LIGAND PHARMACEUTICALS INC
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 7, 2025
LGND$306.20+2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0000886163-25-000051
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0000886163-25-000063
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 74 previous paragraphs and 96 current paragraphs.
25 unchanged; 33 reworded; 38 added; 14 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
2030 Convertible Senior Notes Offering
Current report
On August 14, 2025, we completed the offering of 0.75% convertible senior notes due 2030. The aggregate principal amount of the notes sold was $460 million, which includes the full exercise of the option by the initial purchasers.
Current report
The net proceeds from the offering were approximately $445 million after fees and expenses. Of that amount, we used approximately $46 million of the proceeds to enter into a call spread overlay, comprised of convertible note hedge and warrant transactions and approximately $15 million of the proceeds to repurchase approximately 100,000 shares of Ligand common stock at a price of approximately $147 per share. Ligand expects to use the remaining net proceeds from the offering for general corporate purposes. The convertible note hedge transactions reduce the potential for dilution upon conversion. As a result of the warrants transactions, there will be no dilution to Ligand’s stock until the share price exceeds $294.02 per share.
Current report
On November 6, 2025, we invested $9 million in Pelthos’ $18 million private convertible notes financing. The notes will be secured obligations of Pelthos and will bear interest at a rate of 8.5% per annum, payable quarterly in arrears. The notes will mature on November 6, 2027, unless earlier repurchased, redeemed or converted into shares of Pelthos common stock in accordance with their terms.
Current report
In addition to the notes, we and the other Pelthos notes investors will be entitled to a low single-digit royalty on U.S. net sales of Pelthos’ Xepi and additional milestone payments and royalties on ZELSUVMI net sales in Japan, if ZELSUVMI is approved in Japan.
Current report
New Royalty Investments
Current report
On September 25, 2025, we purchased the global royalty rights to AT220, an Arestat®-enhanced biosimilar product marketed by a global pharmaceutical company, and all potential milestone and technology access fees related to AT292, now Sanofi’s SAR447537, from Arecor Therapeutics plc. We paid Arecor $7 million in cash at closing and have committed an additional $4 million, which is payable upon the achievement of certain commercial milestones related to AT220 and AT292.
Current report
Filspari
Current report
On October 24, 2025, Renalys Pharma and Chugai Pharmaceutical Company announced a definitive stock purchase agreement, under which Chugai will acquire Renalys. Renalys is advancing sparsentan in Japan and has completed primary endpoint data collection in its Phase 3 clinical trial of sparsentan for IgA nephropathy, with topline results expected in Q4 2025. Renalys will proceed with analyses of efficacy and safety data, as well as comparisons with global Phase 3 trial results, in preparation for the submission of a NDA.
Current report
As part of the transaction, Chugai will gain exclusive rights to develop and commercialize sparsentan in Japan, South Korea and Taiwan.
Current report
On September 26, 2025, CSL Vifor and Travere announced support of the recent publication of the updated Kidney Disease: Improving Global Outcomes (KDIGO) clinical practice guidelines for the treatment of IgAN. Within the guidelines it is mentioned that treatment with Filspari, may be an appropriate first-line approach to manage the responses of IgAN-induced nephron loss in contrast to the RASi-first approach. The guidelines also highlight Filspari as the only therapy with proven efficacy compared to optimized RASi in clinical trials.
Current report
On August 27, 2025, Travere announced that the U.S. FDA has approved updated Risk Evaluation and Mitigation Strategy (REMS) labeling for Filspari. The update reduces the frequency of liver function monitoring during the first year of treatment from once a month to once every three months and removes the embryo-fetal toxicity (EFT) monitoring requirement from the REMS.
Current report
Qtorin rapamycin
Current report
On September 24, 2025, Palvella announced the expansion of its Qtorin rapamycin 3.9% anhydrous gel (Qtorin rapamycin) development program into clinically significant angiokeratomas. Clinically significant angiokeratomas are superficial vascular malformations of lymphatic origin that can cause bleeding, pain, functional impairment, and risk of infection, with no tendency for spontaneous regression. Despite the substantial disease burden, there are currently no FDA-approved treatments available for clinically significant angiokeratomas. Palvella plans to meet with the FDA in the first half of 2026 to discuss the proposed design of a Phase 2 study. Study initiation is anticipated in the second half of 2026.
Current report
On September 15, 2025, Palvella announced the successful completion of enrollment in TOIVA, a Phase 2 trial of Qtorin rapamycin for the treatment of cutaneous venous malformations (cutaneous VMs). The Phase 2 trial enrolled 16 subjects at leading vascular anomaly centers. Top-line results from TOIVA are expected in mid-December 2025.
Current report
Other Program Updates
Current report
On October 27, 2025, Orchestra BioMed announced enrollment of the first patients in the Virtue Trial. This is a U.S. investigational device exemption pivotal study comparing Orchestra’s highly differentiated Virtue SAB to the AGENT paclitaxel-coated balloon, currently the only drug-coated balloon that is FDA approved for a coronary indication
Current report
On October 22, 2025, Sanofi announced positive results from the global ElevAATe Phase 2 study, showing that efdoralprin alfa (SAR447537, formerly known as INBRX-101) met all primary and key secondary endpoints in patients with alpha-1 antitrypsin deficiency emphysema.
