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What changed in LIGAND PHARMACEUTICALS INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of LIGAND PHARMACEUTICALS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+429 added−410 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in LIGAND PHARMACEUTICALS INC's 2024 10-K

429 paragraphs added · 410 removed · 262 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

95 edited+56 added−53 removed43 unchanged
Biggest changeApproved Partner Name Program Therapeutic Area Acrotech/CASI Evomela Cancer Alvogen/Adalvo Teriparatide Women's Health Alvogen/Hikma/Nanjing King-Friend Voriconazole Infectious Disease Amgen/Beigene/Ono Kyprolis Cancer Baxter Nexterone Cardiovascular Biocad Teberif Inflammatory/Metabolic Eisai FYCOMPA Central Nervous System Elutia ECM portfolio Medical device/Cardiology Exelixis/Daiichi-Sankyo Minnebro Cardiovascular Gilead Veklury Infectious Disease Ingenus ML-141 Cancer Jazz Rylaze Cancer Melinta Baxdela Infectious Disease Menarini Frovatriptan Central Nervous System Fareva Noxafil-IV Infectious Disease Merck Vaxneuvance Infectious Disease Novan SB206 Infectious Disease 13 Novartis Mekinist Cancer Par Posaconazole Infectious Disease Pfizer Duavee Inflammatory/Metabolic Pfizer Vfend-IV Infectious Disease Sage Zulresso Central Nervous System Sanofi Tzield Metabolic Sedor/Lupin Sesquient Central Nervous System Serum Institute of India Pneumosil Infectious Disease Serum Institute of India Meningococcal Infectious Disease Travere Filspari Metabolic Zydus Cadila Vivitra Cancer Zydus Cadila Bryxta/ZyBev Cancer Zydus Cadila Maropitant Central Nervous System Zydus Cadila Exemptia Inflammatory/Metabolic Zydus Cadila Vortuxi Inflammatory/Metabolic Phase 3/Pivotal or Regulatory Submission Stage Partner Name Program Therapeutic Area Aldeyra Reproxalap Other/Undisclosed BendaRx Bendamustine Oncology Marinus Ganaxalone IV Central Nervous System Merck V116 Pneumococcal adult Ohara Pharmaceuticals JPH203 Cancer Opthea OPT-302 Ophthalmology Outlook Therapeutics ONS-5010 Other/Undisclosed Palvella PTX-022 Other/Undisclosed Sermonix Lasofoxifene Cancer SQ Innovation CE-Furosemide Cardiovascular disease Sunshine Lake Vilazodone Central Nervous System Takeda Soticlestat Central Nervous System Verona Ensifentrine (RPL554) Respiratory Disease Xi'an Xintong Pradefovir Infectious Disease Phase 2 Partner Name Program Therapeutic Area Acrivon ACR-368 Cancer Anebulo ANEB-001 Central Nervous System Corvus Ciforadenant Cancer CurX CE-Topiramate Central Nervous System Phoenix Tissue PTR-01 Genetic Disease Oncternal Zilovertamab Cancer Sato SB206 (Japan) Infectious Disease 14 Takeda TAK-981 Cancer Takeda TAK-925 Central Nervous System Verona Ensifentrine Asthma Verona Ensifentrine Cystic Fibrosis Viking VK5211 Inflammatory/Metabolic Viking VK2809 Inflammatory/Metabolic Xi'an Xintong MB07133 Cancer Phase 1 Partner Name Program Therapeutic Area Apotex Meloxicam Migraine Arcellx ACLX-001 Cancer Arcellx ACLX-002 Cancer China Resources Double Crane CX2101A COVID 19 CSL CSL-324 Immunology Jazz JZP-341 Long Acting Erwinia Asparaginase Jupiter Biomedical Research Viright Cancer MEI Pharma ME-344 Cancer Merck V117 Pneumococcal Novartis MIK-665 Cancer Nucorion NUC-1010 Infectious disease Revision Therapeutics Rev0100 Ophthalmology Sage SAGE-689 Central Nervous System Takeda TAK-243 Cancer Vaxxas Nanopatch Infectious Disease Viking VK-0214 Genetic Disease Summary of selected programs available for license In addition to Zelsuvmi, discussed above, we have a number of unpartnered programs focused on a wide-range of potential indications or diseases with the potential for further development or licensing: Program Development Stage Targeted Indication or Disease CE-Iohexol Phase 2 Diagnostics Luminespib/Hsp90 Inhibitor Phase 2 Oncology CE-Sertraline, Oral Concentrate Phase 1 Depression CCR1 Antagonist Preclinical Oncology CE-Busulfan Preclinical Oncology CE-Cetirizine Injection Preclinical Allergy CE-Silymarin for Topical formulation Preclinical Sun damage FLT3 Kinase Inhibitors Preclinical Oncology GCSF Receptor Agonist Preclinical Blood disorders 15 Manufacturing We contract with a third-party manufacturer, Hovione, for Captisol production.
Biggest changeIn addition to these assets, we have a substantial pipeline of development stage assets that currently generate contractual payments through milestone and license fees with future potential for royalties and Captisol material sales for those programs under our Captisol technology. 11 Approved Partner Name Program Therapeutic Area Acrotech/CASI Evomela Oncology Alvogen/Adalvo Teriparatide Women's Health Alvogen/Hikma/Nanjing King-Friend Voriconazole Infectious Disease Amgen/Beigene/Ono Kyprolis Oncology Baxter Nexterone Cardiovascular Eisai Fycompa Central Nervous System Elutia ECM portfolio Medical device/Cardiology Exelixis/Daiichi-Sankyo Minnebro Cardiovascular Gilead Veklury Infectious Disease Ingenus Taxotere Oncology Jazz Rylaze Oncology Melinta Baxdela Infectious Disease Menarini Frovatriptan Central Nervous System Fareva Noxafil-IV Infectious Disease Merck Vaxneuvance Infectious Disease Merck Capvaxive Infectious Disease Pelthos ZELSUVMI Infectious Disease Novartis Mekinist Oncology Outlook Therapeutics Lytenava Ophthalmology Par Posaconazole Infectious Disease Pfizer Duavee Inflammatory/Metabolic Pfizer Vfend-IV Infectious Disease Recordati Qarziba Oncology Sage Zulresso Central Nervous System Sanofi Tzield Metabolic Sedor/Lupin Sesquient Central Nervous System Serum Institute of India Pneumosil Infectious Disease Serum Institute of India Men5 Infectious Disease Travere Filspari Metabolic Verona Ohtuvayre Respiratory Disease Xi'an Xintong Pradefovir Infectious Disease Phase 3/Pivotal or Regulatory Submission Stage Partner Name Program Therapeutic Area Aldeyra Reproxalap Other/Undisclosed BendaRx Bendamustine Oncology Marinus Ganaxalone IV Central Nervous System Ohara Pharmaceuticals JPH203 Oncology Opthea OPT-302 Ophthalmology Outlook Therapeutics ONS-5010 Other/Undisclosed Palvella Qtorin rapamycin Other/Undisclosed Sermonix Lasofoxifene Oncology SQ Innovation CE-Furosemide Cardiovascular Disease Sunshine Lake Vilazodone Central Nervous System 12 Phase 2 Partner Name Program Therapeutic Area Agenus Bot/Bal Oncology Anebulo ANEB-001 Central Nervous System Corvus Ciforadenant Oncology CurX CE-Topiramate Central Nervous System Phoenix Tissue PTR-01 Genetic Disease Sato SB206 (Japan) Infectious Disease Verona Ensifentrine (nebulizer) Non-Cystic Fibrosis Bronchiectasis Verona Ensifentrine + LAMA (Nebulizer) COPD Viking VK5211 Inflammatory/Metabolic Viking VK2809 Inflammatory/Metabolic Xi'an Xintong MB07133 Oncology Phase 1 Partner Name Program Therapeutic Area Arcellx ACLX-001 Oncology Arcellx ACLX-002 Oncology Beloteca CE-Ziprasidone Central Nervous System China Resources Double Crane CX2101A COVID 19 InvIOs APN401 Oncology Jazz JZP-341 Long Acting Erwinia Asparaginase Jupiter Biomedical Research Viright Oncology Merck V117 Pneumococcal Nucorion NUC-1010 Infectious Disease UroGen UGN-301 Oncology Vaxxas Nanopatch Infectious Disease Viking VK-0214 Genetic Disease Summary of selected programs available for license In addition to ZELSUVMI, discussed above, we have a number of unpartnered programs focused on a wide-range of potential indications or diseases with the potential for further development or licensing: Program Development Stage Targeted Indication or Disease CE-Iohexol Phase 2 Diagnostics Luminespib/Hsp90 Inhibitor Phase 2 Oncology CE-Sertraline, Oral Concentrate Phase 1 Depression CCR1 Antagonist Preclinical Oncology CE-Busulfan Preclinical Oncology CE-Cetirizine Injection Preclinical Allergy CE-Silymarin for Topical formulation Preclinical Sun damage FLT3 Kinase Inhibitors Preclinical Oncology GCSF Receptor Agonist Preclinical Blood disorders 13 Manufacturing We contract with a third-party manufacturer, Hovione, for Captisol production.
The process required by the FDA before pharmaceutical products may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory tests and preclinical animal studies, certain of which must performed in accordance with Good Laboratory Practice regulations and other applicable requirements ; • submission to the FDA of an IND application, which must become effective before human clinical studies may begin; • approval by an independent institutional review board or ethics committee at each clinical site before each clinical study may be initiated; • performance of adequate and well-controlled human clinical studies in accordance with Good Clinical Practice (GCP) requirements to establish the safety and efficacy, or with respect to biologics, the safety, purity and potency of the product candidate for each proposed indication; • preparation of and submission to the FDA of an NDA or BLA after completion of all pivotal clinical studies that include substantial evidence of safety, purity, and potency of the drug from analytical studies and from results of nonclinical testing and clinical trials; • satisfactory completion of an FDA advisory committee review, where appropriate and if applicable; • a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the proposed product is produced to assess compliance with cGMP, and potential FDA inspection of nonclinical study and clinical trial sites that generated the data in support of the NDA or BLA to ensure compliance with GCP; and • FDA review and approval of an NDA or BLA prior to any commercial marketing or sale of the drug in the United States.
The process required by the FDA before pharmaceutical products may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory tests and preclinical animal studies, certain of which must be performed in accordance with Good Laboratory Practice regulations and other applicable requirements; • submission to the FDA of an IND application, which must become effective before human clinical studies may begin; • approval by an independent institutional review board or ethics committee at each clinical site before each clinical study may be initiated; • performance of adequate and well-controlled human clinical studies in accordance with Good Clinical Practice (“GCP”) requirements to establish the safety and efficacy, or with respect to biologics, the safety, purity and potency of the product candidate for each proposed indication; • preparation of and submission to the FDA of an NDA or BLA after completion of all pivotal clinical studies that include substantial evidence of safety, purity, and potency of the drug from analytical studies and from results of nonclinical testing and clinical trials; • satisfactory completion of an FDA advisory committee review, where appropriate and if applicable; • a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the proposed product is produced to assess compliance with cGMP, and potential FDA inspection of nonclinical study and clinical trial sites that generated the data in support of the NDA or BLA to ensure compliance with GCP; and • FDA review and approval of an NDA or BLA prior to any commercial marketing or sale of the drug in the United States.
Title Expiration (nominal) ‡ United States 7635773 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 8410077 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 9200088 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 10117951 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 9750822 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 9493582 Alkylated Cyclodextrin Compositions And Processes For Preparing And Using The Same 2/27/2033 United States 10040872 Alkylated Cyclodextrin Compositions And Processes For Preparing And Using The Same 10/21/2033 United States 10864183 Injectable Nitrogen Mustard Compositions Comprising A Cyclodextrin Derivative And Methods Of Making And Using The Same 5/28/2030 United States 10940128 Injectable Melphalan Compositions Comprising A Cyclodextrin Derivative And Methods Of Making And Using The Same 5/28/2030 United States 11020363 Injectable Nitrogen Mustard Compositions Comprising A Cyclodextrin Derivative And Methods Of Making And Using The Same 5/28/2030 18 ‡ Expiration dates are calculated as 20 years from the earliest nonprovisional filing date to which priority is claimed, and do not take into account disclaimers or extensions that are or may be available in these jurisdictions.
Title Expiration (nominal) ‡ United States 7635773 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 8410077 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 9200088 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 10117951 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 9750822 Sulfoalkyl Ether Cyclodextrin Compositions 03/13/2029 United States 9493582 Alkylated Cyclodextrin Compositions And Processes For Preparing And Using The Same 2/27/2033 United States 10040872 Alkylated Cyclodextrin Compositions And Processes For Preparing And Using The Same 10/21/2033 United States 10864183 Injectable Nitrogen Mustard Compositions Comprising A Cyclodextrin Derivative And Methods Of Making And Using The Same 5/28/2030 United States 10940128 Injectable Melphalan Compositions Comprising A Cyclodextrin Derivative And Methods Of Making And Using The Same 5/28/2030 United States 11020363 Injectable Nitrogen Mustard Compositions Comprising A Cyclodextrin Derivative And Methods Of Making And Using The Same 5/28/2030 ‡ Expiration dates are calculated as 20 years from the earliest nonprovisional filing date to which priority is claimed, and do not take into account disclaimers or extensions that are or may be available in these jurisdictions.
The BEPro technology platform is a next generation prodrug technology distinct from HepDirect and LTP prodrug technologies, expanding use to non-liver related diseases. BEPro is specifically applicable to nucleotides and nucleotide analogs for the development of compounds with improved product profiles. Ligand has demonstrated benefits in cell penetration and oral, intravenous and inhaled pharmacokinetics with BEPro-enabled nucleotide analogs.
The BEPro technology platform is a next generation prodrug technology distinct from HepDirect and LTP prodrug technologies, expanding use to non-liver related diseases. BEPro is specifically applicable to nucleotides and nucleotide analogs 4 for the development of compounds with improved product profiles. Ligand has demonstrated benefits in cell penetration and oral, intravenous and inhaled pharmacokinetics with BEPro-enabled nucleotide analogs.
RYLAZE, which was approved by the FDA in June 2021, is a recombinant erwinia 7 asparaginase used as a component of a multi-agent chemotherapeutic regimen for the treatment of acute lymphoblastic leukemia (ALL) and lymphoblastic lymphoma (LBL) in adult and pediatric patients one month or older who have developed hypersensitivity to E. coli-derived asparaginase.
Rylaze, which was approved by the FDA in June 2021, is a recombinant erwinia asparaginase used as a component of a multi-agent chemotherapeutic regimen for the treatment of acute lymphoblastic leukemia (ALL) and lymphoblastic lymphoma (LBL) in adult and pediatric patients one month or older who have developed hypersensitivity to E. coli-derived asparaginase.
For both currently marketed products and products in development, failure to comply with applicable regulatory requirements at any time during the product development process, approval process or after approval, can, among other things, result in delays, the suspension of regulatory approvals, regulatory enforcement 16 actions, as well as possible civil and criminal sanctions.
For both currently marketed products and products in development, failure to comply with applicable regulatory requirements at any time during the product development process, approval process or after approval, can, among other things, result in delays, the suspension of regulatory approvals, regulatory enforcement actions, as well as possible civil and criminal sanctions.
Other potential consequences for non-compliance include, among other things: • restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical studies; 17 • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals; • product seizure or detention, or refusal of the FDA to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Other potential consequences for non-compliance include, among other things: • restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals; • product seizure or detention, or refusal of the FDA to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; 15 • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Patents and applications owned by Ligand relating to the Captisol component of Kyprolis are not expected to expire until 2033. Amgen filed suit against several generic drug companies over their applications to make generic versions of Kyprolis. Several generics have settled with Amgen on confidential terms.
Patents and applications owned by Ligand relating to the Captisol component of Kyprolis are not expected to expire until 2033. Amgen 16 filed suit against several generic drug companies over their applications to make generic versions of Kyprolis. Several generics have settled with Amgen on confidential terms.
In accordance with our agreements with Alvogen, we are eligible to receive tiered gross profit sharing of between 25% and 40% of quarterly profits prior to an “A” therapeutic equivalence designation, which increases to a flat 50% if an “A” rating is achieved.
In accordance with our agreements with Alvogen, we are eligible to receive tiered gross profit sharing of between 25% and 40% of quarterly profits prior 8 to an “A” therapeutic equivalence designation, which increases to a flat 50% if an “A” rating is achieved.
TZIELD (Sanofi) We acquired a royalty of less than 1% on net sales of TZIELD through our acquisition of Tolerance Therapeutics in the fourth quarter of 2023. TZIELD is the first disease-modifying therapy to be approved in type 1 diabetes (“T1D”).
Tzield (Sanofi) We acquired a royalty of less than 1% on net sales of Tzield through our acquisition of Tolerance Therapeutics (“Tolerance”) in the fourth quarter of 2023. Tzield is the first disease-modifying therapy to be approved in type 1 diabetes (“T1D”).
The scope and type of patent protection provided by each patent family is defined by the claims in the various patents. Patent term may vary by jurisdiction and depend on a number of factors including potential patent term adjustments, patent term extensions, and terminal disclaimers.
The scope and type of patent protection provided by each patent family is defined by the claims in the various patents. Patent terms may vary by jurisdiction and depend on a number of factors including potential patent term adjustments, patent term extensions, and terminal disclaimers.
Additionally, as part of the merger of Pelican and Primrose, Pfenex acquired a non-exclusive, worldwide, royalty free, irrevocable, and fully sublicensable license to a portfolio of approximately 90 patents and approximately 15 pending patent applications which cover various aspects of the Pelican Expression Technology platform that are critical in helping support and retain contractual relationships including Jazz’s RYLAZE, Merck’s VAXNEUVANCE and V116 vaccines, Alvogen’s Teriparatide, and Serum Institute of India’s vaccine programs, including Pneumosil and MenFive vaccines, among others.
Additionally, as part of the merger of Pelican and Primrose, Pfenex acquired a non-exclusive, worldwide, royalty-free, irrevocable, and fully sublicensable license to a portfolio of approximately 90 patents and approximately 15 pending patent applications which cover various aspects of the Pelican Expression Technology platform that are critical in helping support and retain contractual relationships including Jazz’s Rylaze, Merck’s Vaxneuvance and Capvaxive vaccines, Alvogen’s Teriparatide, and Serum Institute of India’s vaccine programs, including Pneumosil and MenFive vaccines, among others.
