to drill down a little bit more in terms of what types of work we're actually doing across the major, buckets of diligence activity. On the clinical and regulatory side, we're working with, a deep bench of experts that have specific indication experience, and again, we're typically under CDA. We may get access to confidential information about trial enrollment, trial protocols, FDA correspondence, and we look to partner with, subject matter expert consultants who have either worked at FDA and evaluated drugs in the indication that we're looking at, or have previously served in senior R&D roles and can help us really get to a very thorough and detailed evaluation of the strength of the clinical profile and ultimate approvability of the drug. That ultimately helps us gain conviction in the, the asset PTRS. In parallel, our Ligand team does extensive research with key, key opinion leaders and high-volume prescribers to help strengthen our understanding of the current treatment paradigm, the patient unmet needs, the value proposition of the asset that we're looking at, and ultimately how it might be slotted into the treatment paradigm. On the CMC front, we also have a deep bench of experts who are highly technically specialized in manufacturing, and ultimately here, what we're trying to do is identify whether there could be any manufacturing problems that either delay approval of the asset or potentially create downstream supply chain challenges, both of which we're always hoping to avoid. On the commercial front, we partner with consultants who have expertise in sales and marketing, forecasting, and market access, or looking at insurance dynamics for patients. On the IP front, we partner with counsel who helps us do a thorough review of all the IP, initially to kind of identify if there are any potential showstoppers in terms of strength of IP as well as term, and then to subsequently do a more fulsome evaluation. Then finally, on the legal front, the initial focus is to look at the underlying contracts. It's important for our team to be fully aligned with the legal team to understand things like, the term of the royalty that we're investing in, the geographic territory. There can be step-down rates depending on certain IP dynamics, and it's important for us to be fully aligned so that we're appropriately, appropriately valuing the investment. The subsequent focus from there involves contracting discussions so that we make sure that Ligand is, is fully protected in all of the investments that we make. So as Todd alluded to, you know, we've reviewed hundreds of deals this year, we closed on five investments in 2023. So I wanted to give you a few examples of things that we did not move forward, and so you can understand sort of the types of assets that we did not advance into further stages of deal execution. The first example would be time to cash flows. We looked at a really exciting oncology asset, novel mechanism. KOLs are very excited about the target delivering to patients with very high unmet medical need. However, the asset was further away from approval than our team was comfortable with, given our strategy and priorities, so we passed on that opportunity. In terms of clinical differentiation, we looked at a cardiovascular asset with a really strong safety and efficacy profile. However, it looked to be, although it not in a head-to-head trial, slightly inferior to a, another asset that was in development by a much larger, more experienced pharma company, and ultimately, we couldn't get conviction in the, the sort of competitive, differentiation there. In terms of IP, we looked at a really promising dermatology drug that was being developed in several indications, with high unmet need. However, it, it turned out that the IP term was shorter than we initially anticipated, so our team felt that we wouldn't be able to fully realize the investment potential of the life cycle options that were available to that asset that got us excited about it in the first place. Fourth, competitive landscape. We looked at a CNS kind of paradigm-changing opportunity. However, a looming patent expiry on an existing branded drug would, in our opinion, have created a really challenging market access environment where you would be looking at step therapy and prior authorizations, et cetera. And then finally, in some situations, there's not, you know, one specific criteria that we can point to in terms of why we might deprioritize an investment, but it's sort of a holistic assessment of risk-reward. An example here would be a really paradigm-shifting, exciting opportunity, but faced a really difficult kind of clinical development pathway, regulatory pathway, and ultimately a challenging hospital-based reimbursement protocol, where the cost of the product would have had to be absorbed into the fixed lump sum payment to the hospital. So we ultimately passed on that opportunity. I hope that gives you a little bit of a snapshot in terms of the assets that we're excited about investing in at Ligand and how we evaluate those opportunities. With that, I will turn it over to Paul Hadden, who's gonna go through our deal pipeline and recent completed transactions. Good morning, and thank you, Lauren. My name is Paul Hadden. I'm Senior Vice President of Investments and Business Development. I joined the company in the first quarter of this year, and I'm here to cover off on our transaction activity and some of the things we've been building in the last several months. To borrow a golf analogy, we're on the back nine of the presentation, so we're definitely accelerating and there's a number of things we're gonna talk about, but suffice to say, we have a lot of tailwinds. We've built a lot of momentum going into the end of the year, coming into the new year, and we're very excited about where we're going and where we're headed. When I first arrived, we sat down as a senior team, we said, "Well, if we're gonna really participate in this royalty market, what are the capabilities that we have, and what do we need to build on top of that?" It was clear from an M&A perspective, we had a lot of great success with M&A. From a sourcing perspective, there were some things we could do in the royalty market that would be incremental, and also from an execution and underwriting perspective, there were some things that we could build. Lauren already talked through some of our diligence process that is not only up and running, but is being effective in terms of creating new deals and new transactions. She also defined our investment criteria, which is a very important piece of how we guide our time, 'cause it's one of the only resources that we can't get back once we've spent that. So if you think about it, you know, our investment criteria both guides where we, where we want to be. It also helps us to look at the things that come in the front door, saying, "Sorry, not yet," or, "Not right now." I think it's pretty clear now today that we have a pretty seasoned investment team around the table, and this is a team that's built processes, it's a team that's built, teams, and it's a team that's deployed capital and understands how to underwrite these, these complex investments in the royalty space. It's also a team that has decades of experience, so relationships, understands where to hunt for these opportunities. The royalty market is not an efficient market. If you look at some of the commercial stage assets, the bigger ones, sure. If you look at some of the smaller assets that are embedded in academia or with inventors or in phase III, there's not a lot of people hunting in those spaces, and not a lot of people who understand how to underwrite the risks. And so from that perspective, we feel very good about where we're, we're focused on and where we're looking for new investments. We also have structural