Current report
On October 20, 2025, Sanofi announced the FDA accepted for expedited review the supplemental biologics license application for Tzield (teplizumab) to delay the progression of stage 3 type 1 diabetes in adults and pediatric patients eight years of age and older recently diagnosed with stage 3 type 1 diabetes. The FDA also nominated Tzield for the Commissioner’s National Priority Voucher (CNPV) pilot program. The new CNPV process aims to shorten the standard 10 to 12 month timeline to one to two months. Tzield is currently approved to delay the onset of stage 3 type 1 diabetes in adults and children eight years and older diagnosed with stage 2 type 1 diabetes.
Current report
On October 8, 2025, SQ Innovation announced that the FDA approved its drug-device combination Lasix® ONYU (furosemide injection), a novel drug-device combination for the treatment of edema (due to fluid overload) in adult patients with chronic heart failure. Lasix ONYU provides a novel high-concentration formulation of furosemide combined with a state-of-the-art small Infusor for treatment at home. Captisol is a key part of the Lasix ONYU formulation. Lasix ONYU is the 17th Captisol enabled approved product and Ligand is entitled to milestone payments, a low-single-digit royalty, and revenue from material sales.
Current report
On October 7, 2025, Merck announced the completion of the Verona Pharma acquisition. Verona is now a wholly-owned subsidiary of Merck. Ohtuvayre, a first-in-class maintenance treatment for chronic obstructive pulmonary disease, is now part of Merck’s portfolio of treatments for patients with cardio-pulmonary disease.
Current report
On September 9, 2025, Agenus announced that the French National Agency of Medicines and Health Product Safety’s (ANSM) granted reimbursed compassionate access for Agenus’ investigational combination botensilimab plus balstilimab (Bot/Bal) in refractory microsatellite-stable (MSS) metastatic colorectal cancer. The ANSM listings for Bot/Bal are live and include eligibility (including MSS and no active liver metastases) and dosing. Bot/Bal remains investigational and is not approved for commercial marketing in France or elsewhere.
Current report
On July 10, 2025, Pelthos announced the launch of Zelsuvmi, for the treatment of molluscum contagiosum (molluscum) in adults and pediatric patients one year of age and older. Zelsuvmi received a Novel Drug designation from the FDA in January 2024 and is the first and only prescription therapy approved for use at home by patients, parents, and caregivers to treat molluscum infections, a highly contagious viral skin condition.
Current report
Total revenue and other income increased by $63.6 million, or 123%, to $115.5 million in Q3 2025 compared to $51.8 million in Q3 2024.
Current report
Royalties increased by $14.9 million, or 47%, to $46.6 million in Q3 2025 compared to $31.7 million in Q3 2024, primarily due to increase in Filspari, Ohtuvayre and Capvaxive sales.
Current report
Captisol sales increased by $4.4 million, or 71%, to $10.7 million in Q3 2025 compared to $6.3 million in Q3 2024, primarily due to the timing of customer orders.
Current report
Contract revenue and other income increased by $44.4 million, or 320%, to $58.2 million in Q3 2025 compared to $13.8 million in Q3 2024, with the change due to income from the Pelthos Transaction. DuringQ3 2025, we recognized $53.1 million in total income related to the divestiture of our Pelthos subsidiary. This included $24.5 million associated with the out-license of Zelsuvmi and a $28.6 million gain on the sale of the business. The full $53.1 million is reported in contract revenue and other income.
Current report
Total revenue and other income increased by $84.1 million, or 68%, to $208.4 million in YTD 2025 compared to $124.3 million in YTD 2024.
Current report
Captisol sales increased by $9.5 million, or 41%, to $32.4 million in YTD 2025 compared to $23.0 million in YTD 2024, primarily due to the timing of customer orders.
Current report
Contract revenue and other income increased by $38.1 million, or 139%, to $65.5 million in YTD 2025 compared to $27.4 million in YTD 2024, with the change due to the above mentioned income from the Pelthos Transaction.
Current report
(2) Our royalty rate on Ohtuvayre is 3%, of which 2% is recognized in revenue from intangible royalty assets and the remaining 1% is accounted for as financial royalty asset. See detail in Note 5, Financial Royalty Assets, net.
Current report
Total operating costs and expenses increased by $11.9 million, or 24%, to $60.5 million in Q3 2025 compared to $48.7 million in Q3 2024.
Current report
Cost of Captisol increased by $1.4 million, or 55%, to $3.8 million in Q3 2025 compared to $2.4 million in Q3 2024, with the increase primarily due to the higher Captisol sales in Q3 2025 compared to Q3 2024.
Current report
Fair value adjustments to partner program derivatives were $(0.8) million for Q3 2025 compared to $7.8 million for Q3 2024. The $(0.8) million in Q3 2025 was a reversal of the adjustments for the six months ended June 30, 2025 upon adopting ASU 2025-07 with the adoption date of January 1, 2025. Refer to Note 1, Basis of Presentation and Summary of Significant Accounting Policies, for additional information on the adoption of this amendment. The adjustment of $7.8 million in Q3 2024 was primarily related to certain Agenus partners discontinuing development of their partnered programs.
Current report
We had no fair value adjustments to partner program derivatives for YTD 2025 due to the adoption of ASU 2025-07 on January 1, 2025, based on which we no longer have partnered program derivative assets. Refer to Note 1, Basis of Presentation and Summary of Significant Accounting Policies, for additional information on the adoption of ASU 2025-07. The adjustment of $7.8 million in YTD 2024 was primarily related to certain Agenus partners discontinuing development of their partnered programs.
