Ligand Reports Second Quarter 2026 Financial Results
Rhea-AI Summary
Ligand (Nasdaq: LGND) reported second-quarter 2026 revenue and income of $63.7 million, up 34% year-over-year, driven by a 32% increase in royalty revenue to $48.0 million, mainly from Travere’s Filspari, Pelthos’ Zelsuvmi, and Merck’s Ohtuvayre.
GAAP net income was $48.5 million ($2.22 per diluted share) versus $4.8 million a year ago. Adjusted net income rose to $50.8 million ($2.37 per diluted share), up 59% and 48% respectively. For the first half, royalties grew 42% to $91.0 million, with adjusted EPS up to $4.00.
Ligand completed a $700 million 0.00% convertible note offering due 2031, ending June with $1.36 billion in cash and investments. After quarter-end it closed the XOMA Royalty acquisition, more than doubling its portfolio to over 200 royalty assets. 2026 revenue guidance is reaffirmed, while the low end of adjusted EPS guidance is raised to $9.00–$9.50.
Positive
- Q2 2026 revenue and income up 34% to $63.7 million
- Q2 2026 royalty revenue up 32% to $48.0 million
- Q2 adjusted EPS up 48% year-over-year to $2.37
- Six-month 2026 royalties up 42% to $91.0 million
- Cash and short-term investments increased to $1.36 billion at June 30, 2026
- Raised 2026 adjusted EPS guidance low end to $9.00–$9.50
Negative
- Captisol sales declined to $16.6 million for six months from $21.7 million
- Q2 2026 R&D expense rose to $14.7 million from $6.6 million
- Q2 2026 G&A expense increased to $29.1 million from $20.2 million
- Six-month 2026 G&A expense grew to $50.0 million from $39.0 million
News Explained
The completed notes add convertible debt; 228,859 repurchased shares and a hedge affect dilution, while related warrants also bear on potential dilution.
Ligand completed its XOMA Royalty acquisition and its convertible-note financing: XOMA holders became entitled to
Convertible senior notes are debt with a route to conversion into common stock; issuing additional shares would reduce existing holders’ percentage ownership absent offsetting changes.
Ligand used about
The specific holder-impact watch item is the 2031 notes’ conversion and warrant mechanisms, which would determine whether additional shares are issued.
Market Reaction – LGND
Following this news, LGND has gained 3.83%, reflecting a moderate positive market reaction. Our momentum scanner has triggered 2 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $314.15.
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Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 07 | First-quarter earnings | Positive | -9.6% | Royalty growth and reaffirmed guidance accompanied a reported GAAP loss. |
| Feb 26 | Full-year earnings | Positive | +2.5% | Strong quarterly and full-year results supported reaffirmed 2026 guidance. |
| Nov 06 | Third-quarter earnings | Positive | +9.4% | Revenue and royalties increased while Ligand raised full-year guidance. |
| Aug 07 | Second-quarter earnings | Positive | +2.8% | Royalty growth, higher revenue, and raised 2025 guidance accompanied results. |
| May 08 | First-quarter earnings | Positive | -2.9% | Revenue and royalty growth accompanied a GAAP loss and reaffirmed guidance. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Ligand’s earnings announcements produced mixed reactions, with three aligned positive moves and two divergences despite generally positive reported results.
Key Terms
convertible senior notes financial
call spread overlay financial
non-gaap financial measure financial
contingent value right financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Second quarter performance driven by strong year-over-year royalty revenue growth of
Raises Low End of 2026 Adjusted EPS Guidance; Revenue Guidance Unchanged
Conference call begins at 8:30 a.m. Eastern Time today
JUPITER, Fla., Aug. 06, 2026 (GLOBE NEWSWIRE) -- Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) today reported financial results for the three and six months ended June 30, 2026, and provided an operating forecast and business update. Ligand management will host a conference call and webcast today at 8:30 a.m. Eastern Time to discuss the results and answer questions.
