Ligand Reports Second Quarter 2024 Financial Results
Conference call at
“We had a strong quarter and are on track to meet the long-term growth objectives we outlined in December,” said
Second Quarter 2024 Financial Results
Total revenues and other income for the second quarter of 2024 were
Cost of Captisol was
GAAP net loss from continuing operations for the second quarter of 2024 was
As of
Year-to-Date Financial Results
Total revenues and other income for the six months ended
Cost of Captisol was
GAAP net income from continuing operations for the six months ended
2024 Financial Guidance
Ligand is reaffirming its 2024 financial guidance given on
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, amortization of financial royalty 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, Pelthos operating loss, impairment of financial royalty assets, loss from equity method investment in
Second Quarter 2024 and Recent Updates
Business Highlights
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The transaction will help advance several clinical milestones for Palvella:
-
A Phase 3 pivotal study of QTORIN 3.9% rapamycin anhydrous gel for the treatment of microcystic lymphatic malformations, a serious, rare genetic and lifelong disease for which there are no FDA-approved therapies. The disease impacts more than 30,000 diagnosed patients in the
U.S. QTORIN rapamycin has been granted FDA’s Breakthrough Therapy, Fast Track, and Orphan Designations for the treatment of microcystic lymphatic malformations.
- A Phase 2 study of QTORIN rapamycin for the treatment of cutaneous venous malformations. Cutaneous venous malformations are a serious, rare genetic disease which can cause functional impairment, significantly impact quality of life, and are associated with severe long-term complications. QTORIN rapamycin has been granted FDA’s Fast Track Designation for the treatment of venous malformations.
Notably, if approved, QTORIN™ rapamycin has the potential to be the first approved therapy and standard of care in the
As background, Palvella was originally sourced through Ligand’s proactive deal origination efforts. Since Ligand's first transaction with Palvella, the company has secured significant subsequent equity funding from leading biotech investors, including
Portfolio Updates
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Conference Call and Webcast
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 Ohtuvayre by
Other Disclaimers and Trademarks
The information in this press release regarding certain third-party products and programs, including Ohtuvayre, a Verona product, CAPVAXIVE, 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 Pelthos 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 |
|
Six Months Ended |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenues and other income: |
|
|
|
|
|
|
|
||||||||
Revenue from intangible royalty assets |
$ |
22,603 |
|
|
$ |
20,430 |
|
|
$ |
40,960 |
|
|
$ |
37,584 |
|
Income from financial royalty assets |
|
559 |
|
|
|
508 |
|
|
|
1,297 |
|
|
|
1,001 |
|
Royalties |
|
23,162 |
|
|
|
20,938 |
|
|
|
42,257 |
|
|
|
38,585 |
|
Captisol |
|
7,500 |
|
|
|
5,220 |
|
|
|
16,712 |
|
|
|
15,842 |
|
Contract revenue and other income |
|
10,869 |
|
|
|
208 |
|
|
|
13,540 |
|
|
|
15,918 |
|
Total revenues and other income |
|
41,531 |
|
|
|
26,366 |
|
|
|
72,509 |
|
|
|
70,345 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of Captisol |
