Ligand Pharmaceuticals on Wednesday reported a 34% year-over-year increase in total revenue to $64 million for the second quarter, alongside a 48% rise in adjusted earnings per share to $2.37. The company also raised its full-year 2024 adjusted EPS guidance to a range of $9.00 to $9.50 from $8.50 to $9.50, citing contributions from the recent XOMA acquisition.
The San Diego-based firm, which operates a royalty-aggregation model launched in late 2022, said its cash and investments balance stood at $1.4 billion at the end of June, following a $700 million convertible debt offering executed at a 0% coupon rate. Total royalties for the quarter reached $48 million, with the company’s market capitalization valued at $5.69 billion. Shares have gained 76% over the past 12 months and 49% year-to-date, trading at $285.73.
Ligand’s portfolio has expanded to over 220 partnered programs following the mid-July acquisition of XOMA, which added 15 new commercial royalty programs—nine of which were approved or invested in since 2022. The company’s largest royalty asset, FILSPARI, generates a 9% royalty on sales for indications including IgA nephropathy and focal segmental glomerulosclerosis. First-quarter sales for FILSPARI in the FSGS indication exceeded analyst expectations, according to Lauren Hay, Vice President of Portfolio Strategy and Investments.
Palvella’s mTOR inhibitor program, ZELSUVMI, showed strong Phase III results, with a 98% patient continuation rate in the open enrollment period. The asset carries an 8% to 9.8% tiered royalty structure. Ligand also holds a 25% contingent value right to proceeds from litigation between Janssen and XOMA, without bearing legal costs.
Chief Financial Officer Tavo Espinoza highlighted the company’s deployable capital of $700 million post-XOMA acquisition, including a revolving credit facility, and reiterated a target of deploying $150 million to $250 million annually across sub-$100 million royalty deals. Over the past three years, Ligand has deployed $1 billion across 19 transactions. The firm projects royalty receipts to grow at a 23% compound annual rate, with late-stage pipeline assets potentially contributing up to $400 million in peak annual royalties.
Long-term growth targets include a $1 billion to $3 billion franchise for Palvella, translating to $100 million to $300 million in annual royalty revenue upon launch, expected in the first half of 2027. Ligand also noted over $110 million in acquired tax attributes, including Section 174 R&D credits and net operating losses, to be utilized over three to five years.