Current report
The gain (loss) from change in fair value of equity-method investments and other investments increased by $78.9 million to $75.9 million in Q3 2025, primarily attributable to the fair value changes of the Pelthos common shares and Pelthos Series A preferred shares that we acquired in connection with the Pelthos Transaction. For additional information, see Note 2, Pelthos Transaction. In Q3 2024, we recognized a full impairment of $3.0 million for our investment in Neuritek warrants.
Current report
The gain (loss) from change in fair value of equity-method investments and other investments increased by $110.5 million to $75.9 million in YTD 2025, primarily attributable to the fair value changes of the Pelthos common shares and Pelthos Series A preferred shares that we acquired in connection with the Pelthos Transaction. For additional information, see Note 2, Pelthos Transaction. In YTD 2024, we recognized a fair value adjustment of $25.8 million to Primrose Bio securities investment and a $5.8 million impairment to Primrose Bio equity method investment.
Current report
On August 14, 2025, we issued $460.0 million aggregate principal amount of 0.75% convertible senior notes due 2030. The aggregate principal includes the purchase of an additional $60.0 million aggregate principal amount of the Notes by the initial purchasers pursuant to the full exercise of the initial purchasers’ option to purchase additional Notes. The net proceeds from the offering were approximately $445.1 million, after deducting the initial purchasers’ discounts and debt issuance costs incurred by Ligand.
Removed paragraphs (14)
Previous report
New Royalty Investment in Orchestra BioMed
Previous report
On July 9, 2025, Merck and Verona announced a definitive agreement under which Merck, through a subsidiary, will acquire Verona for $107 per American Depository Share (ADS), each of which represents eight Verona ordinary shares, for a total transaction value of approximately $10 billion. Verona's portfolio includes Ohtuvayre, which was approved by the FDA in June 2024 for the maintenance treatment of COPD in adult patients. Ligand receives a 3% royalty on Ohtuvayre sales.
Previous report
On July 7, 2025, Agenus announced that its botensilimab and balstilimab (BOT/BAL) combination achieved a two-year survival rate of 42% along with a more mature 21-month median overall survival in an expanded cohort of 123 patients with microsatellite-stable (MSS) metastatic colorectal cancer (mCRC) without active liver metastases (NLM). Agenus also confirmed that it has reached agreement with the FDA on the design of the global BATTMAN Phase 3 trial. The FDA waived the need for a BOT monotherapy arm, allowing for a simple two-arm study design.
Previous report
On June 23, 2025, Palvella Therapeutics announced the full enrollment in SELVA, a Phase 3 trial of Qtorin 3.9% rapamycin anhydrous gel (Qtorin rapamycin) for the treatment of microcystic lymphatic malformations (microcystic LMs). The Phase 3 trial enrolled 51 subjects, exceeding the original target of 40 subjects by over 25%. Top-line results from SELVA are expected in the first quarter of 2026, with a NDA submission planned for the second half of 2026.
Previous report
On June 3, 2025, Agenus announced it entered into a partnership agreement with Zydus designed to accelerate clinical development, scale global manufacturing, and expand patient access to BOT/BAL. The strategic collaboration includes an exchange of Agenus’ state-of-the-art biologics CMC facilities in Emeryville, CA and Berkeley, CA for an upfront consideration of $75 million. Moreover, Agenus will receive up to an additional $50 million in contingent payments triggered by BOT/BAL production orders. This collaboration enables Agenus to unlock the value of its manufacturing assets and secure strategic capital to drive BOT/BAL toward global regulatory engagement and commercialization.
Previous report
On May 23, 2025, CSL Vifor announced that the National Institute for Health and Care Excellence (NICE) has published final draft guidance recommending that Filspari can be used in the NHS in England as an option to treat primary IgA nephropathy in adults with a urine protein excretion of 1.0 g/day or more, or a urine protein-to-creatinine ratio of 0.75 g/g or more.
Previous report
On May 16, 2025, Nuance announced top-line results from the Phase 3 ENHANCE-CHINA trial which evaluated nebulized ensifentrine (marketed as Ohtuvayre in the U.S.) for the maintenance treatment of chronic obstructive pulmonary disease (COPD). The ENHANCE-CHINA trial successfully met its primary endpoint, as well as secondary endpoints demonstrating improvements in lung function.
Previous report
On May 15, 2025, Travere announced that the FDA accepted its supplemental New Drug Application (sNDA) for traditional approval of Filspari (sparsentan) for the treatment of focal segmental glomerulosclerosis (FSGS). The FDA has assigned a Prescription Drug User Fee Act (PDUFA) target action date of January 13, 2026, and has indicated that it is currently planning to hold an advisory committee meeting to discuss the application. Additionally, Travere continues to expect a PDUFA target action date of August 28, 2025 for its sNDA requesting modification of liver monitoring and removal of embryo-fetal toxicity monitoring REMS for Filspari for the treatment of adults with primary immunoglobulin A nephropathy (IgAN) who are at risk for disease progression.
Previous report
Total revenue and other income increased by $20.5 million, or 28%, to $93.0 million in YTD 2025 compared to $72.5 million in YTD 2024. Royalties increased by $21.6 million, or 51%, to $63.9 million in YTD 2025 compared to $42.3 million in YTD 2024, primarily due to income from Qarziba financial royalty asset acquired in Q3 2024 and an increase in Filspari sales. Captisol sales increased by $5.0 million, or 30%, to $21.7 million in YTD 2025 compared to $16.7 million in YTD 2024, primarily due to the timing of customer orders. Contract revenue and other income decreased by $6.2 million, or 46%, to $7.3 million in YTD 2025 compared to $13.5 million in YTD 2024, with the difference due to the timing of partner milestone events.
