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Ligand Pharma (LGND)
NASDAQ:LGND
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Ligand Pharma (LGND) AI Stock Analysis

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LGND

Ligand Pharma

(NASDAQ:LGND)

Rating:67Neutral
Price Target:
$166.00
▲(2.65% Upside)
Ligand Pharma's strong earnings call performance and technical analysis indicators are the most significant factors driving the stock score. The company's strategic investments and increased financial guidance highlight its growth potential. However, financial performance and valuation concerns, such as declining revenue and a negative P/E ratio, present risks that temper the overall score.
Positive Factors
Financial Performance
FILSPARI 2Q25 revenue came in at $71.9 million, ahead of the $61.6 million estimate, highlighting continued adoption in IgAN.
Licensing and Collaboration
Travere has licensed FILSPARI to Renalys Pharma for development and commercialization in Japan, South Korea, Taiwan, and 10 Southeast Asian countries, with potential milestone and royalty benefits.
Regulatory Approval
FDA approved an update to the REMS labeling for FILSPARI, reducing the frequency of liver function monitoring and removing the pregnancy monitoring requirement.
Revenue Growth
Royalty revenue growth from recently launched or acquired products are expected to boost financial results for LGND in 2H25, along with new sources of revenue brought on board early in the third quarter.
Negative Factors
Market Volatility
Ligand is seeing an increased number of opportunities for company financings through royalty agreements during volatile markets.
Sales Volatility
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 Incorporated, a biopharmaceutical company, focuses on developing or acquiring technologies that help pharmaceutical companies to discover and develop medicines worldwide. Its commercial programs include Kyprolis and Evomela, which are used to treat multiple myeloma; Veklury for the treatment of moderate or severe COVID-19; Teriparatide injection product for osteoporosis; Vaxneuvance for the prevention of invasive disease caused by Streptococcus pneumoniae; and Pneumosil, a pneumococcal conjugate vaccine to help fight against pneumococcal pneumonia among children. The company also offers Rylaze, a recombinant erwinia asparaginase for the treatment of acute lymphoblastic leukemia or lymphoblastic lymphoma in adult and pediatric patients; and Nexterone, a captisol-enabled formulation of amiodarone; and Zulresso, a captisol-enabled formulation of brexanolone for the treatment of postpartum depression. In addition, it provides Noxafil-IV, a captisol-enabled formulation of posaconazole for IV use; Duavee for the treatment of postmenopausal osteoporosis; Aziyo portfolio of commercial pericardial repair and CanGaroo envelope extracellular matrix products; Exemptia for autoimmune diseases; Vivitra for breast cancer; Bryxta and Zybev for various indications; and Minnebro for the treatment of hypertension. The company's partners and licenses programs, which are in clinical development used for the treatment of cancer, seizure, diabetes, cardiovascular disease, muscle wasting, liver and kidney disease, and other diseases. Further, it sells Captisol materials. The company was incorporated in 1987 and is headquartered in Emeryville, California.
How the Company Makes MoneyLigand Pharmaceuticals generates revenue through several key streams, primarily focusing on licensing agreements and partnerships with other pharmaceutical companies. The company licenses its technologies and product candidates to partners, receiving upfront payments, milestone payments as development progresses, and royalties on any commercialized products. Significant partnerships with major pharmaceutical companies enhance Ligand’s earning potential, as these collaborations often involve large-scale drug development projects. Additionally, Ligand may receive funds from research and development services provided to partners. The recurring nature of royalty payments from successfully marketed drugs, combined with milestone payments from ongoing collaborations, forms the backbone of Ligand's revenue model.

Ligand Pharma Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance with significant growth in royalty revenue, strategic investments, and successful product launches. However, increased operating expenses and tax rate concerns were noted. The positive aspects significantly outweigh the challenges.
Q2-2025 Updates
Positive Updates
Strong Royalty Revenue Growth
Royalty revenue grew 57% over the same quarter last year, and adjusted EPS increased 14%. Total revenue for Q2 '25 grew 15% year-over-year to $47.6 million.
Strategic Investments and Partnerships
Ligand completed a strategic merger of Pelthos with Channel Therapeutics and partnered with Medtronic and Orchestra BioMed to support development of promising cardiovascular therapies, which have received 4 breakthrough device designations from the FDA.
Successful Launch and Market Expansion
Pelthos launched Zelsuvmi into the market, and the current market value of Ligand's equity stake in Pelthos is approximately $100 million. The company expects Zelsuvmi to achieve $175 million in peak sales.
Merck's Acquisition of Verona
Merck announced a $10 billion acquisition of Verona, which could accelerate the global launch of O2vir, where Ligand receives a 3% royalty on worldwide net sales.
Positive Clinical Trial Developments
Nuance Pharma announced positive data and completion of its Phase III trial in China for an asset partnered with Verona. FDA granted Recordati orphan drug designation for Qarziba in Ewing sarcoma.
Negative Updates
Increased Operating Expenses
R&D and G&A combined expenses increased primarily due to headcount growth and investments made to incubate the Pelthos business.
Tax Rate and Share Count Concerns
The tax rate has increased due to more revenue coming from foreign operations, and the share count has moved up, impacting EPS.
Company Guidance
During Ligand's second quarter 2025 earnings call, the company increased its financial guidance for the year, driven by a strong 57% year-over-year growth in royalty revenue and a 14% rise in adjusted EPS. The company highlighted its robust balance sheet with approximately $450 million in deployable capital and noted several strategic investments, including a $40 million commitment with Medtronic and Orchestra BioMed. This partnership supports the development of two cardiovascular therapies, AVIM therapy and Virtu SAB therapy, both of which have received breakthrough device designations from the FDA. Ligand's CEO, Todd Davis, expressed confidence in the company's diversified portfolio and its ability to deliver sustained growth and value for shareholders.

