Ligand Reports First Quarter 2024 Financial Results
Conference Call Begins at
“We are pleased to report another quarter of strong financial results driven by the performance of our commercial royalty portfolio. Simultaneously, we continue to build our portfolio of development stage royalty assets to deliver future growth,” said
First Quarter 2024 Financial Results
Total revenues and other income for the first quarter of 2024 were
Cost of Captisol was
Net income from continuing operations for the first quarter of 2024 was
As of
2024 Financial Guidance
Ligand is reaffirming its 2024 financial guidance. The Company expects 2024 royalties ranging from
First Quarter and Recent 2024 Business Highlights
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Portfolio Updates
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Adjusted Financial Measures
Ligand reports adjusted net income and adjusted net income per diluted share in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company’s financial measures under GAAP include share-based compensation expense, amortization of debt-related costs, amortization related to acquisitions and intangible assets, changes in contingent liabilities, mark-to-market adjustments for amounts relating to its equity investments in public companies, excess tax benefit from share-based compensation, income tax effect of adjusted reconciling items and others that are listed in the itemized reconciliations between GAAP and adjusted financial measures included at the end of this press release. However, the Company does not provide reconciliations of such forward-looking adjusted measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for changes in contingent liabilities, changes in the market value of its investments in public companies, share-based compensation expense and the effects of any discrete income tax items. Management has excluded the effects of these items in its adjusted measures to assist investors in analyzing and assessing the Company’s past and future core operating performance. Additionally, adjusted earnings per diluted share is a key component of the financial metrics utilized by the Company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.
Conference Call
Ligand management will host a conference call today beginning at
About
Ligand is a biopharmaceutical company enabling scientific advancement through supporting the clinical development of high-value medicines. Ligand does this by providing financing, licensing our technologies or both. Its business model seeks to generate value for stockholders by creating a diversified portfolio of biopharmaceutical product revenue streams that are supported by an efficient and low corporate cost structure. Ligand’s goal is to offer investors an opportunity to participate in the promise of the biotech industry in a profitable and diversified manner. Its business model focuses on funding programs in mid- to late-stage drug development in return for economic rights, purchasing royalty rights in development stage or commercial biopharmaceutical products and licensing its technology to help partners discover and develop medicines. Ligand partners with other pharmaceutical companies to leverage what they do best (late-stage development, regulatory management and commercialization) in order to generate its revenue. Ligand’s Captisol® platform technology is a chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. Ligand has established multiple alliances, licenses and other business relationships with the world’s leading biopharmaceutical companies including
We use our investor relations website and X as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Investors should monitor our website and our X account, in addition to following our press releases,
About Captisol®
Captisol is a patent-protected, chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. Captisol was invented and initially developed by scientists in the laboratories of Dr.
Forward-Looking Statements
