Ligand Pharmaceuticals (LGND) investor relations material

Business overview and strategy

• Focuses on acquiring and investing in late-stage clinical and commercial biopharma programs to generate royalty revenue, with 12 major commercial royalty drivers expected to deliver $150M in revenue this year, up from $109M last year.

• Operates two technology platforms, Captisol and Nitrocil, and maintains a pipeline of 90 partnered programs, emphasizing infrastructure-light, high-margin, and predictable growth.

• Holds $245M in cash and investments, a $200M credit facility, and recently closed a $460M convertible note, providing $800M in deployable capital for annual investments of $150M–$250M.

• Utilizes four main tactics for royalty acquisition: royalty monetization, project finance (synthetic royalties), special situations (including M&A and asset incubation), and platform technologies.

• Team has deep investment and operational experience, with recent strategic leadership changes and a focus on scaling the royalty aggregation model.

Portfolio highlights and growth drivers

• Portfolio is diversified across large pharma and mid-sized companies, with royalty rates ranging from low single digits to mid-teens.

• Key growth drivers include Filspari (approved for IgA nephropathy, potential in FSGS), O2Ver (novel COPD treatment, strong launch, Merck acquisition pending), and Palvella’s Qtorin Rapamycin (potential first-in-class for rare skin diseases).

• Filspari could generate $90M in annual royalties for each indication if approved, with important regulatory catalysts expected soon.

• O2Ver’s peak sales estimates have risen to $3.5B, with potential to reach $6–7B under Merck, translating to $100M in annual royalties.

• Palvella’s programs could yield $150M in royalties, with key clinical readouts expected by early next year.

Financial performance and outlook

• Q2 revenue grew 15% to $47.6M, with royalties up 57% year-over-year; full-year revenue guidance raised to $200M–$225M and adjusted EPS to $6.70–$7.00.

• Convertible note issuance provided favorable terms, further strengthening the balance sheet and supporting business development.

• Major restructuring in 2022 included spinning out the antibody business and bringing in a new CEO, with a focus on high-growth, high-margin royalty investments.

• Long-term outlook targets a 22% CAGR over five years, with commercial portfolio contributing 13% growth, late-stage pipeline 5%, and future investments 4%.

• Recent product outperformance and new launches underpin upward revisions to guidance and future growth expectations.