Ligand Pharmaceuticals (LGND) 17th Annual Midwest IDEAS Conference summary

Strategic direction and business model

• Refocused on royalty aggregation in late 2022, scaling business development and capital deployment since then.

• Maintains a lean structure with 50 employees, prioritizing new deals over portfolio maintenance.

• Royalty investments are non-dilutive and provide predictable, high-margin cash flows.

• Acquires royalties through direct purchase, synthetic creation, or M&A, leveraging a multidisciplinary team.

• CEO and investment leads have deep experience in royalty financing and healthcare investments.

Recent acquisitions and financial performance

• Closed the XOMA acquisition in July, doubling the portfolio to over 220 partnered programs.

• XOMA deal is immediately accretive, raising earnings guidance by $0.50 this year and $1.50 next year.

• Deployed $1 billion across 19 investments in three years, with XOMA as the largest.

• Q2 revenue reached $64 million, up 34% year-over-year, with $48 million in royalties, mainly from FILSPARI.

• Ended Q2 with $1.4 billion in cash and investments, $700 million deployable post-XOMA.

Capital structure and guidance

• Raised $700 million in convertible debt at 0% coupon, structured to minimize dilution.

• Repurchased 229,000 shares for $60 million, reflecting confidence in valuation.

• XOMA integration reduces operating costs from $30 million to under $5 million and brings $110 million in tax attributes.

• Raised lower end of adjusted EPS guidance to $9 per share for the year, maintaining upper end at $9.50.

• Long-term royalty receipts expected to grow at a 23% CAGR.