The Federal Food, Drug and Cosmetic Act and the Public Health Service Act govern the research and development, testing, manufacture, quality, safety, efficacy, labeling, storage, record keeping, approval, advertising and promotion of pharmaceutical products. These activities are subject to additional regulations that apply at the state level. There are similar regulations in other countries as well.
In the U.S., the Federal Food, Drug and Cosmetic Act and the Public Health Service Act govern the research and development, testing, manufacture, quality, safety, efficacy, labeling, storage, record keeping, approval, advertising and promotion of pharmaceutical products. These activities are subject to additional regulations that apply at the state level. There are similar regulations in other countries as well.
Following the spin-offs of our OmniAb antibody discovery business in November 2022 and the Pelican Expression Technology subsidiary in September 2023, our strategy is to continue to expand our pipeline by aggregating royalty rights in mid- to late-stage development and commercial biopharma products, while maintaining a lean infrastructure and high-margin business.
Following the spin-offs of our OmniAb antibody discovery business in November 2022 and the Pelican Expression Technology subsidiary in September 2023, our focus is to continue to expand our pipeline by aggregating royalty rights in mid- to late-stage development and commercial biopharma products, while maintaining a lean infrastructure and high-margin business.
We have a specific set of criteria we use to assess potential investments. The first criteria is time to cash flow, as we seek products that are within a few years of regulatory approval and commercialization. Typically, this means we invest in Phase 3 assets, although we also evaluate opportunities to invest in Phase 2 assets.
We have a specific set of criteria we use to assess potential investments. The first is time to cash flow, as we seek products that are within a few years of regulatory approval and commercialization. Typically, this means we invest in Phase 3 assets, although we also evaluate opportunities to invest from Phase 2 assets to approved assets.
Kyprolis is formulated with Ligand’s Captisol technology and is approved in the United States for the following: • In combination with dexamethasone, lenalidomide plus dexamethasone, daratumumab plus dexamethasone, or daratumumab and hyaluronidase-fihj and dexamethasone, or isatuximab and dexamethasone for the treatment of patients with relapsed or refractory multiple myeloma who have received one to three lines of therapy. • As a single agent for the treatment of patients with relapsed or refractory multiple myeloma who have received one or more lines of therapy.
Kyprolis is formulated with Ligand’s Captisol technology and is approved for the following: • In combination with dexamethasone, lenalidomide plus dexamethasone, daratumumab plus dexamethasone, or daratumumab and hyaluronidase-fihj and dexamethasone, or isatuximab and dexamethasone for the treatment of patients with relapsed or refractory multiple myeloma who have received one to three lines of therapy. • As a single agent for the treatment of patients with relapsed or refractory multiple myeloma who have received one or more lines of therapy.
HepDirect, LTP and BEPro Technology Platform The HepDirect and LTP platforms are our proprietary liver-targeting prodrug technologies that can deliver many different chemical classes of drugs to the liver by using a chemical modification that renders an active pharmaceutical ingredient (API) biologically inactive until cleaved by a liver-specific enzyme.
HepDirect, LTP and BEPro Technology Platform The HepDirect and LTP technology platforms are our proprietary liver-targeting prodrug technologies that can deliver many different chemical classes of drugs to the liver by using a chemical modification that renders an active pharmaceutical ingredient (“API”) biologically inactive until cleaved by a liver-specific enzyme.
Ultimately, we look for assets with favorable risk-reward profiles, which have above average probability of technical and regulatory success and can be commercialized effectively. 4 Technologies Through a combination of research and acquisitions, we have created a partnered portfolio with a wide variety of underlying technologies.
Ultimately, we look for assets with favorable risk-reward profiles, which have above average probability of technical and regulatory success and can be commercialized effectively. 3 Technologies Through a combination of research and acquisitions, we have created a partnered portfolio with a wide variety of underlying technologies.
We will continue our proactive shareholder and employee engagement in 2024. See www.ligand.com for information about our ESG policies and practices. However, note that the information contained on our website is not intended to be part of this filing.
We will continue our proactive shareholder and employee engagement in 2025. See www.ligand.com for information about our ESG policies and practices. However, note that the information contained on our website is not intended to be part of this filing.
Environmental, Health and Safety (EHS) We are committed to providing a safe and healthy workplace, promoting environmental excellence in our communities, and complying with all relevant regulations and industry standards. We establish and monitor programs to reduce pollution, prevent injuries, and maintain compliance with applicable regulations.
Environmental, Health and Safety (“EHS”) We are committed to providing a safe and healthy workplace, promoting environmental excellence in our communities, and complying with all relevant regulations and industry standards. We establish and monitor programs to reduce pollution, prevent injuries, and maintain compliance with applicable regulations.
We expect to continue our effort and to refine our EHS policies and practices in 2024. More information on our EHS policies and initiatives is available on our website at www.ligand.com. However, note that the information contained on our website is not intended to be part of this filing.
We expect to continue our effort and to refine our EHS policies and practices in 2025. More information on our EHS policies and initiatives is available on our website at www.ligand.com. However, note that the information contained on our website is not intended to be part of this filing.
In the event of a Captisol supply interruption, we are permitted to designate and, with Hovione’s assistance, qualify one or more alternate suppliers. If the supply interruption continues beyond a designated period, we may terminate the agreement.
In the event of a Captisol supply interruption, we are permitted to designate and, with Hovione’s assistance, qualify one or more alternate suppliers. If the supply interruption continues beyond a designated period, we may terminate our agreement with Hovione.
Other patent applications covering methods of making Captisol, if issued, extend to 2041. In addition to solid Captisol powder, we offer our partners access to cGMP manufactured aqueous Captisol concentrate. This product offering was established in 2017 to reduce cycle time and increase Captisol production capacity for large-volume drug products.
Other patent applications covering methods of making Captisol, if issued, extend the expiration date to 2041. In addition to solid Captisol powder, we offer our partners access to cGMP manufactured aqueous Captisol concentrate. This product offering was established in 2017 to reduce cycle time and increase Captisol production capacity for large-volume drug products.
These website addresses and the information accessible through our X account are not intended to function as hyperlinks, and the information contained in our website and in the SEC’s website is not intended to be a part of this filing. 20
These website addresses and the information accessible through our X account are not intended to function as hyperlinks, and the information contained in our website and in the SEC’s website is not intended to be a part of this filing. 18
Third, our business model mitigates the high volatility associated with building a business around a single or small number of assets. With this approach, we have the ability to mitigate the impact of binary clinical outcomes in the biopharmaceutical industry, thereby facilitating cash flows that are more predictable.
Third, our business model mitigates the high volatility and risk associated with building a business around a single or small number of assets. With this approach, we have the ability to mitigate the impact of binary clinical outcomes inherent in the biopharmaceutical industry, thereby facilitating cash flows that are more predictable.
TZIELD is marketed by Sanofi, following its acquisition of Provention Bio, Inc., the developer of TZIELD, in 2023 for $2.9 billion. Sanofi recently announced new data from TZIELD’s PROTECT Phase 3 trial which showed TZIELD’s potential to slow the progression of Stage 3 T1D in newly diagnosed children and adolescents.
Tzield is marketed by Sanofi, following its acquisition of Provention Bio, Inc., the developer of Tzield, in 2023 for $2.9 billion. Sanofi also announced data from Tzield’s PROTECT Phase 3 trial, which showed Tzield’s potential to slow the progression of Stage 3 T1D in newly diagnosed children and adolescents.
Veklury (Gilead) 9 We supply Captisol to Gilead for sales of Veklury (remdesivir). Gilead received marketing approval from the FDA in October 2020. Veklury is an antiviral treatment for COVID-19. The product has regulatory approvals for the treatment of moderate or severe COVID-19 in over 70 countries. We are supplying Captisol to Gilead under a 10-year supply agreement.
Gilead received marketing approval from the FDA in October 2020. Veklury is an antiviral treatment for COVID-19. The product has regulatory approvals for the treatment of moderate or severe COVID-19 in over 70 countries. We are supplying Captisol to Gilead under a 10-year supply agreement.
Our business model is highly differentiated from a traditional biotechnology company in several key ways. First, we have limited infrastructure requirements, enabling us to maintain relative high operating margins. Second, we can enable development over a broad range of therapeutic areas and can be strategic and balanced about the size of our investments to achieve a highly diversified portfolio.
Our business model is highly differentiated from a traditional biotechnology company in several important ways. First, we have limited infrastructure requirements, enabling us to maintain relatively high operating margins. Second, we can enable development over a broad range of therapeutic areas and can be strategic and balanced about the size of our investments to achieve a highly diversified portfolio.
In addition, changes in existing regulations could have a material adverse effect on us or our partners. In particular, FDA approval is required before a drug or biological product may be marketed in the United States and they are also subject to other federal, state, and local statutes and regulations.
In addition, changes in existing regulations could have a material adverse effect on us or our partners. 14 In particular, FDA approval is required before a drug or biological product may be marketed in the United States, and these products are also subject to other federal, state, and local statutes and regulations.
Ligand UK Development Limited Under the terms of our sale of Vernalis (R&D) Limited to HitGen in December 2020, Ligand retained a portfolio of fully-funded shots on goal, which now include S65487, a Bcl-2 inhibitor, and S64315, an Mcl-1 inhibitor for treatment of cancers, both of which are partnered with Servier in collaboration with Novartis and VER250840 (an oral, selective Chk1 inhibitor for treatment of cancer).
Ligand UK Development Limited Under the terms of our sale of Vernalis (R&D) Limited to HitGen in December 2020, Ligand retained a portfolio of fully-funded shots on goal, which now include S65487, a Bcl-2 inhibitor, and S64315, an Mcl-1 inhibitor for treatment of cancers, both of which are partnered with Servier in collaboration with Novartis.
There is high demand for capital and low availability of structured capital in the segment of the biopharmaceutical market in which we operate, creating significant deal flow opportunity for Ligand. Unlike open-market equity investing, many of our investments take place under Confidential Disclosure Agreements (CDAs), allowing us access to in-depth, advantageous diligence materials.
There is high demand for capital and low availability of structured capital in the segment of the biopharmaceutical market in which we operate, creating significant investment opportunities for Ligand. Unlike open-market equity investing, many of our investments take place under Confidential Disclosure Agreements (CDAs), allowing us access to in-depth, advantageous diligence materials.
Acrotech and CASI’s obligation to pay royalties will expire at the end of the life of the relevant patents or when a competing product is launched, whichever is earlier, but in no event before ten years after the commercial launch. Our patents and applications relating to the Captisol component of melphalan are not expected to expire until 2033.
Acrotech and CASI’s obligation to pay royalties will expire at the end of the life of the relevant patents or when a competing product is launched, whichever is earlier, but in no event less than ten years from commercial launch. Our patents and applications relating to the Captisol component of melphalan are not expected to expire until 2033.
Pelican Expression Technology Platform In connection with the merger of Pelican and Primrose, Pfenex assigned a global patent portfolio consisting of over 200 patents and over 25 pending patent applications to Pelican, while retaining three patents and six pending patent applications directed to methods of producing Erwinia asparaginase.
Pelican Expression Technology Platform In connection with the merger of Pelican and Primrose, Pfenex assigned a global patent portfolio consisting of over 200 patents and over 25 pending patent applications to Pelican, while retaining four patents and five pending patent applications directed to methods of producing Erwinia asparaginase.
Novan Through the acquisition of certain assets of Novan, we acquired a robust IP portfolio that consists of over 45 U.S. patents, 120 non-U.S. patents, and 25 pending patent applications worldwide along with substantial know-how and trade secrets.
Novan Through the Novan acquisition described above, we acquired a robust IP portfolio that consists of over 45 U.S. patents, 120 non-U.S. patents, and 25 pending patent applications worldwide along with substantial know-how and trade secrets.
Our flexible investment structures are designed to mitigate risks, and also help accommodate different transaction structures based on our partners' goals. We believe our business model is highly scalable and has significant growth potential. We have assembled a talented, long-tenured team with deep industry relationships, investment experience and industry knowledge.
Our flexible investment structures are designed to mitigate risks and help accommodate different transaction structures in line with our partners' goals. We believe our business model is highly scalable and has significant growth potential. We have assembled a talented, long-tenured team with deep industry relationships, investment experience and industry knowledge.
Structural alignment with our counterparty and the marketer is also a key criteria of the investments we make.
Structural alignment with our counterparty and the commercial counterparty is also a key criteria of the investments we make.
From a more tactical perspective, we execute our strategy using four key approaches: royalty monetization, M&A, project finance, and platform investments. With royalty monetization, we purchase rights on existing royalty contracts that are owned by inventors, academic institutions or companies.
From a more tactical perspective, we execute our strategy using four key approaches: royalty monetization, special situations, project finance, and IP technology platform investments. With royalty monetization, we purchase rights on existing royalty contracts that are owned by inventors, academic institutions or companies.
We are proud to provide our employees the opportunity to grow and advance as we invest in their education and career development. As of December 31, 2023, we have 58 employees, of whom 24 are involved directly in scientific research and development activities. We rely on skilled, experienced, and innovative employees to conduct the operations of our company.
We are proud to provide our employees the opportunity to grow and advance as we invest in their education and career development. As of December 31, 2024, we have 68 full-time employees, of whom 24 are involved directly in scientific research and development activities. We rely on skilled, experienced, and innovative employees to conduct the operations of the Company.
We partner with other pharmaceutical companies to leverage what they do best (late-stage development, regulatory management and commercialization) in order to generate our revenue. Our Captisol platform technology is a chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs.
We partner with other pharmaceutical companies to leverage what they do best (late-stage development, regulatory management and commercialization) in order to generate our revenue. We operate two infrastructure-light royalty-generating IP platform technologies. Our Captisol platform technology is a chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs.
By focusing on such practices, we believe we can affect a meaningful, positive change in our community and maintain a healthy and safe environment. During 2023, we progressed our $2.5 million solar investment at Kansas University Innovation Park; made Environmental, Social and Governance (ESG) related charitable donations; and evolved numerous programs from our ESG-focused outreach committees.
By focusing on such practices, we believe we can affect a meaningful, positive change in our community and maintain a healthy and safe environment. In early 2025, we completed our $2.6 million solar investment at Kansas University Innovation Park; made Environmental, Social and Governance (“ESG”) related charitable donations; and evolved numerous programs from our ESG-focused outreach committees.
Ligand has a history of doing this successfully with deals such as: • Pharmacopeia acquisition in 2008 which yielded Travere’s Filspari • Metabasis acquisition in 2010 which contributed to the creation of Viking Therapeutics • Vernalis acquisition in 2018 which yielded Verona’s ensifentrine • Pfenex acquisition in 2020 which yielded four of our major commercial programs – Vaxneuvance, Rylaze, Pneumosil, and Teriparatide as well as our equity interest in Primrose Bio • Novan acquisition in 2023 which yielded Zelsuvmi 3 Project finance involves the provision of development capital to fund late-stage clinical programs in return for royalty contracts that we negotiate, creating royalties on the future sales of those products.
Ligand has a track record of doing this successfully with investments such as: • Pharmacopeia acquisition in 2008, which yielded Travere’s Filspari • Metabasis acquisition in 2010, which contributed to the creation of Viking Therapeutics • Vernalis acquisition in 2018, which yielded Verona’s Ohtuvayre • Pfenex acquisition in 2020, which yielded five of our major commercial programs – Capvaxive, Vaxnuevance, Rylaze, Pneumosil, and Teriparatide, as well as our equity interest in Primrose Bio 2 • Novan acquisition in 2023, which yielded ZELSUVMI • Apeiron acquisition in 2024, which yielded Qarziba Project finance involves the provision of development capital to fund late-stage clinical programs in return for royalty contracts that we negotiate, creating synthetic royalties on the future sales of those products.
These programs and their IP are now owned by Ligand UK Development Limited, which has a worldwide patent portfolio of over 180 granted patents in over 50 countries. This patent portfolio is mature, with expected expiry dates between 2024 and 2033.
These programs and their IP are now owned by Ligand UK Development Limited, which has a worldwide patent portfolio of approximately 100 granted patents in over 40 countries. This patent portfolio is mature, with expected expiry dates up to 2033.
Evomela is a Captisol-enabled melphalan IV formulation which is approved by the FDA for use in two indications: • a high-dose conditioning treatment prior to autologous stem cell transplantation (ASCT) in patients with multiple myeloma; and • for the palliative treatment of patients with multiple myeloma for whom oral therapy is not appropriate. 8 Evomela has been granted Orphan Designation by the FDA for use as a high-dose conditioning regimen for patients with multiple myeloma undergoing ASCT.
Evomela is a Captisol-enabled melphalan IV formulation which is approved by the FDA for use in two indications: • a high-dose conditioning treatment prior to autologous stem cell transplantation (“ASCT”) in patients with multiple myeloma; and • for the palliative treatment of patients with multiple myeloma for whom oral therapy is not appropriate.
In accordance with our EU, MENA and ROW agreements with Adalvo, we may be eligible to receive additional upfront and milestone payments of $1.5 million and may also be eligible to receive up to 60% of gross profit derived from product sales and regional license fees, if approved, depending on geography, cost of goods sold and sublicense fees.
In accordance with our agreements with Adalvo, we may be eligible to receive milestones and may also be eligible to receive up to 60% of gross profit derived from product sales and regional license fees, if approved, depending on geography, cost of goods sold and sublicense fees.
This unique technology has enabled several FDA-approved products, including Gilead’s Veklury, Amgen’s Kyprolis, Baxter International’s Nexterone, Acrotech Biopharma’s and CASI Pharmaceuticals’ Evomela, Melinta Therapeutics’ Baxdela and Sage Therapeutics’ Zulresso. There are many Captisol-enabled products currently in various stages of development. We maintain a broad global patent portfolio for Captisol with the latest expiration date in 2035.
This unique technology has enabled FDA-approved products, including Gilead’s Veklury, Amgen’s Kyprolis, Baxter’s Nexterone, and Acrotech Biopharma’s Evomela. There are many Captisol-enabled products currently in various stages of development. We maintain a broad global patent portfolio for Captisol with the latest expiration date in 2033.
Pneumosil achieved WHO Prequalification in December 2019, allowing the product to be procured by United Nations agencies and Gavi, the Vaccine Alliance, and subsequently achieved Indian Marketing Authorization in July 2020, and SII announced commercial launch of the product in India in December 2020.
Pneumosil achieved WHO Prequalification in December 2019, allowing the product to be procured by United Nations agencies and Gavi, the Vaccine Alliance, and subsequently achieved Indian Marketing Authorization in July 2020, and SII announced commercial launch of the product in India in December 2020. We are entitled to a low-single digit royalty on net product sales of Pneumosil.