|
2,906 |
|
|
|
1,669 |
|
|
|
5,788 |
|
|
|
5,386 |
|
Amortization of intangibles |
|
8,257 |
|
|
|
8,539 |
|
|
|
16,443 |
|
|
|
17,078 |
|
Research and development |
|
5,354 |
|
|
|
6,854 |
|
|
|
11,325 |
|
|
|
13,517 |
|
General and administrative |
|
17,623 |
|
|
|
11,287 |
|
|
|
28,574 |
|
|
|
22,142 |
|
Financial royalty assets impairment |
|
26,491 |
|
|
|
— |
|
|
|
26,491 |
|
|
|
— |
|
Total operating costs and expenses |
|
60,631 |
|
|
|
28,349 |
|
|
|
88,621 |
|
|
|
58,123 |
|
(Loss) income from operations |
|
(19,100 |
) |
|
|
(1,983 |
) |
|
|
(16,112 |
) |
|
|
12,222 |
|
Non-operating income and expenses: |
|
|
|
|
|
|
|
||||||||
(Loss) gain from short-term investments |
|
(14,256 |
) |
|
|
3,991 |
|
|
|
96,516 |
|
|
|
43,524 |
|
Interest income, net |
|
1,489 |
|
|
|
2,036 |
|
|
|
3,366 |
|
|
|
3,231 |
|
Other non-operating expense, net |
|
(33,523 |
) |
|
|
(873 |
) |
|
|
(35,713 |
) |
|
|
(270 |
) |
Total other (loss) income, net |
|
(46,290 |
) |
|
|
5,154 |
|
|
|
64,169 |
|
|
|
46,485 |
|
(Loss) income before income taxes from continuing operations |
|
(65,390 |
) |
|
|
3,171 |
|
|
|
48,057 |
|
|
|
58,707 |
|
Income tax benefit (expense) |
|
13,479 |
|
|
|
(881 |
) |
|
|
(13,829 |
) |
|
|
(12,803 |
) |
Net (loss) income from continuing operations |
|
(51,911 |
) |
|
|
2,290 |
|
|
|
34,228 |
|
|
|
45,904 |
|
Net loss from discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,665 |
) |
Net (loss) income |
$ |
(51,911 |
) |
|
$ |
2,290 |
|
|
$ |
34,228 |
|
|
$ |
44,239 |
|
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) income from continuing operations per share |
$ |
(2.88 |
) |
|
$ |
0.13 |
|
|
$ |
1.91 |
|
|
$ |
2.67 |
|
Basic net loss from discontinued operations per share |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.10 |
) |
Basic net (loss) income per share |
$ |
(2.88 |
) |
|
$ |
0.13 |
|
|
$ |
1.91 |
|
|
$ |
2.58 |
|
Shares used in basic per share calculation |
|
18,028 |
|
|
|
17,276 |
|
|
|
17,880 |
|
|
|
17,170 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted net (loss) income from continuing operations per share |
$ |
(2.88 |
) |
|
$ |
0.13 |
|
|
$ |
1.87 |
|
|
$ |
2.57 |
|
Diluted net loss from discontinued operations per share |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.09 |
) |
Diluted net (loss) income per share |
$ |
(2.88 |
) |
|
$ |
0.13 |
|
|
$ |
1.87 |
|
|
$ |
2.48 |
|
Shares used in diluted per share calculation |
|
18,028 |
|
|
|
17,730 |
|
|
|
18,282 |
|
|
|
17,851 |
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) |
|||||
|
|
|
|
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash, cash equivalents and short-term investments |
$ |
226,932 |
|
$ |
170,309 |
Accounts receivable, net |
|
37,481 |
|
|
32,917 |
Inventory |
|
18,672 |
|
|
23,969 |
Income taxes receivable |
|
— |
|
|
6,395 |
Prepaid expenses |
|
1,911 |
|
|
1,182 |
Current derivative assets |
|
20,141 |
|
|
— |
Other current assets |
|
7,122 |
|
|
2,657 |
Total current assets |
|
312,259 |
|
|
237,429 |
|
|
|
|
||
|
|
388,412 |
|
|
402,976 |
Long-term portion of financial royalty assets, net |
|
80,481 |
|
|
62,291 |
Noncurrent derivative assets |
|
34,505 |
|
|
3,531 |
Property and equipment, net |
|
14,970 |
|
|
15,607 |
Operating lease right-of-use assets |
|
7,403 |
|
|
6,062 |
Finance lease right-of-use assets |
|
3,085 |
|
|
3,393 |
Equity method investment in |
|
2,437 |
|
|
12,595 |
