LIGAND PHARMACEUTICALS INC
For the period ended Mar 31, 2026. Filed May 8, 2026.
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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.
Mar 31, 2026 · Filed May 8, 2026
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 2025-09-30; filed 2025-11-07.
0000886163-25-000063
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0000886163-26-000034
ITEM 2. Management’s 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 96 previous paragraphs and 78 current paragraphs.
20 unchanged; 15 reworded; 43 added; 59 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 6 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 (43)
Current report
First Quarter 2026 Corporate Highlights and Portfolio Updates
Current report
On April 27, 2026, we and XOMA, both biotechnology royalty aggregators, announced that the companies entered into a definitive agreement under which we will acquire XOMA for $39.00 per share of common stock in cash. XOMA stockholders are expected to separately receive one non-transferable Contingent Value Right (“CVR”) per share entitling the holders to receive a portion of 75% of the net proceeds that may result from certain pending litigation at XOMA. The cash purchase price at close represents an approximately 14% premium to XOMA’s 30 trading day volume weighted average price as of April 24, 2026, the last trading day prior to announcement of the transaction. The transaction is expected to close in the third quarter of 2026, subject to customary closing conditions and necessary regulatory approvals. We intend to fund the transaction through a combination of cash on hand and borrowings under our existing revolving credit facility, and expect to retain sufficient capital capacity to continue executing our capital deployment strategy of investing approximately $150 million to $250 million annually in high-value royalty assets.
Current report
The acquisition further diversifies our royalty portfolio across therapeutic areas such as ophthalmology, oncology, CNS and rare diseases and across stages of development and biopharma partners. The anticipated XOMA acquisition will add over 120 commercial, clinical, and preclinical-stage assets to our broad and growing royalty portfolio, highlighted by Roche’s Vabysmo (faricimab-svoa), Day One Pharmaceuticals’, now Servier's, Ojemda (tovorafenib), Zevra Therapeutics’ Miplyffa (arimoclomol), and 14 programs in late-stage development, highlighted by Takeda's mezagitamab and certain assets from Takeda’s externalized asset portfolio, including osavampator, volixibat and OHB-607.
Current report
On April 24, 2026, we delivered written notice to Viking Therapeutics, Inc. of termination of the TR‑Beta Program (including, but not limited to, VK2809 and VK0214), which we believe was effective as of May 4, 2026, under that certain Master License Agreement, dated May 21, 2014, by and among Ligand, Metabasis Therapeutics, Inc. and Viking, as amended (the “License Agreement”). As disclosed in our Current Report on Form 8‑K filed on April 30, 2026, the termination was effected pursuant to the License Agreement following our determination that Viking did not satisfy its contractual obligation to use commercially reasonable efforts to develop and commercialize the TR‑Beta Program.
Current report
In light of the limited development progress achieved under the TR‑Beta Program and our assessment of Viking’s execution against agreed‑upon development objectives, we concluded that Viking materially breached its obligation to use commercially reasonable efforts to develop and commercialize the TR-Beta Program under the License Agreement. In accordance with the terms of the License Agreement, upon the effective date of termination, we believe all licenses granted to Viking with respect to the TR‑Beta Program have terminated in accordance with the License Agreement, and Ligand will retain the contractual right to regain control of the related technology and intellectual property, subject to the terms of the License Agreement.
Current report
Viking is disputing our right to terminate the TR-Beta Program pursuant to the terms of the License Agreement. We believe our right to terminate the TR-Beta Program is valid pursuant to the terms of the License Agreement, and we intend to vigorously enforce our right to terminate the TR-Beta Program under the License Agreement.
Current report
In addition, we have considered the implications for patients, as insufficient development progress could delay the availability of additional and potentially differentiated therapies in Metabolic Dysfunction-Associated Steatohepatitis (MASH), a therapeutic area where meaningful unmet need persists despite recent approvals. Regaining control of the program enables Ligand to actively pursue alternative strategies with the objective of advancing development and enhancing the potential for patient impact.