flexibility, so we have the ability to play in different places within a company's cap structure, which is a creative way of having different conversations about solving ultimately what's a capital issue, in terms of providing non-dilutive capital to companies that are looking to raise capital to put back in their own R&D, but in a way that's safe for our investors and for our capital base. Finally, I would say that we have a nimble organization. Regardless of how much we scale or size the business, that's not gonna change. We think that's a competitive advantage, especially when you have the experience base around the table of knowing how to underwrite these deals and move swiftly to capitalize on it. Let's take a look at the year in review. So this past year, we reviewed over 300 investments, and early on, we established a significant outbound activity and process. So we looked at different screens of assets that we wanted to own or have exposure to, assets that we thought were up and coming, and companies that we thought could use non-dilutive capital, and those were multiple different work streams. And importantly, we set up processes to be able to do that over and over again. So it was not just what we did this year, but it was trying to set up the process for the future, going forward, so that our team could have a constant pipeline that was either refilling itself or providing new opportunities. Staying in the obvious, obviously, the capital markets are where they are. There are a lot of companies that are calling us, looking for opportunities, and there are a lot that we don't put in the pipeline because, frankly, it's just risk that we can't take on. So that number is not skewed because of the capital markets, it's skewed because of the activity the team has been building over the past several months. We did sign 45 CDAs, as Lauren mentioned, as Todd reiterated, at the start. That's an opportunity for us to get a little more serious, get access to information that's not evident to the public. Obviously, we may have information that is, you know, simple, like a license agreement or royalty reports, or it may be more complex in terms of clinical data and some of the items that Lauren described. We closed five investments. I would point out that all of these closed in the past four months, so we had a very strong activity of building towards that. That's why we're cautiously optimistic about a very exciting 2024. And to state the obvious, you know, the 45 CDAs that we signed this year, we're still in discussions with some of those companies. It's not that those have fallen away. And having been in this market for almost 17 years, I can tell you, sometimes you talk to companies for two, three, four years, and it's just a matter of being in the right place at the right time. I'm gonna talk a little bit about soticlestat, which is one of our investments we closed in October. This is an exciting program. It's partnered with Takeda. So Takeda is a multi-global, multi-billion biopharmaceutical company. It's a phase III asset. It's in two indications, two rare pediatric epilepsy diseases, Lennox-Gastaut and Dravet. We like the fact that Takeda is driving the development here. It's expected to read out sometime next year. We also like the fact that it's a novel profile, so it's a novel mechanism, and the profile so far looks quite clean from a safety and adverse event perspective. The reason why that's important is because in these rare pediatric epilepsies, there's a lot of layering therapies on top of therapies. So unfortunately, these patients don't respond to the first line or second line, so they have to be added therapy after therapy, and this product so far looks quite clean. And so, Takeda's developing it. We actually provided $30 million to Ovid, who receives a royalty and milestones on that asset. As I mentioned, we're very excited about Takeda's involvement, and we closed this in October. The next asset, Tzield, was also another exciting asset. This time, the partner is Sanofi, another multi-global... Sorry, multi-billion, global biopharmaceutical company. We liked it also because it was approved, so it's commercial, cash flowing, approved by Provention Bio last year, a public biotech company, and Sanofi then, in the first part of this year, bought them for $2.9 billion. We thought that was a pretty strong statement about their interest level in the asset. This came to us and presented itself as an M&A situation because Tolerance was a private company. They had a contract for a royalty. We actually purchased the shares of the company to access the contract. This was also a breakthrough therapy, so the FDA had approved it with breakthrough therapy designation. So a lot of different external factors suggesting that it had multi-billion-dollar potential, which is what Sanofi had said publicly after the acquisition and in Q3 as well. It was also a very important watershed event for type 1 diabetes. This was the first disease-modifying agent ever approved in type 1 diabetes. So it's approved in what's called Stage 2. It has a phase III they just read out recently in Stage 3, and so ultimately, we were very excited about the parameters of what I was just describing in terms of how attractive it was, the partner, and the opportunity in the market. Let me close by saying that our investment pipeline is robust. We review this every Monday at our investment team meeting. It changes from week to week based on our outbound activity and obviously some inbound activity. It stands now at about over 20 opportunities and about $1 billion. Obviously, we, we would not take down all that, but it means that we can be selective. Going into the new year, we feel very well-positioned from a resource perspective in terms of the team we've built, the process we've built, and the focus that we now have. And so with that, I'll turn it over to Matt, who'll talk about the portfolio. Thanks, Paul. It's good to see everyone here. I'm Matt Korenberg. I'm our President and Chief Operating Officer. It's great to have a full room. It's been a couple years of empty rooms and during COVID, and we know a few of our friends have not joined us today as a result of that, but we're glad everyone's here. One of my responsibilities at Ligand is to oversee our existing portfolio, and that's mostly what I'm going to talk to you about today, is our existing portfolio and our existing technology platforms. This first slide here covers eight of our key commercial programs. We've got about 25 commercial programs that make up part of our portfolio. The eight on this slide are the ones that we think are most important for investors to focus on, will contribute most to our near-term revenue and near-term growth, and support a lot of what Tavo and Todd showed on the five-year slide. The products that I'll focus on most today are highlighted here in green, but Amgen's Kyprolis is an important drug for multiple myeloma. Amgen markets the drug in the U.S. and most of Europe. BeiGene markets the drug in China, and Ono markets the drug in Japan. We benefit from a 1.5%-3% tiered royalty across global sales. The product's on track to do over $1.4 billion sales this year, which generates about $35 million of our $82 million-$84 million royalty that Tavo mentioned as our guidance for this year. And expectations for the drug over the next four or five years until the patent expiry at the end of 2027 are for it to grow continually through the last several years, supported by significant volume growth. The next three products that are highlighted towards the bottom of the page are products that all came from our Pelican or Pfenex acquisition in October of 2020. That acquisition at the time, these products none of these were approved at the time. All have since been approved and launched quite successfully. The first