Ligand Reports Third Quarter 2026 Financial Results
Royalties accounted for 89% of quarterly revenues and income, while acquisition-related expenses weighed on reported earnings.
Sentiment and the balance of points
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Rhea-AI Summary
Ligand Pharmaceuticals (Nasdaq: LGND) reported third-quarter royalty revenue of $70.3 million, up 51% year over year, and raised adjusted earnings guidance. Total revenues and income fell 32% to $78.7 million; excluding prior-year Pelthos income, they rose 26%. GAAP net loss was $28.5 million versus net income of $117.3 million. Adjusted diluted earnings fell to $2.67 from $3.09.
Ligand now expects 2026 adjusted diluted earnings of approximately $9.50–$9.75, up from approximately $9.00–$9.50, while maintaining revenue guidance of $270–$310 million. Cash and short-term investments totaled $447.4 million. Ligand completed the XOMA acquisition, acquired Ryjunea payment rights for $23 million upfront and entered an AvenCell financing agreement for up to $47 million. Portfolio partner Palvella received FDA Priority Review for Qtorin rapamycin, with a February 28, 2027 target action date.
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Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major point. Forward-looking: it has not happened yet and may not happen.2026 adjusted diluted EPS guidance increased to approximately $9.50–$9.75 from approximately $9.00–$9.50.
- Moderate pointThird-quarter royalty revenue rose 51% year over year to $70.3 million, supported by XOMA assets and existing products.
- Moderate pointNine-month royalty revenue rose 46% year over year to $161.3 million.
- Moderate pointNine-month adjusted net income rose 17% to $142.9 million; adjusted diluted EPS increased 10% to $6.67.
- Moderate pointXOMA acquisition completed July 14, 2026, adding seven commercial products, 14 late-stage programs and more than 100 additional assets.
- Moderate pointAvenCell royalty agreement covers all current and future pipeline assets at mid-single-digit to low-double-digit rates, depending on funding.
- Moderate pointApproximately $750 million of deployable capital includes cash, short-term investments, equity investments and available credit.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Qtorin rapamycin application accepted with Priority Review for microcystic lymphatic malformations; FDA target action date is February 28, 2027.
12 minor points
- Minor point. Forward-looking: it has not happened yet and may not happen.2026 revenue guidance reaffirmed at $270–$310 million, including royalties of $225–$250 million.
- Minor point. Forward-looking: it has not happened yet and may not happen.Captisol sales guidance remains $35–$40 million for 2026.
- Minor point. Forward-looking: it has not happened yet and may not happen.Contract revenue guidance remains $10–$20 million for 2026.
- Minor pointRyjunea rights acquired include tiered low-double-digit to high-teens royalties on net sales in Europe, the Middle East and Africa.
- Minor pointThird-quarter Captisol cost fell to $2.7 million from $3.8 million, reflecting lower sales.
- Minor pointNine-month Captisol cost fell to $9.1 million from $11.6 million, reflecting lower sales.
- Minor pointThird-quarter research and development expense fell to $2.8 million from $21.0 million, mainly reflecting a prior-year charge.
- Minor pointNine-month research and development expense fell to $19.6 million from $77.7 million, reflecting prior-year charges.
- Minor point. Forward-looking: it has not happened yet and may not happen.Palvella plans a Phase 3 trial of Qtorin rapamycin for cutaneous venous malformations in fourth-quarter 2026.
- Minor point. Forward-looking: it has not happened yet and may not happen.Palvella plans a Breakthrough Therapy Designation resubmission incorporating patient interviews and new 24-week data.
- Minor pointAVIM Therapy received a second Breakthrough Device Designation for specified patients with uncontrolled hypertension who need a pacemaker.
- Minor pointVirtue SAB pivotal trial advanced with further site activations and patient enrollment.
Negative
- Moderate pointThird-quarter GAAP net loss was $28.5 million, or $1.43 per share, versus $117.3 million net income.