Current report
On April 13, 2026, Travere announced the FDA approved Filspari to reduce proteinuria in adult and pediatric patients aged 8 years and older with FSGS, in patients without nephrotic syndrome. Filspari is currently the first and only medicine approved by the FDA for the treatment of FSGS, marking its expansion beyond IgA nephropathy (IgAN) into a second rare kidney disease.
Current report
People with FSGS who do not have nephrotic syndrome span across different types of FSGS and represent a population aligned with the KDIGO guidelines for treating glomerular diseases. Travere estimates that the addressable population in the U.S. is more than 30,000 individuals with FSGS who do not have nephrotic syndrome.
Current report
On May 4, 2026, Travere announced first quarter results and recent business highlights:
Current report
•Filspari achieved record 993 new patient start forms for IgAN in the U.S. in the first quarter; U.S. net product sales grew 88% year over year to $105 million
Current report
•The first FSGS patients were treated within one week of approval
Current report
•The SPARX Study evaluating Filspari in post-transplant patients with recurrent IgAN or FSGS is on track to complete enrollment in the second quarter of 2026
Current report
On February 24, 2026, Palvella announced positive topline results from its Phase 3 SELVA study of Qtorin rapamycin for the treatment of microcystic lymphatic malformations (MLMs). The Phase 3 trial met its primary endpoint with statistically significant improvement on the Microcystic LM Investigator Global Assessment and achieved statistical significance on its pre-specified key secondary endpoint and all four secondary efficacy endpoints. Qtorin rapamycin was well tolerated, with no drug-related serious adverse events reported and systemic rapamycin levels below 2 ng/mL at all timepoints for all participants. 98% of participants who completed the efficacy evaluation period elected to continue to receive Qtorin rapamycin in the ongoing treatment extension period.
Current report
On March 31, 2026, Palvella announced fourth quarter results and recent business highlights:
Current report
•NDA for Qtorin rapamycin for the treatment of MLM is on track for planned submission in second half of 2026
Current report
•Accelerating U.S. launch readiness for Qtorin rapamycin for MLMs; potential to become the first FDA-approved therapy and first-line, standard-of-care treatment for this serious, lifelong disease affecting an estimated more than 30,000 diagnosed patients in the U.S.
Current report
•Initiation of the Phase 3 trial of Qtorin rapamycin for the treatment of cutaneous venous malformations is planned for second half of 2026
Current report
•Initiation of the Phase 2 trial of Qtorin rapamycin for the treatment of clinically significant angiokeratomas is planned for second quarter of 2026
Current report
On May 4, 2026, Palvella announced the first patients have been dosed in LOTU, a Phase 2 clinical trial designed to evaluate the safety and efficacy of Qtorin rapamycin for the treatment of clinically significant angiokeratomas. Clinically significant angiokeratomas represent a rare, chronic and debilitating lymphatic malformation with no FDA approved therapies and estimated more than 50,000 diagnosed patients in the U.S. Topline resulting from the Phase 2 trial are expected in the second half of 2027.
