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Ligand Pharmaceuticals Inc (LGND)
:LGND
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Ligand Pharma
(NASDAQ:LGND)
72Outperform
Positive Factors
Financial Performance
Ligand reported positive financial results for their 4Q24, including revenues of $42.8 million, up from $28.1 million one year ago, and adjusted earnings per share of $1.27 compared with $1.05 in 4Q23.
Royalty Revenue
Royalty revenue is expected to see meaningful growth based on new products like Filspari, Qarziba, and Ohtuvayre.
Negative Factors
Revenue Stability
There is a long-term theme of choppiness quarter over quarter regarding Captisol sales and contract revenue based almost entirely on the timing of orders and milestone payments.
Ligand Pharma (LGND) vs. S&P 500 (SPY)
Market Cap
$2.04B
Dividend YieldN/A
Average Volume (3M)100.53K
Price to Earnings (P/E)48.0
Beta (1Y)1.42
Revenue Growth27.28%
EPS Growth-101.63%
CountryUS
Employees58
SectorHealthcare
Sector Strength78
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.15
Shares Outstanding19,255,354
10 Day Avg. Volume134,544
30 Day Avg. Volume100,532
Financial Highlights & Ratios
PEG Ratio0.28
Price to Book (P/B)N/A
Price to Sales (P/S)12.59
Price to Cash Flow (P/CF)18.50
P/FCF Ratio18.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$149.80Price Target Upside41.60% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Ligand Pharma Business Overview & Revenue Model
Company DescriptionLigand Pharmaceuticals, Inc. is a biopharmaceutical company, which engages in the development and acquisition of technologies that help pharmaceutical companies to discover and develop medicines. Its products include evomela, IV voriconazole, duavee, viviant/conbriza, nexterone, and noxafil-IV. The company was founded by Ronald M. Evans in 1987 and is headquartered in San Diego, CA.
How the Company Makes MoneyLigand Pharmaceuticals primarily generates revenue through licensing agreements and royalty payments. The company licenses its proprietary technologies to pharmaceutical companies, which use these platforms to develop drugs. In return, Ligand receives milestone payments and royalties on the sales of drugs developed using its technologies. Key revenue streams include royalties from marketed drugs, license fees, and milestone payments from its partners. Significant partnerships with leading pharmaceutical companies further contribute to Ligand's revenue, as these collaborations often involve upfront payments, development milestones, and sales-based royalties.
Ligand Pharma Financial Statement Overview
Summary
Ligand Pharma shows financial resilience with strong liquidity and improved profitability metrics in 2024. The income statement reflects volatility but with signs of recovery. The balance sheet is stable with low leverage, while cash flows are robust, supporting operational and strategic flexibility. Potential risks include operational challenges affecting EBIT margins.Income Statement
Ligand Pharma's income statement shows a volatile revenue trend with a decline from 2021 to 2023 but a recovery in 2024. The 2024 gross profit margin is strong at 100%, indicating effective cost control, but the EBIT margin is negative, reflecting operational challenges. Net profit margin improved significantly from 2023 to 2024, signaling effective management of non-operating expenses.65
Positive
Balance Sheet
The balance sheet exhibits a solid equity base with a high equity ratio of 88% in 2024, indicating financial stability. The debt-to-equity ratio is low at 0.01, suggesting minimal leverage, which is a positive for risk management. Return on equity has improved but remains moderate, reflecting mixed profitability results.70
Positive
Cash Flow
Cash flow analysis reveals robust free cash flow generation in 2024, with free cash flow to net income ratio indicating efficient conversion of income to cash. Operating cash flow to net income ratio is strong, demonstrating quality earnings. The company has shown substantial free cash flow growth over the previous year, enhancing liquidity.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 167.13M | 131.31M | 196.25M | 277.13M | 186.42M | Gross Profit |
| 156.06M | 96.27M | 143.42M | 214.96M | 156.00M | EBIT |
| -22.61M | 11.94M | -25.50M | 78.89M | 8.55M | EBITDA |
| 40.79M | 101.73M | 54.41M | 133.16M | 69.05M | Net Income Common Stockholders |
| -4.03M | 52.15M | -5.22M | 57.14M | -2.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 256.17M | 170.31M | 211.87M | 341.11M | 411.19M | Total Assets |
| 941.77M | 787.22M | 762.67M | 1.30B | 1.36B | Total Debt |
| 7.11M | 6.17M | 87.75M | 336.26M | 454.53M | Net Debt |
| -65.20M | -16.79M | 87.70M | 316.74M | 406.91M | Total Liabilities |
| 111.33M | 86.30M | 165.18M | 479.75M | 652.76M | Stockholders Equity |
| 830.44M | 700.91M | 597.49M | 821.63M | 709.52M |
| Cash Flow | Free Cash Flow | |||
| 95.23M | -4.27M | 119.93M | 70.04M | 50.13M | Operating Cash Flow |
| 97.05M | 49.58M | 137.85M | 78.80M | 54.59M | Investing Cash Flow |
| -143.66M | -11.68M | 163.62M | 30.52M | 231.65M | Financing Cash Flow |
| 97.14M | -59.95M | -275.99M | -137.76M | -310.55M |
Ligand Pharma Technical Analysis
Negative
105.79
Price Trends
114.16
Negative
114.82
Negative
105.44
Positive
Market Momentum
-1.27
Positive
36.55
Neutral
19.35
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LGND, the sentiment is Negative. The current price of 105.79 is below the 20-day moving average (MA) of 116.01, below the 50-day MA of 114.16, and above the 200-day MA of 105.44, indicating a neutral trend. The MACD of -1.27 indicates Positive momentum. The RSI at 36.55 is Neutral, neither overbought nor oversold. The STOCH value of 19.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LGND.