Previous report
Contract revenue includes service revenue, license fees and development, regulatory and sales based milestone payments.
Previous report
Total operating costs and expenses decreased by $21.4 million, or 35%, to $39.2 million in Q2 2025 compared to $60.6 million in Q2 2024.
Previous report
Cost of Captisol remained steady at $2.9 million in Q2 2025 compared to $2.9 million in Q2 2024.
Previous report
Fair value adjustment to partner program derivatives was $1.3 million for Q2 2025 compared to zero for Q2 2024.
Previous report
Fair value adjustment to partner program derivatives was $0.8 million for YTD 2025 compared to zero for YTD 2024.
Reworded paragraphs (33)
Previous wording
Our revenue is generated primarily from royalties on sales of products commercialized by our partners, Captisol material sales, and contract revenue for license fees, regulatory and sales based milestone payments. Other operating income is primarily related to milestone income received for financial royalty assets that have been fully amortized or where there is no underlying asset recognized on the consolidated balance sheets. Also, we selectively pursue acquisitions and drug development funding opportunities that address high unmet clinical needs to bring in new assets, pipelines, and technologies to aid in generating additional potential new incremental revenue streams.
Current wording
Our revenue is generated primarily from royalties on sales of products commercialized by our partners, Captisol material sales, and contract revenue for license fees, regulatory and sales based milestone payments. Other operating income is primarily related to milestone income received for financial royalty assets that have been fully amortized or where there is no underlying asset recognized on the condensed consolidated balance sheets. Also, we selectively pursue acquisitions and drug development funding opportunities that address high unmet clinical needs to bring in new assets, pipelines, and technologies to aid in generating additional potential new incremental revenue streams.
Previous wording
On July 2, 2025, we announced the completion of its previously announced merger between the Company's wholly owned subsidiary, LNHC, Inc., and CHRO Merger Sub Inc., a wholly owned subsidiary of Channel Therapeutics Corporation (“Channel”). The combined company operates under the name Pelthos Therapeutics Inc. (“Pelthos”) and trades on the NYSE American exchange under the ticker symbol “PTHS”.
Current wording
On July 1, 2025, we completed a previously announced merger between the Company’s wholly owned subsidiary, LNHC, Inc., and CHRO Merger Sub Inc., a wholly owned subsidiary of Channel Therapeutics Corporation (“Channel”) (such transaction, the “Pelthos Transaction”). The combined company operates under the name Pelthos Therapeutics Inc. (“Pelthos”) and trades on the NYSE American exchange under the ticker symbol “PTHS”.
Previous wording
Concurrent with the merger, Pelthos raised $50.1 million of equity capital, including a private placement from a group of strategic investors led by Murchinson (“Investor Group” and together with Ligand, the “Investors”). The Investor Group invested $32 million and Ligand invested $18 million in the combined company, respectively. The capital was invested into
Current wording
Concurrent with the merger, Pelthos raised $50.1 million of equity capital, including a private placement from a group of strategic investors led by Murchinson (“Investor Group” and together with Ligand, the “Investors”). The Investor Group invested $32 million and we invested $18 million in the combined company, respectively. The capital was invested into Pelthos’ Series A Convertible Preferred Stock (“Series A”) and common stock and includes cancellation of approximately $18.8 million in bridge capital that was advanced to Pelthos by several of the Investors (including Ligand) since the beginning of 2025 to support the commercial launch of Zelsuvmi.
Previous wording
On August 4, 2025, we invested $25 million in strategic capital to fund Orchestra BioMed's late-stage partnered cardiology programs with an additional $15 million to be funded, subject to certain conditions precedent, at the nine-month anniversary of the transaction closing date. Our investment included a $20 million cash payment and an additional $5 million in an equity private placement at the public offering price of $2.75 per share in Orchestra BioMed’s public offering. In exchange, We will receive a low double-digit royalty on the first $100 million in commercial revenues from Orchestra’s AVIM therapy and Virtue SAB programs in all indications. We will also earn a mid-single-digit royalty on annual revenues exceeding $100 million in commercial revenues from AVIM therapy in the uncontrolled hypertension and increased cardiovascular risk indication and Virtue SAB in coronary artery disease indications.
Current wording
On August 4, 2025, we invested $25 million in strategic capital to fund Orchestra BioMed’s late-stage partnered cardiology programs with an additional $15 million to be funded, subject to certain conditions precedent, at the nine-month anniversary of the transaction closing date. Our investment included a $20 million cash payment and a $5 million equity investment. We are entitled to a low-double-digit royalty on the first $100 million in commercial revenues from Orchestra’s AVIM therapy and Virtue SAB programs in all indications and a mid-single-digit royalty on annual revenues exceeding $100 million in commercial revenues from AVIM therapy in the uncontrolled hypertension and increased cardiovascular risk indication and Virtue SAB in coronary artery disease indications.
Previous wording
Total revenue and other income increased by $6.1 million, or 15%, to $47.6 million in Q2 2025 compared to $41.5 million in Q2 2024. Royalties increased by $13.2 million, or 57%, to $36.4 million in Q2 2025 compared to $23.2 million in Q2 2024, primarily due to income from Qarziba financial royalty asset acquired in Q3 2024 and an increase in Filspari sales. Captisol sales increased by $0.8 million, or 10%, to $8.3 million in Q2 2025 compared to $7.5 million in Q2 2024, primarily due to the timing of customer orders. Contract revenue and other income decreased by $7.9 million, or 73%, to $2.9 million in Q2 2025 compared to $10.9 million in Q2 2024, with the difference due to the timing of partner milestone events.