Current report
Lasofoxifene
Current report
On March 26, 2026, LeonaBio announced fourth quarter results and recent business highlights:
Current report
•Lasofoxifene is currently in a Phase 3 clinical trial in combination with abemaciclib, a CDK4/6 inhibitor, as a targeted therapy for estrogen receptor-positive (ER+), HER2-negative, ESR1-mutated metastatic breast cancer, a population with limited treatment options following progression on aromatase inhibitors and CDK4/6 inhibitors. The primary endpoint of the study is statistically significant improvement in progression free survival (PFS) as determined by blinded, independent central review (BICR). The ongoing Phase 3 trial aims to establish a new standard of care for this genetically defined patient group
Current report
•LeonaBio is amending the ELAINE-3 trial protocol to increase the sample size from 500 participants to up to 600 participants. The primary goal of the amendment is to help ensure that the trial will have the appropriate number of disease progression events. The Company expects to complete enrollment of the Phase 3 ELAINE-3 clinical trial in the fourth quarter of 2026 and to have topline data in the second half of 2027
Current report
AVIM Therapy/Virtue SAB
Current report
On March 12, 2026, Orchestra BioMed announced fourth quarter results and recent business highlights:
Current report
•Accelerated patient enrollment of the BACKBEAT global pivotal study, in collaboration with Medtronic, evaluating the efficacy and safety of AVIM Therapy for the treatment of uncontrolled hypertension in patients indicated for a pacemaker
Current report
•Initiated patient enrollment in the Virtue SAB U.S. pivotal trial, a randomized head-to-head IDE registrational clinical trial comparing Virtue SAB with the commercially available AGENT paclitaxel-coated balloon for the treatment of coronary in-stent restenosis
Current report
On April 30, 2026, Orchestra BioMed announced that the FDA has granted Breakthrough Device Designation (“BDD”) for AVIM Therapy specific to patients with uncontrolled hypertension despite the use of anti-hypertensive medications, and an indication for a pacemaker.
Current report
Together, the two BDD’s for AVIM Therapy cover indications that encompass both the broader population of patients with uncontrolled hypertension despite medication and increased cardiovascular risk as well as the specific pacemaker-indicated population with uncontrolled hypertension being evaluated in the BACKBEAT global pivotal trial, which Orchestra BioMed is conducting in collaboration with Medtronic. This additional BDD supports strategic optionality for the clinical, regulatory and commercial reimbursement strategies for AVIM Therapy.
Current report
Bot/Bal
Current report
On April 1, 2026, Agenus announced the first patient enrolled in the landmark global Phase 3 BATTMAN trial. This study is evaluating Agenus’ immunotherapy combination of botensilimab plus balstilimab (“Bot/Bal”) versus best supportive care in patients with refractory, unresectable microsatellite stable (MSS)/mismatch repair proficient (pMMR) metastatic colorectal cancer (mCRC), a population long considered resistant to immunotherapy. The BATTMAN trial serves as the registrational-enabling study for Bot/Bal, enrolling approximately 830 patients and is expected to complete global enrollment quickly, reflecting the unprecedented investigator and patient enthusiasm worldwide.
Current report
Tzield
Current report
On April 22, 2026, Sanofi announced the FDA approved the supplemental biologic license application for Tzield, expanding the indication from eight years and older to as young as one year of age to delay the onset of stage 3 type 1 diabetes (T1D) in patients diagnosed with stage 2 T1D. The approval was granted under a priority review process and is supported by one-year data from the PETITE-T1D Phase 4 study, evaluating safety and pharmacokinetics in young children.
Current report
Revenue and Income
Current report
Total revenue and income increased by $6.4 million, or 14%, to $51.7 million in Q1 2026 compared to $45.3 million in Q1 2025. Royalties increased by $15.5 million, or 56%, to $43.0 million in Q1 2026 compared to $27.5 million in Q1 2025, primarily attributable to royalties earned on Filspari, Ohtuvayre, Capvaxive, and Kyprolis. Captisol sales decreased by $4.8 million, or 36%, to $8.7 million in Q1 2026 compared to $13.5 million in Q1 2025, primarily due to the timing of customer orders. Contract revenue and income decreased by $4.3 million, or (97)%, to $0.1 million in Q1 2026 compared to $4.4 million in Q1 2025, primarily due to a regulatory milestone tied to Xi’an Xintong’s Xinshumu (pradefovir mesylate tablets) in Q1 2025.
Current report
Total operating costs and expenses decreased by $47.2 million, or 58%, to $34.4 million in Q1 2026 compared to $81.5 million in Q1 2025. Cost of Captisol decreased by $1.6 million, or 33%, to $3.3 million in Q1 2026 compared to $4.8 million in Q1 2025, primarily due to the lower Captisol sales in Q1 2026 compared to Q1 2025. Amortization of intangibles decreased by $0.2 million, or 2%, to $8.1 million in Q1 2026 compared to $8.3 million in Q1 2025, primarily due to the deconsolidation of LNHC, Inc. on July 1, 2025.