VAXNEUVANCE was also approved in Europe in October 2022 for the prevention of invasive disease and pneumonia caused by Streptococcus pneumoniae in individuals 18 years and older and in infants, children and adolescents from 6 weeks to less than 18 years of age. VAXNEUVANCE utilizes CRM197 vaccine carrier protein, which is produced using the patent-protected Pelican Expression Technology™ platform.
Vaxneuvance was also approved in Europe in October 2022 for the prevention of invasive disease and pneumonia caused by Streptococcus pneumoniae in individuals 18 years and older and in infants, children and adolescents from 6 weeks to less than 18 years of age.
We supply Captisol to Baxter for use in accordance with the terms of the license agreement under a separate supply agreement. Under the terms of the license agreement, we will continue to earn milestone payments, royalties, and revenue from Captisol material sales. We will earn royalties on net sales of Nexterone through early 2033.
Under the terms of the license agreement, we will continue to earn milestone payments, a low single digit royalty, and revenue from Captisol material sales. We will earn royalties on net sales of Nexterone through early 2033.
In addition, if Hovione cannot supply our requirements of Captisol due to an uncured force majeure event, we may also obtain Captisol from a third party and have previously identified such parties. The current term of the agreement with Hovione is through December 2024.
In addition, if Hovione cannot supply our requirements of Captisol due to an uncured force majeure event, we may also obtain Captisol from a third party and have previously identified such parties. The original term of the agreement was through December 2024 and has been automatically renewed through December 2026. The agreement automatically renews for successive two-year renewal terms.
MB07133 (Xi'an Xintong) Chinese licensee Xi'an Xintong Medicine Research is also developing MB07133, a liver specific, HepDirect prodrug of cytarabine monophosphate, for the potential treatment of hepatocellular carcinoma and intrahepatic cholangiocarcinoma. MB07133 is currently in Phase 2 in China. We are entitled to an annual licensing maintenance fee and royalties on potential future sales.
Under the terms of our agreement with Xi'an Xintong, we are entitled to an annual licensing maintenance fee, milestones and a 9% royalty on potential future sales. MB07133 (Xi'an Xintong) Xi'an Xintong is also developing MB07133, a liver specific, HepDirect prodrug of cytarabine monophosphate, for the potential treatment of hepatocellular carcinoma and intrahepatic cholangiocarcinoma.
We are also supplying Captisol to Gilead’s voluntary licensing generic partners who are manufacturing remdesivir for 127 low- and middle-income countries. We receive our commercial compensation for this program through the sale of Captisol. Zulresso (Sage) We have a license agreement with Sage, related to Sage's Zulresso, a Captisol-enabled formulation of brexanolone for the treatment of postpartum depression (PPD).
We are also supplying Captisol to Gilead’s voluntary licensing generic partners who are manufacturing remdesivir for 127 low- and middle-income countries. We receive our commercial compensation for this program through the sale of Captisol.
Travere recently received F DA accelerated approval for FILSPARI (sparsentan) for the treatment of immunoglobulin A nephropathy (IgAN). FILSPARI is the first and only dual endothelin and angiotensin II receptor antagonist in development for rare kidney diseases and is the first non-immunosuppressive treatment indicated for IgAN.
Filspari is the first and only dual endothelin and angiotensin II receptor antagonist in development for rare kidney diseases and is the first non-immunosuppressive treatment indicated for IgAN. In February 2024, Travere and its partner CSL Vifor received approval for Filspari for the treatment of IgAN in Europe.
In November 2023, Palvella announced that the FDA granted Breakthrough Therapy Designation to QTORIN rapamycin for the treatment of microcystic LMs. Microcystic LMs is a chronically debilitating and lifelong genetic disease affecting an estimated more than 30,000 patients in the U.S. There are currently no FDA-approved treatments for microcystic LMs.
Microcystic LM is a chronically debilitating and lifelong genetic disease affecting an estimated more than 30,000 patients in the U.S. There are currently no FDA-approved treatments for Microcystic LM. Palvella is currently conducting a Phase 3 trial evaluating Qtorin rapamycin for the treatment of Microcystic LM and a Phase 2 trial evaluating Qtorin rapamycin for the treatment of cutaneous VMs.
The versatility of the platform has been demonstrated in the production of enzymes, peptides, antibody derivatives and engineered non-natural proteins. The platform contributes significant value to biopharmaceutical development programs by shortening timelines and reducing costs associated with research and development through commercial manufacturing of therapeutics and vaccines.
The platform contributes significant value to biopharmaceutical development programs by shortening timelines and reducing costs associated with research and development through commercial manufacturing of therapeutics and vaccines.
We believe that our business benefits from the different perspectives a diverse workforce brings. We strive to maintain an inclusive environment free from discrimination of any kind, including sexual or other discriminatory harassment. Our employees have multiple avenues available through which inappropriate behavior can be reported, including a confidential hotline.
We strive to maintain an inclusive environment free from discrimination of any kind, including sexual or other discriminatory harassment. Our employees have multiple avenues available through which inappropriate behavior can be reported, including a confidential hotline. All reports of inappropriate behavior are promptly investigated with appropriate action taken to stop such behavior.
We maintain both Type IV and Type V drug master files (DMFs) with the FDA. These DMFs contain manufacturing and safety information relating to Captisol that our licensees can reference when developing Captisol-enabled drugs. We also have active DMFs in Japan, China and Canada. In 2023, royalties on commercial products using Captisol comprised over half of our total royalty revenue.
We maintain both Type IV and Type V DMFs with the FDA. These DMFs contain manufacturing and safety information relating to Captisol that our licensees can reference when developing Captisol-enabled drugs. We also have active DMFs in Japan, China and Canada. NITRICIL Technology Platform The NITRICIL technology platform was acquired through our Novan acquisition in 2023.
Pelican Expression Technology (owned by Primrose Bio, of which Ligand owns 49.9%) The Pelican Expression Technology platform is a robust, validated, cost-effective and scalable platform for recombinant protein production, and is especially well suited for complex, large-scale proteins. Global manufacturers have demonstrated consistent success with the platform and the technology is currently outlicensed for multiple commercial and development-stage programs.
Pelican Expression Technology (owned by Primrose Bio, of which Ligand owns 31.4% as of December 31, 2024) The Pelican Expression Technology platform is a robust, validated, cost-effective and scalable platform for recombinant protein production and is especially well suited for complex, large-scale proteins.
Our Captisol business may face competition from other suppliers of similar cyclodextrin excipients or other technologies that are aimed to increase solubility or stability of APIs. Our competitive position also depends upon our ability to obtain patent protection or otherwise develop proprietary products or processes. For a discussion of the risks associated with competition, see below under “ Item 1A.
Our competitive position also depends upon our ability to obtain patent protection or otherwise develop proprietary products or processes. For a discussion of the risks associated with competition, see below under “Item 1A.
Kyprolis (Amgen, Ono, BeiGene) We supply Captisol to Amgen for use with Kyprolis (carfilzomib) and granted Amgen an exclusive product-specific license under our patent rights with respect to Captisol.
For information about the royalties owed to us for certain of these programs, see “Royalties” later in this business section. 6 Kyprolis (Amgen, Ono, BeiGene) We supply Captisol to Amgen for use with Kyprolis (carfilzomib) and granted Amgen an exclusive product-specific license under our patent rights with respect to Captisol.
We are entitled to revenue from Captisol material sales and tiered royalties on potential future sales. Key Partnered Pipeline Programs We have a highly diversified partnered pipeline of development stage assets that either have or are nearing regulatory approval, or given the area of research or value of the license terms, we consider particularly noteworthy.
Other Key Partnered Programs We have a highly diversified partnered pipeline of assets that either have or are nearing regulatory approval that we consider particularly noteworthy given the area of research or value of the license terms. We are eligible to receive milestone payments and royalties on these programs. This list does not include all of our partnered programs.
We are eligible to receive milestone payments and royalties on these programs. This list does not include all of our partnered programs. In the case of Captisol-related programs, we are also eligible to receive revenue for the sale of Captisol material supply.
In the case of Captisol-related programs, we are also eligible to receive revenue for the sale of Captisol material supply.
Under the terms of the agreement with Viking, we may be entitled to up to $375 million of development, regulatory and commercial milestones and tiered royalties on potential future sales. Our TR Beta programs partnered with Viking are subject to CVR sharing and a portion of the cash received will be paid out to CVR holders.
Our TR-beta programs partnered with Viking are subject to CVR sharing, and a portion of the cash received will be paid out to CVR holders.
ZELSUVMI is the first and only topical prescription medication that can be applied by patients, parents, or caregivers at home, outside of a physician's office, or other medical setting to treat this highly contagious viral skin infection. 6 As we incubate this newly acquired business, the Novan team is actively preparing for commercialization.
It is the first and only FDA approved topical prescription medication for this infection that can be applied by patients, parents and caregivers at home, outside of a physician's office, or other medical setting. ZELSUVMI received a Novel Drug designation from the U.S. FDA in January 2024 to treat molluscum viral skin infection.
Competition Some of the drugs we and our licensees and partners are developing may compete with existing therapies or other drugs in development by other companies. Furthermore, academic institutions, government agencies and other public and private organizations conducting research may seek patent protection with respect to potentially competing products or technologies and may establish collaborative arrangements with our competitors.
Furthermore, academic institutions, government agencies and other public and private organizations conducting research may seek patent protection with respect to potentially competing products or technologies and may establish collaborative arrangements with our competitors. Our Captisol business may face competition from other suppliers of similar cyclodextrin excipients or other technologies that are aimed to increase solubility or stability of APIs.
There are advantages of royalty investing as a model since royalties 1) have minimal infrastructure, 2) are non-dilutive and 3) their cash flows are often protected in bankruptcy. In M&A investments, we acquire companies with valuable assets or partnerships and realize the value of those assets by restructuring operations and/or partnering the assets.
There are advantages of royalty investing as a model since royalties 1) require minimal infrastructure, 2) are non-dilutable and 3) their cash flows are often protected in bankruptcy.
Teriparatide injection is a drug indicated for various uses including the treatment of osteoporosis in certain patients at high risk for fracture. Teriparatide injection was developed using our Pelican Expression Technology and was approved by the FDA in 2019 in accordance with the 505(b)(2) regulatory pathway, with FORTEO as the reference product.
Teriparatide injection was developed using our Pelican Expression Technology and was approved by the FDA in 2019 in accordance with the 505(b)(2) regulatory pathway, with FORTEO as the reference product. Our commercialization partner, Alvogen, launched the product in June 2020 in the United States.
All reports of inappropriate behavior are promptly investigated with appropriate action taken to stop such behavior. Investor Information Financial and other information about us is available on our website at www.ligand.com.
Investor Information Financial and other information about us is available on our website at www.ligand.com.
TZIELD met the study’s primary endpoint, significantly slowing the decline of C-peptide levels, compared to placebo. Under our agreement with Tolerance, we are entitled to receive royalties through December 1, 2032. Nexterone (Baxter) We have a license agreement with Baxter, related to Baxter's Nexterone, a Captisol-enabled formulation of amiodarone, which is marketed in the United States and Canada.
Tzield met the study’s primary endpoint, significantly slowing the decline of C-peptide levels, compared to placebo. Sanofi recently announced they have filed for Tzield's approval in Europe and China, expecting responses in the second half of 2025. Under our agreement with Tolerance, we are entitled to receive royalties through December 1, 2032.
We believe that our compensation and employee benefits are competitive and allow us to attract and retain skilled labor throughout our organization. Our notable health, welfare and retirement benefits include: • equity awards through our 2002 Stock Incentive Plan; • subsidized health insurance; 19 • 401(k) Plan with matching contributions; • tuition assistance program; and • paid time off.
Our notable health, welfare and retirement benefits include: • equity awards through our 2002 Stock Incentive Plan; • subsidized health insurance; • 401(k) Plan with matching contributions; • tuition assistance program; and • paid time off. 17 We value diversity at all levels and continue to focus on extending our diversity and inclusion initiatives across our workforce.
The following table represents development-stage assets with disclosed royalty rates: 10 Development stage assets with disclosed royalties Program Licensee Royalty Rate Ciforadenant Corvus Mid-single digit to low-teen royalty DGAT-1 Viking 3.0% - 7.0% Ensifentrine (RPL554) Verona Low single digit royalty FBPase Inhibitor (VK0612) Viking 7.5% - 9.5% Lasofoxifene Sermonix 6.0% - 10.0% MB07133 Xi'an Xintong 6% ME-344 MEI Pharma Low single digit royalty Oral EPO Viking 4.5% - 8.5% Pradefovir Xi'an Xintong 9% PTX-022 Palvella 8.0% - 9.8% SARM (VK5211) Viking 7.25% - 9.25% TR Beta (VK2809 and VK0214) Viking 3.5% - 7.5% Various Nucorion 4.0% - 9.0% Various Seelos 4.0% - 10.0% TR-Beta - VK2809 and VK0214 (Viking) Our partner, Viking, is developing VK2809, a novel selective thyroid hormone receptor beta (TR-beta) agonist with potential in multiple indications, including hypercholesterolemia, dyslipidemia and non-alcoholic steatohepatitis (NASH).
The following table represents development-stage assets with disclosed royalty rates: 9 Development stage assets with disclosed royalties Program Licensee Royalty Rate Bot/Bal Agenus 2.625% UGN-301 UroGen 2.625 - 3.75% Ciforadenant Corvus Mid-single digit to low-teen royalty DGAT-1 Viking 3.0% - 7.0% FBPase Inhibitor (VK0612) Viking 7.5% - 9.5% Lasofoxifene Sermonix 6.0% - 10.0% MB07133 Xi'an Xintong 6% Oral EPO Viking 4.5% - 8.5% Pradefovir Xi'an Xintong 9% Qtorin rapamycin Palvella 8.0% - 9.8% SARM (VK5211) Viking 7.25% - 9.25% TR Beta (VK2809 and VK0214) Viking 3.5% - 7.5% Veklury (Gilead) We supply Captisol to Gilead for sales of Veklury (remdesivir).
Given pharmaceutical industry trends toward large molecules with increased structural complexities, the Pelican Expression Technology platform is well positioned to meet these growing needs as one of the most comprehensive and broadly available, commercially validated protein production platforms in the industry. 2023 Investment Highlights In September 2023, we announced the sale of our Pelican business, inclusive of the Pelican Expression Technology platform, and a merger of Pelican with Primordial Genetics to form a new company, Primrose Bio.
Given pharmaceutical industry trends toward large molecules with increased structural complexities, the Pelican Expression Technology platform is well positioned to meet these growing needs as one of the most comprehensive and broadly available, commercially validated protein production platforms in the industry. 2024 and Recent Investment Highlights On February 25, 2025, we announced that we entered into a royalty financing agreement with Castle Creek Biosciences, Inc., a late-stage cell and gene therapy company, to support Castle Creek’s D-Fi (FCX-007) Phase 3 clinical study.
Under this agreement, we are entitled to receive revenue from clinical and commercial Captisol material sales and royalties on annual net sales of Kyprolis based on our patents and applications relating to the Captisol component of Kyprolis which are not expected to expire until 2033.
Under this agreement, we are entitled to receive revenue from clinical and commercial Captisol material sales and a 1.5% to 3.0% royalty on annual net sales of Kyprolis. Amgen’s obligation to pay royalties does not expire until four years after the expiration of the last-to-expire patent covering Captisol.
Evomela (Acrotech and CASI) We supply Captisol to, and receive royalties from, Acrotech Biopharma for sales of Evomela in the U.S., and CASI Pharmaceuticals for sales in China. Evomela received marketing approval by the NMPA in August of 2019. It is the only approved and commercially available melphalan product in China.
Evomela (Acrotech and CASI) We supply Captisol to, and receive royalties from, Acrotech Biopharma for sales of Evomela in the United States, and CASI Pharmaceuticals for sales in China.
Lasofoxifene (Sermonix) Lasofoxifene is a selective estrogen receptor modulator for osteoporosis treatment and other diseases, discovered through the research collaboration between Pfizer and Ligand. Our partner, Sermonix has a license for the development of oral lasofoxifene, its lead investigational drug, for the United States and additional territories.
Lasofoxifene is a selective estrogen receptor modulator in development for the treatment of breast cancer, discovered through the research collaboration between Pfizer and Ligand.
In addition, either party may terminate the agreement for the uncured material breach or bankruptcy of the other party or an extended force majeure event. We may terminate the agreement for extended supply interruption, regulatory action related to Captisol or other specified events. We have ongoing minimum purchase commitments under the agreement.
We may terminate the agreement for extended supply interruption, regulatory action related to Captisol or other specified events. We have ongoing minimum purchase commitments under our agreement with Hovione. Competition Some of the drugs we and our licensees and partners are developing may compete with existing therapies or other drugs in development by other companies.
The agreement will automatically renew for successive two-year renewal terms unless either party gives written notice of its intention to terminate the agreement no less than two years prior to the expiration of the initial term or renewal term.
Either party can give written notice of its intention to terminate the agreement no less than two years prior to the expiration of renewal term. In addition, either party may terminate the agreement for the uncured material breach or bankruptcy of the other party or an extended force majeure event.
Novan Acquisition In September 2023, the bankruptcy court approved a $12.2 million bid from Ligand to purchase certain assets of Novan, Inc., including berdazimer gel, all assets related to the NITRICIL™ technology platform and the rights to one commercial stage asset. Prior to Novan's bankruptcy, we had a royalty interest in berdazimer topical gel, 10.3%.
(“Novan”), including its lead product candidate berdazimer topical gel, 10.3% (“berdazimer gel”), all assets related to the NITRICIL technology platform and the rights to one development stage asset. Prior to Novan's bankruptcy, we had a royalty interest in berdazimer gel. Berdazimer gel was subsequently approved by the FDA in January 2024, with a brand name of ZELSUVMI.
Finally, with platform technology acquisitions, we look for platforms with high operating margins and existing licensing contracts and acquire these targets. The ideal platform will provide new royalties by operating those platforms, and it will be scalable and have broad applicability. Our Captisol business is an excellent example of a successful platform technology investment.
Finally, with IP technology platform acquisitions, we look for platforms that are infrastructure-light with existing royalties in place while providing the potential for new royalties through operating those platforms. Ideal technology IP platforms will be scalable and have broad applicability. Our Captisol and NITRICIL businesses are excellent examples of successful platform technology investments.