- Moderate pointThird-quarter adjusted net income fell 10% to $57.5 million; adjusted diluted EPS declined 14% to $2.67.
- Moderate pointThird-quarter revenues and income fell 32% to $78.7 million, but rose 26% excluding prior-year Pelthos income.
- Moderate pointCash and short-term investments declined to $447.4 million from $733.5 million at December 31, 2025, primarily funding XOMA.
- Moderate pointThird-quarter general and administrative expense increased to $72.6 million from $28.4 million, including XOMA-related costs.
- Moderate pointThird-quarter net non-operating expense was $28.3 million, versus $85.8 million income, primarily reflecting investment losses.
- Moderate pointAvenCell financing commitments total up to $47 million, including up to $6 million in its Series C financing.
14 minor points
- Minor pointNine-month revenues and income fell 7% to $194.2 million, but rose 25% excluding prior-year Pelthos income.
- Minor pointNine-month GAAP net income fell to $6.7 million, or $0.31 diluted EPS, from $79.7 million and $3.95.
- Minor pointNine-month general and administrative expense increased to $122.6 million from $67.4 million, including acquisition and employee costs.
- Minor pointNine-month net non-operating expense was $14.7 million, versus $76.5 million income, primarily reflecting investment valuation losses.
- Minor pointThird-quarter contingent-liability adjustments produced a $6.3 million loss, versus a $0.5 million gain, mainly involving XOMA liabilities.
- Minor pointThird-quarter Captisol sales declined to $7.9 million from $10.7 million, reflecting customer-order timing.
- Minor pointNine-month Captisol sales declined to $24.6 million from $32.4 million, reflecting customer-order timing.
- Minor pointThird-quarter contract revenue and income declined to $0.5 million from $58.2 million, mainly reflecting prior-year Pelthos income.
- Minor pointNine-month contract revenue and income declined to $8.3 million from $65.5 million, mainly reflecting prior-year Pelthos income.
- Minor pointThird-quarter intangible amortization increased to $10.2 million from $8.1 million following the XOMA acquisition.
- Minor pointNine-month intangible amortization increased to $26.4 million from $24.6 million following the XOMA acquisition.
- Minor pointRyjunea rights required a $23 million upfront payment to Sydnexis.
- Minor point. Forward-looking: it has not happened yet and may not happen.AvenCell's remaining three royalty-financing tranches are conditional on predetermined clinical milestones and specified financing conditions.
- Minor point. Forward-looking: it has not happened yet and may not happen.Qtorin rapamycin's potential first-half 2027 U.S. launch remains subject to FDA approval.
News Explained
AvenCell’s royalty funding is partly milestone-contingent; Ligand separately reports approximately seven hundred fifty million dollars of deployable capital.
Ligand entered an agreement to commit up to
The
As of
Key Figures
- Q3 royalty revenue
- $70.3 million (+51% year-over-year)
- Third quarter 2026
- Adjusted diluted EPS guidance
- $9.50 to $9.75, raised from $9.00 to $9.50
- Full-year 2026
- Total revenue guidance
- $270 million to $310 million
- Full-year 2026; reaffirmed
- Adjusted total revenues and income growth
- 26%
- Third quarter 2026, excluding prior-year Pelthos-related income
- Adjusted net income
- $57.5 million (-10% year-over-year)
- Third quarter 2026
- Adjusted diluted EPS
- $2.67 per diluted share (-14% year-over-year)
- Third quarter 2026
- Adjusted net income
- $142.9 million (+17% year-over-year)
- Nine months ended September 30, 2026
Previous Earnings Reports
-
Raised 2026 adjusted EPS guidance to $9.00–$9.50 after Q2 results.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
convertible senior notes financial
mark-to-market losses financial
allogeneic car-t medical
pdufa regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
Third-quarter royalty revenue up
Raises Full-Year 2026 Adjusted Diluted EPS Guidance to
Conference call begins at 8:30 a.m. Eastern Time today
JUPITER, Fla., Oct. 29, 2026 (GLOBE NEWSWIRE) -- Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) today reported financial results for the three and nine months ended September 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
Third Quarter 2026 Financial Results
Third-quarter 2026 results reflect continued strength in the royalty business, with royalty revenue increasing
Total revenues and income for the third quarter of 2026 were
Cost of Captisol was
Net non-operating expense was
GAAP net loss was
Adjusted net income was
Pelthos note: Prior-year results included
Year-to-Date Financial Results
Royalty revenue for the nine months ended September 30, 2026 increased
Cost of Captisol for the nine months ended September 30, 2026 was
Net non-operating expense was
GAAP net income was
Adjusted net income was
Adjusted Financial Measures
Ligand reports adjusted net income 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.