Current report
Research and development expenses decreased by $47.9 million, or 96%, to $2.1 million in Q1 2026 compared to $50.1 million in Q1 2025. The decrease was primarily attributable to (1) the absence in the current period of a $44.3 million research and development funding payment recognized in the first quarter of 2025 in connection with the D-Fi royalty rights acquired through the Castle Creek Transaction, and (2) the absence of $2.7 million research and development expenses associated with our former Pelthos business, which were included in our results for the first quarter of 2025 but were no longer recognized in 2026 following the deconsolidation of LNHC, Inc. on July 1, 2025 in connection with the Pelthos Transaction. See Note 3, Investment Transactions, and Note 2, Pelthos Transaction.
Current report
General and administrative expenses increased by $2.0 million, or 11%, to $20.8 million in Q1 2026 compared to $18.8 million in Q1 2025. The increase primarily reflects higher employee-related costs, including increased headcount and share-based compensation, consistent with the Company’s continued investment in its origination and portfolio management functions. Fair value adjustments to partner program derivatives were zero for Q1 2026 compared to $(0.4) million for Q1 2025.
Current report
Operating income was $17.4 million in Q1 2026, compared to an operating loss of $36.2 million in Q1 2025, an improvement of $53.6 million. The improvement was primarily driven by (1) the non-recurrence in the current period of the $44.3 million research and development funding charge recognized in connection with the Castle Creek Transaction in Q1 2025 and (2) continued growth of royalty revenues.
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Removed paragraphs (59)
Previous report
Business Updates
Previous report
2030 Convertible Senior Notes Offering
Previous 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.
Previous 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.
Previous report
Pelthos Therapeutics Transaction
Previous report
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 report
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 report
On July 10, 2025, Pelthos commercially launched Zelsuvmi (berdazimer) topical gel 10.3%, the first and only U.S. FDA approved at-home treatment for molluscum contagiosum. Ligand earned a $5 million milestone payment from Pelthos following the commercial launch of Zelsuvmi. Ligand is also entitled to a 13% royalty on worldwide sales of Zelsuvmi, excluding Japan, and up to an additional $5 million in commercial sales milestones.
Previous 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.
Previous 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.
Previous report
New Royalty Investments
Previous 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.
Previous report
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 report
Portfolio Updates
Previous 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.
Previous report
As part of the transaction, Chugai will gain exclusive rights to develop and commercialize sparsentan in Japan, South Korea and Taiwan.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Other Program Updates
Previous 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
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Revenue and Other Income
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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.
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Reworded paragraphs (15)
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 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%.
Current wording
Revenue from intangible royalty assets is a function of our partners’ product sales and the applicable royalty rate. The following table represents revenue from intangible royalty assets by program (in millions):
Previous wording
(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 wording
(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.
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 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.
Current wording
The gain from short-term investments was $3.9 million in Q1 2026 compared to the loss from short-term investments of $12.4 million in Q1 2025. The change is primarily driven by 1) $3.8 million unrealized gain on Palvella common stock and $1.2 million realized gain from sales of shares of Palvella common stock in Q1 2026 as compared to $3.9 million unrealized gain on Palvella common stock in Q1 2025, 2) $2.6 million unrealized loss on Viking common stock in Q1 2026 as compared to $16.1 million unrealized loss in Q1 2025, and 3) unrealized gains of $1.5 million on other equity securities and financial instrument in Q1 2026 compared to $0.1 million unrealized loss in Q1 2025.
Previous wording
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 wording
The loss from change in fair value of equity-method investments and other investments was $49.2 million in Q1 2026, attributable to the fair value changes of the shares of Pelthos common stock and Pelthos Series A convertible preferred stock that we acquired in connection with the Pelthos Transaction in July 2025. For additional information, see Note 2, Pelthos Transaction.
Previous 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.