“Ligand delivered another strong quarter, with royalty revenue growing
Financial Results
Second Quarter 2026 Financial Results
Second-quarter 2026 results reflect continued strong momentum in the royalty business, with royalty revenue increasing
Total revenues and income for the second quarter of 2026 were
Cost of Captisol was
Net non-operating income was
GAAP net income was
Year-to-Date Financial Results
Total revenues and income for the six months ended June 30, 2026 were
Cost of Captisol for the six months ended June 30, 2026 was
Non-operating income, net, was
GAAP net income was
Liquidity and Capital Resources
As of June 30, 2026, Ligand had cash, cash equivalents, and short-term investments of
Following the completion of the XOMA Acquisition, Ligand has approximately
2031 Convertible Debt Financing
On June 25, 2026, Ligand completed its offering of
Net proceeds from the offering were approximately
The convertible note hedge transactions are intended to reduce the potential for dilution to Ligand’s common stock upon conversion of the notes. The warrant transactions increase the effective conversion price such that the warrants will not result in dilution unless Ligand’s common price exceeds
Ligand expects to use the remaining net proceeds from the offering for general corporate purposes, including potential royalty acquisitions, strategic investments, and other growth initiatives.
2026 Financial Guidance Update
Ligand is reaffirming its 2026 full-year revenue guidance and is raising the low end of its adjusted earnings per diluted share guidance range, reflecting stronger than previously anticipated cost synergies from the XOMA Acquisition, incremental net interest income resulting from proceeds of the 2031 Notes, and reduced share count following the Company’s share repurchase in connection with the convertible debt financing. Ligand continues to expect the following:
- Full-year 2026 royalty revenue to be in the range of
$225 million to$250 million - Revenue from sales of Captisol is unchanged at
$35 million to$40 million - Contract revenue of
$10 million to$20 million - Total revenue of
$270 million to$310 million - Adjusted earnings per diluted share1 of approximately
$9.00 t o$9.50 for the full year (previously$8.50 t o$9.50)
This guidance reflects the completion of the XOMA Acquisition on its previously anticipated timeline, consistent with the partial-year contribution contemplated in guidance issued earlier this year.
XOMA Acquisition
On July 14, 2026, Ligand announced completion of the acquisition of XOMA Royalty, a biotechnology royalty aggregator. Details of the transaction are as follows:
- Each outstanding share of XOMA Royalty common stock was converted into the right to receive (i)
$39.00 in cash and (ii) one contingent value right (CVR) representing the holder’s right to receive potential future payments derived from the CVR trust’s interest in XOMA Royalty LLC in connection with the Holding Company Reorganization (as defined in the merger agreement); - The closing of the transaction met Ligand’s original timeline expectations. We believe the transaction will be immediately accretive and to add approximately
$0.50 and$1.50 per share to Ligand’s projected 2026 and 2027 adjusted earnings per share2; and - Ligand funded the transaction through cash on hand and expects to retain sufficient capital capacity to continue executing its capital deployment strategy of investing approximately
$150 million to$250 million annually in high-value royalty assets.
The XOMA Acquisition strengthens Ligand’s royalty portfolio by adding seven commercial products, including Roche’s VABYSMO® (faricimab-svoa), Servier’s OJEMDA™ (tovorafenib), and Zevra Therapeutics’ MIPLYFFA® (arimoclomol). Additionally, the acquisition adds 14 late-stage development programs, featuring Takeda’s mezagitamab and certain assets from Takeda’s externalized asset portfolio, such as osavampator, volixibat, and OHB-607, along with more than 100 assets in various stages of development to Ligand’s portfolio. As a result, Ligand’s portfolio has more than doubled in size, now comprising over 200 commercial, clinical, and preclinical stage royalty assets.
Key Portfolio Developments
| Filspari |
|
| Ohtuvayre |
|
| Qtorin rapamycin |
|
| Capvaxive |
|
| Tzield |
|
| AVIM Therapy/VIRTUE SAB |
|
| BOT/BAL |
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| Lasofoxifene |
|
| Ojemda |
|
| Volixibat |
|
| Ersodetug |
|
Adjusted Financial Measures
Ligand reports adjusted net income from continuing operations, adjusted net income per diluted share and adjusted earnings per diluted share in addition to, and not as a substitute for, financial measures calculated in accordance with GAAP, and does not consider such measures superior to GAAP results. The Company also reports “core” versions of these measures, which exclude any gains on the sale of the Pelthos business.