Ligand Pharma Risk Analysis
Ligand Pharma disclosed 45 risk factors in its most recent earnings report. Ligand Pharma reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ligand Pharma Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $78.51B | 19.43 | 15.95% | 0.12% | 8.27% | 10.35% | |
75 Outperform | $171.31B | 43.30 | 67.55% | 2.79% | 18.64% | -39.39% | |
72 Outperform | $2.04B | 48.01 | -0.53% | ― | 27.28% | -101.63% | |
69 Neutral | $21.03B | 12.85 | 10.36% | ― | -1.60% | 39.71% | |
64 Neutral | $128.40B | ― | -3.15% | ― | 11.64% | -114.72% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% | |
49 Neutral | $30.91B | ― | -414.62% | ― | 22.97% | 38.54% |
* Healthcare Sector Average
Performance Comparison
LGND
Ligand Pharma
105.79
33.43
46.20%
ALNY
Alnylam Pharma
238.74
92.09
62.80%
AMGN
Amgen
318.89
50.53
18.83%
BIIB
Biogen
143.66
-83.70
-36.81%
REGN
Regeneron
718.16
-251.16
-25.91%
VRTX
Vertex Pharmaceuticals
488.34
75.89
18.40%
Ligand Pharma Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -8.02% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call demonstrated strong financial growth and strategic achievements, highlighted by significant increases in revenue and successful product launches. Despite some financial setbacks related to non-cash impairments and increased operating expenses, Ligand's robust financial position and promising investment pipeline indicate a positive outlook.Highlights
Strong Financial Performance in 2024
Ligand reported a 28% increase in royalty revenue and over 40% growth in core adjusted EPS to $5.74 per share. Fourth-quarter royalty revenue surged by 55% compared to Q4 2023.
Successful Commercial Launches
Verona Pharma’s Ohtuvayre and Merck's Capvaxive exceeded expectations post-launch. Filspari sales increased by approximately 40% in Q4 2024.
Strong Financial Position
Ligand holds over $250 million in cash and investments, no debt, and access to a $125 million revolving credit facility, expandable to $175 million.
Promising New Investments
Ligand led a $75 million financing round for Castle Creek's D-Fi, a phase 3 gene modified autologous cell therapy.
Strategic Business Model Transformation
Reduced cash operating expenses by over 50% and decreased headcount to less than a third of 2022 levels, while growing royalty revenue by nearly 50%.
Positive Guidance for 2025
Projected royalty revenue of $135 million to $140 million, with total revenue guidance of $180 million to $200 million and adjusted EPS of $6 to $6.25.
Lowlights
GAAP Net Loss in 2024
Reported a GAAP net loss of $4 million or $0.22 per share in 2024, driven by non-cash items including a financial royalty asset impairment.
Increased Operating Expenses
Total R&D and G&A operating expenses increased by 29% in 2024, primarily due to higher non-cash stock-based compensation expenses.
Asset Impairments and Fair Value Adjustments
Experienced non-cash financial royalty asset impairment and fair value adjustments to certain partner programs.
Company Guidance
During Ligand's fourth quarter and full-year 2024 earnings call, the company reported impressive financial achievements. Royalty revenue surged by 28%, while core adjusted EPS climbed over 40% to $5.74 per share. The fourth quarter alone saw a 55% increase in royalty revenue compared to the same period in 2023, contributing to over $100 million in operating cash flow for the year. Ligand ended 2024 with more than $250 million in cash and investments, no debt, and access to a $125 million revolving credit facility, expandable to $175 million. The company's strategic focus on economically diversified, infrastructure-light operations has resulted in significant growth, with a five-year royalty receipt outlook projecting a compound annual growth rate of 22% or more from 2024 through 2029.Ligand Pharma Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Ligand Pharma Enters $75M Agreement with Castle Creek
Positive
Feb 25, 2025
On February 24, 2025, Ligand Pharmaceuticals entered into a $75 million Purchase and Sale Agreement with Castle Creek Biosciences and co-investors to support the Phase 3 clinical study of D-Fi, a gene therapy candidate for dystrophic epidermolysis bullosa (DEB). Ligand invested $50 million, receiving a high single-digit royalty on worldwide sales of D-Fi and warrants to purchase shares of Castle Creek. This collaboration aims to advance an orphan drug-designated therapy for a serious unmet medical need, reflecting Ligand’s commitment to investing in groundbreaking treatments and expanding its portfolio of revenue-generating assets.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.