This press release includes adjusted total revenues and income, which excludes all
Liquidity and Capital Resources
As of September 30, 2026, Ligand had cash, cash equivalents, and short-term investments of
2026 Financial Guidance
Ligand is raising its 2026 full year adjusted earnings per diluted share guidance and reaffirming its 2026 revenue guidance. Ligand now expects the following:
- Royalty revenue of
$225 million to$250 million (unchanged) - Captisol sales of
$35 million to$40 million (unchanged) - Contract revenue of
$10 million to$20 million (unchanged) - Total revenue of
$270 million to$310 million (unchanged) - Adjusted earnings per diluted share2 of approximately
$9.50 t o$9.75 , raised from approximately$9.00 t o$9.50
Third Quarter Corporate Highlights
On July 14, 2026, Ligand completed the acquisition of XOMA Royalty, a biotechnology royalty aggregator. The acquisition strengthens Ligand’s royalty portfolio by adding seven commercial products, including Roche’s VABYSMO® (faricimab-svoa), Servier and Ipsen’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, including osavampator, volixibat, and OHB-607, along with more than 100 additional 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.
On September 22, 2026, Ligand announced the acquisition of a milestone and royalty interest in Santen Pharmaceutical’s Ryjunea from Sydnexis for a
On September 24, 2026, Ligand announced it entered into a financing agreement with AvenCell Therapeutics, Inc., a clinical-stage cell therapy company developing controllable, allogeneic CAR-T therapies for patients with cancer, for up to
Key Portfolio Developments
| Qtorin rapamycin |
|
| AVIM Therapy/VIRTUE SAB |
|
| Zelsuvmi |
|
| Lasofoxifene |
|
| Ojemda |
|
| Volixibat |
|
| Ersodetug |
|
| Soticlestat |
|
| IV ganaxolone |
|
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 708822080. 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 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; royalty revenue and income for partners that had not reported product sales as of the date of this press release are based on estimates that may differ from actual results and if such results differ they will be adjusted in future periods; 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; 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 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; Ligand may not successfully integrate the XOMA portfolio or realize the anticipated benefits of the XOMA acquisition; 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, Filspari, a Travere Therapeutics product, Ohtuvayre and Capvaxive, Merck products, Qtorin rapamycin, a Palvella Therapeutics product candidate, Vabysmo, a Roche product, Ojemda, a Servier and Ipsen product, Miplyffa, a Zevra Therapeutics product, mezagitamab, osavampator and OHB-607, Takeda product candidates, volixibat, a Mirum Pharmaceuticals product candidate, Ryjunea, a Santen product, AVC-201 and AVC-203, AvenCell Therapeutics product candidates, ersodetug, a Rezolute product candidate, soticlestat, an Ovid Therapeutics product candidate, and Zelsuvmi, a Pelthos Therapeutics product, 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
investors@ligand.com
(858) 550-7761
Media:
Kellie Walsh
media@ligand.com
(914) 315-6072
[Tables Follow]