Royalties on Commercial Products The following table provides an overview of our current portfolio of royalties: Product Partner Therapeutic Area Royalty Rate 2023 Royalty Revenue (in millions) Estimated 2023 Product Revenue (in millions) Kyprolis Amgen/Ono/Beigene Cancer 1.5% - 3.0% $35.6 $1,503.1 Rylaze Jazz Cancer Low single digit $13.5 $397.5 Teriparatide Alvogen Women's Health 25%-40%¹ $11.1 $37.2 Evomela Acrotech/CASI Cancer 20% $10.2 $51.0 Vaxneuvance Merck Infectious Disease Low single digit $4.1 $653.9 Pneumosil Serum Institute Infectious Disease Low single digit $4.5 $198.5 Filspari Travere IgA Nephropathy 9% $2.7 $29.5 Nexterone Baxter Cardiovascular Low single digit $1.5 $50.9 Other Various Various Various $0.7 $23.6 (1) We receive tiered profit sharing of 25% on quarterly profits less than $3.75 million, 35% on quarterly profits greater than $3.75 million but less than $7.5 million and 40% on quarterly profits greater than $7.5 million.
The following table provides an overview of royalty receipts on our commercial-stage revenue-generating royalty assets: Product Partner Therapeutic Area Royalty Rate 2024 Royalty Receipts (in millions) Estimated 2024 Product Revenue (in millions) Kyprolis Amgen/Ono/Beigene Oncology 1.5% - 3.0% $38.4 $1,627.4 Qarziba Recordati Oncology Tiered mid-teen $14.6 — 1 Rylaze Jazz Oncology Low single digit $13.7 $409.4 Filspari Travere Nephropathy 9% $12.2 $135.6 Evomela Acrotech/CASI Oncology 20% $8.7 $44.8 Teriparatide Alvogen Women's Health 25%-40% 2 $8.2 $30.2 Vaxneuvance Merck Infectious Disease Low single digit $5.2 $791.3 Pneumosil Serum Institute Infectious Disease Low single digit $3.8 $161.5 Nexterone Baxter Cardiovascular Low single digit $2.8 $70.1 Ohtuvayre 3 Verona Respiratory Disease 3% $2.7 $41.6 Capvaxive Merck Infectious Disease Low single digit $0.6 $95.7 Tzield Sanofi Metabolic Disease Less than 1% $0.2 $58.0 19 Other Products $8.5 Total Royalty Receipts $119.6 Less: Amortization of Financial Royalty Assets 4 $10.8 GAAP Income from Royalty Assets $108.8 NOTES: (1) Based on our agreement with Recordati, sales of Qarziba are undisclosed.
There are 14 issued U.S. patents covering ZELSUVMI which are expected to be listed in the Orange Book and which are expected to expire during the time period beginning in 2026 and ending in 2035. Human Capital Management We recognize and take care of our employees by offering a wide range of competitive pay, recognition, and benefit programs.
There are 14 issued U.S. patents covering ZELSUVMI which are listed in the Orange Book and which are expected to expire during the time period beginning in 2026 and ending in 2035. Upon the initial approval of ZELSUVMI, we applied for 1,280 days of patent term extension, or PTE, for the U.S. patent covering ZELSUVMI compositions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSanctions imposed by the United States and other countries in response to military conflicts, including the wars between Russia and Ukraine and Israel and Hamas, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
Biggest changeSanctions imposed by the United States and other countries in response to military conflicts, including the wars between Russia and Ukraine and Israel and Hamas, significant natural disasters (including as a result of climate change), new or increased tariffs or other barriers to trade, changes to fiscal or monetary policy or government budget dynamics (particularly in the biotechnology and pharmaceutical industries), higher interest rates and economic inflation, declines in economic growth or recession, geopolitical instability and other unstable market and macroeconomic conditions may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
In addition, we may continue to generate no revenue from Captisol sales related to remdesivir due to a number of factors, including alternative treatments for COVID-19 that have been or will be developed by other companies and the decrease in COVID-19 infections, in which case the commercial opportunity could be continue to be limited.
In addition, we may continue to generate no revenue from Captisol sales related to remdesivir due to a number of factors, including alternative treatments for COVID-19 that have been or will be developed by other companies and the decrease in COVID-19 infections, in which case the commercial opportunity could be limited.
An unpaid creditor or an entity acting on behalf of a creditor (including without limitation a trustee or debtor-in-possession in a bankruptcy by New OmniAb or Ligand or any of their respective subsidiaries) may bring an action alleging that the Separation or Distribution or any of the related transactions constituted a constructive fraudulent conveyance.
An unpaid creditor or an entity acting on behalf of a creditor (including without limitation a trustee or debtor-in-possession in a bankruptcy by New OmniAb or Ligand or any of their respective subsidiaries) may bring an action alleging that the OmniAb Separation or OmniAb Distribution or any of the related transactions constituted a constructive fraudulent conveyance.
As is common in our industry, our partners and we face an inherent risk of product liability as a result of the clinical testing of our product candidates in clinical trials and face an even greater risk for commercialized products.
As is common in our industry, we and our partners face an inherent risk of product liability as a result of the clinical testing of our product candidates in clinical trials and face an even greater risk for commercialized products.
Also, Amgen previously settled patent litigation related to Kyprolis on confidential terms with several parties, but it was publicly reported that the U.S. launch date for at least Breckenridge Pharmaceuticals’ applicable generic product will be “on a date that is held as confidential in 2027 or sooner, depending on certain occurrences.” 21 Future revenue from sales of Captisol material to our license partners may be lower than expected.
Also, Amgen previously settled patent litigation related to Kyprolis on confidential terms with several parties, but it was publicly reported that the U.S. launch date for at least Breckenridge Pharmaceuticals’ applicable generic product will be “on a date that is held as confidential in 2027 or sooner, depending on certain occurrences.” Future revenue from sales of Captisol material to our license partners may be lower than expected.
Each of these constantly evolving laws can be subject to varying interpretations. If we fail to comply with any such laws, rules or regulations, we may face government investigations and/or enforcement actions, fines, civil or criminal penalties, private litigation or adverse publicity that could adversely affect our business, financial condition and results of operations.
Each of these constantly evolving laws can be subject to varying interpretations. If we fail to comply with any such laws, rules or regulations, we may 32 face government investigations and/or enforcement actions, fines, civil or criminal penalties, private litigation or adverse publicity that could adversely affect our business, financial condition and results of operations.
Although we believe that we and our partners have adjusted our business practices to the impacts of the COVID-19 pandemic, in the future, we may experience similar pandemics or epidemic diseases that could severely impact our business, drug manufacturing and supply chain, nonclinical activities and clinical trials and our partners’ business may be impacted in similar ways, including due to delays or difficulties in enrolling patients in clinical trials, diversion of healthcare resources away from the conduct of clinical trials, interruption of, or delays in receiving, supplies of 37 Captisol or other product or product candidates from contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems, which may result in cancellations of Captisol orders or refunds if we fail to deliver Captisol timely, interruption or delays to discovery and development pipelines and difficulties launching or commercializing products, including due to reduced access to doctors as a result of social distancing protocols.
Although we believe that we and our partners have adjusted our business practices to the impacts of the COVID-19 pandemic, in the future, we may experience similar pandemics or epidemic diseases that could severely impact our business, drug manufacturing and supply chain, nonclinical activities and clinical trials and our partners’ business may be impacted in similar ways, including due to delays or difficulties in enrolling patients in clinical trials, diversion of healthcare resources away from the conduct of clinical trials, interruption of, or delays in receiving, supplies of Captisol or other product or product candidates from contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems, which may result in cancellations of Captisol orders or refunds if 43 we fail to deliver Captisol timely, interruption or delays to discovery and development pipelines and difficulties launching or commercializing products, including due to reduced access to doctors as a result of social distancing protocols.
Furthermore, the FTC also has authority to initiate enforcement actions against entities that make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal health information, fail to implement 33 policies to protect personal health information or engage in other unfair practices that harm customers or that may violate Section 5 of the FTC Act.
Furthermore, the FTC also has authority to initiate enforcement actions against entities that make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal health information, fail to implement policies to protect personal health information or engage in other unfair practices that harm customers or that may violate Section 5 of the FTC Act.
Litigation or other proceedings to enforce or defend intellectual property rights are often very complex in nature, may be very expensive and time-consuming, may divert our management’s attention from our core business, and may result in unfavorable results that could adversely impact our ability to prevent third parties from competing with our partner’s products or technologies.
Litigation or other proceedings to enforce or defend intellectual property rights are often very complex in nature, may be very expensive and time-consuming, may divert our management’s attention from our core business, and may result in unfavorable results that could adversely impact our ability to prevent third parties from competing with our partner’s products 25 or technologies.
Nevertheless, a partner or third-party or another party in interest in an insolvency proceeding may attempt to recharacterize the royalty purchase agreement and claim that the royalty payments are property of the bankruptcy estate, in which case we would rely upon contractual protections related to such recharacterizations, which may not be respected in bankruptcy.
Nevertheless, a partner or third-party or another party with an interest in an insolvency proceeding may attempt to recharacterize the royalty purchase agreement and claim that the royalty payments are property of the bankruptcy estate, in which case we would rely upon contractual protections related to such recharacterizations, which may not be respected in bankruptcy.
In spite of our efforts to comply with our obligations under our in-license agreements, our licensors might conclude that we have materially breached our obligations under our license agreements and might therefore, including in connection with any aforementioned disputes, terminate the relevant license agreement, thereby removing or limiting our ability to develop and commercialize technology covered by these license agreements.
In spite of our efforts to comply with our obligations under our in-license agreements, our licensors might conclude that we have materially breached our obligations under our license agreements and might 28 therefore, including in connection with any aforementioned disputes, terminate the relevant license agreement, thereby removing or limiting our ability to develop and commercialize technology covered by these license agreements.
Under Sections 382 and 383 of Internal Revenue Code of 1986, as amended (Code) if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes, such as research tax credits, to offset its future post-change income and taxes may be limited.
Under Sections 382 and 383 of Internal Revenue Code of 1986, as amended (the “Code”) if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes, such as research tax credits, to offset its future post-change income and taxes may be limited.
There is also no assurance that all of the potentially relevant prior art relating to our patents and patent applications or licensed patents and patent applications has been found, which could be used by a third party to challenge their validity, or prevent a patent from issuing from a pending patent application.
There is also no assurance that all of the potentially relevant prior art relating to our 27 patents and patent applications or licensed patents and patent applications has been found, which could be used by a third party to challenge their validity, or prevent a patent from issuing from a pending patent application.
In the United States, numerous federal and state laws and regulations govern the collection, use, disclosure, and protection of personal information, including state data breach notification laws, federal and state health 32 information privacy laws, and federal and state consumer protection laws. Each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues.
In the United States, numerous federal and state laws and regulations govern the collection, use, disclosure, and protection of personal information, including state data breach notification laws, federal and state health information privacy laws, and federal and state consumer protection laws. Each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues.
There have been several Congressional inquiries, as well as legislative and regulatory initiatives and executive orders designed to, among other things, bring more transparency to product pricing, review 31 the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.
There have been several Congressional inquiries, as well as legislative and regulatory initiatives and executive orders designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.
We are required to furnish annually a report by management of its assessment of the effectiveness of our internal control over financial reporting as of the end of our most recent fiscal year. In addition, our independent registered public accounting firm is required to provide a related attestation report on our internal control over financial reporting.
We are required to furnish annually a report by management of its assessment of the effectiveness of our internal control over 42 financial reporting as of the end of our most recent fiscal year. In addition, our independent registered public accounting firm is required to provide a related attestation report on our internal control over financial reporting.
This would result in increased competition for our or our partners' programs. If product candidates are approved for marketing under our collaboration programs, revenues we receive 22 will depend on the manufacturing, marketing and sales efforts of our collaboration partners, who generally retain commercialization rights under the collaboration agreements.
This would result in increased competition for our or our partners' programs. If product candidates are approved for marketing under our collaboration programs, revenues we receive will depend on the manufacturing, marketing and sales efforts of our collaboration partners, who generally retain commercialization rights under the collaboration agreements.
This could place us at a competitive disadvantage compared to our competitors that have less indebtedness. The Credit Agreement contains customary affirmative and negative covenants that limit our ability to engage in certain transactions that may be in our long-term best interest.
This could place us at a competitive disadvantage compared to our competitors that have less indebtedness. 40 The Credit Agreement contains customary affirmative and negative covenants that limit our ability to engage in certain transactions that may be in our long-term best interest.
Continued volatility in the overall capital markets could reduce the market price of our common stock in spite of our operating performance. Further, high stock price volatility could result in higher share-based compensation expense. 41 Our common stock has experienced significant price and volume fluctuations and may continue to experience volatility in the future.
Continued volatility in the overall capital markets could reduce the market price of our common stock in spite of our operating performance. Further, high stock price volatility could result in higher share-based compensation expense. Our common stock has experienced significant price and volume fluctuations and may continue to experience volatility in the future.
Given the nature of our royalty purchase agreements, royalty payments 24 due to our partners or third-parties prior to or after a bankruptcy proceeding may not be subject to the insolvency proceeding and may be considered our property, meaning there is a reduced risk of payment delay and/or non-payment.
Given the nature of our royalty purchase agreements, royalty payments due to our partners or third-parties prior to or after a bankruptcy proceeding may not be subject to the insolvency proceeding and may be considered our property, meaning there is a reduced risk of payment delay and/or non-payment.
Any successful third party challenge to our patents in this 28 or any other proceeding could result in the unenforceability or invalidity of such patents or amendment to our patents in such a way that any resulting protection may lead to increased competition to our business, which could harm our business.
Any successful third party challenge to our patents in this or any other proceeding could result in the unenforceability or invalidity of such patents or amendment to our patents in such a way that any resulting protection may lead to increased competition to our business, which could harm our business.
In addition, the FDA’s and other regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit or delay marketing authorization of any product 35 candidates we or our partners develop.
In addition, the FDA’s and other regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit or delay marketing authorization of any product candidates we or our partners develop.
If we are unable to remediate successfully our existing or any future material weakness or other deficiencies in our internal control over financial reporting: the accuracy and timing of our financial reporting may be adversely affected; our liquidity, our access to capital markets, the perceptions of our creditworthiness, and our ability to complete acquisitions may be adversely affected; we may be unable to maintain compliance with applicable securities laws, Nasdaq listing requirements, and the covenants under our debt instruments regarding the timely filing of periodic reports; we may be subject to regulatory investigations and penalties; and investors may lose confidence in our financial reporting.
If we are unable to monitor and remediate successfully any future material weakness or other deficiencies in our internal control over financial reporting: the accuracy and timing of our financial reporting may be adversely affected; our liquidity, our access to capital markets, the perceptions of our creditworthiness, and our ability to complete acquisitions may be adversely affected; we may be unable to maintain compliance with applicable securities laws, Nasdaq listing requirements, and the covenants under our debt instruments regarding the timely filing of periodic reports; we may be subject to regulatory investigations and penalties; and investors may lose confidence in our financial reporting.
For example, the California Consumer Privacy Act of 2018 (CCPA) went into effect on January 1, 2020. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information.
For example, the California Consumer Privacy Act of 2018 (“CCPA”) went into effect on January 1, 2020. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information.
If a court accepts these allegations, it could impose a number of remedies, including without limitation, voiding New OmniAb’s claims against Ligand, requiring New OmniAb stockholders to return to Ligand some or all of the shares of New OmniAb common stock issued via the Distribution and Merger, or providing Ligand with a claim for money damages against New OmniAb in an amount equal to the difference between the consideration received by Ligand and OmniAb’s fair market value at the time of the Distribution.
If a court accepts these allegations, it could impose a number of remedies, including without limitation, voiding New OmniAb’s claims against Ligand, requiring New OmniAb stockholders to return to Ligand some or all of the shares of New OmniAb common stock issued via the OmniAb Transactions, or providing Ligand with a claim for money damages against New OmniAb in an amount equal to the difference between the consideration received by Ligand and OmniAb’s fair market value at the time of the OmniAb Distribution.
For example, any of these parties may breach the agreements and disclose our 30 proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
For example, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
If we fail to comply with applicable laws and regulations we could be subject to penalties or sanctions, including criminal penalties if we knowingly obtain or disclose individually identifiable health information from a covered entity in a manner that is not authorized or permitted by the Health Insurance Portability and Accountability Act, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations implemented thereunder (collectively, HIPAA) or applicable state laws.
If we fail to comply with applicable laws and regulations we could be subject to penalties or sanctions, including criminal penalties if we knowingly obtain or disclose individually identifiable health information from a covered entity in a manner that is not authorized or permitted by the Health Insurance Portability and Accountability Act, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations implemented thereunder (collectively, “HIPAA”) or applicable state laws.
By way of example, the Affordable Care Act (ACA) was enacted in 2010 and included a number of provisions affecting the pharmaceutical industry, including, among other things, annual, non-deductible fees on any entity that manufactures or imports some types of branded prescription drugs and increases in Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program.
By way of example, the Affordable Care Act (“ACA”) was enacted in 2010 and included a number of provisions affecting the pharmaceutical industry, including, among other things, annual, non-deductible fees on any entity that manufactures or imports some types of branded prescription drugs and increases in Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program.
We or our license partners may decide to opt out future European patents from the UPC, but doing so may preclude us or our license partners from realizing the benefits of the 29 UPC.
We or our license partners may decide to opt out future European patents from the UPC, but doing so may preclude us or our license partners from realizing the benefits of the UPC.
On October 7, 2022, President Biden signed an Executive Order on ‘Enhancing Safeguards for United States Intelligence Activities’ which introduced new redress mechanisms and binding safeguards to address the concerns raised by the CJEU in relation to data transfers from the EEA to the United States and which formed the basis of the new EU-US Data Privacy Framework (DPF), as released on December 13, 2022.
On October 7, 2022, President Biden signed an Executive Order on ‘Enhancing Safeguards for United States Intelligence Activities’ which introduced new redress mechanisms and binding safeguards to address the concerns raised by the CJEU in relation to data transfers from the EEA to the United States and which formed the basis of the new EU-US Data Privacy Framework (“DPF”), as released on December 13, 2022.
We believe we have experienced certain ownership changes in the past 38 and have reduced our deferred tax assets related to NOLs and research and development tax credit carryforwards accordingly.
We believe we have experienced certain ownership changes in the past and have reduced our deferred tax assets related to NOLs and research and development tax credit carryforwards accordingly.
These types of initiatives may result in additional reductions in Medicare, Medicaid, and other healthcare funding. Most significantly, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law. This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010.