Current wording
Royalties increased by $36.5 million, or 49%, to $110.5 million in YTD 2025 compared to $74.0 million in YTD 2024, primarily due to income from Qarziba financial royalty asset acquired in Q3 2024 and an increase in Filspari, Ohtuvayre and Capvaxive sales.
Previous wording
Revenue from intangible royalty assets is a function of our partners’ product sales and the applicable royalty rate. Kyprolis royalty rates are under a tiered royalty rate structure with the highest tier being 3%. Evomela has a fixed royalty rate of 20%. Teriparatide injection has a tiered royalty between 25% and 40% on sales that have been adjusted for certain deductible items as defined in the respective license agreement. The Rylaze and Vaxneuvance royalty rates are in the low single digits. Filspari has a fixed royalty rate of 9%.
Current wording
Revenue from intangible royalty assets is a function of our partners’ product sales and the applicable royalty rate. Kyprolis royalty rates are under a tiered royalty rate structure with the highest tier being 3%. Evomela has a fixed royalty rate of 20%. Teriparatide injection has a tiered royalty between 25% and 40% on sales adjusted for certain deductible items as defined in the respective license agreement. The Rylaze, Vaxneuvance, Ohtuvayre and Capvaxive royalty rates are in the low single digits. Filspari has a fixed royalty rate of 9%.
Previous wording
Amortization of intangibles remained steady at $8.3 million in Q2 2025 compared to $8.3 million in Q2 2024.
Current wording
Amortization of intangibles remained relatively steady in Q3 2025 at $8.1 million compared to $8.3 million in Q3 2024, with the change due to deconsolidation of LNHC, Inc. on July 1, 2025.
Previous wording
At any one time, we are working on multiple R&D programs. As such, we generally do not track our R&D expenses on a specific program basis. Research and development expense was $6.6 million for Q2 2025, compared with $5.4 million for Q2 2024, with the increase primarily attributable to expenses incurred by Pelthos in preparation for the commercial launch of ZELSUVMI.
Current wording
At any one time, we are working on multiple R&D programs. As such, we generally do not track our R&D expenses on a specific program basis. Research and development expense was $21.0 million for Q3 2025, compared with $5.7 million for Q3 2024, with the increase primarily attributable to a $17.8 million research and development funding arrangement related to the royalty rights of AVIM Therapy acquired in the Orchestra transaction as discussed in Note 3, Investment Transactions.
Previous wording
General and administrative expense was $20.2 million for Q2 2025, compared to $17.6 million for Q2 2024, with the increase primarily attributable to employee related costs and operating costs associated with incubating the Pelthos business.
Current wording
General and administrative expense was $28.4 million for Q3 2025, compared to $24.5 million for Q3 2024, with the increase primarily attributable to transaction costs.
Previous wording
Total operating costs and expenses increased by $32.1 million, or 36%, to $120.7 million in YTD 2025 compared to $88.6 million in YTD 2024.
Current wording
Total operating costs and expenses increased by $44.0 million, or 32%, to $181.3 million in YTD 2025 compared to $137.3 million in YTD 2024.
Previous wording
Cost of Captisol increased by $2.0 million, or 34%, to $7.8 million in YTD 2025 compared to $5.8 million in YTD 2024, with the increase primarily due to the higher Captisol sales in YTD 2025 compared to YTD 2024.
Current wording
Cost of Captisol increased by $3.3 million, or 40%, to $11.6 million in YTD 2025 compared to $8.2 million in YTD 2024, with the increase primarily due to the higher Captisol sales in YTD 2025 compared to YTD 2024.
Previous wording
Amortization of intangibles remained steady at $16.5 million in YTD 2025 compared to $16.4 million in YTD 2024.
Current wording
Amortization of intangibles remained relatively steady in YTD 2025 at $24.6 million compared to $24.7 million in YTD 2024, with the change due to deconsolidation off LNHC, Inc. on July 1, 2025.
Previous wording
Research and development expense was $56.7 million for YTD 2025, compared with $11.3 million for YTD 2024, with the increase primarily due to a $44.3 million research and development funding arrangement related to the D-Fi royalty rights acquired with the Castle Creek Investment transaction as discussed in Note 3, Castle Creek and Agenus Transactions.
Current wording
Research and development expense was $77.7 million for YTD 2025, compared with $17.0 million for YTD 2024, with the increase primarily due to a $44.3 million research and development funding arrangement related to the D-Fi royalty rights acquired with the Castle Creek Investment transaction and a $17.8 million research and development funding arrangement related to the Orchestra transaction. Both transaction are discussed in Note 3, Investment Transactions.
Previous wording
General and administrative expense was $39.0 million for YTD 2025, compared to $28.6 million for YTD 2024, with the increase primarily due to employee related costs and operating costs associated with incubating the Pelthos business.
Current wording
General and administrative expense was $67.4 million for YTD 2025, compared to $53.0 million for YTD 2024, with the increase primarily due to transaction costs.
Previous wording
The fluctuation in the gain (loss) from short-term investments is primarily driven by the changes in the fair value of our ownership in Viking common stock and other equity security investments. The gain from short-term investments was $0.9 million in Q2 2025 as compared to the net loss from short-term investments of $14.3 million in Q2 2024. In Q2 2025, we recorded an unrealized gain on Viking shares of $2.4 million as compared to an unrealized loss of $29.0 million in Q2 2024. In addition, we recorded a gain of $15.2 million on the fair value adjustment to the Viking Share Collar in Q2 2024.