| LIGAND PHARMACEUTICALS INCORPORATED | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (Unaudited, in thousands, except per share amounts) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenues and income: | |||||||||||||||
| Revenue from intangible royalty assets | $ | 47,427 | $ | 40,161 | $ | 117,720 | $ | 91,832 | |||||||
| Income from financial royalty assets | 22,857 | 6,425 | 43,554 | 18,640 | |||||||||||
| Royalties | 70,284 | 46,586 | 161,274 | 110,472 | |||||||||||
| Captisol | 7,946 | 10,672 | 24,578 | 32,419 | |||||||||||
| Income from Pelthos transaction - Zelsuvmi out-license | — | 24,503 | — | 24,503 | |||||||||||
| Income from Pelthos transaction - gain on the sale of the Pelthos business | — | 28,569 | — | 28,569 | |||||||||||
| Other | 516 | 5,131 | 8,309 | 12,458 | |||||||||||
| Contract revenue and income | 516 | 58,203 | 8,309 | 65,530 | |||||||||||
| Total revenues and income | 78,746 | 115,461 | 194,161 | 208,421 | |||||||||||
| Operating costs and expenses: | |||||||||||||||
| Cost of Captisol | 2,650 | 3,801 | 9,137 | 11,557 | |||||||||||
| Amortization of intangibles | 10,205 | 8,097 | 26,399 | 24,612 | |||||||||||
| Research and development | 2,766 | 21,019 | 19,582 | 77,671 | |||||||||||
| General and administrative | 72,616 | 28,446 | 122,575 | 67,422 | |||||||||||
| Fair value adjustments to contingent liabilities | 6,267 | (456 | ) | 5,775 | 1,475 | ||||||||||
| Fair value adjustments to partner program derivatives | — | (833 | ) | — | — | ||||||||||
| Total operating costs and expenses | 94,504 | 60,074 | 183,468 | 182,737 | |||||||||||
| Operating (loss) income | (15,758 | ) | 55,387 | 10,693 | 25,684 | ||||||||||
| Non-operating income and expenses: | |||||||||||||||
| (Loss) gain from short-term investments | (3,817 | ) | 7,798 | 11,806 | (3,630 | ) | |||||||||
| (Loss) gain from change in fair value of equity-method investments and other investments | (35,727 | ) | 75,887 | (49,229 | ) | 75,887 | |||||||||
| Interest income, net | 2,594 | 2,964 | 13,052 | 4,336 | |||||||||||
| Other non-operating expense, net | 8,614 | (899 | ) | 9,629 | (97 | ) | |||||||||
| Total non-operating (expenses) income, net | (28,336 | ) | 85,750 | (14,742 | ) | 76,496 | |||||||||
| (Loss) income before income taxes | (44,094 | ) | 141,137 | (4,049 | ) | 102,180 | |||||||||
| Income tax benefit (expense) | 15,609 | (23,864 | ) | 10,727 | (22,511 | ) | |||||||||
| Net (loss) income | $ | (28,485 | ) | $ | 117,273 | $ | 6,678 | $ | 79,669 | ||||||
| Basic net (loss) income per share | $ | (1.43 | ) | $ | 5.99 | $ | 0.33 | $ | 4.11 | ||||||
| Shares used in basic per share calculation | 19,962 | 19,578 | 19,970 | 19,367 | |||||||||||
| Diluted net (loss) income per share | $ | (1.43 | ) | $ | 5.68 | $ | 0.31 | $ | 3.95 | ||||||
| Shares used in diluted per share calculation | 19,962 | 20,629 | 21,822 | 20,170 | |||||||||||
| LIGAND PHARMACEUTICALS INCORPORATED | |||||||
| SELECTED BALANCE SHEET DATA | |||||||
| (unaudited, in thousands) | |||||||
| September 30, 2026 | December 31, 2025 | ||||||
| Cash, cash equivalents and short-term investments | $ | 447,395 | $ | 733,521 | |||
| Accounts receivable, net | 83,221 | 59,601 | |||||
| Total current and non-current financial royalty assets, net | 800,114 | 219,669 | |||||
| Goodwill and intangible assets, net | 509,899 | 326,979 | |||||
| Equity method investments | 48,445 | 46,500 | |||||
| Other investments | 94,479 | 121,451 | |||||