Ligand Pharma Financial Statement Overview

Summary
Ligand Pharma shows a mixed financial picture with declining revenue and profitability, yet maintains a strong equity position. While cash flows are generally positive, volatility in free cash flow and revenue trends pose risks. Financial stability is supported by low leverage, but improving operational efficiency remains crucial.
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 Flow80.27M97.57M-59.95M-275.99M-137.76M-310.55M

Ligand Pharma Technical Analysis

Technical Analysis Sentiment
Positive
Last Price161.71
Price Trends
50DMA
136.90
Positive
100DMA
121.67
Positive
200DMA
117.71
Positive
Market Momentum
MACD
7.34
Positive
RSI
74.67
Negative
STOCH
87.57
Negative
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 161.71 is above the 20-day moving average (MA) of 153.83, above the 50-day MA of 136.90, and above the 200-day MA of 117.71, indicating a bullish trend. The MACD of 7.34 indicates Positive momentum. The RSI at 74.67 is Negative, neither overbought nor oversold. The STOCH value of 87.57 is Negative, 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 (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$3.17B48.01-9.46%40.54%-264.26%
58
Neutral
$3.71B-24.19%62.33%48.34%
54
Neutral
$2.47B-31.46%254.45%48.06%
51
Neutral
$7.86B-0.33-41.39%2.23%23.26%-2.03%
49
Neutral
$2.17B-34.12%-79.09%
43
Neutral
$2.05B-37.34%-26.26%
40
Underperform
$1.63B-295.94%16.36%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LGND
Ligand Pharma
163.73
61.17
59.64%
MIRM
Mirum Pharmaceuticals
74.34
32.54
77.85%
TARS
Tarsus Pharmaceuticals
58.58
29.55
101.79%
BLTE
Belite Bio, Inc. ADR
65.36
16.95
35.01%
BHVN
Biohaven Ltd.
15.89
-21.96
-58.02%
APGE
Apogee Therapeutics
37.86
-9.09
-19.36%

Ligand Pharma Corporate Events

Private Placements and FinancingStock BuybackBusiness Operations and Strategy
Ligand Pharma Completes $460M Convertible Notes Offering
Neutral
Aug 14, 2025

On August 14, 2025, Ligand Pharmaceuticals completed a private offering of $460 million in convertible senior notes due 2030, including an additional $60 million purchased by initial buyers. The notes, which are unsecured and bear a 0.75% interest rate, are part of Ligand’s strategy to manage potential stock dilution and fund corporate purposes, including stock repurchases and convertible note hedge transactions. These financial maneuvers are expected to impact Ligand’s stock market activity and provide flexibility in managing its capital structure.

Private Placements and FinancingStock BuybackBusiness Operations and Strategy
Ligand Pharma Announces $400M Convertible Notes Offering
Neutral
Aug 11, 2025

On August 11, 2025, Ligand Pharmaceuticals announced a proposed offering of $400 million in convertible senior notes due 2030, aimed at qualified institutional buyers. This financial move is expected to support Ligand’s strategic initiatives, including potential repurchases of its common stock and investments in complementary businesses, which could influence the market dynamics of its stock and overall financial positioning.

Product-Related AnnouncementsPrivate Placements and FinancingM&A Transactions
Ligand Pharma Completes Merger Forming Pelthos Therapeutics
Positive
Jul 2, 2025

On July 2, 2025, Ligand Pharmaceuticals completed a merger between its subsidiary LNHC, Inc. and Channel Therapeutics Corporation’s subsidiary, resulting in the formation of Pelthos Therapeutics Inc. Pelthos will trade on the NYSE American exchange under the ticker symbol ‘PTHS’ and plans to launch ZELSUVMI, a novel treatment for Molluscum contagiosum infections. Ligand invested $18 million in Pelthos and will receive a 13% royalty on worldwide sales of ZELSUVMI. The merger is seen as a transformative milestone, unlocking potential for innovation and long-term value for shareholders. Pelthos also raised $50.1 million in equity capital to support the commercial launch of ZELSUVMI and other development programs.

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.

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: Aug 19, 2025