is Jazz's Rylaze. Jazz's Rylaze is an oncology product that replaced a previous product that had significant manufacturing issues. Those manufacturing issues resulted in shortages. At the time, the product was doing global sales less than $200 million. Jazz had a fantastic launch, and the product this year is on track to do close to $400 million, with the last several quarters exceeding $100 million of sales. They recently got approval in Europe and expect to launch in Europe next year, which should add incrementally to growth. Merck's Vaxneuvance is a pneumococcal vaccine that we generate or benefit from a low double-digit royalty. That product was originally approved in 2021, followed by a pediatric approval in 2022, and then a pediatric launch late last year or early this year. Since the pediatric launch, the product has really excelled. Last quarter, did over $200 million of sales, and we expect the product to continue to grow into what is a more than $6 billion market for pneumococcal vaccines. Serum Institute of India markets a separate pneumococcal vaccine. They market in India and the surrounding developing world. That product, again, another low double-digit royalty. This year, it's on track to do $3 million-$4 million of royalty to us. Serum's a private company that doesn't put out public information on their sales, but they've talked a lot about generating up to 100-150 million doses a year of the vaccine for that region of the world, which would contribute nice growth over the next several years for us. On here, on this slide, I talk about the key partner programs. In addition to the about 25 commercial programs we have, we have about 75 additional development stage programs. You can see that these seven are the ones that we're talking about as key drivers of the near-term growth. The events on the right, far right column here are some of the near-term catalysts for these programs. There's two potential approvals next year, three phase III readouts, and a couple of phase III starts. All of these are important date events for investors to track over the next 12 months or so. In terms of highlighting a few of these to talk about, Merck's V116 is a follow-on to the Vaxneuvance pneumococcal vaccine. This one is targeted at adults in the adult population. They recently reported very nice top-line phase III data. They're running a phase III program that consists of eight total clinical trials, and we expect to see continued readouts for the balance of this year, as well as potentially a BLA filing. Palvella's PTX-022 being developed for rare dermatology diseases. In particular, here, we're talking about microcystic lymphatic malformations. The program has been in development for several different indications, but the phase II data in microcystic lymphatic malformations has been really impressive in an open-label 12-patient trial. All patients responded, and that is one of the reasons that we are comfortable reinvesting again recently. We provided the company an additional $5 million to help support the MLM indication. As part of that transaction, we increased our royalty rights, as well as broadened our rights to other portions of the Palvella portfolio. The last product on this slide to talk about is Viking's VK2809. This is their TR beta NASH program. Viking's an interesting case study for us to talk about as I talk about Novan towards the end of the presentation. But Viking was a company that we helped found. We bought a company called Metabasis and paired some of those assets together with our existing a couple of our existing assets and created the Viking entity as a standalone, separate entity. The NASH program at the time was one of the key programs of that. The company reported nice phase II data last year and/or this year, 2023, and are and on the top line, and we're looking for the full biopsy confirmed data in the first half of next year. We benefit from a 3.5%-7.5% royalty on that program, as well as significant milestone package, which will help drive, as I said, the cash flow over the next couple of years. Turning now to our platform technology. It's our Captisol platform technology. Todd alluded to our CyDex acquisition in 2011. That brought us this technology. At the time we bought the company, it was an integrated pharmaceutical company, similar to Ligand, but we restructured that company to focus around a lean operating team, and it was the first platform that we acquired and did this with. The platform from our partners generates two kinds of revenue for us. It generates material sales, as well as, royalties, royalties on all the programs. Across our portfolio of about 100 programs, about 40 are Captisol-based. The material sales have been, in that mid-20s range, between $20 million-$30 million, if you exclude the years that, we sold significant, portions of Captisol to Gilead and others for, the remdesivir drug. We're on track again for a very nice year, as Tavo mentioned, over $28 million, or $27 million-$28 million of, of Captisol sales. But that Captisol line, I've talked about on the last couple of earnings calls, is, functions to our—from our point of view, much like a royalty. It's a very high-margin business that generates really nice cash flow and would be our second-largest royalty if we count it as a royalty. On top of that, we obviously get the royalty interest. The technology is broadly applicable. Nearly 40% of the small molecules out there have some sort of solubility or other formulation challenge that Captisol could solve. And the significant breadth of our portfolio, as well as the exposure we got during COVID to the platform, really has accelerated people's interest in it. This next slide looks at, on the right-hand side, the approvals over time. There are 15 approved Captisol drugs. Each are labeled at the time and when they were approved on the chart on the right. And the other portion of this chart shows the metric tons of Captisol that we've produced over time. You can see the acceleration during the COVID period, but a really robust business that has a significant number of interest and partners for us. The left-hand side just illustrates that we expect potentially up to five approvals in 2024 for Captisol. Not all the drugs are the largest, but will be by far the most prolific year if we even do half of those. And some of the potential approvals that are upcoming and have recently happened are really credentializing for Captisol. The Mekinist product that was approved late last year was the first liquid oral. The first biowaiver approval will be as part of the 2024 class, as well as potentially the first sub-Q program and the first oral tablet as well. So broadening out route of administration from the traditional just IV translation that Captisol has supported. Turning now to some details on three different products that I didn't mention on the previous slides, but the first is Filspari. Again, Tavo's 5-year chart showed that this is a significant potential driver of our future revenue and growth. But we acquired our rights to Filspari through our Pharmacopeia acquisition back in 2008. Since then, we then out licensed the program to Travere, who has been developing it for a set of rare kidney diseases. Recently, they received approval in February of this year, 2023, for the drug in IgA nephropathy. They They also recently discussed with the FDA plans to submit an sNDA for full approval following the accelerated approval back in February. IgA nephropathy is a large indication for a rare disease. There's about 140,000 patients in the U.S., a similar number in the EU. And given Filspari's competitive profile, it's the only non-immunosuppressive agent that's approved for IgA nephropathy. We think it's got significant potential in that disease area. We get a 9% worldwide royalty on the drug, and I always remind