| Deferred income taxes, net | 104,117 | 8,345 | |||||
| Total assets | 2,237,462 | 1,560,637 | |||||
| Accounts payable and accrued liabilities | 39,760 | 34,691 | |||||
| Total current and non-current contingent liabilities | 38,867 | 3,221 | |||||
| Convertible senior notes, net | 1,128,217 | 446,192 | |||||
| Total liabilities | 1,275,699 | 543,425 | |||||
| Total stockholders’ equity | $ | 961,763 | $ | 1,017,212 | |||
LIGAND PHARMACEUTICALS INCORPORATED
ADJUSTED FINANCIAL MEASURES
(Unaudited, in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net (loss) income | $ | (28,485 | ) | $ | 117,273 | $ | 6,678 | $ | 79,669 | ||||||
| Adjustments: | |||||||||||||||
| Share-based compensation expense(1) | 29,026 | 14,746 | 53,275 | 32,579 | |||||||||||
| Non-cash interest expense(2) | 1,393 | 447 | 2,209 | 2,263 | |||||||||||
| Amortization of intangible assets | 10,205 | 8,097 | 26,399 | 24,612 | |||||||||||
| Amortization of financial royalty assets(3) | 4,411 | 4,327 | 6,857 | 11,069 | |||||||||||
| Change in contingent liabilities(4) | 6,267 | (456 | ) | 5,775 | 1,475 | ||||||||||
| Pelthos operating loss | — | — | — | 13,212 | |||||||||||
| Loss (gain) from short-term investments | 3,817 | (7,798 | ) | (11,806 | ) | 3,630 | |||||||||
| Realized gain (loss) from short-term investments | 2,904 | (2 | ) | 13,635 | (22 | ) | |||||||||
| Transaction and integration costs(5) | 23,900 | 4,815 | 28,911 | 4,815 | |||||||||||
| Provision for current expected credit losses on financial royalty assets | 6,641 | 26 | 6,440 | (724 | ) | ||||||||||
| R&D funding expenses | — | 18,659 | 12,328 | 64,686 | |||||||||||
| (Gain) loss from derivative assets | (8,544 | ) | (111 | ) | (9,076 | ) | 134 | ||||||||
| Loss (gain) from change in fair value of equity-method investments and other investments(6) | 35,727 | (75,887 | ) | 49,229 | (75,887 | ) | |||||||||
| Income from Pelthos transaction - gain on the sale of the Pelthos business(7) | — | (28,569 | ) | — | (28,569 | ) | |||||||||
| Other | (307 | ) | 166 | (277 | ) | (1,612 | ) | ||||||||
| Income tax effect of adjusted reconciling items above | (28,178 | ) | 9,359 | (39,832 | ) | (6,862 | ) | ||||||||
| Excess tax benefit from share-based compensation(8) | (1,325 | ) | (1,260 | ) | (7,890 | ) | (2,073 | ) | |||||||
| Adjusted net income | $ | 57,452 | $ | 63,832 | $ | 142,855 | $ | 122,395 | |||||||
| Total revenues and income | $ | 78,746 | $ | 115,461 | $ | 194,161 | $ | 208,421 | |||||||
| Less: Income from Pelthos transaction – gain on the sale of the Pelthos business(7) | — | (28,569 | ) | — | (28,569 | ) | |||||||||
| Core revenues and income | $ | 78,746 | $ | 86,892 | $ | 194,161 | $ | 179,852 | |||||||
| Diluted per-share amounts attributable to common stockholders: | |||||||||||||||
| Diluted net (loss) income per share | $ | (1.43 | ) | $ | 5.68 | $ | 0.31 | $ | 3.95 | ||||||
| Adjustments: | |||||||||||||||
| Share-based compensation expense(1) | 1.35 | 0.71 | 2.49 | 1.62 | |||||||||||
| Non-cash interest expense(2) | 0.06 | 0.02 | 0.10 | 0.11 | |||||||||||
| Amortization of intangible assets | 0.47 | 0.39 | 1.23 | 1.22 | |||||||||||
| Amortization of financial royalty assets(3) | 0.20 | 0.21 | 0.32 | 0.55 | |||||||||||
| Change in contingent liabilities(4) | 0.29 | (0.02 | ) | 0.27 | 0.07 | ||||||||||
| Pelthos operating loss | — | — | — | 0.66 | |||||||||||