Current wording
The gain from short-term investments was $7.8 million in Q3 2025 compared to $2.4 million in Q3 2024. In Q3 2025, we recorded an unrealized loss on Viking common stock of $0.2 million as compared to an unrealized gain of $10.3 million in Q3 2024. In Q3 2025, we recorded a $9.8 million unrealized gain on Palvella common stock that we acquired in December 2024. In Q3 2024, we recorded a loss of $7.9 million on the fair value adjustment to the Viking Share Collar.
Previous wording
Interest income consists primarily of interest earned on our short-term investments. The decrease over the prior year period was due to the decrease in average investment balances in Q2 2025 compared to Q2 2024.
Current wording
Interest income consists primarily of interest earned on our short-term investments. The increase over the prior year period was due to the increase in average investment balances in Q3 2025 compared to Q3 2024.
Previous wording
Interest expense consists primarily of interest accrued related to a royalty and milestone payments purchase agreement entered into by Novan, Inc. in 2019, and assumed by Pelthos as part of the Novan acquisition in September 2023.
Current wording
In Q3 2025, interest expense consists primarily of the 0.75% coupon cash interest expense in addition to the non-cash accretion of discount (including the amortization of debt issuance costs) on our 0.75% Convertible Senior Notes due 2030 (the “Notes”), which were issued in August 2025. In Q3 2024, interest expense consists primarily of interest accrued related to a royalty and milestone payments purchase agreement entered into by Novan, Inc. in 2019, assumed by Ligand as part of the Novan acquisition in September 2023, and deconsolidated on July 1, 2025.
Previous wording
Other non-operating expense, net, primarily consists of mark-to-market adjustments on derivatives (other than the Viking Share Collar and the partner program derivatives) and CVRs. Other non-operating expense, net, in Q2 2025 decreased by $34.9 million as compared to Q2 2024, primarily due to the fair market changes to derivative assets and the revaluation of investments in Primrose Bio and the equity method loss related to Primrose Bio in Q2 2024.
Current wording
Other non-operating expense, net, primarily consists of mark-to-market adjustments on derivatives (other than the Viking Share Collar and the partner program derivatives) and CVRs. Other non-operating expense, net, in Q3 2025 decreased by $9.0 million as compared to Q3 2024, primarily due to the fair value changes to derivative assets and the loss from equity method investment in Primrose Bio in Q3 2024.
Previous wording
The fluctuation in the gain (loss) from short-term investments is primarily driven by the changes in the fair value of our ownership in Viking common stock and other equity security investments. The net loss from short-term investments was $11.4 million in YTD 2025 as compared to the net gain from short-term investments of $96.5 million in YTD 2024. In YTD 2025, we recorded an unrealized loss on Viking shares of $13.7 million as compared to an unrealized gain of $21.8 million in YTD 2024. In addition, we recorded a gain of $15.2 million on the the fair value adjustment to the Viking Share Collar in YTD 2024. Besides, we sold 0.7 million shares of Viking common stock and recognized a realized gain of $60.0 million in total in YTD 2024.
Current wording
The fluctuation in the gain (loss) from short-term investments is primarily driven by the changes in the fair value of our ownership in Viking common stock and other equity security investments. The loss from short-term investments was $3.6 million in YTD 2025 as compared to the gain from short-term investments of $98.9 million in YTD 2024. In YTD 2025, we recorded an unrealized loss on Viking common stock of $14.0 million as compared to an unrealized gain of $32.1 million in YTD 2024. In YTD 2025, we recorded a $12.3 million unrealized gain on Palvella common stock that we acquired in December 2024. In YTD 2024, we recorded a gain of $7.3 million on the fair value adjustment to the Viking Share Collar. In addition, we sold 0.7 million shares of Viking common stock and recognized a realized gain of $60.0 million in total in YTD 2024.
Previous wording
Interest income consists primarily of interest earned on our short-term investments. The decrease over the prior year period was due to the decrease in average investment balances in YTD 2025 compared to YTD 2024.
Current wording
Interest income consists primarily of interest earned on our short-term investments. The increase over the prior year period was due to the increase in average investment balances in YTD 2025 compared to YTD 2024.
Previous wording
Interest expense consists primarily of interest accrued related to a royalty and milestone payments purchase agreement entered into by Novan, Inc. in 2019, and assumed by Pelthos as part of the Novan acquisition in September 2023.
Current wording
Interest expense consists primarily of 1) the 0.75% coupon cash interest expense in addition to the non-cash accretion of discount (including the amortization of debt issuance costs) on our 0.75% Convertible Senior Notes due 2030 which was issued in August 2025, and 2) interest accrued related to a royalty and milestone payments purchase agreement entered into by Novan, Inc. in 2019, assumed by Ligand as part of the Novan acquisition in September 2023, and deconsolidated on July 1, 2025.
Previous wording
Other non-operating expense, net, primarily consists of mark-to-market adjustments on derivatives (other than the Viking Share Collar and the partner program derivatives) and CVRs. Other non-operating expense, net, in YTD 2025 decreased by $34.6 million as compared to YTD 2024, primarily due to the fair market changes to derivative assets and the revaluation of investments in Primrose Bio and the equity method loss related to Primrose Bio in YTD 2024.