investors that you might see Filspari, sorry, Travere, talk about a 17% royalty. The original innovator of the drug shares the 17% with us, and we benefit from 9%. In terms of the market opportunity for Filspari, Travere launched early, immediately after the approval in February. Last quarter, they reported $8 million of sales, $14.5 million since the launch. Really, the product is just ramping. Filspari, Travere is also disclosing new patient forms, new patient start forms, and they've disclosed that 990 new patient forms have been submitted since the launch. If all those patients flow through, that represents approximately $100 million of annual revenue. In Europe, the product will be launched by Vifor, partnered with Travere, and the potential European approval is coming in the first half of next year. The right side of the page shows the projections for Filspari from the consensus analysts that cover Travere. You can see that analysts, even focusing just on IgA nephropathy, are still expecting over $500 million of sales and a 9% royalty rate. The bottom half of the page shows that that translates to over $50 million of potential sales in royalties to Ligand. Ensifentrine, second product I'll talk about, is a product that we acquired the rights to through our Vernalis acquisition. We partnered this product with Verona, and Verona's recently done a great job moving this through the end of regulatory and into approval phase. They reported data on two different phase III trials at the end of 2022. They filed their NDA in the middle of 2023, and their PDUFA date is June 26, 2024. The drug's approved or seeking approval for COPD. We'll talk about the commercial market for that in the next slide, but, if it's commercialized, we receive a low single-digit royalty, and there's a, again, a significant milestone package, the first of which is a $5 million approval milestone. In terms of the potential commercial opportunity today, it's about a $10.5 billion market. Ensifentrine will be the first new class of drugs approved for COPD in a very long time. There are about 6 million patients on chronic treatment, of which nearly 40% still remain symptomatic even on standard of care, which provides a significant opportunity for additional benefit from ensifentrine. The right-hand side shows consensus estimates for Verona's commercialization of the drug, exceeding $1 billion, and our royalty exceeding $20 million over this 5-year period. The last drug I'll talk about today is berdazimer gel. We initially got rights to our berdazimer gel product back in 2019 through a project finance deal. The company ran several phase III trials, eventually successfully getting a very nice readout in phase III, and submitting an NDA in January of 2024. They're developing the drug for a treatment called... for a disease called molluscum contagiosum. The The company ran into some financial difficulties, and Ligand acquired the business through a bankruptcy process in the middle of this year. We're now incubating the business, making sure that the product continues on its regulatory track, and the team is able to prepare for commercialization, while we intend to seek a strategic exit, whether it's through a spin-off, much like our Viking, or other transactions, or through a strategic partnering effort. From a commercial standpoint, berdazimer is the first at-home, patient-applied topical drug that will be approved for molluscum. Today, all the treatments are in-office, and frequently come with pain and other irritation and adverse event profile that's not particularly appealing for a patient population that's largely a pediatric population. T here are more than 6 million patients that are in the US. At least 1 million seek treatment each year. And you can see on the right-hand side some of the projections that existed for the drug prior to Novan being acquired by Ligand. But it is north of a few hundred million dollars of potential sales. Our previous royalty was 7%-10%, and we hope to do that or better as we transition out of the product to an independent marketing company. So, with that, I think I can turn the call or the conversation back over to Todd for some closing remarks. Todd? Thanks, Matt. So just real quickly, in conclusion, I think, you know, we, we believe the future is very bright, that we have a pretty controllable business model that will allow us to grow this business predictably over the next many years, and achieve and deliver high levels of growth for, our, our investors, and that we have the team here to do it and the financial strength to achieve it. So, that is the concluding remark, and we'd like to open it up for questions at this point. Yeah. So, question for you. You use sell-side-- If we could wait for the microphone to come around to you for each person, so they can hear the questions on the webcast. So you use sell-side consensus for your estimates, which doesn't... I mean, you've got a very established team with deep understanding of these products, but you're not sharing it with us. You're giving us sell-side guidance based on sell-side consensus, so why is that? Yeah, I realize this is a source of frustration, Bob, for some investors. We do have insights on some of these products. We do extensive research on the markets, but we also have partners that are marketing these, and they don't like us front running their guidance. And so that's my understanding of the history here. Matt or Tavo, I don't know if you have anything to add. Yeah. No, Bob, real good question. But like Todd said, many of our partners do give guidance for their products. If they do, we adhere to that guidance, and we continue to do that. But just to be transparent, as we always have been about this topic, we don't get any sort of projections from our partners. We don't get any sort of inside look onto what their commercial plans or any of that type of information. And so they tend to encourage us not to try and come up with that information ourselves, just in case it's in conflict with whatever their internal plans are. And so we tend to just rely on the third-party consensus. This question for Tavo. Deployable capital, is that free cash flow, or is there something to reconcile between the two figures? Deployable capital is cash generated from operations, minus a base level of operating cash that we need for the business. Yeah, thanks. Thank you. Joe Pantginis, H.C. Wainwright. First, I just want to ask a logistical question on your five-year projection slide. Does that also take into account the recent update from Travere on sparsentan with regard to FSGS, or were those just basically the IgAN projections? Yeah, no, good question. The consensus estimates that we're pulling in are just for IgAN, and they are after this recent FDA meeting that they had, so. Got it. And then, maybe a question, if you have data to share on the deal breaker slide. Maybe an additional column you can discuss or maybe not. How would you define sort of the competitive landscape with regard to, say, term sheet status and other players that might be at the table, and why you might or might not have missed out on a deal? You want to take that one? Yeah. Yeah. Yeah, sure. I'll take that. What I can say is most of the things that we've been looking at this past year from a resource perspective have been non-competitive, so proprietary. We're not entering broad auctions, unless we think that we've got some competitive edge. So there have been some things we've killed, but for most of the reasons that Lauren articulated, you know, basically diligence, IP, those kinds of dynamics. Yeah. I would just add, Joe, that the, the competition here are the alternatives in the market. And so companies, if they're well managed, they will have alternatives, of course. So there's some backstop. We need to be partners, not bullies, and so