Other investments |
|
10,741 |
|
|
36,726 |
Deferred income taxes, net |
|
190 |
|
|
214 |
Other assets |
|
11,922 |
|
|
6,392 |
Total assets |
$ |
866,405 |
|
$ |
787,216 |
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable and accrued liabilities |
$ |
13,964 |
|
$ |
14,894 |
Income taxes payable |
|
2,091 |
|
|
— |
Deferred revenue |
|
1,196 |
|
|
1,222 |
Current contingent liabilities |
|
146 |
|
|
256 |
Current operating lease liabilities |
|
1,156 |
|
|
403 |
Current finance lease liabilities |
|
12 |
|
|
7 |
Total current liabilities |
|
18,565 |
|
|
16,782 |
|
|
|
|
||
Long-term contingent liabilities |
|
4,052 |
|
|
2,942 |
Long-term operating lease liabilities |
|
6,415 |
|
|
5,755 |
Deferred income taxes, net |
|
30,128 |
|
|
31,622 |
Other long-term liabilities |
|
32,047 |
|
|
29,202 |
Total liabilities |
|
91,207 |
|
|
86,303 |
|
|
|
|
||
Total stockholders' equity |
|
775,198 |
|
|
700,913 |
Total liabilities and stockholders' equity |
$ |
866,405 |
|
$ |
787,216 |
ADJUSTED FINANCIAL MEASURES (Unaudited, in thousands, except per share amounts) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net (loss) income from continuing operations |
$ |
(51,911 |
) |
|
$ |
2,290 |
|
|
$ |
34,228 |
|
|
$ |
45,904 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Share-based compensation expense |
|
11,060 |
|
|
|
7,207 |
|
|
|
18,394 |
|
|
|
13,138 |
|
Non-cash interest expense (1) |
|
1,207 |
|
|
|
64 |
|
|
|
1,291 |
|
|
|
159 |
|
Amortization of intangible assets |
|
8,257 |
|
|
|
8,539 |
|
|
|
16,443 |
|
|
|
17,078 |
|
Amortization of financial royalty assets (2) |
|
962 |
|
|
|
(508 |
) |
|
|
4,224 |
|
|
|
(1,001 |
) |
Change in contingent liabilities (3) |
|
1,233 |
|
|
|
779 |
|
|
|
1,200 |
|
|
|
108 |
|
Pelthos operating loss |
|
4,686 |
|
|
|
— |
|
|
|
10,846 |
|
|
|
— |
|
Loss (gain) from short-term investments |
|
14,256 |
|
|
|
(3,991 |
) |
|
|
(96,516 |
) |
|
|
(43,524 |
) |
Realized (loss) gain from short-term investments |
|
(17 |
) |
|
|
16,645 |
|
|
|
59,962 |
|
|
|
37,197 |
|
Provision for current expected credit losses on financial royalty assets |
|
(1,419 |
) |
|
|
— |
|
|
|
(4,260 |
) |
|
|
— |
|
Impairment of financial royalty assets (4) |
|
26,491 |
|
|
|
— |
|
|
|
26,491 |
|
|
|
— |
|
Decrease in investments in |
|
33,789 |
|
|
|
— |
|
|
|
36,141 |
|
|
|
— |
|
Other (6) |
|
(1,500 |
) |
|
|
94 |
|
|
|
(1,347 |
) |
|
|
196 |
|
Income tax effect of adjusted reconciling items above |
|
(21,785 |
) |
|
|
(5,655 |
) |
|
|
(12,588 |
) |
|
|
(3,675 |
) |
Discrete tax expense related to increase in unrecognized tax benefits |
|
426 |
|
|
|
— |
|
|
|
426 |
|
|
|
— |
|
Excess tax benefit (shortfall) from share-based compensation (7) |
|
98 |
|
|
|
(353 |
) |
|
|
563 |
|
|
|
(565 |
) |
Adjusted net income from continuing operations |
$ |
25,833 |
|
|
$ |
25,111 |
|
|
$ |
95,498 |
|
|
$ |
65,015 |
|
Realized gains from sales of VKTX stock, net of tax (8) |
|
— |
|
|
|
(13,392 |
) |
|
|
(47,857 |
) |
|
|
(29,940 |
) |
Core adjusted net income from continuing operations |
$ |
25,833 |
|
|
$ |
11,719 |
|
|
$ |
47,641 |
|
|
$ |
35,075 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted per-share amounts attributable to common shareholders: |
|
|
|
|
|
|
|
||||||||
Diluted net (loss) income per share from continuing operations |
$ |
(2.88 |
) |
|
$ |
0.13 |
|
|
$ |
1.87 |
|
|
$ |
2.57 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Share-based compensation expense |