Adjusted earnings per diluted share is a key component of the financial metrics utilized by the Company’s board of directors to evaluate management performance and determine certain elements of management compensation. GAAP results include items such as share‑based compensation expense, amortization of acquisition‑related and intangible assets, changes in contingent liabilities, mark‑to‑market adjustments on investments in public companies, transaction‑related costs and related tax effects, which are excluded from adjusted results and are detailed in the reconciliations included at the end of this press release.
Conference Call and Webcast
Ligand management will host a conference call today beginning at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss its results and answer questions. To participate via telephone, please dial (833) 461-5787 using the conference ID 780702347. International participants outside of Canada may use the toll number +1(585) 542-9983. To participate via live or replay webcast, a link is available at www.ligand.com.
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 200 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. For more information, visit www.ligand.com or follow Ligand on X and LinkedIn.
Forward-Looking Statements
This press release contains forward-looking statements, as defined in Section 21E of the Securities Exchange Act of 1934, regarding Ligand’s current expectations. All statements, other than statements of historical fact, could be deemed to be forward-looking statements. In some instances, words such as “plans,” “believes,” “expects,” “anticipates,” and “will,” and similar expressions, are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our good faith beliefs (or those of the indicated third parties) and speak only as of the date hereof. These forward-looking statements include, without limitation, Ligand’s ability to expand its portfolio with life sciences royalty opportunities; the timing of clinical and regulatory events of Ligand’s partners and other commercialization and marketing efforts; 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 projected 2026 or 2027 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 financial guidance for 2026 or 2027; 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 collaboration partners may become insolvent; 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; cyber-attacks or other failures in telecommunications or information technology systems could result in information theft, data corruption and significant disruption to Ligand’s business operations; Ligand’s partners may terminate any of their agreements or the 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 implement its strategic growth plan and continue the development of its proprietary programs; restrictions under Ligand’s credit agreement may limit its flexibility in operating its business and a default under the agreement could result in a foreclosure of the collateral securing such obligations; Ligand may not realize the anticipated benefits from investments in financing instruments such as convertible notes, including the 2031 Notes; XOMA’s products pipeline; and changes in general economic conditions, including as a result of war, conflict, epidemic diseases, the imposition and/or announcement of tariffs and ongoing or future litigation could expose Ligand to significant liabilities and have a material adverse effect on the Company. The failure to meet expectations with respect to any of the foregoing matters may reduce Ligand’s stock price. Additional information concerning these and other risk factors affecting Ligand can be found in prior press releases available at www.ligand.com as well as in Ligand’s public periodic filings with the Securities and Exchange Commission available at www.sec.gov. Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release, including the possibility of additional license fees and milestone revenues we may receive. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Other Disclaimers and Trademarks
The information in this press release regarding certain third-party products and programs, including Lasofoxifene, a LeonaBio product, AVIM Therapy and Virtue SAB, Orchestra products, Botensilimab and Balstilimab, Agenus products, Filspari, a Travere Therapeutics product, Ohtuvayre, a Merck product, Tzield, a Sanofi product, and Qtorin rapamycin, a Palvella Therapeutics product candidate, comes from information publicly released by the owners of such products and programs. Ligand is not responsible for, and has no role in, the development of such products or programs.
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, NITRICIL and Zelsuvmi. 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.
References to “Ligand,” the “Company,” “we,” “our” and similar expressions include Ligand Pharmaceuticals Incorporated and our wholly-owned subsidiaries.