These types of initiatives may result in additional reductions in Medicare, Medicaid, and other healthcare funding. Most significantly, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010.
Case law from the Court of Justice of the European Union (CJEU) states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
Case law from the Court of Justice of the European Union (“CJEU”) states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
Our existing collaborations may not continue or be successful, and we may be unable to enter into future collaboration arrangements to develop and commercialize our unpartnered assets. In addition, our collaborators may develop products, either alone or with others that compete with the types of products they are developing with us (or that we are developing on our own).
Our existing collaborations may not continue or be successful, and we may be unable to enter into future collaboration arrangements to develop and commercialize our unpartnered assets. In addition, our collaboration partners may develop products, either alone or with others, that compete with the types of products they are developing with us (or that we are developing on our own).
In such an event, we could be liable for any damages that result, which could adversely affect our business. We may also be subject to laws and regulations not specifically targeting the healthcare industry. 36 Certain regulations not specifically targeting the healthcare industry also could have material effects on our operations.
In such an event, we could be liable for any damages that result, which could adversely affect our business. We may also be subject to other laws and regulations not specifically targeting the healthcare industry. Certain regulations not specifically targeting the healthcare industry also could have material effects on our operations.
Our strategy for developing and commercializing many of our product candidates includes entering into collaboration agreements, outlicenses, and development funding and royalty purchase agreements with corporate partners and others. These agreements give our collaboration partners significant discretion when deciding whether or not to pursue any development program.
Our strategy for developing and commercializing many of our product candidates includes entering into collaboration agreements, outlicenses, and development funding and royalty purchase agreements with corporate and other collaboration partners. These agreements give our collaboration partners significant discretion when deciding whether or not to pursue any development program.
The opinion was delivered in connection with the closing of the Merger and was based on, among other things, certain facts, assumptions, representations and undertakings from us, OmniAb and New OmniAb, including those regarding the past and future conduct of the companies’ respective businesses and other matters.
The opinion was delivered in connection with the closing of the OmniAb Merger and was based on, among other things, certain facts, 38 assumptions, representations and undertakings from us, OmniAb, APAC and New OmniAb, including those regarding the past and future conduct of the companies’ respective businesses and other matters.
Our low-chloride patents and foreign equivalents are not expected to expire until 2033, our high purity patents and foreign equivalents, are not expected to expire until 2029 and our morphology patents and foreign equivalents are not expected to expire until 2026 in the United States, but the initially filed patents relating to Captisol expired starting in 2010 in the United States and in 2016 in most countries outside the United States.
Our low-chloride patents and foreign equivalents are not expected to expire until 2033, our high purity patents and foreign equivalents are not expected to expire until 2029 and our morphology patents and foreign equivalents are not expected to expire until 2026 in the United States; however, the initially filed patents relating to Captisol expired starting in 2010 in the United States and in 2016 in most countries outside the United States.
Disputes or litigation may also arise with our collaborators (with us and/or with one or more third parties), including those over ownership rights to intellectual property, know-how or technologies developed with our collaborators. Such disputes or litigation could adversely affect our rights to one or more of our product candidates.
Disputes or litigation may also arise with our collaborators (with us and/or with one or more third parties), including those over ownership rights to intellectual property, know-how or technologies developed with our collaboration partners. Such disputes or litigation could adversely affect our rights to one or more of our product candidates.
If a third party submits a new drug application (NDA) or abbreviated new drug application (ANDA) for a generic drug product that relies in whole or in part on studies contained in our partner’s NDA for their branded product, the third party will have the option to certify to the FDA that, in the opinion of that third party, the patents listed in the Orange Book for our partner’s branded product are invalid, unenforceable, or will not be infringed by the manufacture, use or sale of the third party’s generic drug product.
If a third party submits a new drug application (“NDA”) or abbreviated new drug application (“ANDA”) for a generic drug product that relies in whole or in part on studies contained in our partner’s NDA for their branded product, the third party will have the option to certify to the FDA that, in the opinion of that third party, the patents listed in the Orange Book for our partner’s branded product are invalid, unenforceable, or will not be infringed by the manufacture, use or sale of the third party’s generic drug product.
These requirements include submissions of safety and other post-marketing information and reports, registration, as well as ongoing compliance with current Good Manufacturing Practices (cGMPs) and Good Clinical Practice requirements for any clinical trials that we or they may conduct.
These requirements include submissions of safety and other post-marketing information and reports, registration, as well as ongoing compliance with current Good Manufacturing Practices (“cGMPs”) and Good Clinical Practice requirements for any clinical trials that we or they may conduct.
The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented.
The IRA permits the Secretary of the Department of 30 Health and Human Services (“HHS”) to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented.
Concerns over inflation, energy costs, geopolitical issues, military conflicts, including the wars between Russia and Ukraine and Israel and Hamas, terrorism, public health emergencies or pandemics, the availability and cost of credit, and the U.S. financial markets have in the past contributed to, and may continue in the future to contribute to, increased volatility and diminished expectations for the economy and the markets.
Concerns over inflation, energy costs, geopolitical issues, the new presidential administration in the U.S., military conflicts, including the wars between Russia and Ukraine and Israel and Hamas, terrorism, public health emergencies or pandemics, the availability and cost of credit, and the U.S. financial markets have in the past contributed to, and may continue in the future to contribute to, increased volatility and diminished expectations for the economy and the markets.
Risks Related to Our Business Operations and Reliance on Third Parties: Future revenue based on Kyprolis, Evomela, Teriparatide and Rylaze as well as royalties from our other partnered products, may be lower than expected.
Risks Related to Our Business Operations and Reliance on Third Parties: Future revenue based on Kyprolis, Qarziba, Filspari, Evomela, Teriparatide and Rylaze, as well as royalties from our other partnered products, may be lower than expected.
In the U.S., neither we nor our partners are permitted to market our product candidates in the U.S. until we receive approval of a biologics license application (BLA) or an NDA from the FDA.
In the U.S., neither we nor our partners are permitted to market our product candidates in the U.S. until we receive approval of a biologics license application (“BLA”) or an NDA from the FDA.
The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that has increased the likelihood of, and risks associated with data breach litigation. Further, the California Privacy Rights Act (CPRA) generally went into effect on January 1, 2023, and significantly amends the CCPA.
The CCPA provides for civil penalties for violations, 31 as well as a private right of action for data breaches that has increased the likelihood of, and risks associated with data breach litigation. Further, the California Privacy Rights Act (“CPRA”) generally went into effect on January 1, 2023, and significantly amends the CCPA.
We cannot assure you what standard a court would apply to determine insolvency or that a court would determine that New OmniAb or Ligand or any of their subsidiaries were solvent at the time of or after giving effect to the Distribution. 25 The Distribution of OmniAb common stock is also subject to review under state corporate distribution statutes.
We cannot assure you what standard a court would apply to determine insolvency or that a court would determine that New OmniAb or Ligand or any of their subsidiaries were solvent at the time of or after giving effect to the OmniAb Distribution. The OmniAb Distribution is also subject to review under state corporate distribution statutes.
Often, the information we have regarding products following our acquisition of a royalty may be limited to the information that is available in the public domain. Therefore, there may be material information that relates to such products that we would like to know but do not have and may not be able to obtain.
At times, the information we have regarding products following our acquisition of a royalty may be limited to the information that is available in the public domain. Therefore, there may be material information that relates to such products that we would like to know but do not have and may not be able to obtain.
In addition, certain of agreements with our partners or third-parties permit us to take a secured interest in the intellectual property underlying the licenses and royal purchase agreements, which may improve our risk profile in an insolvency proceeding.
In addition, certain 23 of agreements with our partners or third-parties permit us to take a secured interest in the intellectual property underlying the licenses and royal purchase agreements and/or other collateral, which may improve our risk profile in an insolvency proceeding.
The DPF also introduced a new redress mechanism for EU citizens which addresses a key concern in the previous CJEU judgments and may mean transfers under standard contractual clauses are less likely to be challenged in future.
The DPF also introduced a new redress mechanism for E.U. citizens which addresses a key concern in the previous CJEU judgments and may mean transfers under standard contractual clauses are less likely to be challenged in future.
Furthermore, geo-political actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future license partners and the maintenance, enforcement or defense of our issued patents or those of any current or future license partners.
Furthermore, geopolitical actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future license partners and the maintenance, enforcement or defense of our issued patents or those of any current or future license partners.
The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including: • such authorities may disagree with the design or execution of clinical trials; • negative or ambiguous results from clinical trials or results may not meet the level of statistical significance or persuasiveness required by the FDA or comparable foreign regulatory agencies for approval; • serious and unexpected drug-related side effects may be experienced by participants in clinical trials or by individuals using drugs similar to the applicable product candidates; • the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we or our partners seek approval; • such authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own country; • we or our partners may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our or our partners’ interpretation of data from preclinical studies or clinical trials; 34 • such authorities may not agree that the data collected from clinical trials are acceptable or sufficient to support the submission of a BLA, NDA or other submission or to obtain regulatory approval in the U.S. or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials; • such authorities may disagree with us or our partners regarding the formulation, labeling and/or product specifications; • approval may be granted only for indications that are significantly more limited than those sought by us or our partners, and/or may include significant restrictions on distribution and use; • such authorities may find deficiencies in the manufacturing processes or facilities of the third-party manufacturers utilized for clinical and commercial supplies; or • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.
The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including: • such authorities may disagree with the design or execution of clinical trials; • negative or ambiguous results from clinical trials or results may not meet the level of statistical significance or persuasiveness required by the FDA or comparable foreign regulatory agencies for approval; • serious and unexpected drug-related side effects may be experienced by participants in clinical trials or by individuals using drugs similar to the applicable product candidates; • the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we or our partners seek approval; • such authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own country; • we or our partners may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our or our partners’ interpretation of data from preclinical studies or clinical trials; • such authorities may not agree that the data collected from clinical trials are acceptable or sufficient to support the submission of a BLA, NDA or other submission or to obtain regulatory approval in the U.S. or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials; • such authorities may disagree with us or our partners regarding the formulation, labeling and/or product specifications; • approval may be granted only for indications that are significantly more limited than those sought by us or our partners, and/or may include significant restrictions on distribution and use; • such authorities may find deficiencies in the manufacturing processes or facilities of the third-party manufacturers utilized for clinical and commercial supplies; or • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission. 33 With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing, administrative review periods and agreements with pricing authorities.
We are also or may become subject to rapidly evolving data protection laws, rules and regulations in foreign jurisdictions. For example, the European Union General Data Protection Regulation (GDPR) governs certain collection and other processing activities involving personal data about individuals in the European Economic Area (EEA).
We are also or may become subject to rapidly evolving data protection laws, rules and regulations in foreign jurisdictions. For example, the European Union General Data Protection Regulation (“GDPR”) governs certain collection and other processing activities involving personal data about individuals in the European Economic Area (“EEA”).
Although Ligand intended to make the Distribution of OmniAb common stock entirely from surplus, we cannot assure you that a court will not later determine that some or all of the Distribution to Ligand stockholders was unlawful.
Although Ligand intended to make the OmniAb Distribution entirely from surplus, we cannot assure you that a court will not later determine that some or all of the OmniAb Distribution was unlawful.
Under the DGCL, a corporation may only pay dividends to its stockholders either (i) out of its surplus (net assets minus capital) or (ii) if there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared or the preceding fiscal year.
Under the Delaware General Corporation Law, a corporation may only pay dividends to its stockholders either (i) out of its surplus (net assets minus capital) or (ii) if there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared or the preceding fiscal year.
In connection with our 2023 year-end assessment of internal control over financial reporting, we determined that the material weakness related to the ineffective process-level control activities in the business combination processes were unremediated as of December 31, 2023. For further discussion of the material weakness identified and our remedial efforts, see Item 9A. Controls and Procedures .
In connection with our 2024 year-end assessment of internal control over financial reporting, we determined that the previously identified material weakness related to the ineffective process-level control activities in the business combination processes were remediated as of December 31, 2024. For further discussion of the material weakness identified and our remedial efforts, see Item 9A. Controls and Procedures .
We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with rules applicable to the particular jurisdiction.
We engage reputable law firms and other third party professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with rules applicable to the particular jurisdiction.
Information available to us about the biopharmaceutical products underlying the royalties we buy may be limited and, therefore, our ability to analyze each product and its potential future cash flow may be similarly limited. We may have limited information concerning the products generating the royalties we are evaluating for acquisition.
Information available to us about the biopharmaceutical products underlying the royalties we purchase and invest in may be limited and, therefore, our ability to analyze each product and its potential future cash flow may be similarly limited. We may have limited information concerning the products generating the royalties we are evaluating for acquisition.
If we are unable to remediate the identified material weakness in our internal control over financial reporting, or if we experience additional material weakness or other deficiencies or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately and timely report our financial results, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports, and the price of our common stock may decline.
If we are unable to remediate any material weakness in our internal control over financial reporting or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately and timely report our financial results, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports, and the price of our common stock may decline.
The terms of our Credit Agreement may limit our flexibility in operating our business and adversely af ect our financial health and competitive position, and all of our obligations under our Credit Agreement are secured by certain of our 39 collateral and the collateral of certain of our subsidiaries, as Guarantors.
The terms of our Credit Agreement may limit our flexibility in operating our business and adversely affect our financial health and competitive position, and all of our obligations under our Credit Agreement are secured by certain of our collateral and the collateral of certain of our subsidiaries, as Guarantors.
Further, under most of our Captisol outlicenses, the amount of royalties we receive will be reduced or will cease when the relevant patent expires.
Further, under most of our Captisol out licenses, the amount of royalties we receive will be reduced or will cease when the relevant patent expires.
Even though the FDA has resumed standard inspection operations of domestic facilities where feasible, any resurgence of the virus or emergence of new variants may lead to further inspectional or administrative delays. Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.
Even though the FDA has resumed standard inspection operations of domestic facilities where feasible, any resurgence of the COVID-19 virus or future pandemics may lead to further inspectional or administrative delays. Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to future pandemics.
In addition, the opinion is not binding on the IRS or the courts, and notwithstanding the opinion, the IRS could determine on audit that the Distribution or Merger does not qualify as a reorganization if it determines that any of the facts, assumptions, representations or undertakings on which the opinion is based are not correct or have been violated or that the Distribution or Merger should be taxable for other reasons, including as a result of a significant change in stock or asset ownership after the Distribution.
In addition, the opinion is not binding on the IRS or the courts, and notwithstanding the opinion, the IRS could determine on audit that the OmniAb Transactions do not qualify as a tax-free reorganization if it determines that any of the facts, assumptions, representations or undertakings on which the opinion is based are not correct or have been violated or that the OmniAb Transactions should be taxable for other reasons, including as a result of a significant change in stock or asset ownership after the OmniAb Transactions.
For example, on June 1, 2023, the European Union Patent Package (EU Patent Package) regulations were implemented with the goal of providing a single pan-European Unitary Patent and a new European Unified Patent Court (UPC) for litigation involving European patents.
For example, on June 1, 2023, the European Union Patent Package (“EU Patent Package”) regulations were implemented with the goal of providing a single pan-European Unitary Patent and a new European Unified Patent Court (“UPC”) for litigation involving European patents.
Our charter documents and concentration of ownership may hinder or prevent change of control transactions. Provisions contained in our certificate of incorporation and bylaws may discourage transactions involving an actual or potential change in our ownership. In addition, our Board of Directors may issue shares of common or preferred stock without any further action by the stockholders.
Provisions contained in our certificate of incorporation and bylaws may discourage transactions involving an actual or potential change in our ownership. In addition, our Board of Directors may issue shares of common or preferred stock without any further action by the stockholders.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on the effectiveness of our system of internal control.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on the effectiveness of our system of internal control, including monitoring corrective actions.
If our partners discontinue sales of products using Captisol, fail to obtain regulatory approval for products using Captisol, fail to satisfy their obligations under their agreements with us, choose to utilize a competing product, or if we are unable to establish new licensing and marketing relationships, our financial results and growth prospects would be materially affected.
If our partners discontinue sales of products using Captisol, fail to obtain regulatory approval for products using Captisol, fail to satisfy their obligations under their agreements with us, choose to utilize a competing product, or if we are unable to establish new licensing and marketing relationships then revenue from royalties on Captisol partnered products could be decreased and our financial results and growth prospects could be materially affected.
Integrating any newly acquired business could be expensive and time-consuming. Integration efforts often take a significant amount of time, place a significant strain on managerial, operational and financial resources and could prove to be more difficult or expensive than we predict.
Integration efforts often take a significant amount of time, place a significant strain on managerial, operational and financial resources and could prove to be more difficult or expensive than we predict.
Revenues from sales of Captisol material to our collaboration partners, including Amgen, represent a significant portion of our current revenues. Any setback that may occur with respect to Captisol could significantly impair our operating results and/or reduce the market price of our stock.
Revenues from sales of Captisol material to our collaboration partners, including Amgen, represent approximately half of our royalty revenues. Any setback that may occur with respect to Captisol could significantly impair our operating results and/or reduce the market price of our stock.
Domestic and international equity markets periodically experience heightened volatility and turmoil. These events may have an adverse effect on us. In the event of a market downturn, our results of operations could be adversely affected by those factors in many ways, including making it more difficult for us to raise funds if necessary, and our stock price may further decline.
All of these events may have an adverse effect on us. In the event of a market downturn, our results of operations could be adversely affected by those factors in many ways, including making it more difficult for us to raise funds if necessary, and our stock price may further decline.
If the Distribution, together with certain related transactions, failed to qualify as a reorganization under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”), or the Merger failed to qualify as a reorganization under Section 368(a) of the Code, we could incur significant tax liabilities.
If the OmniAb Distribution, together with certain related transactions (including the OmniAb Separation), failed to qualify as a reorganization under Sections 355 and 368(a)(1)(D) of the Code, or the OmniAb Merger failed to qualify as a reorganization under Section 368(a) of the Code, we could incur significant tax liabilities.
The decision on whether to record an impairment is determined in part by our assessment of the financial condition and prospects of a particular issuer, projections of future cash flows and recoverability of the particular security as well as management’s assertion of whether it is more likely than not that we will sell the particular security before recovery.
The decision on whether to record an impairment is determined in part by our assessment of the financial condition and prospects of a particular issuer, projections of future cash flows and recoverability of the particular security as well as management’s assertion of whether it is more likely than not that we will sell the particular security before recovery. 41 Our charter documents and concentration of ownership may hinder or prevent change of control transactions.