This news release contains forward-looking statements by Ligand that involve risks and uncertainties and reflect Ligand's judgment as of the date of this release. Words such as “plans,” “believes,” “expects,” “anticipates,” and “will,” and similar expressions, are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements regarding: Ligand’s ability to expand its portfolio with life sciences royalty opportunities; the timing of clinical and regulatory events of Ligand’s partners, including the expected commercial launch of Zelsuvmi by Pelthos Therapeutics; the timing of the initiation or completion of preclinical studies and clinical trials by Ligand and its partners; the timing of product launches by Ligand or its partners; and guidance regarding the full-year 2024 financial results. Actual events or results may differ from Ligand's expectations due to risks and uncertainties inherent in Ligand’s business, including, without limitation: Ligand relies on collaborative partners for milestone payments, royalties, materials revenue, contract payments and other revenue projections and may not receive expected revenue; Ligand may not receive expected revenue from Captisol material sales; Ligand and its partners may not be able to timely or successfully advance any product(s) in its internal or partnered pipeline or receive regulatory approval and there may not be a market for the product(s) even if successfully developed and approved; Ligand may not achieve its guidance for 2024; Ligand faces competition in acquiring royalties and locating suitable royalties to acquire; Ligand may not be able to create future revenues and cash flows through the acquisition of royalties or by developing innovative therapeutics; products under development by Ligand or its partners may not receive regulatory approval; the total addressable market for our partners’ products may be smaller than estimated; Ligand faces competition with respect to its technology platforms which may demonstrate greater market acceptance or superiority; Ligand is currently dependent on a single source sole supplier for Captisol and failures by such supplier may result in delays or inability to meet the Captisol demands of its partners; Ligand’s partners may change their development focus and may not execute on their sales and marketing plans for marketed products for which Ligand has an economic interest; Ligand’s and its partners’ products may not be proved to be safe and efficacious and may not perform as expected and uncertainty regarding the commercial performance of such products; Ligand or its partners may not be able to protect their intellectual property and patents covering certain products and technologies may be challenged or invalidated; Ligand's partners may terminate any of its agreements or development or commercialization of any of its products; Ligand and its partners may experience delays in the commencement, enrollment, completion or analysis of clinical testing for its product candidates, or significant issues regarding the adequacy of its clinical trial designs or the execution of its clinical trials, challenges, costs and charges associated with integrating acquisitions with Ligand’s existing businesses; Ligand may not be able to successfully commercialize ZELSUVMI; the potential impact of six partnered programs, including BMS-986442 (
Other Disclaimers and Trademarks
The information in this press release regarding certain third-party products and programs, including ensifentrine, a Verona product candidate, V116, a
Ligand owns or has rights to trademarks and copyrights that it uses in connection with the operation of its business including its corporate name, logos and websites. Other trademarks and copyrights appearing in this press release are the property of their respective owners. The trademarks Ligand owns include Ligand®, Captisol® and ZELSUVMI, a Novan product. Solely for convenience, some of the trademarks and copyrights referred to in this press release are listed without the ®, © and ™ symbols, but Ligand will assert, to the fullest extent under applicable law, its rights to its trademarks and copyrights.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share amounts) |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Revenues and other income: |