Current wording
Interest expense consists primarily of 1) coupon interest expense on the 0.75% stated rate and non-cash amortization of debt discount and issuance costs on our 2030 Notes issued in August 2025, and 2) interest accrued under a royalty and milestone payments purchase agreement entered into by Novan, Inc. in 2019, which Ligand assumed in connection with the Novan acquisition in September 2023. Interest expense increased by $0.9 million to $1.7 million in Q1 2026 compared to $0.9 million in Q1 2025. The increase was primarily attributable to interest expense on the 2030 Notes, which were not outstanding during the prior-year period, partially offset by the absence of interest expense related to the Novan-assumed obligation following the deconsolidation of LNHC, Inc. on July 1, 2025, in connection with the Pelthos Transaction.
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 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.
Current wording
Other non-operating expense, net, primarily consists of mark-to-market adjustments on derivatives (other than the partner program derivatives), and mark-to-market adjustments on CVRs. Other non-operating expense, net, in Q1 2026 decreased by $1.3 million as compared to Q1 2025, primarily due to the $0.6 million loss from change in fair value of CVR liabilities in Q1 2026 compared to the loss of $1.9 million in Q1 2025.
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 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.
Current wording
We compute our income tax provision by applying the estimated annual effective tax rate to income (loss) from operations and adjusting for the effects of any discrete income tax items recognized in the period. Our effective tax rate was 45.0% for the three months ended March 31, 2026 and 15.4% for the three months ended March 31, 2025. The variance from the U.S. federal statutory tax rate of 21% for the three months ended March 31, 2026 was primarily attributable to the limitation on the deductibility of certain officer compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), other non-deductible items, and the impact of foreign operations, partially offset by the foreign-derived intangible income deduction. The variance from the U.S. federal statutory tax rate of 21% for the three months ended March 31, 2025 was primarily attributable to the limitation on the deductibility of certain officer compensation under Section 162(m) of the Code, other non-deductible items, and the impact of foreign operations, partially offset by the foreign-derived intangible income deduction.
Previous 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.
Current wording
As of March 31, 2026, we had approximately $779.4 million in cash, cash equivalents, and short-term investments, an increase of $45.9 million from $733.5 million as of December 31, 2025. The increase was primarily attributable to the cash flow activity described in the “Cash Flow Summary” below. In addition, as of March 31, 2026, we had $124.4 million in available borrowing capacity under the Revolving Credit Facility, after utilizing $0.6 million for letter of credit. Our principal sources of liquidity are our existing cash, cash equivalents, and short-term investments; cash flows generated from operations; and available borrowings under our Revolving Credit Facility. We believe these sources provide us with the financial flexibility necessary to meet our 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, 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.
Current wording
In addition to cash flows generated from operations, we have historically supplemented our liquidity by liquidating short-term investments and by issuing debt and equity securities. Our short-term investments consist of U.S. government debt securities, equity securities of publicly traded companies, investment-grade corporate debt securities, commercial paper, and certificates of deposit. We maintain investment guidelines governing the diversification and maturities of our portfolio to provide both safety of principal and liquidity. These guidelines are reviewed periodically and updated as appropriate to reflect prevailing yields and interest rate conditions.
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 nine months ended September 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 approved a stock repurchase program (the “Repurchase Program”) authorizing, but not requiring, the repurchase of up to $50.0 million of our common stock from time to time through April 2026. Repurchases under the Repurchase Program may be made, if at all, primarily through open-market transactions in accordance with the requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing and amount of repurchases will be determined by management based on our evaluation of market conditions, our share price, applicable legal requirements, and other factors. We did not repurchase any shares of common stock under the Repurchase Program during either of the three months ended March 31, 2026 or 2025.
Previous wording
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.
Current wording
On August 14, 2025, we issued the 2030 Notes. The $460.0 million aggregate principal balance of the 2030 Notes includes the purchase of an additional $60.0 million aggregate principal amount of the 2030 Notes by the initial purchasers pursuant to the full exercise of their overallotment option. The net proceeds from the 2030 Notes offering were approximately $445.1 million, after deducting the initial purchasers’ discounts and commissions and the debt issuance costs incurred by Ligand.
