Press release·05/10/2025 07:24:42

Overview

Ligand Pharmaceuticals is a biopharmaceutical company that enables scientific advancement by supporting the clinical development of high-value medicines. The company’s business model focuses on generating revenue streams from licensing its technologies, purchasing royalty rights, and funding drug development programs in exchange for economic rights.

Ligand operates two main technology platforms - Captisol, a chemically modified cyclodextrin that improves drug solubility and stability, and NITRICIL, which allows for “tunable” drug release profiles. The company has established partnerships with leading pharmaceutical companies like Amgen, Merck, Pfizer, and Gilead to leverage its technologies and generate revenue from royalties, material sales, and milestone payments.

Financial Performance

In the first quarter of 2025, Ligand reported total revenue and other income of $45.3 million, a 46% increase from the $31.0 million reported in the same period in 2024. This growth was driven by:

• A 44% increase in royalties to $27.5 million, primarily due to income from the Qarziba financial royalty asset and higher Filspari sales.
• A 46% increase in Captisol material sales to $13.5 million, due to the timing of customer orders.
• A 64% increase in contract revenue and other income to $4.4 million, mainly from a regulatory milestone payment related to Xinshumu.

The company’s operating costs and expenses increased by 191% to $81.5 million in Q1 2025, compared to $28.0 million in Q1 2024. This was primarily due to:

• A 68% increase in the cost of Captisol to $4.8 million, in line with the higher Captisol sales.
• A $44.1 million increase in research and development expenses to $50.1 million, related to a funding arrangement for the D-Fi royalty rights acquisition.
• A $7.8 million increase in general and administrative expenses to $18.8 million, driven by higher employee costs and operating expenses for the Pelthos business.

Ligand reported a net loss of $42.5 million in Q1 2025, compared to net income of $86.1 million in the prior year period. This was largely due to a $123.1 million swing in non-operating income, from a $110.8 million gain in Q1 2024 to a $12.4 million loss in Q1 2025, primarily related to changes in the fair value of the company’s equity investments.

Liquidity and Capital Resources

As of March 31, 2025, Ligand had $208.9 million in cash, cash equivalents, and short-term investments, down from $256.2 million at the end of 2024 mainly due to the cash used for the Castle Creek transaction.

The company has historically supplemented its operating cash flows by liquidating short-term investments and issuing debt and equity. Ligand has a $125 million revolving credit facility, of which $124.4 million was available as of March 31, 2025.

In April 2023, Ligand’s board approved a $50 million stock repurchase program, which remained fully available as of the end of Q1 2025.

Business Updates

Pelthos Therapeutics Transaction: In April 2025, Ligand announced a definitive merger agreement to combine its Pelthos Therapeutics subsidiaries with Channel Therapeutics. The combined company, to be named Pelthos Therapeutics Inc., will initially focus on commercializing Pelthos’ ZELSUVMI topical gel for the treatment of molluscum contagiosum infections. Ligand has agreed to invest $18 million in the combined company, with an additional $32 million coming from a group of strategic investors.

New Royalty Investment: In February 2025, Ligand closed a $75 million royalty financing agreement with Castle Creek Biosciences to support the Phase 3 clinical study of Castle Creek’s D-Fi gene therapy for the treatment of dystrophic epidermolysis bullosa. Ligand committed $50 million and will receive a mid-single digit royalty on D-Fi sales.

Portfolio Updates:

• Verona reported a 95% increase in Ohtuvayre net sales to $71.3 million in Q1 2025.
• Travere and CSL Vifor received European approval to convert the conditional marketing authorization for Filspari to a standard marketing authorization.
• UroGen reported encouraging safety data from a Phase 1 study of its bladder cancer drug UGN-301.
• Merck reported a 120% increase in Capvaxive sales to $107 million in Q1 2025 and received European approval for the vaccine.
• Palvella announced progress in clinical trials for its Qtorin rapamycin gel for lymphatic and venous malformations.
• Travere submitted a supplemental NDA to the FDA for traditional approval of Filspari for focal segmental glomerulosclerosis.

Outlook

Ligand’s diversified portfolio of royalty-generating assets, technology platforms, and drug development partnerships provide a foundation for sustainable revenue growth. The company’s efficient operating model and access to capital through its revolving credit facility and stock repurchase program give it financial flexibility to pursue new opportunities.

However, Ligand’s financial performance remains subject to the success and timing of its partners’ product launches and sales, as well as the inherent risks of drug development. Ongoing litigation and disputes with third parties could also have a material adverse effect. Investors should carefully consider these factors when evaluating Ligand’s long-term prospects.