|
0.60 |
|
|
|
0.41 |
|
|
|
1.01 |
|
|
|
0.75 |
|
Non-cash interest expense (1) |
|
0.07 |
|
|
|
— |
|
|
|
0.07 |
|
|
|
0.01 |
|
Amortization of intangible assets |
|
0.45 |
|
|
|
0.48 |
|
|
|
0.90 |
|
|
|
0.97 |
|
Amortization of financial royalty assets (2) |
|
0.05 |
|
|
|
(0.03 |
) |
|
|
0.23 |
|
|
|
(0.06 |
) |
Change in contingent liabilities (3) |
|
0.07 |
|
|
|
0.04 |
|
|
|
0.07 |
|
|
|
0.01 |
|
Pelthos operating loss |
|
0.25 |
|
|
|
— |
|
|
|
0.59 |
|
|
|
— |
|
(Loss) gain from short-term investments |
|
0.77 |
|
|
|
(0.23 |
) |
|
|
(5.28 |
) |
|
|
(2.47 |
) |
Realized gain from short-term investments |
|
— |
|
|
|
0.94 |
|
|
|
3.28 |
|
|
|
2.11 |
|
Provision for current expected credit losses on financial royalty assets |
|
(0.08 |
) |
|
|
— |
|
|
|
(0.23 |
) |
|
|
— |
|
Impairment of financial royalty assets (4) |
|
1.44 |
|
|
|
— |
|
|
|
1.45 |
|
|
|
— |
|
Decrease in investments in |
|
1.83 |
|
|
|
— |
|
|
|
1.98 |
|
|
|
— |
|
Other (6) |
|
(0.06 |
) |
|
|
0.01 |
|
|
|
(0.07 |
) |
|
|
0.01 |
|
Income tax effect of adjusted reconciling items above |
|
(1.17 |
) |
|
|
(0.31 |
) |
|
|
(0.69 |
) |
|
|
(0.22 |
) |
Discrete tax expense related to increase in unrecognized tax benefits |
|
0.02 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
Excess tax benefit (shortfall) from share-based compensation (7) |
|
0.01 |
|
|
|
(0.02 |
) |
|
|
0.03 |
|
|
|
(0.03 |
) |
Adjustment for shares excluded due to anti-dilution effect on GAAP net loss |
|
0.03 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjustment for shares excluded using the if-converted method under ASU 2020-06 (9) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.04 |
|
Adjusted diluted net income per share from continuing operations |
$ |
1.40 |
|
|
$ |
1.42 |
|
|
$ |
5.23 |
|
|
$ |
3.69 |
|
Realized gains from sales of VKTX stock, net of tax (8) |
|
— |
|
|
|
(0.76 |
) |
|
|
(2.62 |
) |
|
|
(1.70 |
) |
Core adjusted diluted net income per share from continuing operations |
$ |
1.40 |
|
|
$ |
0.66 |
|
|
$ |
2.61 |
|
|
$ |
1.99 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP - weighted average number of common shares - diluted |
|
18,028 |
|
|
|
17,730 |
|
|
|
18,282 |
|
|
|
17,851 |
|
Shares excluded due to anti-dilutive effect on GAAP net loss |
|
413 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted effect of the 2023 Notes (9) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(240 |
) |
Adjusted weighted average number of common shares - diluted |
|
18,441 |
|
|
|
17,730 |
|
|
|
18,282 |
|
|
|
17,611 |
|
(1) Amounts represent (a) non-cash interest expense in connection with the royalty and milestone payments purchase agreement assumed as part of the Novan acquisition in
(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) Amounts represent the impairment of financial royalty assets primarily related to Ovid (soticlestat) in connection with Takeda's studies of soticlestat missing its primary endpoint in their studies.
(5) In
(6) Amounts primarily relate to gain or loss from change in fair value or derivative assets, restructuring costs, and losses associated with our equity investment in Nucorion.
(7) 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
(8) Amounts for the six months ended
(9) Excluding the impact from the adoption of accounting pronouncement (ASU 2020-06) on
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