Ligand Announces Pricing of Upsized $625 Million Convertible Senior Notes Offering
Rhea-AI Summary
Ligand (Nasdaq: LGND) priced an upsized private offering of $625 million aggregate principal amount of 0.0% convertible senior notes due 2031, with an option for an additional $75 million.
Net proceeds of about $605.3 million will fund convertible note hedges, a $60 million share repurchase of 228,859 shares at $262.17, and general corporate purposes, including its previously announced Xoma Royalty Corporation acquisition. The initial conversion price is approximately $334.27 per share, a 27.5% premium to the last closing price, and related warrant transactions carry a $524.34 strike price, 100% above that close.
Positive
- Upsized 0.0% convertible senior notes offering of $625 million due 2031
- Estimated net proceeds of $605.3 million, or $678.2 million if option fully exercised
- Initial conversion price of $334.27, about 27.5% above $262.17 last sale
- Approximately $60 million used to repurchase 228,859 shares at $262.17
- About $72.9 million allocated to convertible note hedge to reduce dilution risk
- Warrant strike price set at $524.34, 100% above last reported share price
Negative
- Convertible notes and related warrants may dilute common stock upon conversion or above warrant strike
- Future cash outlay risk from potential fundamental change repurchase at 100% of principal
- Hedging and repurchase activities may increase or decrease LGND share and note prices unpredictably
News Market Reaction – LGND
In the Jun 23 session, LGND gained 6.59%, reflecting a notable positive market reaction. Argus tracked a peak move of +2.9% during that session. Our momentum scanner triggered 22 alerts that day, indicating elevated trading interest and price volatility. Trading volume was exceptionally heavy at 7.1x the daily average, suggesting very strong buying interest.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Offering Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Aug 14 | Convertible notes closing | Neutral | -1.8% | Closing of 0.75% 2030 convertible notes and related hedge, repurchase steps. |
| Aug 11 | Convertible notes pricing | Neutral | +3.9% | Pricing of $400M 2030 converts with hedge, buyback, and warrant transactions. |
| Aug 11 | Proposed notes offering | Neutral | -2.0% | Announcement of proposed $400M 2030 converts with option and hedge plans. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Past convertible note offerings have produced modest, mixed single-digit share price moves around the announcement.
Key Terms
convertible senior notes financial
rule 144a regulatory
convertible note hedge transactions financial
warrant transactions financial
fundamental change regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
- Opportunistic capital raise with proceeds used to enhance financial flexibility
- A portion of the proceeds to be used to purchase call spreads and to fund concurrent share repurchase intended to offset potential dilution to Ligand’s common stock upon conversion of the notes
JUPITER, Fla., June 23, 2026 (GLOBE NEWSWIRE) -- Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) (“Ligand”) announced today the pricing of
Key Elements of Transaction
The notes will be general unsecured, senior obligations of Ligand and will not bear regular interest and the principal amount of the notes will not accrete. The notes will mature on September 15, 2031, unless earlier converted, redeemed or repurchased.
Use of Proceeds
Ligand estimates that the net proceeds from the offering will be approximately
Conversion
Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding June 15, 2031 only upon the occurrence of certain circumstances. On or after June 15, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time.
Upon conversion, Ligand will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of Ligand’s common stock or a combination of cash and shares of Ligand’s common stock, at Ligand’s election, in respect of the remainder, if any, of Ligand’s conversion obligation in excess of the aggregate principal amount of the notes being converted. The conversion rate will initially be 2.9916 shares of Ligand’s common stock per
Ligand may not redeem the notes prior to September 21, 2029. Ligand may redeem for cash all or any portion of the notes (subject to a partial redemption limitation), at its option, on or after September 21, 2029 and prior to the 51st scheduled trading day immediately preceding the maturity date, if the last reported sale price of Ligand’s common stock has been at least
If Ligand undergoes a fundamental change (as defined in the indenture that will govern the notes), then, subject to certain conditions and limited exceptions, holders may require Ligand to repurchase for cash all or any portion of their notes at a fundamental change repurchase price equal to
Convertible Note Hedge Transactions
In connection with the pricing of the notes, Ligand entered into convertible note hedge transactions (the “convertible note hedge transactions”) with certain of the initial purchasers or their affiliates and certain other financial institutions (the “option counterparties”). Ligand also entered into warrant transactions (the “warrant transactions”) with the option counterparties, pursuant to which Ligand issued warrants to purchase Common Stock (the “warrants”) to such option counterparties. The convertible note hedge transactions are expected generally to reduce the potential dilution to Ligand’s common stock upon any conversion of notes and/or offset any cash payments Ligand is required to make in excess of the principal amount of converted notes, as the case may be. However, the warrant transactions could separately have a dilutive effect on Ligand’s common stock to the extent that the market price per share of Ligand’s common stock exceeds the strike price of the warrants. The strike price of the warrants will initially be
In connection with establishing their initial hedges of the convertible note hedge transactions and the warrant transactions, Ligand expects the option counterparties or their respective affiliates to enter into various derivative transactions with respect to Ligand’s common stock and/or purchase shares of Ligand’s common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Ligand’s common stock or the notes at that time.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Ligand’s common stock and/or purchasing or selling shares of Ligand’s common stock or other securities of Ligand in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so in connection with any conversion, redemption or repurchase of the notes). This activity could also cause or avoid an increase or a decrease in the market price of Ligand’s common stock or the notes, which could affect a holder’s ability to convert its notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the number of shares of Ligand’s common stock, if any, and value of the consideration, if any, that a holder will receive upon conversion of its notes.
Share Repurchases
In addition, Ligand expects to use approximately
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall it constitute an offer to sell, solicitation of an offer to buy or sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
Forward-Looking Statements
This press release contains “forward-looking” statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “predict,” “intend,” “may,” “might,” “plan,” “project,” “potential,” “seek,” “should,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements concerning the closing of the offering, the convertible note hedge transactions and the warrant transactions; the anticipated use of the net proceeds of the offering and the warrant transactions; and the potential impact of the foregoing or related transactions on dilution to holders of Ligand’s common stock, and the market price of Ligand’s common stock and/or the notes are forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various risk factors that are described more fully in Ligand’s reports and other documents filed with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2025 and other flings that Ligand makes from time to time with the SEC, which are available on the SEC’s website at www.sec.gov, and could cause actual results to vary from expectations. All information provided in this press release is as of the date hereof, and Ligand undertakes no duty to update or revise this information, whether as a result of new information, new developments or otherwise, except as required by law, are forward-looking statements. These statements are not guarantees of future performance but are based on management’s expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements.
About Ligand Pharmaceuticals
Ligand is a leading royalty aggregator, partnering with biopharmaceutical companies to finance and advance late-stage clinical development programs. Ligand owns and manages one of the largest and most diversified portfolios of biopharmaceutical royalties in the industry, with economic interests in more than 100 development and commercial-stage assets. Ligand funds high-value programs in exchange for long-term economic interests, aligning capital with clinical and commercial success. Ligand’s royalty portfolio is designed to deliver consistent and predictable revenue streams across a broad range of therapeutic assets. Ligand also licenses its proprietary technologies, Captisol® and NITRICIL™, to support drug development and formulation across its global partner network.
Contacts
Investors:
Melanie Herman
investors@ligand.com
(858) 550-7761
Media:
Kellie Walsh
media@ligand.com
(914) 315-6072