Contacts:
Investors:
Melanie Herman
(858) 550-7761
Media:
Kellie Walsh
(914) 315-6072
[Tables Follow]
| LIGAND PHARMACEUTICALS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share amounts) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenues and income: | |||||||||||||||
| Revenue from intangible royalty assets | $ | 37,362 | $ | 30,084 | $ | 70,293 | $ | 51,671 | |||||||
| Income from financial royalty assets | 10,670 | 6,313 | 20,697 | 12,215 | |||||||||||
| Royalties | 48,032 | 36,397 | 90,990 | 63,886 | |||||||||||
| Captisol | 7,978 | 8,287 | 16,632 | 21,747 | |||||||||||
| Contract revenue and income | 7,683 | 2,943 | 7,793 | 7,327 | |||||||||||
| Total revenues and income | 63,693 | 47,627 | 115,415 | 92,960 | |||||||||||
| Operating costs and expenses: | |||||||||||||||
| Cost of Captisol | 3,214 | 2,907 | 6,487 | 7,756 | |||||||||||
| Amortization of intangibles | 8,097 | 8,258 | 16,194 | 16,515 | |||||||||||
| Research and development | 14,668 | 6,567 | 16,816 | 56,652 | |||||||||||
| General and administrative | 29,123 | 20,175 | 49,959 | 38,976 | |||||||||||
| Fair value adjustments to partner program derivatives | — | 1,276 | — | 833 | |||||||||||
| Total operating costs and expenses | 55,102 | 39,183 | 89,456 | 120,732 | |||||||||||
| Operating income (loss) | 8,591 | 8,444 | 25,959 | (27,772 | ) | ||||||||||
| Non-operating income and expenses: | |||||||||||||||
| Gain (loss) from short-term investments | 11,754 | 939 | 15,623 | (11,428 | ) | ||||||||||
| Gain (loss) from change in fair value of equity-method investments and other investments | 35,727 | — | (13,502 | ) | — | ||||||||||
| Interest income, net | 5,550 | 468 | 10,458 | 1,372 | |||||||||||
| Other non-operating expense, net | 2,682 | 1,372 | 1,507 | (1,129 | ) | ||||||||||
| Total non-operating income (expenses), net | 55,713 | 2,779 | 14,086 | (11,185 | ) | ||||||||||
| Income (loss) before income taxes | 64,304 | 11,223 | 40,045 | (38,957 | ) | ||||||||||
| Income tax (expense) benefit | (15,796 | ) | (6,376 | ) | (4,882 | ) | 1,353 | ||||||||
| Net income (loss) | $ | 48,508 | $ | 4,847 | $ | 35,163 | $ | (37,604 | ) | ||||||
| Basic net income (loss) per share | $ | 2.42 | $ | 0.25 | $ | 1.76 | $ | (1.95 | ) | ||||||
| Shares used in basic per share calculation | 20,063 | 19,327 | 19,974 | 19,259 | |||||||||||
| Diluted net income (loss) per share | $ | 2.22 | $ | 0.24 | $ | 1.63 | $ | (1.95 | ) | ||||||
| Shares used in diluted per share calculation | 21,837 | 19,926 | 21,548 | 19,259 | |||||||||||
| LIGAND PHARMACEUTICALS INCORPORATED SELECTED BALANCE SHEET DATA (unaudited, in thousands) | |||||
| June 30, 2026 | December 31, 2025 | ||||
| Cash, cash equivalents and short-term investments | $ | 1,357,758 | $ | 733,521 | |
| Accounts receivable, net | 67,011 | 59,601 | |||
| Total current and non-current financial royalty assets, net | 207,210 | 219,669 | |||
| Goodwill and intangible assets, net | 310,785 | 326,979 | |||
| Equity method investments | 42,390 | 46,500 | |||
| Other investments | 114,483 | 121,451 | |||
| Total assets | 2,185,875 | 1,560,637 | |||
| Accounts payable and accrued liabilities | 41,272 | 34,691 | |||
| Total current and non-current contingent liabilities | 2,592 | 3,221 | |||
| Convertible senior notes, net | 1,126,594 | 446,192 | |||
| Total liabilities | 1,218,359 | 543,425 | |||
| Total stockholders’ equity | $ | 967,516 | $ | 1,017,212 | |
| LIGAND PHARMACEUTICALS INCORPORATED ADJUSTED FINANCIAL MEASURES (Unaudited, in thousands, except per share amounts) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net income (loss) | $ | 48,508 | $ | 4,847 | $ | 35,163 | $ | (37,604 | ) | ||||||
| Adjustments: | |||||||||||||||