there's a backstop here on, you know, the deals, because most of the folks we talk to have equity alternatives or other alternatives at the table, and we're very aware of that. Good morning, guys. This is Balaji from Barclays. The color on the deal environment was pretty interesting, the way you approached the deal and all. So a question for the deal team: Could you speak a bit more about the broader environment for biotech deals? And especially, I'd be very interested to compare it with how the pre-COVID environment was, post-COVID, things changed, and what kind of an environment are we looking at for the deals now? So the So just to add a bit more, sorry. Particularly looking at the valuations and how we approach these valuations, how that's evolved too. Thanks. Yeah. So just to repeat it, I think the question is about the deal environment, what it looked like pre-COVID versus post-COVID now, and what that's doing with regard to valuations. Paul, do you want to take that? Yeah, well, well, maybe stating the obvious. I mean, obviously, valuations have been dramatically impacted in the last few years, both COVID—COVID was obviously better pre-COVID. Now, with the capital markets are what they are, you know, we're seeing a lot of companies that have depressed valuations. We're really focusing more on assets, specifically. So we're looking for assets that we think have a good long-term tenure, potential to be highly differentiated clinically, and are soon to market. So a lot of the investment criteria that Lauren had described. And so there are companies that are, you know, either hurting from a capital perspective, but that's not necessarily guiding how we're looking for the deals in the environment. But we recognize that that context is behind everything that we're talking to. So sometimes we're dealing with individual inventors. They don't care about the capital markets. They're looking at this as a financial trade for them personally to, to benefit. And so it's a little bit different in terms of where we're focused today, even though the capital markets overlays all that. So hopefully that answers some of your question. Can I add a follow-up to that? When you evaluate cash flows, do you necessarily look at consensus numbers, or do you form your own internal revenue projections, cash flow projections, to base your valuations upon? So on new investments, we absolutely form our own views. We may start with consensus, looking at how they've approached the overall forecast, but we do our own diligence, we do our own epidemiology, our own assessment of the clinical pipeline in terms of competition in the future. Today, who's out there in the market, reimbursement dynamics. So it's really a ground-up approach to understanding, you know, what the potential is for that sales projection. Yeah. Yes. Howard Leavitt, Vector Capital. You have a large number of individual investments. What's your process to monitor them, make sure that they're on track, and how often do you review that? Just give me some color on that, please. Sure. Good, good question, Howard. Yeah. Thanks. The question is focused on how do we manage our portfolio, and that's largely my job, but thankfully, I don't do it myself. We, about eight, seven, six years ago, six, seven, eight years ago, developed something we call our portfolio investment management system. We call it PIMS internally. We highlighted it four or five years ago at one of our investor days. It's our database. We talked today about 100 or so partnered programs. The database actually has close to 150, 175 programs in it that we've interacted with at some point in time. Each program in the database has got someone assigned to it as sort of a business lead as well as a scientific lead. And then, Tavo and his team have added a software overlay into the database that helps us manage it. I hesitate to say the word AI, because it's really not AI, and we don't want our stock to go up 3x just today. It's AI. But, it is. It's sort of a little bit of automated information pull that helps us manage the portfolio, track events. 'Cause remember or recall that across that 100 portfolio, 100 programs in the portfolio or so, we're still owed something like $1.5 billion or $2 billion of potential milestones that's split over 400 or 500 different events over time. So we have to constantly be managing those type of things. The flip side of that is that's all just information tracking and reporting. What Todd has been focused on and asked me to focus on more significantly is actually managing the portfolio a little more actively. So, things like our Novan transaction, the Palvella transaction, some of the things we're working on internally are mining the existing portfolio for more opportunities, where we have insights into the programs and think it's a particularly attractive opportunity, we'll put more capital to work. So we're doing all that. Scott. Thank you. Scott Henry, Roth Capital. First question on the guidance through 2028. Kyprolis, do you expect there to be any cliff at all there, or do you expect to grow through with positive comps during the generic period of that drug? Yeah. Yeah, thanks for the question, Scott. On Kyprolis, the assumption there is that by the end of 2027, there's a significant decline in the royalties that we receive, and that's—you can see that on the chart that we showed there. Yeah. Yeah. Yeah, I could see it, and I remember. I think it was the gray box. Yeah. But when we get the comps in 2027, and I don't recall exactly when in the year it may- I think it's late 2027. It may hit a little bit in 2027 and a little bit in 2028? 2028. But at that point, do you think the larger part of the business will be big enough that the growth of that can offset a lot of that genericization? Yeah. Go, go ahead. I was just gonna add two things. First, like most of our royalty contracts, it's probably safe to assume that the Kyprolis contract is on a country-by-country product by product basis. So the U.S. expiry is 2027 at a date undisclosed by Amgen, but Europe will maintain for periods beyond that, as well as Japan, China, et cetera. We also continue to get royalties even on the lower sales level at a slightly lower rate. So it doesn't immediately go to zero, like a traditional generic might. But as the chart showed, yeah, the point of the long-term chart that we showed today was to get beyond that period and show that, based on existing portfolio, we grow right through that. That's the existing drugs launching between now and then, as well as some of the existing commercial products continuing to grow. We don't see a decline in the royalties just as a result of that. We can overcome the decline that we predict at this point. Okay. Thank you. That, that's great. That's quite an accomplishment. Second question, just on the pipeline, specifically ensifentrine. I think I've asked you this before, but COPD, that's a large pharma market. That's a big category. It's not something a small company does. At this point in time, as we near that PDUFA date, would you expect to partner that product? I mean, typically, I would think a partner would wanna be thinking about it already, because every day past that approval is into the patent expiration, so. Yeah. And circling back to the first question that we got, you know, in terms of our insight into what Verona is doing on the commercial side, we have no non-public information about exactly what they're doing. Publicly, they do talk about preparing for the commercial launch themselves. It's clear from their financials that they are preparing for commercial launch. They're hiring people, they're going through that whole process. The charts that we show on the revenue for ensifentrine, the analyst consensus numbers, six months or nine months ago, there was two or three analysts that had projections