Overview

Ligand is a profitable biopharmaceutical company that generates revenue by providing funding and licensing technologies to partners to help discover and develop new medicines.

In Q1 2024, Ligand reported $31 million in total revenue, a 30% decrease compared to Q1 2023. The decrease was primarily due to lower contract revenue from milestones. However, royalty revenue from partnered products increased 8% to $19 million.

Ligand maintains a lean cost structure. Total operating costs and expenses were $28 million in Q1 2024, a 6% decrease from Q1 2023. As a result of revenue generation and cost control, Ligand reported net income of $86 million in Q1 2024.

Portfolio and Business Updates

• Entered a $100 million royalty financing agreement with Agenus to support late-stage development of Agenus’ oncology pipeline
• Launched Pelthos Therapeutics to focus on commercializing the recently approved ZELSUVMI to treat molluscum contagiosum
• European Commission granted conditional marketing authorization to Travere Therapeutics’ FILSPARI to treat IgA nephropathy
• Viking Therapeutics completed patient biopsies in Phase 2b VOYAGE trial of VK2809 in NASH

Financial Results

Revenue

Q1 2024 total revenue decreased 30% to $31 million due to:

• 7% increase in royalty revenue from intangible assets to $18 million
• 13% decrease in Captisol material sales to $9 million
• 83% decrease in contract revenue and milestones to $3 million

Royalty revenue increased due to growth of partnered products including Kyprolis, Evomela, Teriparatide injection, Rylaze, Filspari, and Vaxneuvance.

Expenses

Total operating expenses decreased 6% to $28 million in Q1 2024 due to:

• 22% decrease in Cost of Captisol to $3 million
• 4% decrease in Amortization of intangibles to $8 million
  
• 10% decrease in R&D expense to $6 million

The reduced expenses reflect Ligand’s efficient operating structure.

Profitability

Ligand reported robust profitability with $113 million of pre-tax income and $86 million of net income in Q1 2024.

The 24% effective tax rate was higher than the 21% statutory rate, primarily due to non-deductible incentive stock option expense.

Cash and Liquidity

Ligand maintains a strong cash position, ending Q1 2024 with $311 million of cash, cash equivalents, and short-term investments.

During Q1 2024:

• Generated $19 million in cash from operations
• Used $4 million for net investing activities
• Generated $12 million from financing activities

Ligand’s existing cash resources and efficient operating structure provide financial flexibility to pursue business development and growth initiatives.

Outlook

Ligand reaffirmed its business model and focus on generating diversified revenue streams through funding and licensing programs to partners to aid in discovering and developing new medicines.

With its substantial cash holdings, lean cost structure, and portfolio of over 200 partnered programs, Ligand remains well-positioned for continued growth and revenue diversification.