| Share-based compensation expense | 13,653 | 9,997 | 24,249 | 17,833 | |||||||||||
| Non-cash interest expense(1) | 381 | 1,054 | 816 | 1,816 | |||||||||||
| Amortization of intangible assets | 8,097 | 8,258 | 16,194 | 16,515 | |||||||||||
| Amortization of financial royalty assets(2) | 1,248 | 4,177 | 2,446 | 6,742 | |||||||||||
| Change in contingent liabilities(3) | (1,116 | ) | 52 | (492 | ) | 1,931 | |||||||||
| Pelthos operating loss | — | 8,467 | — | 13,212 | |||||||||||
| (Gain) loss from short-term investments | (11,754 | ) | (939 | ) | (15,623 | ) | 11,428 | ||||||||
| Realized gain (loss) from short-term investments | 9,541 | — | 10,731 | (20 | ) | ||||||||||
| Transaction costs | 5,011 | — | 5,011 | — | |||||||||||
| Provision for current expected credit losses on financial royalty assets | (222 | ) | (420 | ) | (201 | ) | (750 | ) | |||||||
| R&D funding expenses | 12,328 | 857 | 12,328 | 46,027 | |||||||||||
| (Gain) loss from derivative assets | (1,369 | ) | 71 | (532 | ) | 245 | |||||||||
| (Gain) loss from change in fair value of equity-method investments and other investments(4) | (35,727 | ) | — | 13,502 | — | ||||||||||
| Other | 30 | (2,221 | ) | 30 | (1,778 | ) | |||||||||
| Income tax effect of adjusted reconciling items above | 4,564 | (2,276 | ) | (11,654 | ) | (16,221 | ) | ||||||||
| Excess tax (shortfall) benefit from share-based compensation(5) | (2,392 | ) | 41 | (6,565 | ) | (813 | ) | ||||||||
| Adjusted net income | $ | 50,781 | $ | 31,965 | $ | 85,403 | $ | 58,563 | |||||||
| Diluted per-share amounts attributable to common stockholders: | |||||||||||||||
| Diluted net income (loss) per share | $ | 2.22 | $ | 0.24 | $ | 1.63 | $ | (1.95 | ) | ||||||
| Adjustments: | |||||||||||||||
| Share-based compensation expense | 0.64 | 0.50 | 1.14 | 0.89 | |||||||||||
| Non-cash interest expense(1) | 0.02 | 0.05 | 0.04 | 0.09 | |||||||||||
| Amortization of intangible assets | 0.38 | 0.41 | 0.76 | 0.83 | |||||||||||
| Amortization of financial royalty assets(2) | 0.06 | 0.21 | 0.11 | 0.34 | |||||||||||
| Change in contingent liabilities(3) | (0.05 | ) | — | (0.02 | ) | 0.10 | |||||||||
| Pelthos operating loss | — | 0.42 | — | 0.66 | |||||||||||
| (Gain) loss from short-term investments | (0.55 | ) | (0.05 | ) | (0.73 | ) | 0.57 | ||||||||
| Realized gain (loss) from short-term investments | 0.45 | — | 0.50 | — | |||||||||||
| Transaction costs | 0.23 | — | 0.23 | — | |||||||||||
| Provision for current expected credit losses on financial royalty assets | (0.01 | ) | (0.02 | ) | (0.01 | ) | (0.04 | ) | |||||||
| Loss from equity method investment in Primrose Bio | — | — | — | — | |||||||||||
| R&D funding expenses | 0.58 | 0.04 | 0.58 | 2.31 | |||||||||||
| (Gain) loss from derivative assets | (0.06 | ) | 0.01 | (0.02 | ) | 0.01 | |||||||||
| (Gain) loss from change in fair value of equity-method investments and other investments(4) | (1.67 | ) | — | 0.63 | — | ||||||||||
| Other | — | (0.10 | ) | — | (0.09 | ) | |||||||||
| Income tax effect of adjusted reconciling items above | 0.24 | (0.11 | ) | (0.53 | ) | (0.81 | ) | ||||||||
| Excess tax (shortfall) benefit from share-based compensation(5) | (0.11 | ) | — | (0.31 | ) | (0.04 | ) | ||||||||
| Adjustment for shares excluded due to anti-dilution effect on GAAP net loss | — | — | — | 0.07 | |||||||||||
| Adjusted diluted net income per share | $ | 2.37 | $ | 1.60 | $ | 4.00 | $ | 2.94 | |||||||
| GAAP - weighted average number of common shares - diluted | 21,837 | 19,926 | 21,548 | 19,259 | |||||||||||
| Diluted effect of the 2030 Notes(6) | (409 | ) | — | (224 | ) | — | |||||||||
| Shares excluded due to anti-dilutive effect on GAAP net loss | — | — | — | 677 | |||||||||||