Previous wording
On October 12, 2023, we entered into a $75 million revolving credit facility (the “Revolving Credit Facility”) with Citibank, N.A. as the Administrative Agent (as defined in the Credit Agreement). We, our material domestic subsidiaries, as Guarantors (as defined in the Credit Agreement), and the Lenders (as defined in the Credit Agreement) entered into a credit agreement (the “Credit Agreement”) with the Administrative Agent, under which the Lenders, the Swingline Lender and the L/C Issuer (each as defined in the Credit Agreement) agreed to make revolving loans, swingline loans and other financial accommodations to us (including the issuance of letters of credit) in an aggregate amount of up to $75 million. Borrowings under the Revolving Credit Facility accrue interest at a rate equal to either Term Secured Overnight Financing Rate (“Term SOFR”) or a specified base rate plus an applicable margin linked to our leverage ratio, ranging from 1.75% to 2.50% per annum for Term SOFR loans and 0.75% to 1.50% per annum for base rate loans. The Revolving Credit Facility is subject to a commitment fee payable on the unused Revolving Credit Facility commitments ranging from 0.30% to 0.45%, depending on our leverage ratio. During the term of the Revolving Credit Facility, we may borrow, repay and re-borrow amounts available under the Revolving Credit Facility, subject to voluntary reductions of the swing line, letter of credit and revolving credit commitments.
Current wording
On October 12, 2023, we entered into a $75.0 million revolving credit facility (the “Revolving Credit Facility”) with Citibank, N.A. as the Administrative Agent (as defined in the Credit Agreement). We, our material domestic subsidiaries, as Guarantors (as defined in the Credit Agreement), and the Lenders (as defined in the Credit Agreement) entered into a credit agreement (the “Credit Agreement”) with the Administrative Agent, under which the Lenders, the Swingline Lender and the L/C Issuer (each as defined in the Credit Agreement) agreed to make revolving loans, swingline loans and other financial accommodations to us (including the issuance of letters of credit) in an aggregate amount of up to $75.0 million. Borrowings under the Revolving Credit Facility accrue interest at a rate equal to either Term Secured Overnight Financing Rate (“Term SOFR”) or a specified base rate plus an applicable margin linked to our leverage ratio, ranging from 1.75% to 2.50% per annum for Term SOFR loans and 0.75% to 1.50% per annum for base rate loans. The Revolving Credit Facility is subject to a commitment fee payable on the unused Revolving Credit Facility commitments ranging from 0.30% to 0.45%, depending on our leverage ratio. During the term of the Revolving Credit Facility, we may borrow, repay and re-borrow amounts available under the Revolving Credit Facility, subject to voluntary reductions of the swing line, letter of credit and revolving credit commitments.
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. 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.
Current wording
On July 8, 2024, we entered into the first amendment to the Credit Agreement, which amends the Credit Agreement to, among other things, increase the aggregate revolving credit facility amount from $75.0 million to $125.0 million. In connection with the offering of the 2030 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 2030 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 us to maintain not less than $55.0 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
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.
Current wording
During the three months ended March 31, 2026, we generated cash from operations primarily 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, and cash proceeds from financial royalty assets. We used cash in financing activities primarily due to cash paid for taxes related to net share settlement of equity awards, partially offset by net proceeds from stock options exercises and ESPP.
Previous 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.
Current wording
During the three months ended March 31, 2025, we used cash in operations primarily for the Castle Creek Transaction, partially offset by cash from revenue and other operating income. We generated cash from investing activities primarily from sale and maturity of short-term investments partially offset by purchases of short-term investments. We used cash in financing activities primarily due to cash paid for taxes related to net share settlement of equity awards, partially offset by net proceeds from stock options exercises and ESPP.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following table represents revenue from intangible royalty assets by program (in millions):
Previous report — wording carried elsewhere
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.