| Loss (gain) from short-term investments | 0.18 | (0.38 | ) | (0.55 | ) | 0.18 | |||||||||
| Realized gain (loss) from short-term investments | 0.13 | — | 0.64 | — | |||||||||||
| Transaction and integration costs(5) | 1.11 | 0.23 | 1.35 | 0.24 | |||||||||||
| Provision for current expected credit losses on financial royalty assets | 0.31 | — | 0.30 | (0.04 | ) | ||||||||||
| R&D funding expenses | — | 0.90 | 0.58 | 3.21 | |||||||||||
| (Gain) loss from derivative assets | (0.40 | ) | (0.01 | ) | (0.42 | ) | 0.01 | ||||||||
| Loss (gain) from change in fair value of equity-method investments and other investments(6) | 1.66 | (3.68 | ) | 2.30 | (3.76 | ) | |||||||||
| Income from Pelthos transaction - gain on the sale of the Pelthos business(7) | — | (1.38 | ) | — | (1.42 | ) | |||||||||
| Other | (0.01 | ) | 0.02 | (0.01 | ) | (0.08 | ) | ||||||||
| Income tax effect of adjusted reconciling items above | (1.30 | ) | 0.46 | (1.88 | ) | (0.35 | ) | ||||||||
| Excess tax benefit from share-based compensation(8) | (0.06 | ) | (0.06 | ) | (0.37 | ) | (0.10 | ) | |||||||
| Adjustment for shares excluded due to anti-dilution effect on GAAP net loss | 0.11 | — | 0.01 | — | |||||||||||
| Adjusted earnings per diluted share | $ | 2.67 | $ | 3.09 | $ | 6.67 | $ | 6.07 | |||||||
| GAAP - weighted average number of common shares - diluted | 19,962 | 20,629 | 21,822 | 20,170 | |||||||||||
| Diluted effect of the convertible senior notes | — | — | (420 | ) | — | ||||||||||
| Shares excluded due to anti-dilutive effect on GAAP net loss | 1,593 | — | — | — | |||||||||||
| Adjusted weighted average number of common shares - diluted | 21,555 | 20,629 | 21,402 | 20,170 | |||||||||||
(1) Amounts include a
(2) 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.
(3) Amounts represent a portion of the contract payments and royalty receipts that are applied to reduce the carrying balance of our financial royalty assets.
(4) Amounts represent fair value adjustments to contingent liabilities assumed in the XOMA acquisition and those related to the CyDex and Metabasis transactions.
(5) Amounts represent (a) costs of
(6) Amounts represent gains or losses from changes in the fair value of the Pelthos equity-method investment and Pelthos Series A Preferred Shares.
(7) During the third quarter of 2025, the Company recognized
(8) Excess tax benefit 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.
1 A reconciliation of forward-looking non-GAAP adjusted earnings per diluted share to the most directly comparable GAAP measure is not available without unreasonable effort, as certain items cannot be reasonably predicted because of their high variability, complexity and low visibility. Specifically, non-cash 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, directly impact the calculation of our core adjusted earnings per diluted share.
2 A reconciliation of forward-looking non-GAAP adjusted earnings per diluted share to the most directly comparable GAAP measure is not available without unreasonable effort, as certain items cannot be reasonably predicted because of their high variability, complexity and low visibility. Specifically, non-cash 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, directly impact the calculation of our core adjusted earnings per diluted share.
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