out any kind of material way. Today, this chart that we showed actually includes six or seven different analysts. There's more people picking up. If you scan through their research and kind of investigate sort of what the investor base is saying about the product, I think most people do expect that a big pharma partner of some sort comes in. I don't think those projections that we showed today assume a big pharma partner. I think if it's a big pharma partner, there's probably a boost to those numbers, but we'll wait and see and wish whoever it is success. Okay, great. I know analysts can be optimistic... present company excluded. Yeah. Final question. You know, if we were talking about real estate, we'd be talking about a cap rate, and when interest rates go up, cap rates go up. When we think about royalties, yeah, we think there'd be a similar relationship. When interest rates go up, the hurdle rate goes up, and perhaps less capital comes in, maybe there's less competition right now. How do you think higher interest rates impact the overall atmosphere as well as Ligand specifically? Yeah. I think it's a factor. A lot of the, like, the commercial stage royalty funds, because Royalty Pharma is so strong, frankly, have really become lenders, and so they're kind of focused on returns in that space as lenders would be. So I do think that that moves around quite a bit. It affects, I believe, the commercial side of the equation, commercial financings, commercial lending, commercial royalty deals, probably more. There's significant, I'd say, margin between the amount of risk we're buying in our assessment and the level of returns we're achieving. So there's significant alpha in what we're doing, and we're looking for equity-like returns. So there is... On the margin, there's, you know, less capital available in an environment like this. A lot of that is driven by the interest rate environment, and I think that becomes more favorable for investors in general, as well as us, in terms of the underwriting returns. And we achieve the highest returns we can in terms of getting the assets in the portfolio that we want. So overall, I would say that, you know, a more challenging investment, or excuse me, fundraising environment for those raising funds probably is beneficial to our strategy. But these are deals you can get done in good times as well, so. So I guess more specifically, if as far as the overall environment, if you're looking at a specific project, do you feel that maybe there's just not as many people in the room anymore? I mean, when interest rates are at 1%, people are looking to put money wherever they can to get a return. Yeah. Maybe just a few less players? Yeah. It's supply and demand of capital, for sure, which is very affected in our space right now. There's been people are not looking for new biotech investments right now, which probably means it's a very good time to make new biotech investments right now. So, that's definitely going on. It's true for us on a relative basis. Again, we try to... There's so much inbound opportunity right now in this type of environment. You'll get a lot of calls. There's a lot of interest in raising capital. It's really important that we don't let that drown out our outbound, proactive origination efforts, because we're identifying not just assets, but assets and teams that we have a lot of confidence in that can develop these assets. Because we're not gonna become the best product developer in all these therapeutic areas, which affects our approach to portfolio management as well. We have to be passive-... we can kind of be the brainstem of a development operation, but what makes this model really work and really profitable is to be lean and mean. So we need an outbound effort to find the right assets, combined with the right teams that we can in, that we can invest in. So there's definitely a lot more, out there to do in this type of environment, but, we want to remain highly selective. And, and at the end of the day, a- as I said before, we're typically competing against the alternatives in the market, which is equity capital. And if there's less equity capital- Mm ... that makes it a little bit easy for us, when we get down to the bottom line in the term sheet negotiations and the terms. Thank you. Hi, Matt Hewitt from Craig-Hallum. As you look out to the 2028 targets and the $1 billion that you'll be deploying in capital, how do you make those investments without changing your risk profile of the portfolio? So if you think about the $5 million-$20 million investments that you're making right now, as you get out to 2028, does the size of those investments change or the number? And as you do that, does that change the risk profile of your portfolio? Thanks. Yeah. Yeah, well, size is really important, in terms of, you know, how much we'll allocate to a single asset. And the riskier an asset is, doesn't mean it's a bad investment, as long as your underwriting returns are much higher than the risk that you assessed numerically. But if it's a riskier asset, we're gonna typically go smaller on it. And so as we grow, as we achieve greater cash flows, you know, our portfolio diversification allows us to do slightly larger deals on a proportional basis as we get bigger. It's just, it's portfolio math. It's the way that works. And that's why we're focused now on the, you know, kind of the... I'd put it broadly, 20-50. Because, you know, if we go to 50, you know, that's got to be a really high probability shot on goal, in my view. Yeah. If we go above that, we're probably talking about a commercial stage asset. You know, that chart I had up, where you see the risk coming down on assets as it goes to the right, there's a pretty big step down when you launch an asset, when you get the FDA approval. In fact, there's a 50%-55% chance on average, that a phase III asset is approved. Once an NDA is submitted, it's literally over 90% right now. A lot of that's 'cause the FDA feedback mechanism is better, and people don't submit bad NDAs, right? So that's kind of self-selection to a degree there. But even when you launch a drug, there's a lot of launch risks. Sometimes the market, there, there's market surprises, there's commercial issues, safety issues pop up that you didn't see in the smaller population when you did the study. So once you're kind of three years in to a launch, and there's no major safety issues or anything, that's kind of an 8%-9% discount rate probability if you really do the analysis on that risk. So, you know, that's kind of how we look at the market and how we're thinking about sizing sizing deals within the context of our portfolio. Yeah, and Matt, maybe just also keep in mind that, you know, we already deployed about $75 million this year. You know, if you think about that $1 billion over time, and the pace of deals that Todd and the team wanna do, it's really not gonna take too long to get through $1 billion of capital if we do four, five, six deals a year. You know, if we're doing $800-$150 million a deal, a year of capital, we can probably deploy it as it's generated pretty efficiently. Given how successful CyDex has been, really a home run, I was wondering how much time you guys spend on that aspect of platform-type deals, and does that need its own dedicated effort? Yeah, that's a good question, Stuart. Not enough. I think we need to really embed ourselves in that space more thoroughly. We'll get there. We're still building the team. I think we've done a phenomenal job this year of getting some real talent in the organization, but there's a few gaps we're going to add. And one of them will be you know, the type of person that is embroiled in that space, traffic in that space, is at the right conferences, sees new technologies emerging. The early warning radar, if you will, for the types of things that we're