These competitors may be able to access lower cost capital, may be larger than us, may have relationships that provide them access to opportunities before us, or may be willing to acquire royalties for lower projected returns than we are.
These competitors may be able to access lower cost capital, may be larger than us, may cause the price we pay for such royalty assets to increase, may have relationships that provide them access to opportunities before us, or may be willing to acquire royalties for lower projected returns than we are.
Parties making claims against us may be able to obtain injunctive or other relief, which could block our ability to develop, commercialize and sell products or services and could result in the award of substantial damages against us, including treble damages, attorney’s fees, costs and expenses if we are found to have willfully infringed.
Parties making claims against us may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources, or may be able to obtain injunctive or other relief, which could block our ability to develop, commercialize and sell products or services and could result in the award of substantial damages against us, including treble damages, attorney’s fees, costs and expenses if we are found to have willfully infringed.
Any impairment charges could have a material adverse impact on our results of operations and the market value of our common stock. 40 Our investments are subject to market and credit risks that could diminish their value and these risks could be greater during periods of extreme volatility or disruption in the financial and credit markets, which could adversely impact our business, financial condition, results of operations, liquidity and cash flows.
Our investments are subject to market and credit risks that could diminish their value and these risks could be greater during periods of extreme volatility or disruption in the financial and credit markets, which could adversely impact our business, financial condition, results of operations, liquidity and cash flows.
The Distribution and the Merger were conditioned upon receipt of a tax opinion from outside counsel to the effect that the Distribution qualified as a reorganization under Sections 355 and 368(a)(1)(D) of the Code, that the Merger would not cause Section 355(e) of the Code to apply to the Distribution and that the Merger would be treated as a reorganization under Section 368(a) of the Code.
The OmniAb Separation, OmniAb Distribution and OmniAb Merger (collectively, together with certain related transactions, the “OmniAb Transactions”) were conditioned upon receipt of a tax opinion from outside counsel to the effect that the OmniAb Separation and OmniAb Distribution qualified as a reorganization under Sections 355 and 368(a)(1)(D) of the Code, that the OmniAb Merger would not cause Section 355(e) of the Code to apply to the OmniAb Separation or OmniAb Distribution and that the OmniAb Merger would be treated as a reorganization under Section 368(a) of the Code.
ITEM 1A. RISK FACTORS The following is a summary description of some of the many risks we face in our business. You should carefully review these risks in evaluating our business, including the businesses of our subsidiaries.
ITEM 1A. RISK FACTORS The following is a summary description of some of the many risks we face in our business. You should carefully review these risks in evaluating our business and making an investment decision with respect to our securities, including the businesses of our subsidiaries.
We cannot provide assurance that our investments are not subject to adverse changes in market value. If our investments experience adverse changes in market value, we may have less capital to fund our operations.
We cannot provide assurance that our investments are not subject to adverse changes in market value. If our investments experience adverse changes in market value, we may have less capital to fund our operations. Our business is subject to risks arising from pandemic and epidemic diseases.
We currently depend on our arrangements with our partners and licensees to sell products using our Captisol technology. These agreements generally provide that our partners may terminate the agreements at will.
Future revenue from royalties on Captisol partnered products may be lower than expected. We currently depend on our contractual arrangements with our partners and licensees to sell products using our Captisol technology. These agreements generally provide that our partners may terminate the agreements at will.
Even if our efforts are successful, we may incur, as part of a transaction, substantial charges for closure costs associated with elimination of duplicate operations and facilities and acquired in-process research and development charges. In either case, the incurrence of these charges could adversely affect our results of operations for particular quarterly or annual periods.
Even if our efforts are successful, we may incur, as part of a transaction, substantial charges for closure costs associated with elimination of duplicate operations and facilities and acquired in-process research and development charges.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeBoard members receive presentations on cybersecurity topics from senior management, or external experts as part of the Board’s continuing education on topics that impact public companies. Our senior management team, including the Senior Director of Information Services, is responsible for assessing and managing our material risks from cybersecurity threats.
Biggest changeBoard members receive presentations on cybersecurity topics from senior management, or external experts as part of the Board’s continuing education on topics that impact public companies. Our senior management team, including the Senior Director, IT and Facilities, is responsible for assessing and managing our material risks from cybersecurity threats.
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST, ISO and other standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
This does not imply that we 44 meet any particular technical standards, specifications, or requirements, only that we use the NIST, ISO and other standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the Committee) oversight of cybersecurity and other information technology risks. The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives regular reports from management on our cybersecurity risks.
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity and other information technology risks. The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives regular reports from management on our cybersecurity risks.
Our senior management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat 43 intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the information technology environment. 44
Our senior management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the information technology environment.
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. The Senior Director of Information Services has over 20 years of industry experiences leading and overseeing cybersecurity programs at public and private companies.
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. The Senior Director, IT and Facilities has over 20 years of industry experiences leading and overseeing cybersecurity programs at public and private companies.
We design and assess our program based on the National Institute of Standards and Technology (NIST), the International Organization for Standardization (ISO) and other applicable industry standards.
We design and assess our program based on the National Institute of Standards and Technology (“NIST”), the International Organization for Standardization (“ISO”) and other applicable industry standards.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Approximate Square Feet Operation Lease Expiration Date Jupiter, FL 1,650 Corporate headquarter October 2026 San Diego, CA 6,850 Office March 2029 Boston, MA (1) 6,840 Office June 2029 Las Vegas, NV 4,100 Office April 2028 Lawrence, KS 3,700 Office and laboratory August 2032 Durham, NC 19,300 Office and laboratory January 2032 (1) Including lease executed in November 2023 with occupancy expected in approximately the second quarter of 2024.
Biggest changeWe believe our facilities are adequate for our current and near-term needs, and we will be able to locate additional facilities, as needed. 45 Location Approximate Square Feet Operation Lease Expiration Date Jupiter, FL 1,650 Corporate headquarters October 2026 San Diego, CA 6,850 Office March 2029 Boston, MA 6,840 Office May 2029 Las Vegas, NV 4,100 Office April 2028 Lawrence, KS 3,700 Office and laboratory August 2032 Durham, NC 19,300 Office and laboratory January 2032
Item 2. Properties The following table summarizes our principal facilities leased as of December 31, 2023, including the location and size of each facility, and their designated use. We believe our facilities are adequate for our current and near-term needs, and we will be able to locate additional facilities, as needed.
Item 2. Properties The following table summarizes our principal facilities leased as of December 31, 2024, including the location and size of each facility, and their designated use.
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Item 3. Legal Proceedings See “ Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (11), Commitments and Contingencies—Legal Proceedings. ” Item 4. Mine Safety Disclosures Not applicable. PART II Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Market under the symbol “LGND.” As of February 26, 2024, there were approximately 339 holders of record of the common stock.
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Except for 2007, during which we declared a cash dividend on our common stock of $2.50 per share, we have not paid any dividends on our common stock in the past and currently do not expect to pay cash dividends or make any other distributions on common stock in the future.
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We expect to retain our future earnings, if any, for use in the operation and expansion of our business, to pay down debt and potentially for share repurchases.
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Any future determination to pay dividends on common stock will be at the discretion of our Board of Directors and will depend upon our financial condition, results of operations, capital requirements and such other factors as the board deems relevant.
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During the fiscal year ended December 31, 2023, we did not repurchase any shares of our common stock under the stock repurchase program approved by our Board of Directors in April 2023, which allowed us to acquire up to $50 million of our common stock from time to time through April 2026.
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The information required by Item 201(d) of Regulation S-K is incorporated by reference to the 2023 Annual Meeting Proxy Statement as defined in Item 10 below. 45 Performance Graph The graph below shows the five-year cumulative total stockholder return assuming the investment of $100 and is based on the returns of the component companies weighted monthly according to their market capitalization.
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The graph compares total stockholder returns of our common stock, of all companies traded on the Nasdaq Stock market, as represented by the Nasdaq Composite ® Index, and of the Nasdaq Biotechnology Stock Index, as prepared by The Nasdaq Stock Market Inc.
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The stockholder return shown on the graph below is not necessarily indicative of future performance and we will not make or endorse any predictions as to future stockholder returns.
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Value of $100 Invested Over Time 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Ligand $ 100.00 $ 76.85 $ 73.29 $ 113.82 $ 72.27 $ 77.26 NASDAQ Composite-Total Return $ 100.00 $ 136.69 $ 198.10 $ 242.03 $ 163.28 $ 236.17 NASDAQ Biotechnology Index $ 100.00 $ 125.11 $ 158.17 $ 158.20 $ 142.19 $ 148.72 46 Item 6. [RESERVED]

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCash Flow Summary (in thousands) 2023 2022 2021 Net cash provided by (used in): Operating activities $ 49,577 $ 137,850 $ 78,798 Investing activities $ (11,682) $ 163,624 $ 30,523 Financing activities $ (59,947) $ (275,990) $ (137,761) In 2023, we generated cash from operations primarily from collections on our trade receivables.
Biggest changeAs of December 31, 2024, we had $3.7 million in fair value of contingent consideration liabilities associated with the acquisitions to be settled in future periods. 52 Cash Flow Summary (in thousands) 2024 2023 2022 Net cash provided by (used in): Operating activities $ 97,047 $ 49,577 $ 137,850 Investing activities $ (143,664) $ (11,682) $ 163,624 Financing activities $ 97,141 $ (59,947) $ (275,990) In 2024, we generated cash from operations primarily from revenue and other operating income.
We, our material domestic subsidiaries, as Guarantors (as defined in the Credit Agreement), and the Lenders (each as defined in the Credit Agreement) entered into the Credit Agreement with the Administrative Agent, under which the Lenders, the Swingline Lender and the L/C Issuer (each as defined in the Credit Agreement) agreed to make loans and other financial accommodations to us in an aggregate amount of up to $75.0 million.
We, our material domestic subsidiaries, as Guarantors (as defined in the Credit Agreement), and the Lenders (each as defined in the Credit Agreement) entered into the Credit Agreement with the Administrative Agent, under which the Lenders, the Swingline Lender and the L/C Issuer (each as defined in the Credit Agreement) agreed to make loans and other financial accommodations to us in an aggregate amount of up to $75 million.
At our option, borrowings under the Revolving Credit Facility accrue interest at a rate equal to either Term SOFR or a specified base rate plus an applicable margin linked to our leverage ratio, ranging from 1.75% to 2.50% per annum for Term SOFR loans and 0.75% to 1.50% per annum for base rate loans.
Borrowings under the Revolving Credit Facility accrue interest at a rate equal to either Term SOFR or a specified base rate plus an applicable margin linked to our leverage ratio, ranging from 1.75% to 2.50% per annum for Term SOFR loans and 0.75% to 1.50% per annum for base rate loans.
We generated cash from investing activities primarily from the sale and maturity of short-term investments. During the year, we used cash for financing activities, including the payments related to the extinguishment of certain 2023 Notes. In 2021, we generated cash from operations primarily due to the increase in net income.
We generated cash from investing activities primarily from the sale and maturity of short-term investments. During the year, we used cash for financing activities, including the payments related to the extinguishment of certain 2023 Notes.
During the year, we used 52 cash for financing activities, including the repayment of the remaining $76.9 million principal amount upon maturity of the 2023 Notes and $0.3 million accrued interest in cash. In 2022, we generated cash from operations primarily from collections on our trade receivables.
During the year, we used cash for financing activities, including the repayment of the remaining $76.9 million principal amount upon maturity of the 2023 Notes and $0.3 million accrued interest in cash. In 2022, we generated cash from operations primarily from revenue and other operating income.
During the term of the Revolving Credit Facility, we may borrow, repay and re-borrow amounts available under the Revolving Credit Facility, subject to voluntary reductions of the swing line, letter of credit and revolving credit commitments. Borrowings under the Credit Agreement are secured by certain of our collateral and that of the Guarantors.
During the term of the Revolving Credit Facility, we may borrow, repay and re-borrow amounts available under the Revolving Credit Facility, subject to voluntary reductions of the swing line, letter of credit and revolving credit commitments.
We used cash for investing activities primarily for the purchases of commercial license rights, Novan acquisition and investment in Primrose Bio, partially offset by cash from the sale and maturity of short-term investments including Viking shares.
In 2023, we generated cash from operations primarily from revenue and other operating income. We used cash for investing activities primarily for the purchases of financial royalty assets, the Novan acquisition and our investment in Primrose Bio, partially offset by cash from the sale and maturity of short-term investments including Viking shares.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (1), Basis of Presentation and Summary of Significant Accounting Policies. ”
Recent Accounting Pronouncements For the summary of recent accounting pronouncements applicable to our consolidated financial statements, see “ Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (1), Basis of Presentation and Summary of Significant Accounting Policies. ”
If indicators of impairment exist, we assess the recoverability of the affected long-lived assets by comparing its carrying amounts to its undiscounted cash flows. If the affected assets are not recoverable, we estimate the fair value of the assets and record an impairment loss if the carrying value exceeds the fair value.
If the affected assets are not recoverable, we estimate the fair value of the assets and record an impairment loss if the carrying value exceeds the fair value.
As of December 31, 2023, we had $74.5 million in available borrowing under the Revolving Credit Facility, after utilizing $0.5 million for a letter of credit. The maturity date of the Revolving Credit Facility is October 12, 2026.
As of December 31, 2024, we had $124.4 million in available borrowing under the Revolving Credit Facility, after utilizing $0.6 million for letter of credit. The maturity date of the Revolving Credit Facility, as amended, is October 12, 2026. As of December 31, 2024, there were no events of default or violation of any covenants under our financing obligations.
Impairment charges could materially decrease our future net income and result in lower asset values on our balance sheet. 54 Income Taxes Our provision for income taxes, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect our best assessment of estimated future taxes to be paid.
Impairment charges could materially decrease our future net income and result in lower asset values on our balance sheet.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (4), Spin-off of OmniAb.” Intangible Assets We regularly perform reviews to determine if an event occurred that may indicate the carrying values of our intangible assets are impaired.
Impairment Assessment of Finite-lived Intangibles We regularly perform reviews to determine if an event occurred that may indicate the carrying values of our intangible assets are impaired. If indicators of impairment exist, we assess the recoverability of the affected long-lived assets by comparing its carrying amounts to its undiscounted cash flows.
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As of December 31, 2023, we had $3.2 million in fair value of contingent consideration liabilities associated with the acquisitions to be settled in future periods.
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On July 8, 2024, we entered into the first Amendment to the Revolving Credit Facility which amends the Credit Agreement to, among other things, increase the aggregate revolving credit facility amount from $75 million to $125 million. Borrowings under the Credit Agreement are secured by certain of our collateral and that of the Guarantors.
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We generated cash from investing activities primarily from the sale and maturity of short-term investments. During the year, we used cash for financing activities, including the payments related to the extinguishment of certain 2023 Notes, partially offset by cash received from issuance of common stock under employee stock plans and bond hedge settlement.
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We used cash for investing activities primarily for the Apeiron Acquisition and Agenus Transaction. During the year, we generated cash from financing activities, primarily including net proceeds from the sales of shares of common stock in the ATM Offering, and net proceeds from stock options exercises and ESPP.
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Revenue Recognition We apply the following five-step model in accordance with ASC 606 in order to determine the revenue: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
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Financial Royalty Assets - Recognition of Income 53 Financial royalty assets represent a portfolio of future milestone and royalty payment rights acquired that are passive in nature (i.e., we do not own the intellectual property or have the right to commercialize the underlying products).
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We receive royalty revenue on sales by our partners of products covered by patents that we or our partners own under contractual agreements. We do not have future performance obligations under these license arrangements. We generally satisfy our obligation to grant intellectual property rights on the effective date of the contract.
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Our financial royalty assets are classified similar to loans receivable and are measured at amortized cost using the prospective effective interest method described in ASC 835-30 Imputation of Interest . The effective interest rate is calculated by forecasting the expected cash flows to be received over the life of the asset relative to the initial invested amount.
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However, we apply the royalty recognition constraint required under the guidance for sales-based royalties which requires a royalty to be recorded no sooner than the underlying sale occurs. Therefore, royalties on sales of products commercialized by our partners are recognized in the quarter the product is sold. Our partners generally report sales information to us on a one quarter lag.
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The effective interest rate is recalculated in each reporting period as the difference between expected cash flows and actual cash flows are realized and as there are changes to expected future cash flows.
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Thus, we estimate the expected royalty proceeds based on an analysis of historical experience and interim data provided by our partners including their publicly announced sales. Differences between actual and estimated royalty revenues are adjusted in the period in which they become known, typically the following quarter.
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The gross carrying value of a financial royalty asset is made up of the opening balance, or net purchase price for a new financial royalty asset, which is increased by accrued interest income (except for assets under the non-accrual method) and decreased by cash receipts in the period to arrive at the ending balance.
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Our contracts with customers often will include variable consideration in the form of contingent milestone-based payments. We include contingent milestone based payments in the estimated transaction price when it is probable a significant reversal in the amount of cumulative revenue recognized will not occur. These estimates are based on historical experience, anticipated results and our best judgment at the time.
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We recognize income from financial royalty assets when there is a reasonable expectation about the timing and amount of cash flows expected to be collected. Income is calculated by multiplying the carrying value of the financial royalty asset by the periodic effective interest rate.
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If the contingent milestone based payment is sales-based, we apply the royalty recognition constraint and record revenue when the underlying sale has taken place. Significant judgments must be made in determining the transaction price for our sales of intellectual property.
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We account for financial royalty assets related to developmental pipeline or recently commercialized products on a non-accrual basis. Developmental pipeline products are non-commercialized, non-approved products that require FDA or other regulatory approval, and thus have uncertain cash flows. Newly commercialized products typically do not have an established reliable sales pattern, and thus have uncertain cash flows.
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Because of the risk that products in development with our partners will not reach development based milestones or receive regulatory approval, we generally recognize any contingent payments that would be due to us upon the occurrence of the development milestone or regulatory approval.
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Valuation of Partnered Programs Derivative Assets Acquired in Agenus Transaction Partnered Programs acquired in the transaction with Agenus are accounted for as derivative assets under ASC 815, Derivatives and Hedging , and were recorded at fair value at acquisition. These derivative assets are marked to fair value at each subsequent reporting period.
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Revenue from Captisol sales is recognized when control of Captisol material or intellectual property license rights is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those products.
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To determine the fair value of the derivative assets, the Company applied a discounted cash flow model using observable and unobservable market data for inputs, including the estimated amount and timing of the expected cash flows and the probability of success of underlying clinical programs which considers the level of risk appropriate for a respective program stage.