| Adjusted weighted average number of common shares - diluted | 21,428 | 19,926 | 21,324 | 19,936 | |||||||||||
| LIGAND PHARMACEUTICALS INCORPORATED 2026 GUIDANCE (Unaudited, in millions, except per share amounts) | ||||||||
| Low | High | |||||||
| Adjusted Net Income | $ | 195 | $ | 206 | ||||
| Adjustments: | ||||||||
| Share-based compensation expense | 57 | 57 | ||||||
| Non-cash interest expense | 3 | 3 | ||||||
| Amortization of intangibles(7) | 32 | 32 | ||||||
| Amortization of financial royalty assets | 3 | 3 | ||||||
| Orchestra Bio R&D Investment | 12 | 12 | ||||||
| Transaction Costs(8) | 5 | 5 | ||||||
| Income tax effect of adjusted reconciling items above | (24 | ) | (24 | ) | ||||
| Total Adjustments | 88 | 88 | ||||||
| GAAP Net Income | $ | 107 | $ | 118 | ||||
| Shares Outstanding | 21.7 | 21.7 | ||||||
| Adjusted Core Net Income Per Share | $ | 9.00 | $ | 9.50 | ||||
| Adjustments on a per share basis | $ | 4.06 | $ | 4.06 | ||||
(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 September 2023; (b) non-cash debt related costs that are calculated in accordance with the authoritative accounting guidance for our convertible debt instruments that may be settled in cash and revolving credit facility; and (c) non-cash interest income from notes receivable.
(2) Amounts represent a portion of the contract payments and royalty receipts that are applied to reduce the carrying balance of our financial royalty assets.
(3) Amounts represent changes in fair value of contingent consideration related to CyDex and Metabasis transactions.
(4) Amounts represent loss from change in fair value of equity-method investment in Pelthos and Pelthos Series A Preferred Shares.
(5) Excess tax benefit (shortfall) from share-based compensation is 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 January 1, 2017. Prior to the adoption, the amount was recognized in additional paid-in capital on the consolidated statement of stockholders’ equity.
(6) Excludes the dilutive effect of the 2030 Notes. Although the Company intends to settle the principal amount of the 2030 Notes in cash, diluted EPS is required to be calculated using the if-converted method under GAAP.
(7) Amortization of intangibles excludes the impact of intangible assets that may be recognized in connection with the XOMA Acquisition. Because the valuation of acquired assets and the related purchase accounting have not been finalized, the Company is unable to reasonably estimate the resulting amortization expense, which has therefore been excluded from its non-GAAP adjusted EPS guidance.
(8) Amounts represent transaction-related expenses incurred through June 30, 2026, primarily in connection with the XOMA Acquisition. The Company expects to incur additional acquisition and integration-related costs during the remainder of 2026. Because the amount and accounting treatment of such costs are dependent on post-closing activities and other factors that cannot be reasonably predicted, these costs have not been included in the Company’s non-GAAP adjusted EPS guidance.
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1 The financial outlook, expectations and other forward-looking statements provided by Ligand for 2026 and beyond reflect Ligand’s judgment based on the information available at the time of this release. Please see the “Cautionary Note Regarding Forward-looking Statements” section in this release for factors that may impact Ligand’s ability to meet expectations.
2 Ligand reports adjusted earnings per share in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with generally accepted accounting principles in the United States (“GAAP”). Adjusted earnings per share is a non-GAAP financial measure.
