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Ligand Pharma (LGND)
NASDAQ:LGND

Ligand Pharma (LGND) AI Stock Analysis

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Ligand Pharma

(NASDAQ:LGND)

Rating:64Neutral
Price Target:
$126.00
▲(10.38%Upside)
Ligand Pharmaceuticals scores moderately well, reflecting strong earnings call insights and positive corporate events that highlight growth potential. However, financial performance and valuation concerns temper the overall outlook. Technical indicators suggest bullish momentum but caution is advised due to overbought conditions.
Positive Factors
Cash and Financing
The company has a cash balance of $209 million, providing runway for future deals and investments.
Financial Performance
Ligand reported financial results including revenues of $45.3 million, an increase of 46% year-over-year, and higher adjusted earnings of $1.33 per share, boosted by higher sales of Ligand's Captisol excipient and increased royalty revenues from licensed products.
Strategic Developments
Ligand investors can expect several catalysts including continued growth from new products, the beginning of trading for Pelthos Therapeutics, and potential clinical progress from partners.
Negative Factors
Market Challenges
Ligand focuses primarily on development-stage companies where capital needs are perpetual and allocation is highly inefficient.
Revenue Fluctuations
There is a long-term theme of choppiness in Captisol sales and contract revenue based on the timing of orders and milestone payments.

Ligand Pharma (LGND) vs. SPDR S&P 500 ETF (SPY)

Ligand Pharma Business Overview & Revenue Model

Company DescriptionLigand Pharmaceuticals Inc. (LGND) is a biopharmaceutical company focused on developing and acquiring technologies that aid pharmaceutical companies in the discovery and development of new drugs. Operating within the healthcare and biotechnology sectors, Ligand specializes in providing a diverse range of drug discovery technologies, including its proprietary Captisol technology, which enhances the solubility and stability of drugs. The company collaborates with a broad spectrum of pharmaceutical and biotechnology companies to develop innovative therapies across various therapeutic areas.
How the Company Makes MoneyLigand Pharmaceuticals generates revenue primarily through licensing agreements and royalties derived from its proprietary technologies and partnered programs. The company's Captisol technology is a significant revenue driver, as it is licensed to numerous pharmaceutical partners for use in drug formulation. Ligand earns royalties on the sales of drugs that incorporate its technologies, and it also receives milestone payments when specific developmental and commercial achievements are met by its partners. Additionally, the company engages in research and development collaborations, which can result in upfront payments, ongoing research fees, and potential royalties from successfully commercialized products. Strategic acquisitions and partnerships further enhance its revenue streams by expanding its portfolio of technologies and potential drug candidates.

Ligand Pharma Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 8.08%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant revenue growth and successful product launches. Despite challenges in the biopharmaceutical financing environment and a decline in Kyprolis sales, Ligand's diversified portfolio and strategic investments provide a positive outlook for the future.
Q1-2025 Updates
Positive Updates
Significant Revenue Growth
Ligand reported a 46% increase in total revenue for Q1 2025 compared to the same period last year, totaling just over $45 million. Royalty revenue grew by 44%, reaching $27.5 million.
Strong Financial Position
Ligand has over $200 million in cash and investments, no debt, and access to a $125 million revolving credit facility, which can be upsized to $200 million.
Successful Launches and Approvals
Verona Pharma's Ohtuvayre reported net sales of $71 million, and Merck's Capvaxive reported $107 million in sales, both exceeding expectations. Travere's Filspari is also seeing strong growth with a 180% year-over-year increase in sales.
Portfolio Diversification and Expansion
Ligand's portfolio consists of more than 90 assets diversified across various stages of clinical development and therapeutic areas. The company executed a strategic transaction with Channel Therapeutics to accelerate the commercialization of Zelsuvmi.
Positive Long-term Growth Outlook
Ligand expects a compound annual growth rate of 22% for royalty revenue by 2029, with current portfolio supporting an 18% CAGR.
Negative Updates
Kyprolis Sales Decline
Amgen reported a 14% year-over-year decline in sales for Kyprolis due to competitive pressures, impacting Ligand's royalty revenue.
Challenges in Biopharmaceutical Financing Environment
The current landscape for biotech companies is challenging due to fewer IPOs and more difficult private fundraising, leading to increased demand for royalty financing.
Operating Expense Increase
R&D and G&A expenses increased this quarter primarily due to a one-time $44 million charge related to the royalty financing agreement with Castle Creek.
Company Guidance
During Ligand's first quarter 2025 earnings call, the company emphasized its strong start to the year, highlighting a 46% increase in total revenue compared to the same period last year. Royalty revenue saw a 44% growth, contributing $27.5 million, driven by successful performances from key products like Verona's Ohtuvayre and Merck's Capvaxive. Ligand maintained a robust financial position with over $209 million in cash and investments, and no debt, while also deploying nearly $250 million in capital across 10 investments over the past 15 months. The company reaffirmed its 2025 guidance, projecting royalty revenue between $135 million and $140 million and adjusted EPS between $6 and $6.25. CEO Todd Davis expressed optimism about the ongoing momentum from their royalty portfolio, including recent FDA approvals and strategic investments, which are expected to drive substantial growth and shareholder value through the year and beyond.