Current wording
Other non-operating expense, net, primarily consists of mark-to-market adjustments on derivatives (other than the Viking Share Collar and the partner program derivatives) and CVRs. Other non-operating expense, net, in YTD 2025 decreased by $12.0 million as compared to YTD 2024, primarily due to the fair value changes to derivative assets and the loss from equity method investment in Primrose Bio in YTD 2024.
Previous wording
We compute our income tax provision by applying the estimated annual effective tax rate to income from operations and adding the effects of any discrete income tax items specific to the period. The effective tax rate for the three months ended June 30, 2025 and 2024 was 56.8% and 20.6%, respectively. The effective tax rate for the six months ended June 30, 2025 and 2024 was 3.5% and 28.8%, respectively. The variance from the U.S. federal statutory tax rate of 21% for the three and six months ended June 30, 2025 was primarily due to Section162(m) limitation on deduction for officer compensation, other non-deductible items and income from foreign operations, which were partially offset by the foreign derived intangible income deduction. The variance from the U.S. federal statutory tax rate of 21% for the three and six months ended June 30, 2024 was primarily due to tax benefits from the foreign-derived intangible income deduction, as well as the research and development tax credits, which were partially offset by the Section 162(m) limitation during the period.
Current wording
We compute our income tax provision by applying the estimated annual effective tax rate to income from operations and adding the effects of any discrete income tax items specific to the period. The effective tax rate for the three months ended September 30, 2025 and 2024 was 16.9% and (13.1)%, respectively. The effective tax rate for the nine months ended September 30, 2025 and 2024 was 22.0% and 35.1%, respectively. The variance from the U.S. federal statutory tax rate of 21% for the three and nine months ended September 30, 2025 was primarily due to Section162(m) limitation on deduction for officer compensation, and income from foreign operations, which were partially offset by the foreign derived intangible income deduction. The variance from the U.S. federal statutory tax rate of 21% for the three and nine months ended September 30, 2024 was primarily due to tax benefits from the foreign-derived intangible income deduction as well as the research and development tax credits, which were partially offset by the Section 162(m) limitation during the period.
Previous wording
As of June 30, 2025, our cash, cash equivalents, and short-term investments totaled $245.0 million, which decreased by $11.1 million from the end of last year mainly due to the cash paid for the Castle Creek transaction. Our primary source of liquidity, other than our holdings of cash, cash equivalents, and short-term investments, has been cash flows from operations. Our ability to generate cash from operations provides us with the financial flexibility we need to meet operating, investing, and financing needs.
Current wording
As of September 30, 2025, our cash, cash equivalents, and short-term investments totaled $664.5 million, which increased by $408.4 million from the end of last year mainly due to the issuance of the Notes in August 2025. Our primary source of liquidity, other than our holdings of cash, cash equivalents, and short-term investments, has been cash flows from operations. Our ability to generate cash from operations provides us with the financial flexibility we need to meet operating, investing, and financing needs.
Previous wording
Historically, we have liquidated our short-term investments and/or issued debt and equity securities to finance our business needs as a supplement to cash provided by operating activities. Our short-term investments include U.S. government debt securities, investment-grade corporate debt securities, and certificates of deposit. We have established guidelines relative to diversification and maturities of our investments in order to provide both safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates. Additionally, we own certain securities which are classified as short-term investments that we received as a result of a milestone and an upfront license payment as well as 1.0 million shares of common stock in Viking.
Current wording
Historically, we have liquidated our short-term investments and/or issued debt and equity securities to finance our business needs as a supplement to cash provided by operating activities. Our short-term investments include U.S. government debt securities, investment-grade corporate debt securities, commercial paper, and certificates of deposit. We have established guidelines relative to diversification and maturities of our investments in order to provide both safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates. Additionally, we own certain equity securities which are classified as short-term investments that we received as a result of a milestone and an upfront license payment as well as 1.0 million shares of common stock in Viking.
Previous wording
On September 30, 2022, we entered into an At-The-Market Equity Offering Sales Agreement (the “Sales Agreement”) with Stifel, Nicolaus & Company, Incorporated (the “Agent”), under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100 million in “at the market” offerings through the Agent (the “ATM Offering”). The shelf registration statement relating to such shares included a prospectus covering the offering, issuance and sale of up to $100 million of our common stock from time to time through the ATM Offering. The shares to be sold under the Sales Agreement may be issued and sold pursuant to the shelf registration statement. During the three and six months ended June 30, 2025 and 2024, we did not issue any shares of common stock in the ATM Offering.
Current wording
On September 30, 2022, we entered into an At-The-Market Equity Offering Sales Agreement (the “Sales Agreement”) with Stifel, Nicolaus & Company, Incorporated (the “Agent”), under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100 million in “at the market” offerings through the Agent (the “ATM Offering”). The shelf registration statement relating to such shares included a prospectus covering the offering, issuance and sale of up to $100 million of our common stock from time to time through the ATM Offering. The shares to be sold under the Sales Agreement may be issued and sold pursuant to the shelf registration statement. During the three and nine months ended September 30, 2025, we did not issue any shares of common stock in the ATM Offering. During the three and nine months ended September 30, 2024, we issued 334,325 shares of common stock in the ATM Offering, generating proceeds of 34.3 million, net of commissions and other transaction costs.
Previous wording
In April 2023, our Board has approved a stock repurchase program authorizing, but not requiring, the repurchase of up to $50 million of our common stock from time to time through April 2026. We expect to acquire shares, if at all, primarily through open-market transactions in accordance with all applicable requirements of Rule 10b-18 of the Exchange Act. The timing and amount of repurchase transactions will be determined by management based on our evaluation of market conditions, share price, legal requirements and other factors. During the three and six months ended June 30, 2025 and 2024, we did not repurchase any shares of common stock, respectively, under the stock repurchase program.