|
|
|
||||
Revenue from intangible royalty assets |
$ |
18,357 |
|
|
$ |
17,154 |
|
Income from financial royalty assets |
|
738 |
|
|
|
493 |
|
Royalties |
|
19,095 |
|
|
|
17,647 |
|
Captisol |
|
9,212 |
|
|
|
10,622 |
|
Contract revenue and other income |
|
2,671 |
|
|
|
15,710 |
|
Total revenues and other income |
|
30,978 |
|
|
|
43,979 |
|
Operating costs and expenses: |
|
|
|
||||
Cost of Captisol |
|
2,882 |
|
|
|
3,717 |
|
Amortization of intangibles |
|
8,186 |
|
|
|
8,539 |
|
Research and development |
|
5,971 |
|
|
|
6,663 |
|
General and administrative |
|
10,951 |
|
|
|
10,855 |
|
Total operating costs and expenses |
|
27,990 |
|
|
|
29,774 |
|
Income from operations |
|
2,988 |
|
|
|
14,205 |
|
Gain from short-term investments |
|
110,772 |
|
|
|
39,533 |
|
Interest income, net |
|
1,879 |
|
|
|
1,195 |
|
Gain on derivative instruments |
|
196 |
|
|
|
— |
|
Other non-operating income (expense), net |
|
(2,388 |
) |
|
|
603 |
|
Total other income, net |
|
110,459 |
|
|
|
41,331 |
|
Income before income taxes from continuing operations |
|
113,447 |
|
|
|
55,536 |
|
Income tax expense |
|
(27,308 |
) |
|
|
(11,922 |
) |
Net income from continuing operations |
|
86,139 |
|
|
|
43,614 |
|
Net loss from discontinued operations |
|
— |
|
|
|
(1,665 |
) |
Net income: |
$ |
86,139 |
|
|
$ |
41,949 |
|
|
|
|
|
||||
Basic net income from continuing operations per share |
$ |
4.86 |
|
|
$ |
2.56 |
|
Basic net loss from discontinued operations per share |
$ |
— |
|
|
$ |
(0.10 |
) |
Basic net income per share |
$ |
4.86 |
|
|
$ |
2.46 |
|
Shares used in basic per share calculation |
|
17,732 |
|
|
|
17,063 |
|
|
|
|
|
||||
Diluted net income from continuing operations per share |
$ |
4.75 |
|
|
$ |
2.43 |
|
Diluted net loss from discontinued operations per share |
$ |
— |
|
|
$ |
(0.09 |
) |
Diluted net income per share |
$ |
4.75 |
|
|
$ |
2.33 |
|
Shares used in diluted per share calculation |
|
18,122 |
|
|
|
17,974 |
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) |
|||||
|
|
|
|
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash, cash equivalents and short-term investments |
$ |
310,593 |
|
$ |
170,309 |
Accounts receivable, net |
|
28,435 |
|
|
32,917 |
Inventory |
|
21,337 |
|
|
23,969 |
Income tax receivable |
|
— |
|
|
6,395 |
Prepaid expenses |
|
1,237 |
|
|
1,182 |
Other current assets |
|
7,311 |
|
|
2,657 |
Total current assets |
|
368,913 |
|
|
237,429 |
|
|
|
|
||
Deferred income taxes, net |
|
— |
|
|
214 |
|
|
396,670 |
|
|
402,976 |
Long-term portion of financial royalty assets, net |
|
65,710 |
|
|
62,291 |
Property and equipment, net |
|
15,135 |
|
|
15,607 |
Operating lease right-of-use assets |
|
6,028 |
|
|
6,062 |
Financing lease right-of-use assets |
|
3,219 |
|
|
3,393 |
Equity method investment in |
|
10,469 |
|
|
12,595 |
Other investments |
|
36,500 |
|
|
36,726 |
Other assets |
|
11,225 |
|
|
9,923 |
Total assets |
$ |
913,869 |
|
$ |
787,216 |
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable and accrued liabilities |
$ |
14,323 |
|
$ |
14,894 |
Income tax payable |
|
1,138 |
|
|
— |
Current contingent liabilities |
|
127 |
|
|
256 |
Current operating lease liabilities |
|
1,000 |
|
|
403 |
Current finance lease liabilities |
|
3 |
|
|
7 |
Current deferred revenue |
|
1,227 |
|
|
1,222 |
Total current liabilities |
|
17,818 |
|
|
16,782 |
|
|
|
|
||
Long-term contingent liabilities |
|
2,888 |
|
|
2,942 |
Long-term operating lease liabilities |
|
5,191 |
|
|
5,755 |
Deferred income taxes, net |
|
50,606 |
|
|
31,622 |
Other long-term liabilities |
|
30,845 |
|
|
29,202 |
Total liabilities |
|
107,348 |
|
|
86,303 |
|
|
|
|
||
Total stockholders' equity |
|
806,521 |
|
|
700,913 |
Total liabilities and stockholders' equity |
$ |
913,869 |
|
$ |
787,216 |
ADJUSTED FINANCIAL MEASURES (Unaudited, in thousands, except per share amounts) |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023(5) |
|
|
|
|
|
||||