Ligand Pharma Financial Statement Overview

Summary
Ligand Pharmaceuticals shows mixed financial performance. While it maintains a strong equity position with low leverage, declining revenues and profitability, coupled with volatility in free cash flow, present significant challenges.
Income Statement
35
Negative
The company's income statement shows a declining revenue trend with significant fluctuations in profitability. Gross profit margin is relatively high, but EBIT and net profit margins are negative, indicating operational challenges. Revenue has decreased significantly in recent periods, affecting overall financial performance.
Balance Sheet
60
Neutral
The balance sheet reveals a strong equity position with a low debt-to-equity ratio, suggesting financial stability. However, total assets have been decreasing, and liabilities are relatively high compared to assets. Return on equity has been inconsistent, indicating fluctuating profitability.
Cash Flow
50
Neutral
The company's cash flow statement indicates adequate operating cash flow; however, free cash flow has been volatile, with a significant decline recently. The operating cash flow to net income ratio is favorable, but fluctuations in free cash flow present challenges.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue181.49M167.13M131.31M196.25M277.13M186.42M
Gross Profit150.14M156.06M96.27M143.42M214.96M156.00M
EBITDA-122.11M40.79M100.84M54.41M133.16M69.05M
Net Income-132.62M-4.03M52.15M-5.22M57.14M-2.98M
Balance Sheet
Total Assets905.43M941.77M787.22M762.67M1.30B1.36B
Cash, Cash Equivalents and Short-Term Investments208.90M256.17M170.31M211.87M341.11M411.19M
Total Debt4.45M7.11M6.17M87.75M336.26M454.53M
Total Liabilities109.90M111.33M86.30M165.18M479.75M652.76M
Stockholders Equity795.53M830.44M700.91M597.49M821.63M709.52M
Cash Flow
Free Cash Flow35.51M95.23M-4.27M119.93M70.04M50.13M
Operating Cash Flow52.81M97.05M49.58M137.85M78.80M54.59M
Investing Cash Flow-135.00M-143.66M-11.68M163.62M30.52M231.65M
Financing Cash Flow80.39M97.57M-59.95M-275.99M-137.76M-310.55M

Ligand Pharma Technical Analysis

Technical Analysis Sentiment
Positive
Last Price114.15
Price Trends
50DMA
107.56
Positive
100DMA
109.29
Positive
200DMA
110.30
Positive
Market Momentum
MACD
2.81
Negative
RSI
57.69
Neutral
STOCH
60.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LGND, the sentiment is Positive. The current price of 114.15 is above the 20-day moving average (MA) of 111.02, above the 50-day MA of 107.56, and above the 200-day MA of 110.30, indicating a bullish trend. The MACD of 2.81 indicates Negative momentum. The RSI at 57.69 is Neutral, neither overbought nor oversold. The STOCH value of 60.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
64
Neutral
$2.20B48.01-16.56%53.40%-230.86%
63
Neutral
CHF22.72B15.2710.81%2.14%47.85%-11.82%
57
Neutral
$2.53B-33.06%69.31%57.12%
49
Neutral
$1.70B-33.98%449.03%42.86%
49
Neutral
$2.58B-27.85%-94.92%
43
Neutral
$1.92B-33.43%4.80%
40
Underperform
$1.44B-316.82%-65.63%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LGND
Ligand Pharma
114.15
29.30
34.53%
MIRM
Mirum Pharmaceuticals
51.09
16.93
49.56%
TARS
Tarsus Pharmaceuticals
40.35
12.11
42.88%
BLTE
Belite Bio, Inc. ADR
59.04
13.22
28.85%
BHVN
Biohaven Ltd.
14.09
-21.22
-60.10%
APGE
Apogee Therapeutics
43.38
4.80
12.44%

Ligand Pharma Corporate Events

Executive/Board ChangesShareholder Meetings
Ligand Pharma Elects Board Members at Annual Meeting
Neutral
Jun 9, 2025

On June 6, 2025, Ligand Pharmaceuticals held its Annual Meeting of Stockholders where eight board members were elected for terms expiring in 2026. Additionally, the selection of Ernst & Young LLP as the company’s independent registered public accounting firm for 2025 was ratified, and a non-binding advisory resolution on executive compensation was approved.

The most recent analyst rating on (LGND) stock is a Buy with a $130.00 price target. To see the full list of analyst forecasts on Ligand Pharma stock, see the LGND Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Ligand Pharma Announces Merger to Enhance ZELSUVMI Sales
Positive
Apr 17, 2025

On April 17, 2025, Ligand Pharmaceuticals announced a merger agreement between its subsidiaries, Pelthos Therapeutics and LNHC, Inc., and Channel Therapeutics Corporation. The merger, supported by $50 million in equity capital, aims to enhance the commercialization of ZELSUVMI, an FDA-approved topical gel for Molluscum contagiosum, and will see the combined company operate under the name Pelthos Therapeutics Inc. The transaction is expected to close in the summer of 2025, with Ligand entitled to a 13% royalty on worldwide sales of ZELSUVMI. This strategic move is anticipated to deliver significant value to shareholders and advance Channel’s existing NaV 1.7 programs.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 25, 2025