Current wording
In April 2023, our Board has approved a stock repurchase program authorizing, but not requiring, the repurchase of up to $50 million of our common stock from time to time through April 2026. We expect to acquire shares, if at all, primarily through open-market transactions in accordance with all applicable requirements of Rule 10b-18 of the Exchange Act. The timing and amount of repurchase transactions will be determined by management based on our evaluation of market conditions, share price, legal requirements and other factors. During the three and nine months ended September 30, 2025 and 2024, we did not repurchase any shares of common stock, respectively, under the stock repurchase program.
Previous wording
On July 8, 2024, we entered into the first Amendment to the Revolving Credit Facility which amends the Credit Agreement to, among other things, increase the aggregate revolving credit facility amount from $75 million to $125 million.
Current wording
On July 8, 2024, we entered into the first amendment to the Revolving Credit Facility which amends the Credit Agreement to, among other things, increase the aggregate revolving credit facility amount from $75 million to $125 million. In connection with the Notes, on August 11, 2025, we entered into the second amendment to the Credit Agreement, to permit, among other things, certain cash settlement payments on the Notes, subject to customary conditions set forth therein. On September 12, 2025, we entered into the third amendment to the Credit Agreement to, among other things, extend the maturity date to September 12, 2028 and modify the minimum consolidated EBITDA (as defined in the Credit Agreement) covenant to require the Company to maintain not less than $55 million of consolidated EBITDA (as defined in the Credit Agreement) for the trailing four-quarter period ended September 30, 2025 and each trailing four-quarter period ending thereafter.
Previous wording
As of June 30, 2025, we had $124.4 million in available borrowing under the Revolving Credit Facility, after utilizing $0.6 million for letter of credit. The maturity date of the Revolving Credit Facility is October 12, 2026.
Current wording
As of September 30, 2025, we had $124.4 million in available borrowing under the Revolving Credit Facility, after utilizing $0.6 million for letter of credit.
Previous wording
We believe that our existing funds, cash generated from operations and existing sources of and access to financing are adequate to fund our need for working capital, capital expenditures, Pelthos Therapeutics transaction, debt service requirements, continued advancement of research and development efforts, potential stock repurchases and other business initiatives we plan to strategically pursue, including acquisitions and strategic investments.
Current wording
We believe that our existing funds, cash generated from operations and existing sources of and access to financing are adequate to fund our need for working capital, capital expenditures, Pelthos Transaction, debt service requirements, continued advancement of research and development efforts, potential stock repurchases and other business initiatives we plan to strategically pursue, including acquisitions and strategic investments.
Previous wording
As of June 30, 2025, we had $5.6 million in fair value of contingent consideration liabilities associated with prior acquisitions to be settled in future periods.
Current wording
As of September 30, 2025, we had $3.8 million in fair value of contingent consideration liabilities associated with prior acquisitions to be settled in future periods.
Previous wording
During the six months ended June 30, 2025, we used cash in operations primarily for the Castle Creek transaction, partially offset by cash from revenue and other operating income. We used cash in investing activities primarily for purchases of short-term investments, partially offset by cash proceeds from sale and maturity of short-term investments. We generated cash from financing activities primarily due to net proceeds from stock options exercises and ESPP, as well as proceeds from Pelthos investors.
Current wording
During the nine months ended September 30, 2025, we generated cash from operations primarily from revenue and other operating income which was partially offset by our investments in Castle Creek and Orchestra R&D funding arrangements. We used cash in investing activities primarily for purchases of short-term investments, financial royalty assets, and warrants derivative assets, as well as Pelthos deconsolidation, partially offset by cash proceeds from sale and maturity of short-term investments, and cash proceeds from financial royalty assets. We generated cash from financing activities primarily due to net proceeds from Convertible Notes and related transactions (purchase of hedge, issuance of warrants, and repurchase of shares). stock options exercises and ESPP, as well as proceeds from Pelthos investors.
Previous wording
During the six months ended June 30, 2024, we generated cash from operations primarily from revenue and other operating income. We used cash in investing activities for purchases of short-term investments, financial royalty assets and Palvella notes receivable, and for the Agenus Transaction, partially offset by cash proceeds from sale and maturity of short-term investments, including Viking shares, and cash proceeds from financial royalty assets. We generated cash from financing activities primarily due to net proceeds from stock options exercises and ESPP.
Current wording
During the nine months ended September 30, 2024, we generated cash from operations primarily from revenue and other operating income. We used cash in investing activities primarily for Apeiron Acquisition, Agenus acquisition, and purchases of short-term investments, financial royalty assets and Palvella notes receivable, partially offset by cash proceeds from sale and maturity of short-term investments including Viking common stock. We generated cash from financing activities primarily due to net proceeds from sales of our common stock in the ATM Offering, and net proceeds from stock options exercises and ESPP.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Pelthos’ Series A Convertible Preferred Stock (“Series A”) and common stock and includes cancellation of approximately $18.8 million in bridge capital that was advanced to Pelthos by several of the Investors (including Ligand) since the beginning of 2025 to support the commercial launch of Zelsuvmi.
Previous report — wording carried elsewhere
Financial royalty asset impairment was $26.5 million for Q2 2024 due to Takeda’s Soticlestat missing its Phase 3 clinical trial primarily endpoint of reducing the frequency of convulsive seizures for patients with Dravet Syndrome.