Net income from continuing operations |
$ |
86,139 |
|
|
$ |
43,614 |
|
Adjustments: |
|
|
|
||||
Share-based compensation expense |
|
7,334 |
|
|
|
5,931 |
|
Non-cash interest expense (1) |
|
84 |
|
|
|
95 |
|
Amortization related to acquisitions and intangible assets |
|
8,186 |
|
|
|
8,539 |
|
Amortization of financial royalty assets (2) |
|
3,262 |
|
|
|
(493 |
) |
Change in contingent liabilities (3) |
|
(33 |
) |
|
|
(671 |
) |
Novan operating loss |
|
6,160 |
|
|
|
— |
|
Gain from short-term investments |
|
(110,772 |
) |
|
|
(39,533 |
) |
Realized gain from short-term investments |
|
59,979 |
|
|
|
20,552 |
|
Provision for current expected credit losses on financial royalty assets |
|
(2,841 |
) |
|
|
— |
|
Loss from equity method investment in |
|
2,352 |
|
|
|
— |
|
Other |
|
153 |
|
|
|
102 |
|
Income tax effect of adjusted reconciling items above |
|
9,197 |
|
|
|
1,980 |
|
Excess tax benefit (shortfall) from share-based compensation (4) |
|
465 |
|
|
|
(212 |
) |
Adjusted net income from continuing operations |
$ |
69,665 |
|
|
$ |
39,904 |
|
Realized gains from sales of VKTX stock, net of tax |
|
(47,857 |
) |
|
|
(16,548 |
) |
Core adjusted net income from continuing operations |
$ |
21,808 |
|
|
$ |
23,356 |
|
|
|
|
|
||||
Diluted per-share amounts attributable to common shareholders: |
|
|
|
||||
Diluted net income per share from continuing operations |
$ |
4.75 |
|
|
$ |
2.43 |
|
Adjustments: |
|
|
|
||||
Share-based compensation expense |
|
0.40 |
|
|
|
0.34 |
|
Non-cash interest expense (1) |
|
— |
|
|
|
0.01 |
|
Amortization related to acquisitions and intangible assets |
|
0.45 |
|
|
|
0.49 |
|
Amortization of financial royalty assets (2) |
|
0.18 |
|
|
|
(0.03 |
) |
Change in contingent liabilities (3) |
|
— |
|
|
|
(0.04 |
) |
Novan operating loss |
|
0.34 |
|
|
|
— |
|
Gain from short-term investments |
|
(6.11 |
) |
|
|
(2.26 |
) |
Realized gain from short-term investments |
|
3.31 |
|
|
|
1.18 |
|
Provision for current expected credit losses on financial royalty assets |
|
(0.16 |
) |
|
|
— |
|
Loss from equity method investment in |
|
0.13 |
|
|
|
— |
|
Other |
|
0.01 |
|
|
|
0.01 |
|
Income tax effect of adjusted reconciling items above |
|
0.51 |
|
|
|
0.09 |
|
Excess tax benefit (shortfall) from share-based compensation (4) |
|
0.03 |
|
|
|
(0.01 |
) |
Adjustment for shares excluded using the if-converted method under ASU 2020-06 (6) |
|
— |
|
|
|
0.07 |
|
Adjusted diluted net income per share from continuing operations |
$ |
3.84 |
|
|
$ |
2.28 |
|
Realized gains from sales of VKTX stock, net of tax |
|
(2.64 |
) |
|
|
(0.95 |
) |
Core adjusted diluted net income per share from continuing operations |
$ |
1.20 |
|
|
$ |
1.33 |
|
|
|
|
|
||||
|
|
|
|
||||
GAAP - weighted average number of common shares - diluted |
|
18,122 |
|
|
|
17,974 |
|
Diluted effect of the 2023 Notes |
|
— |
|
|
|
(483 |
) |
Adjusted weighted average number of common shares - diluted |
|
18,122 |
|
|
|
17,491 |
|
(1) Amounts represent non-cash debt related costs that are calculated in accordance with the authoritative accounting guidance for our revolving credit facility and convertible debt instruments that may be settled in cash. |
(2) Amounts represent the adjustments bridging the income from financial royalty assets to total contractual payments recorded in the period. |
(3) Amounts represent changes in fair value of contingent consideration related to CyDex and Metabasis transactions. |
(4) Excess tax benefits from share-based compensation are recorded as a discrete item within the provision for income taxes on the consolidated statements of operations as a result of the adoption of an accounting pronouncement (ASU 2016-09) on |
(5) Q1 2023 numbers are adjusted to exclude after-tax impact from realized gain of Viking common stock. |
(6) Excluding the impact from the adoption of accounting pronouncement (ASU 2020-06) on |
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investors@ligand.com
(561) 214-4232
Twitter/ X: @Ligand_LGND
bob@lifesciadvisors.com
(516) 428-8577
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