looking for. So that will come. Yes, David. Oh, sorry. Over here. Good morning. Les Sulewski, Truist Securities. What is your immediate and long-term opportunities for the Captisol platform, and what is your involvement in the clinical and formulation process? And are there any funding obligations on your behalf during the development stage? Thank you. Yeah. Yeah. Go ahead, Matt. Thanks. A good question. I think, the Captisol technology, as I mentioned, when we acquired it, it was close to a fully integrated pharmaceutical company. Today, it's run on a much leaner operation. We outsource nearly everything, so we have a third-party manufacturing operation that's exclusive to us, but managed by our team. We have a couple of key scientists that were the inventors of the technology, that have been with it for 20, 30 years. That aid our partners in determining whether or not their particular molecule will be useful with Captisol. That's usually more of an upfront screening kind of exercise, though. That-- Well, part of the beauty of the Captisol platform is that it's a technology that, most of the scientists out there at any pharma company, can utilize themselves. And so, we're happy to kind of do a little bit of initial screening for folks, if they don't have the resources to do it themselves. But a lot of our business just comes from people asking for a sample. We send them a sample. They run the tests. If it works, they take a license, and then we supply them the actual powder, the Captisol, over time. So it's really a very-- we like to use the word portable or leverageable, technology platform that is, has been a great business for us. Yeah. And that's not true with most drug delivery technologies, I would say, where there's a very high degree of what I would call customization required on each project, so you end up needing to build a lot of infrastructure, PhDs, et cetera, to facilitate the development and the formulation process. That's much less the case. We have experts. They do advise clients, but it's a small team, and as Matt said, very leverageable for that reason. Yes, David. So on your pipeline list, there are some pretty, pretty big players in Sanofi and Takeda. Why are those deals available when they could just take those assets in, you know, in one fell swoop? Yeah. Why is that available to you? Yeah, so Paul can answer this, but I love this question, so I'm gonna take it, Paul. So this is kind of one of the things that... I mean, it's obvious when I say it, but it's hard if you haven't been embroiled in this type of activity or space for years. You don't always see this on the first pass. But our counterparties on deals are not always the marketers. Like in the case of Takeda, our counterparty was Ovid. So this is beneficial for Ovid to engage with us. As products make their way from sometimes government institutions like NIH or universities or inventor labs of some sort, to smaller biotechs, there's a license that's put in place. To larger biotechs, there's another license, sublicense put in place. Ultimately, to the large marketing companies, you know, there's now multiple licenses around any given asset. And so we can, you know. We We look at the marketing partners, which is very important, Scott, consistent with your, the question you just had. And but we look hard at the marketing partners, and if we find an asset we really like, we will go around, follow the you know the inventorship trail, if you will, and see what royalties are held and who holds them. And so our counterparties can be other biotech companies, inventors, nonprofit institutions that were in the trail of development on that intellectual property. And it can be different IP. It could be manufacturing IP, it could be the invention of the molecule itself in a therapeutic area, for example. So there's lots of places to do these deals, and ultimately, as you just pointed out, two, two of the deals are premier large pharma assets. Now, if we knocked on Sanofi's door and say, excuse me, and said, "Hey, we'd like to, you know, write you a $30 million check and buy," you know, "create a royalty," they... Well, the door wouldn't open, right? There's, that, that is. We can't move the needle for them. But with a lot of counterparties, certainly with individual inventors, you can transform their businesses with relatively small deals that, that fit well for us in terms of portfolio strategy. They don't have a right of first refusal or right of, you know, right to take over the royalty- Typically not. Okay. Typically not. Can you touch on the bankruptcy dynamics? You, there was some mention about how the royalty gives you preferential status in a bankruptcy process. Yeah. Well, that's just a function of western law. I'm not a lawyer, by the way, so I suggest you talk to your lawyers, but I've been doing this for a long time. So, you know, under the bankruptcy code, intellectual property and royalties have special protections. It's written into the code. So and we've had a couple assets, when I was in the fund business, that have gone through this. So, company's launching a product, it gets distressed, the launch doesn't go well, and it goes back into the company, and the company files for bankruptcy protection. If it's a good asset, and we've had this happen, I think twice, other marketers, bidders will come in and bid on those assets. Part of the requirement under bankruptcy, in general, again, I'm not a lawyer, is you have to acquire the contracts. And so you end up picking up your royalty then again with a new with a new marketer. Now, that's not the case if you're creating a royalty in project finance, and I won't go into tremendous detail here. But in project finance, you can use structure to mimic the natural state of a royalty. Because a project finance, even though you're creating a royalty in that process, in the eyes of the law, there has not been any intellectual property license, so it's technically a financing and not a royalty acquisition. So we're aware of that. We know how to structure those deals and treat them accordingly so that we have similar protections. But in the case of Novan, did your royalty effectively give you stalking horse status in the bankruptcy process? In that particular case, no, it did not. ... Okay, so the dynamics there was just you were the highest bidder for the overall assets? Yeah. Well, yes. Yeah, we were already kind of on the inside of the company, if you will, having some privity with them. And as they filed, as you know, we did a DIP financing and then took full ownership of the asset on the other side of that. Okay. And with regards to the Novan deal, this is, it seems to be another step. You kind of spent all this time getting away from platforms, and here's this one where all of a sudden there's a new platform. Is that accidental or... I know you've mentioned you expect to spin that out, but you seem to keep on getting back into platforms. Yeah. No, that's, that's a really good question. We'd prefer to remain passive, but where we have significant insight on assets and where we see opportunity, we will step back in, and I think that's the case here. And we have historically, and we will again, own infrastructure on what I would call a transitory basis. You know, this is not something we're gonna do long term. I suspect, and I'll let Matt comment on this 'cause he's driving the process, but we're either gonna finance that with private equity capital or there could be a strategic deal. We don't know about that. But we think that's a good asset. Obviously, nobody's gonna step in front of a January sixth PDUFA date there. So we own that risk. We owned it already. We bought some more of that risk, and when that turns, we're gonna start setting this up. And, you know, we know how to do that. We've got a CEO in place already. I mean, we've... We