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A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract.
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For Captisol material, we consider our performance obligation is satisfied at a point in time, once we have transferred control of the product, meaning the customer has the ability to use and obtain the benefit of the 53 Captisol material or intellectual property license right.
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We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. Sales tax and other taxes we collect concurrent with revenue-producing activities are excluded from revenue.
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We have elected to recognize the cost of freight and shipping when control over Captisol material has transferred to the customer as an expense in Cost of Captisol.
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We expense incremental costs of obtaining a contract when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We did not incur any incremental costs of obtaining a contract during the periods reported.
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We occasionally have sub-license obligations related to arrangements for which we receive license fees, milestones and royalties. We evaluate the determination of gross as a principal versus net as an agent reporting based on each individual agreement. Goodwill and Intangible Assets — Impairment Assessments Goodwill Goodwill is evaluated annually for impairment using either a quantitative or qualitative analysis.
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Goodwill is tested for impairment at the reporting unit level, and is based on the net assets for each reporting unit, including goodwill and intangible assets. Goodwill is assigned to each reporting unit, as this represents the lowest level that constitutes a business and is the level at which management regularly reviews the operating results.
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The Company performs a quantitative analysis using a discounted cash flow model and other valuation techniques, but may elect to perform a qualitative analysis.
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In addition, goodwill is evaluated for impairment whenever an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
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Events or circumstances that may result in an impairment review include changes in macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events, specific events affecting the reporting unit or sustained decrease in share price. The annual goodwill impairment test was performed using a qualitative analysis in 2023 and 2022.
Removed
A qualitative analysis is performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual sales and operating profit margins, discount rates, industry data, and other relevant qualitative factors. These trends and factors are compared to, and based on, the assumptions used in the most recent quantitative analysis performed for each reporting unit.
Removed
The results of the qualitative analyses did not indicate a need to perform quantitative analysis. In 2022, during an interim period we used a quantitative assessment for goodwill and the relative fair value method to reallocate goodwill for the OmniAb business and Ligand core business due to the reorganization of the Company’s business discussed in “Item 8.
Removed
Significant judgments and estimates based on interpretations of existing tax laws or regulations in the United States are required in determining our provision for income taxes.
Removed
Changes in tax laws, statutory tax rates, and estimates of our future taxable income could impact the deferred tax assets and liabilities provided for in the consolidated financial statements and would require an adjustment to the provision for income taxes. Deferred tax assets are regularly assessed to determine the likelihood they will be recovered from future taxable income.
Removed
A valuation allowance is established when we believe it is more likely than not the future realization of all or some of a deferred tax asset will not be achieved. In evaluating our ability to recover deferred tax assets within the jurisdiction which they arise, we consider all available positive and negative evidence.
Removed
Factors reviewed include the cumulative pre-tax book income for the past three years, scheduled reversals of deferred tax liabilities, our history of earnings and reliability of our forecasts, projections of pre-tax book income over the foreseeable future, and the impact of any feasible and prudent tax planning strategies.
Removed
We recognize the impact of a tax position in our financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position.
Removed
Tax authorities regularly examine our returns in the jurisdictions in which we do business and we regularly assess the tax risk of our return filing positions. Due to the complexity of some of the uncertainties, the ultimate resolution may result in payments that are materially different from our current estimate of the tax liability.
Removed
These differences, as well as any interest and penalties, will be reflected in the provision for income taxes in the period in which they are determined. Share-Based Compensation We measure and recognize compensation expense for all share-based payments, including restricted stock, ESPP and stock options, based on the estimated fair value.
Removed
Restricted stock unit (RSU) and performance stock unit (PSU) are all considered restricted stock. The fair value of restricted stock is determined by the closing market price of our common stock on the date of grant.
Removed
We recognize share-based compensation expense based on the fair value on a straight-line basis over the requisite service periods of the awards, taking into consideration of forfeitures as they occur.
Removed
A PSU generally represents a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the vesting period.
Removed
At each reporting period, we reassess the probability of the achievement of such corporate performance goals and any expense change resulting from an adjustment in the estimated shares to be released are treated as a cumulative catch-up in the period of adjustment.
Removed
A limited amount of PSUs contain a market condition dependent upon the Company’s relative and absolute total stockholder return over a three-year period, with a range of 0% to 200% of the target amount granted to be issued under the award.
Removed
Share-based compensation expense for these PSUs is measured using the Monte-Carlo simulation valuation model and is not adjusted for the achievement, or lack thereof, of the market conditions.
Removed
Conversion and Modification of Equity Awards Outstanding at Separation Date In connection with the OmniAb Separation on November 1, 2022, under the provisions of the existing plans, we adjusted our outstanding equity awards in accordance with the Merger Agreement to preserve the intrinsic value of the awards immediately before and after the Distribution.
Removed
Upon the Distribution, employees holding stock options, restricted stock units and performance restricted stock units denominated in pre-Distribution Ligand stock received a number of otherwise-similar awards either in post-Distribution Ligand stock or in a combination of post-Distribution Ligand stock and OmniAb stock based on conversion ratios outlined for each group of employees in the Merger Agreement that we entered into in connection with the Distribution.
Removed
The equity awards that were granted prior to March 2, 2022 were converted under the shareholder method, wherein employees holding outstanding equity awards received equity awards in both Ligand and OmniAb.
Removed
For equity awards granted after March 2, 2022, for Ligand employees, the number of awards that were outstanding at the Separation were proportionately adjusted into post-Distribution Ligand stock to maintain the aggregate intrinsic value of the awards at the date of the Separation; for OmniAb employees, the number of awards that were outstanding at the Separation were proportionately adjusted into post-Distribution OmniAb stock to maintain the aggregate intrinsic value of the awards at the date of the Separation.
Removed
The conversion ratio was determined based on the relative values of Ligand common stock in the “regular way” and “ex-distribution” markets during the five-trading day period prior to the closing of the business combination. These modified awards otherwise retained substantially the same terms and conditions, including term and vesting provisions.
Removed
Additionally, we will not incur any future compensation cost related to equity awards held by OmniAb employees and directors. We will incur future compensation cost related to OmniAb equity awards held by our employees. Recent Accounting Pronouncements 55 For the summary of recent accounting pronouncements applicable to our consolidated financial statements, see “ Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

27 edited+15 added−30 removed7 unchanged
Biggest changeThe following table represents royalty revenue by program: (in millions) 2023 Estimated Partner Product Sales Effective Royalty Rate 2023 Royalty Revenue 2022 Estimated Partner Product Sales Effective Royalty Rate 2022 Royalty Revenue Kyprolis $ 1,503.1 2.4% $ 35.6 $ 1,275.6 2.4% $ 30.1 Evomela 51.0 20.0% 10.2 51.0 20.0% 10.2 Teriparatide injection (1) 37.2 29.8% 11.1 47.2 33.5% 15.8 Rylaze 397.5 3.4% 13.5 278.7 3.2% 8.8 Other 956.4 1.4% 13.5 383.7 2.0% 7.6 Total $ 2,945.2 $ 83.9 $ 2,036.2 $ 72.5 (1) - Teriparatide injection sales have been adjusted for certain deductible items as defined in the respective license agreement, and the royalty revenue is based on a tiered gross profit share.
Biggest changeThe following table represents revenue from intangible royalty assets by program (in millions): (in millions) 2024 Estimated Partner Product Sales Effective Royalty Rate 2024 Royalty Revenue 2023 Estimated Partner Product Sales Effective Royalty Rate 2023 Royalty Revenue Kyprolis $ 1,627.4 2.4% $ 38.4 $ 1,503.1 2.4% $ 35.6 Rylaze 409.4 3.3% 13.7 397.5 3.4% 13.5 Filspari 135.6 9.0% 12.2 30.0 9.0% 2.7 Evomela 43.5 20.0% 8.7 51.0 20.0% 10.2 Teriparatide injection (1) 30.2 27.2% 8.2 37.2 29.8% 11.1 Vaxneuvance 791.3 0.7% 5.2 653.9 0.6% 4.1 Other 451.7 2.0% 8.9 272.5 2.5% 6.7 Total $ 3,489.1 $ 95.3 $ 2,945.2 $ 83.9 (1) We receive tiered profit sharing of 25% on quarterly profits less than $3.75 million, 35% on quarterly profits greater than $3.75 million but less than $7.5 million and 40% on quarterly profits greater than $7.5 million.
Gain on Sale of Pelican The gain on sale of Pelican in the amount of $2.1 million for 2023 represents the excess of the fair value of 1) our investment in Primrose Bio and other economic rights; 2) the carrying amount of Pelican business assets and liabilities together with allocated goodwill as of September 18, 2023, the date of sale; and 3) $15.0 million consideration paid.
Gain on Sale of Pelican The gain on sale of Pelican in the amount of $2.1 million for 2023 represents the excess of the fair value of 1) our investment in Primrose Bio and other economic rights; 2) the carrying amount of Pelican business assets and liabilities together with allocated goodwill as of September 18, 2023, the date of sale; and 3) $15 million consideration paid.
The shelf registration statement relating to such shares included a prospectus covering the offering, issuance and sale of up to $100.0 million of our common stock from time to time through the ATM Offering. The shares to be sold under the Sales Agreement may be issued and sold pursuant to the shelf registration statement.
The shelf registration statement relating to such shares included a prospectus covering the offering, issuance and sale of up to $100 million of our common stock from time to time through the ATM Offering. The shares to be sold under the Sales Agreement may be issued and sold pursuant to the shelf registration statement.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (7), Leases.” We also have commitments under our supply agreement with Hovione for Captisol purchases.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (9), Leases.” We also have commitments under our supply agreement with Hovione for Captisol purchases.
Additionally, we own certain securities which are classified as short-term investments that we received as a result of a milestone and an upfront license payment as well as 1.7 million shares of common stock in Viking.
Additionally, we own 51 certain securities which are classified as short-term investments that we received as a result of a milestone and an upfront license payment as well as 1.0 million shares of common stock in Viking.
On September 30, 2022, we entered into an At-The-Market Equity Offering Sales Agreement (Sales Agreement) with Stifel, Nicolaus & Company, Incorporated (Agent), under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100.0 million in “at the market” offerings through the Agent (ATM Offering).
On September 30, 2022, we entered into an At-The-Market Equity Offering Sales Agreement (the “Sales Agreement”) with Stifel, Nicolaus & Company, Incorporated (the “Agent”), under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100 million in “at the market” offerings through the Agent (the “ATM Offering”).
Cash and cash equivalents and short-term investments decreased by $41.6 million from last year, due to factors described in the “ Cash Flow Summary ” below. Our primary source of liquidity, other than our holdings of cash, cash equivalents, and investments, has been cash flows from operations.
Cash and cash equivalents and short-term investments decreased by $85.9 million from last year, due to factors described in the “Cash Flow Summary” below. Our primary source of liquidity, other than our holdings of cash, cash equivalents, and investments, has been cash flows from operations.
The total purchase obligation as of December 31, 2023 was $28.8 million, of which $8.6 million is expected to be paid within a year and the remaining amount is expected to be paid between 1 to 3 years.
The total purchase obligation as of December 31, 2024 was $21.6 million, of which $9.0 million is expected to be paid within a year and the remaining amount is expected to be paid between 1 to 3 years.
Immediately following the Distribution on November 1, 2022, in accordance with and subject to the terms and conditions of the Merger Agreement, Merger Sub merged with and into OmniAb (the Merger), with OmniAb continuing as the surviving company in the Merger and as a wholly-owned subsidiary of New OmniAb.
Following the OmniAb Separation and the OmniAb Distribution, on November 1, 2022, in accordance with and subject to the terms and conditions of the OmniAb Merger Agreement, Merger Sub merged with and into OmniAb, with OmniAb continuing as the surviving company and wholly-owned subsidiary of New OmniAb on and after the effective time of the merger (the “OmniAb Merger”).
It is also affected by discrete items that may occur in any given year, but are not consistent from year to year. In 2023, the variance from the U.S. federal statutory rate of 21% was primarily attributable to the decrease in unrecognized tax benefits.
It is also affected by discrete items that may occur in any given year, but are not consistent from year to year. In 2024, the variance from the U.S. federal statutory rate of 21% was primarily attributable to increase in foreign includable income and non-deductible stock based compensation.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (1), Basis of Presentation and Summary of Significant Accounting Policies .” Results of Operations Revenue FY 2023 vs.
For summary of recent accounting pronouncements applicable to our consolidated financial statements, see “ Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (1), Basis of Presentation and Summary of Significant Accounting Policies .” 48 Results of Operations Revenue and Other Income FY 2024 vs.
Amortization of intangibles decreased by $0.6 million in 2023 compared to 2022 with the decrease primarily due to the cessation of amortization of certain Pelican intangibles resulting from the sale of the Pelican business. At any one time, we are working on multiple programs. As such, we generally do not track our R&D expenses on a specific program basis.
At any one time, we are working on multiple programs. As such, we generally do not track our R&D expenses on a specific program basis. Our R&D expenses decreased by $3.1 million in 2024 compared to 2023, with the decrease primarily attributable to lower employee related expenses and lab supplies resulting from the Pelican spin-off in September 2023.
(Merger Sub), pursuant to which New OmniAb combined with OmniAb, our then-antibody discovery business (the OmniAb Business), in a Reverse Morris Trust transaction. Pursuant to the Separation Agreement, we transferred the OmniAb Business, including certain of our related subsidiaries, to OmniAb and, in connection therewith, distributed (the Distribution) to Ligand stockholders 100% of the common stock of OmniAb.
Pursuant to the OmniAb Separation and Distribution Agreement, we, prior to the effective time of the OmniAb Merger (i) transferred our then-antibody discovery business (the “OmniAb Business”), including certain of our related subsidiaries, to OmniAb (the “OmniAb Separation”) and (ii) in connection therewith, distributed 100% of OmniAb’s common stock held by Ligand to Ligand stockholders (the “OmniAb Distribution”).
Discussion of significant changes we believe are important to understand the assumptions and judgments underlying our consolidated financial statements. • Recent Accounting Pronouncements. For summary of recent accounting pronouncements applicable to our consolidated financial statements, see “ Item 8.
Discussion of key aspects of our consolidated statements of cash flows, changes in our financial position, and our financial commitments. • Critical Accounting Policies and Estimates. Discussion of significant changes we believe are important to understand the assumptions and judgments underlying our consolidated financial statements. • Recent Accounting Pronouncements.
Teriparatide injection has a tiered gross profit share between 25% and 40% on sales that have been adjusted for certain deductible items as defined in the respective license agreement. The Rylaze royalty rate is in the low single digits. Contract revenue includes service revenue, license fees and development, regulatory and sales based milestone payments.
Kyprolis royalty rate is under a tiered royalty rate structure with the highest being 3%. Evomela has a contractually fixed royalty rate of 20%. Teriparatide injection has a tiered gross profit share between 25% and 40% on sales that have been adjusted for certain deductible items as defined in the respective license agreement.
In April 2023, our Board of Directors approved a stock repurchase program authorizing, but not requiring, the repurchase of up to $50.0 million of our common stock from time to time through April 2026.
In April 2023, our Board approved a stock repurchase program authorizing, but not requiring, the repurchase of up to $50 million of our common stock from time to time through April 2026. We expect to acquire shares, if at all, primarily through open-market transactions in accordance with all applicable requirements of Rule 10b-18 of the Exchange Act.
After the Distribution, we do not beneficially own any shares of common stock in OmniAb and no longer consolidate OmniAb into our financial results for periods ending after October 31, 2022. As a result, OmniAb's historical financial results through the Separation are reflected in our consolidated financial statements as discontinued operations.
In addition, New OmniAb changed its corporate name to “OmniAb, Inc.” concurrently upon the effectiveness of the OmniAb Merger. After the OmniAb Distribution, we do not beneficially own any shares of common stock in OmniAb and no longer consolidate OmniAb into our financial results for periods ending after October 31, 2022.
The year over year increase in 2023 is primarily due to the significant interest rate increases by the federal reserve during 2023. Interest expense includes the 0.75% coupon cash interest expense in addition to the non-cash accretion of discount (including the amortization of debt issuance costs) on our 2023 Notes.
Interest expense in 2023 consists primarily of the 0.75% coupon cash interest expense in addition to the non-cash accretion of discount (including the amortization of debt issuance costs) on our 2023 Notes. In May 2023, the 2023 Notes matured, and we paid the remaining $76.9 million principal amount and $0.3 million accrued interest in cash.
FY 2022 (Dollars in thousands) 2023 2022 Change % Change Gain (loss) from short-term investments $ 46,365 $ 28,540 $ 17,825 (62) % Interest income 7,711 2,046 5,665 277 % Interest expense (656) (1,799) 1,143 64 % Gain on derivative instruments 250 — 250 N/A Other income (expense), net (1,952) 4,187 (6,139) 147 % Total other income (expense), net $ 51,718 $ 32,974 $ 18,744 (57) % The fluctuation in the gain (loss) from short-term investments is primarily driven by the realized gain of $44.4 million from the sales of 5.0 million shares of Viking common stock in 2023, compared to no Viking shares sold in 2022.
FY 2023 (Dollars in thousands) 2024 2023 Change % Change Gain (loss) from short-term investments $ 75,024 $ 46,365 $ 28,659 62 % Interest income 8,055 7,711 344 4 % Interest expense (3,037) (656) (2,381) 363 % Other non-operating expense, net (54,918) (1,702) (53,216) 3127 % Total other income (expense), net $ 25,124 $ 51,718 $ (26,594) (51) % The increase in the gain (loss) from short-term investments of $28.7 million is primarily driven by the realized gain of $60.0 million from the sale of 0.7 million shares of Viking common stock in 2024, compared to the $44.4 million realized gain from the sales of 5.0 million shares of Viking common shares in 2023.
FY 2022 (Dollars in thousands) 2023 2022 Change % Change Income before income tax expense (benefit) from continuing operations $ 63,660 $ 36,011 $ 27,649 77 % Income tax benefit (expense) (9,841) (41,230) 31,389 (76) % Net income (loss) from continuing operations $ 53,819 $ (5,219) $ 59,038 (1,131) % Effective Tax Rate 15 % 114 % 50 Our effective tax rate for 2023 and 2022 was 15% and 114%, respectively.
FY 2023 (Dollars in thousands) 2024 2023 Change % Change Income before income tax expense (benefit) from continuing operations $ 2,518 $ 63,660 $ (61,142) (96) % Income expense (6,550) (9,841) 3,291 (33) % Net income (loss) from continuing operations $ (4,032) $ 53,819 $ (57,851) (107) % Effective Tax Rate 260 % 15 % Our effective tax rate for 2024 and 2023 was 260% and 15%, respectively.
