Ligand Pharma (LGND) AI Stock Analysis

• Market Cap: $2.11B
• Dividend Yield: N/A
• Average Volume (3M): 117.90K
• Price to Earnings (P/E): 48.0
• Beta (1Y): 1.18
• Revenue Growth: 27.28%
• EPS Growth: -101.63%
• Country: US
• Employees: 68
• Sector: Healthcare
• Sector Strength: 60
• Industry: Biotechnology
• EPS (TTM): 1.27
• Shares Outstanding: 19,280,962
• 10 Day Avg. Volume: 97,903
• 30 Day Avg. Volume: 117,902
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.85
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 11.43
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $148.67
• Price Target Upside: 39.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

Ligand Pharma's overall score reflects strong financial growth and a robust cash position, countered by operational challenges impacting margins. Technical analysis suggests caution with mixed signals, while valuation concerns arise from negative P/E. The positive earnings call with promising guidance enhances the outlook.

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.

Future Growth Prospects

Looking ahead, Ligand investors can anticipate growing royalties from Travere as Filspari gains market share in IgAN and potentially launches for FSGS, from Verona as it expands adoption of Ohtuvayre thanks to a new J-1 reimbursement code for COPD and pursues additional indications, and from Merck as it launches pneumococcal vaccine Capvaxive in Europe after approval in that jurisdiction.

Strategic Partnerships

LGND uniquely positions itself as a strategic partner, providing not just royalty capital for products in development but serving as a technology partner and biopharma incubator for innovative treatments.

Negative Factors

Revenue 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 Business Overview & Revenue Model

Company Description

Ligand 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 Money

Ligand 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 demonstrates financial resilience with strong liquidity and improved profitability in 2024. The income statement shows volatility but recovery signs, while the balance sheet is stable with low leverage. Robust cash flows support operational flexibility, though operational challenges impact 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 106.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 106.35 is above the 20-day moving average (MA) of 105.86, below the 50-day MA of 108.49, and below the 200-day MA of 109.45, indicating a neutral trend. The MACD of 0.42 indicates Negative momentum. The RSI at 47.79 is Neutral, neither overbought nor oversold. The STOCH value of 48.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LGND.

Ligand Pharma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LGND	67 Neutral	$2.11B	48.01	-0.53%	―	27.28%	-101.63%
MIRM	55 Neutral	$2.16B	―	-37.08%	―	80.76%	53.98%
TARS	54 Neutral	$1.99B	―	-33.98%	―	449.03%	42.86%
Sector *	52 Neutral	$5.35B	3.83	-41.61%	2.85%	17.10%	1.22%
APGE	49 Neutral	$2.34B	―	-33.22%	―	―	-94.92%
BLTE	43 Neutral	$1.99B	―	-30.60%	―	―	4.80%
BHVN	40 Underperform	$2.33B	―	-198.83%	―	―	-65.63%

Ligand Pharma Corporate Events

Ligand Pharma Announces Merger to Enhance ZELSUVMI Sales

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.

Spark’s Take on LGND Stock

According to Spark, TipRanks’ AI Analyst, LGND is a Neutral.

Ligand Pharma’s overall score reflects strong financial growth and a robust cash position, countered by operational challenges impacting margins. Technical analysis suggests caution with mixed signals, while valuation concerns arise from negative P/E. The positive earnings call with promising guidance enhances the outlook.

To see Spark’s full report on LGND stock, click here.

Ligand Pharma Enters $75M Agreement with Castle Creek

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.