know how to do this and spin it out. That's similar to what we did with Metabasis and Viking, so it's a very similar process. Yes. Good afternoon. Ahu Demir, Senior Analyst at Ladenburg Thalmann. So we heard about your deal-making strategies and investment strategies as well. Curious if there is any therapeutic area or any modalities that you'll specifically focus on in the next ten years or so? Yeah, we are therapeutically agnostic, but the criteria which Lauren laid out for us does naturally drive us into certain types of areas. For example, we're not typically making a meaningful dent in the cost of a new cardiac drug that have to run a five-year survival study, because those are $hundreds of millions. Also, one of our criteria is a very high unmet clinical need, 'cause when you're investing at the development stage, and one of the risks that's increased dramatically in the last 15 years is payer risk. The payers have a lot more to say in the overall equation in the pharmaceutical industry. And so your best protection against that is to invest in something that's very high clinical unmet need. If you're really solving a big clinical problem, not only are you doing something you feel pretty good about, but also you're really protecting yourself as an investor, because ultimately you have to sit down and work out pricing. The pharma company that markets this has to sit down and work out pricing. So we end up looking at a lot of, you know, high-impact drugs like in rare diseases and places like that. So now, that doesn't stop us from, as I said before, going to some of the smaller, earlier counterparties and investing in a royalty that's in COPD, which is a pretty large category. So it does happen, but we are therapeutically agnostic. We think we do. You just naturally end up with therapeutic diversity in that case, which complements our overall strategy of having a diverse portfolio. Thank you. I just want to ask a question that's coming in on the web from Larry Solow, from CJS Securities. He's basically asking about the... If you look at the graph with regards to the Captisol sales, it seems like the Captisol sales is pretty modest growth out to 2028. Obviously, part of that is tied to Kyprolis. And will generic competitors to Kyprolis need to use Captisol, and will you earn royalties related to that? Yeah. Thanks, Larry. The Captisol platform and Kyprolis specifically, in general, pre-COVID, the Captisol material sales were in that $20 million-$30 million range. We continue to see sales in that range for the foreseeable future. So, our projections for Captisol show slight growth with the growth of the overall portfolio, but not a breakout. I always used to joke, "You'll never wake up one day and see Captisol double or triple in sales," but then it did with COVID. I don't expect that to happen again, hopefully. But absent something like that, there are some products that are bigger users that could drive, you know, a step up in kind of overall tier or level of the sales. But generally speaking, the products that are commercial will grow as they do, and our sales will generally grow with that. The clinical side, as products move from phase I to II to III, the trials get bigger, and so the sales for those grow as well. They're offset by things like Kyprolis going generic. The benefit for us, though, is that most of the generics for a product like that will use Captisol as well. The generics don't wanna make generic Captisol, they wanna make generic Kyprolis. So they fight the patents for Kyprolis, and then they strike a license deal with us to use our Captisol. That's what's happened in some of the previous examples of products that have gone off patent, where we do get continued capture of most of the Captisol sales for all of a particular product that goes generic. And we do capture a royalty from most of the generics as well. Tends to be lower than a proprietary drug royalty, because it's not drug-enabling from day one, but it is still a royalty. So while we do see a step down, we do continue to benefit from both royalty and material sales. Great. Thanks very much, Matt. Yeah. Todd, I just actually wanted to follow up on one comment you made. I think you - we're talking about one of your programs, maybe it hits commercialization, and someone will need to commercialize it, and maybe that gets financed by private equity. But is that your... When you talk about that, is that your private equity, or is that going out to private equity players who could invest in the product and the commercialization? No, at that stage, if we already have a position or a royalty in the product, they're gonna finance it, separate parties that are out there. And, if they're private, up in the private equity market or, in the public markets, one way or the other. Sorry. Thank you. Yeah. Thanks for clarifying. There's one question in the back corner, and then maybe that should be our last question. We can move to lunch. Just any thoughts on the impact of GLPs on the size of the NASH market, I guess, for Madrigal and then eventually for VK2809? Yeah. You wanna take it? Sure. The short answer is, it's really early. Yeah. Obviously, the world is convinced that GLPs will be $100 billion drugs. To be determined, but we share everybody's enthusiasm. As far as we know, we don't see any data or direct correlation yet that says that it will limit the NASH market, but it's really to be determined. For better or worse, Madrigal will be out there for a few years before Viking's NASH program comes to market, so we'll get to see to the extent there's any impact there. But for now, we're just cautiously optimistic about the GLPs and as well as the NASH programs. You mentioned the first subcutaneous program for Captisol. Is there any opportunity in GLP for Captisol at some point? It's a good question. The opportunity for Captisol, generally, is anywhere that there's a formulation or, particularly, usually it's a solubility issue. I'm not close enough to the GLP-1 drugs to know if there are ones that are having significant solubility challenges. We're close to one particular drug in that class, it's very early stage, that is having some challenges. We are testing Captisol with it, but it's really too early to figure out if there's gonna be any real pull-through there. Okay. And, the Viking 2735 drug, does that change any of your thoughts, on the thinking with Novan, for how you would create, I guess, the future-proof of the royalty structures there, that would be different than maybe what you did with Viking? Yeah. So, in case anyone's not aware, when Viking was founded, as I mentioned, the first five assets that were founded at Viking, that were at Viking at founding, were Ligand assets. A few of them came from the Metabasis transaction, a few were invented internally at Ligand. The 2735 GLP asset at Viking was created and invented at Viking following our founding. So that's proprietary to them and wholly owned by the team there. We don't... The only real way to have maybe solved for that upfront would've been, and solve for, I mean, get a royalty on that asset upfront, would've been to get a royalty on everything that the company was doing. That's not really something that outside capital tends to support usually, just a blank check royalty on everything that's happening. That said, in certain transactions, including the recent Palvella deal that we just did, we did broaden out our rights to buy a royalty on anything new that comes through the platform, specifically for that reason. As companies move away from our assets, or in addition, add to our assets, we like to have the ability to step in and get some extra royalty. So, that's something we've done recently. Thanks. Good. Great. Well, thank you again for everybody for coming today, and we'll look forward to hopefully seeing you at lunch.