We expect to acquire these shares, if at all, primarily through open-market transactions in accordance with all applicable requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing and amount of repurchase transactions will be determined by management based on our evaluation of market conditions, share price, legal requirements and other factors. See “
The timing and amount of repurchase transactions will be determined by management based on our evaluation of market conditions, share price, legal requirements and other factors. Authorization to repurchase $50 million of our common stock remained available as of December 31, 2024. See “
In addition, 49 the fluctuation is driven by the changes in the fair value of our ownership in Viking common stock (an unrealized gain of $2.6 million in 2023 as compared to an unrealized gain of $32.2 million in 2022). Interest income consists primarily of interest earned on our short-term investments.
In addition, the increase was driven by changes in the fair value of our ownership in Viking common stock (an unrealized gain of $9.0 million in 2024 compared to an unrealized gain of $2.6 million in 2023) and a $7.1 million net gain on the arrangements we executed and exercised in 2024 to hedge against the fluctuation in Viking's share price.
On May 15, 2023, the 2023 Notes maturity date, we paid the remaining $76.9 million principal amount and $0.3 million accrued interest in cash. We are obligated to make payments to operating leases, including rental commitments on leases that have not yet commenced. For information on these obligations, see detail in “Item 8.
During 2024, we issued 360,325 shares of common stock in the ATM Offering, generating net proceeds of $37.4 million, net of commissions and other transaction costs. We are obligated to make payments under operating leases, including rental commitments on leases that have not yet commenced. For information on these obligations, see detail in “Item 8.
Our MD&A is organized as follows: • Results of Operations. Detailed discussion of our revenue and expenses from continuing operations for years ended December 31, 2023, 2022 and 2021. • Liquidity and Capital Resources. Discussion of key aspects of our consolidated statements of cash flows, changes in our financial position, and our financial commitments. • Critical Accounting Policies and Estimates.
As a result, OmniAb's historical financial results through the OmniAb Separation are reflected in our consolidated financial statements as discontinued operations. Our MD&A is organized as follows: • Results of Operations. Detailed discussion of our revenue and expenses for twelve months ended December 31, 2024 and 2023.
OmniAb Separation and Spin-Off On March 23, 2022, we entered into the Merger Agreement, by and among our company, Avista Public Acquisition Corp. II (New OmniAb) and OmniAb, Inc., a Delaware corporation and then wholly-owned subsidiary of our company (OmniAb), and Orwell Merger Sub Inc.
OmniAb Transactions On March 23, 2022, we entered into (i) an Agreement and Plan of Merger (the “OmniAb Merger Agreement”), among Ligand, OmniAb, Avista Public Acquisition Corp.
FY 2022 (Dollars in thousands) 2023 2022 Change % Change Cost of Captisol $ 10,512 $ 52,827 $ (42,315) (80) % Amortization of intangibles 33,654 34,237 (583) (2) % Research and development 24,537 36,082 (11,545) (32) % General and administrative 52,790 70,062 (17,272) (25) % Total operating costs and expenses $ 121,493 $ 193,208 $ (71,715) (37) % Total operating costs and expenses for 2023 decreased by $71.7 million or 37% compared with 2022.
FY 2023 (Dollars in thousands) 2024 2023 Change % Change Cost of Captisol $ 11,074 $ 10,512 $ 562 5 % Amortization of intangibles 32,959 33,654 (695) (2) % Research and development 21,425 24,537 (3,112) (13) % General and administrative 78,654 52,790 25,864 49 % Financial royalty assets impairment 30,572 — 30,572 n/a Fair value adjustment to partner program derivatives 15,055 — 15,055 n/a Total operating costs and expenses $ 189,739 $ 121,493 $ 68,246 56 % Total operating costs and expenses for 2024 increased by $68.2 million or 56% compared with 2023. 49 Cost of Captisol increased year over year in 2024 primarily due to higher sales of Captisol during 2024 compared to 2023.
Contract revenue decreased year over year in 2022 by $9.1 million primarily due to the timing of partner milestone events. Royalty revenue is a function of our partners' product sales and the applicable royalty rate. Kyprolis royalty rate is under a tiered royalty rate structure with the highest being 3.0%. Evomela has a contractually fixed royalty rate of 20%.
The higher Captisol sales were due to the timing of customer orders. Contract revenue and other revenue increased by $9.5 million primarily due to milestone payments earned from Verona Pharma upon the approval and commercial launch of Ohtuvayre. Revenue from intangible royalty assets is a function of our partners' product sales and the applicable royalty rate.
Removed
FY 2022 (Dollars in thousands) 2023 2022 Change % Change Royalties $ 83,910 $ 72,527 $ 11,383 16 % Captisol - Core 28,372 16,429 11,943 73 % Captisol - COVID — 88,066 (88,066) (100) % Contract 19,032 19,223 (191) (1) % Total revenue $ 131,314 $ 196,245 $ (64,931) (33) % Total revenue decreased by $64.9 million, or 33%, to $131.3 million in 2023 compared to $196.2 million in 2022 primarily due to the $88.1 million decrease in sales of COVID-related Captisol.
Added
II, a Cayman Islands exempted company (“APAC”), and Orwell Merger Sub, Inc., a wholly owned subsidiary of APAC (“Merger Sub”), and (ii) a Separation and Distribution Agreement (the “OmniAb Separation and Distribution Agreement”), among Ligand, OmniAb and APAC.
Removed
The lower sales were due to reduced demand for remdesivir, a treatment for moderate or severe COVID-19. Core Captisol sales were $28.4 million in 2023 compared to $16.4 million in 2022. The higher sales were due to the timing of customer orders.
Added
Prior to the effective time of the OmniAb Merger (defined below), APAC migrated to and domesticated as a Delaware corporation (“New OmniAb”) in accordance with the terms and conditions of the OmniAb Merger Agreement.
Removed
Royalty revenue increased by $11.4 million, or 16%, to $83.9 million in 2023 compared to $72.5 million in 2022. The increase in royalty revenue is primarily due to the increases in sales of Kyprolis, Rylaze and Pneumosil. 47 FY 2022 vs.
Added
We also contributed to OmniAb cash and certain specific assets and liabilities constituting the OmniAb Business.
Removed
FY 2021 (Dollars in thousands) 2022 2021 Change % Change Royalties $ 72,527 $ 48,927 $ 23,600 48 % Captisol - Core 16,429 23,423 (6,994) (30) % Captisol - COVID 88,066 140,827 (52,761) (37) % Contract 19,223 28,367 (9,144) (32) % Total revenue $ 196,245 $ 241,544 $ (45,299) (19) % Total revenue from continuing operations decreased by $45.3 million, or 19%, to $196.2 million in 2022 compared to $241.5 million in 2021 primarily due to the $52.8 million decrease in sales of COVID-related Captisol.
Added
A comparison of our results of operations for twelve months ended December 31, 2024 and 2023 can be found under “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report. • Liquidity and Capital Resources.
Removed
The lower sales were due to reduced demand for remdesivir, a treatment for moderate or severe COVID-19. Core Captisol sales were $16.4 million in 2022 compared to $23.4 million in 2021. The lower sales were due to the timing of customer orders.
Added
FY 2023 (Dollars in thousands) 2024 2023 Change % Change Revenue from intangible royalty assets $ 95,329 $ 83,910 $ 11,419 14 % Income from financial royalty assets 13,444 1,049 12,395 1182 % Royalties 108,773 84,959 23,814 28 % Captisol 30,883 28,372 2,511 9 % Contract revenue and other income 27,477 17,983 9,494 53 % Total revenue and other income $ 167,133 $ 131,314 $ 35,819 27 % Total revenue and other income increased by $35.8 million, or 27%, to $167.1 million in 2024 compared to $131.3 million in 2023 primarily due to the $23.8 million increase in royalties.
Removed
Royalty revenue increased by $23.6 million, or 48%, to $72.5 million in 2022 compared to $48.9 million in 2021. The increase in royalty revenue is driven primarily by increases in sales of drugs using the Pelican platform (Rylaze, Pneumosil and Teriparatide) along with an increase in sales of Kyprolis.
Added
The increase in royalties in 2024 was primarily due to income from Qarziba financial royalty asset acquired in the third quarter of 2024 and an increase in sales of Travere Therapeutics’ Filspari. Captisol sales increased by $2.5 million to $30.9 million in 2024 compared to $28.4 million in 2023.
Removed
Cost of Captisol decreased year over year in 2023 primarily due to lower sales of Captisol during 2023 and by the capacity ramp-up right of use asset impairment of $9.8 million recorded in the fourth quarter of 2022.
Added
The Rylaze and Vaxnuevance royalty rates are in the low single digits. Filspari has a fixed royalty rate of 9%.
Removed
Our R&D expenses decreased by $11.5 million in 2023 compared to 2022, with the decrease primarily due to lower share-based compensation and employee-related expenses, partially offset by an increase in R&D expenses due to the Novan acquisition. 48 General and administrative expenses decreased by $17.3 million in 2023 compared to 2022 primarily due to decreases in share-based compensation expense including a one-time charge associated with the retirement of our former CEO in the fourth quarter of 2022, and employee-related expenses, partially offset by an increase in G&A expenses due to the Novan acquisition.
Added
The decrease was partially offset by additional costs associated with incubating the Pelthos business. General and administrative expenses increased by $25.9 million in 2024 compared to 2023, with the increase primarily driven by higher stock-based compensation expenses for investments made in building out our business development and investment team.
Removed
FY 2021 (Dollars in thousands) 2022 2021 Change % Change Cost of Captisol $ 52,827 $ 62,176 $ (9,349) (15) % Amortization of intangibles 34,237 34,222 15 — % Research and development 36,082 32,105 3,977 12 % General and administrative 70,062 46,790 23,272 50 % Other operating income — (37,600) 37,600 (100) % Total operating costs and expenses $ 193,208 $ 137,693 $ 55,515 40 % Total operating costs and expenses from continuing operations for 2022 increased by $55.5 million, or 40% compared with 2021.
Added
Additionally, a one-time, non-cash stock award modification expense related to the departure of Ligand's former Chief Operating Officer and costs associated with incubating the Pelthos Therapeutics business contributed to the increase. Financial royalty asset impairment was $30.6 million for 2024 primarily due to Takeda's decision to discontinue the soticlestat program.
Removed
Cost of Captisol decreased year over year in 2022 primarily due to lower sales of Captisol during 2022, partially offset by the capacity ramp-up right of use asset impairment of $9.8 million recorded in the fourth quarter of 2022.
Added
Fair value adjustment to partner program derivatives was $15.1 million for 2024 primarily due to certain Agenus partners discontinuing development of their partnered programs. These programs may be relicensed at a later date, and Ligand would retain its economic interest upon any relicense activity.
Removed
Amortization of intangibles remained steady in 2022 compared to 2021 as there have been no significant changes to the gross balance of intangible assets over these periods. At any one time, we are working on multiple programs. As such, we generally do not track our R&D expenses on a specific program basis.
Added
Interest income consists primarily of interest earned on our short-term investments and remained relatively steady in 2024 compared to 2023. Interest expense in 2024 consists primarily of a royalty and milestone payments purchase agreement, entered by Novan in 2019, and assumed as part of the Novan acquisition in September 2023.
Removed
Our R&D expenses increased by $4.0 million in 2022 compared to 2021 due to higher employee-related expenses and increased facility related expenses.
Added
See additional information in “ Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (10), Debt. ” 50 Other non-operating expense, net, primarily consists of mark-to-market adjustments on derivatives (other than Viking Share Collar and Put and the partner program derivatives) and CVRs and losses on equity method investments.
Removed
General and administrative expenses increased by $23.3 million in 2022 compared to 2021 primarily due to increases in stock compensation expense including a one-time charge associated with the retirement of our former CEO in the fourth quarter of 2022, headcount-related expenses and legal expenses.
Added
Other non-operating expense, net, increased by $53.2 million in 2024 compared to 2023, primarily due to the $25.8 million loss from revaluation of Primrose investments, the $12.8 million equity method loss from Primrose Bio, the $12.1 million loss from change in fair value of derivative assets, and the $3.0 million impairment loss related to Neuritek warrants in 2024.
Removed
Other operating income in 2021 was due to reducing the fair value of the CVR liability associated to the acquisition of Pfenex to zero, as the CVR payment expiration date passed on December 31, 2021 without achieving the triggering event. We did not have any other operating income in 2022.
Added
In 2023, the variance from the U.S. federal statutory rate of 21% was primarily due the decrease in unrecognized tax benefits.
Removed
In May 2023, the 2023 Notes matured, and we paid the remaining $76.9 million principal amount and $0.3 million accrued interest in cash. The decrease in interest expense was primarily due to the zero debt outstanding balance after May 2023 compared to 2022. See additional information in “ Item 8.
Added
The items below also had an impact on the difference between our statutory U.S. rate. 2024 • $5.6 million (224.2%) increase from foreign includable income • $3.9 million (155.6%) increase from Section 162(m) limitation • $3.2 million (128.3%) decrease from foreign tax credit • $1.6 million (65.0%) decrease from valuation allowance • $1.1 million (44.3%) increase from foreign rate differential • $0.8 million (33.0%) decrease from the foreign-derived intangible income deduction • $0.6 million (23.9%) increase from the return to provision • $0.2 million (9.1%) decrease from research & development tax credit 2023 • $7.2 million (11.3%) decrease from unrecognized tax benefits • $2.2 million (3.4%) increase from the return to provision • $1.2 million (1.9%) decrease from stock based compensation • $1.0 million (1.6%) decrease from the foreign-derived intangible income deduction • $0.8 million (1.3%) decrease from Section 162(m) limitation Liquidity and Capital Resources At December 31, 2024, we had approximately $256.2 million in cash, cash equivalents, and short-term investments.
Removed
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Debt. ” Other expense, net, increased year over year in 2023 primarily due to a current expected credit loss (CECL) adjustment over the Elutia commercial license right of $3.2 million and a Selexis commercial license right impairment loss of $0.9 million compared to no CECL adjustment over similar assets in 2022.
Removed
In addition, we recorded a $4.2 million gain on our debt extinguishments in 2022 compared to no loss on debt extinguishments in 2023. See additional information in “ Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Debt. ” FY 2022 vs.
Removed
FY 2021 (Dollars in thousands) 2022 2021 Change % Change Gain (loss) from short-term investments $ 28,540 $ (5,263) $ 33,803 (642) % Interest income 2,046 886 1,160 131 % Interest expense (1,799) (19,619) 17,820 91 % Other income (expense), net 4,187 (7,650) 11,837 155 % Total other income (expense), net $ 32,974 $ (31,646) $ 64,620 204 % The fluctuation in the gain (loss) from short-term investments is primarily driven by the changes in the fair value of our ownership in Viking common stock (an unrealized gain of $32.2 million in 2022 as compared to an unrealized loss of $9.6 million in 2021).
Removed
Interest income consists primarily of interest earned on our short-term investments. The year over year increase in 2022 is primarily due to the significant interest rate increases by the federal reserve during 2022.
Removed
Interest expense includes the 0.75% coupon cash interest expense in addition to the non-cash accretion of discount (including the amortization of debt issuance costs) on our 2023 Notes. The year over year decrease was primarily due to the adoption of ASU 2020-06 which significantly reduced the debt discount balance subject to amortization. See additional information in “Item 8.
Removed
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (1), Basis of Presentation and Summary of Significant Accounting Policies.” In addition, we carried a lower average debt outstanding balance during 2022 as compared 2021. During 2022, we repurchased $266.4 million in principal of the 2023 Notes for $261.4 million in cash, including accrued interest of $0.5 million.
Removed
See additional information in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Debt.” Other income (expense), net, increased year over year in 2022 primarily due to a $4.2 million gain on our debt extinguishments in 2022 compared to $7.3 million loss on debt extinguishments in 2021. See additional information in “Item 8.
Removed
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Debt.” Income tax benefit (expense) FY 2023 vs.
Removed
In 2022, the variance from the U.S. federal statutory rate of 21% was primarily due to limitations on the deductibility of stock-based compensation for certain officers and a discrete tax expense of $24.8 million related to the valuation allowance established during the fourth quarter of 2022 against deferred tax assets for California research and development credits and net operating losses.
Removed
Beginning in 2022, the Tax Cuts and Jobs Act of 2017 requires taxpayers to capitalize and amortize R&D expenditures over five years for domestic research and fifteen years for foreign research pursuant to Section 174 of the Internal Revenue Code of 1986, as amended.
Removed
We recorded an increase of $4.7 million to our current federal income tax expense and deferred tax assets for continuing operations during 2022 due to the capitalization of R&D under Section 174. 2023 • $7.2 million (11.3%) decrease from unrecognized tax benefits • $2.2 million (3.4%) increase from the return to provision • $1.2 million (1.9%) decrease from stock based compensaiton • $1.0 million (1.6%) decrease from the foreign-derived intangible income deduction • $0.8 million (1.3%) decrease from Section 162(m) limitation 2022 • $24.8 million (68.9%) increase from valuation allowance adjustments • $5.9 million (16.3%) increase from Section 162(m) limitation • $2.4 million (6.7%) decrease from the foreign-derived intangible income deduction • $1.3 million (3.6%) increase due to excess tax benefits from share-based compensation which are recorded as a discrete item within the provision for income tax pursuant to ASU 2016-09 Net Loss from Discontinued Operations Net loss from discontinued operations for the years ended December 31, 2023, 2022 and 2021 was $1.7 million, $28.1 million and $19.2 million, respectively.
Removed
See additional information in “ Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (4), Spin-off Of OmniAb. ” Liquidity and Capital Resources At December 31, 2023, we had approximately $170.3 million in cash, cash equivalents, and short-term investments .
Removed
As of December 31, 2023 we have not issued any shares of common stock in the ATM Offering. In May 2018, we issued the 2023 Notes with an aggregate principal amount of $750.0 million. A portion of the proceeds from such issuance totaling $49.7 million were used to repurchase 260,000 shares of our common stock.
Removed
During 2021, we repurchased $152.0 million in principal of the 2023 Notes for $156.0 million in cash, including accrued interest of $0.3 million. 51 During 2022, we repurchased $266.4 million in principal of the 2023 Notes for $261.4 million in cash, including accrued interest of $0.5 million.
Removed
In September 2019, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to $500.0 million of our common stock from time to time over a period of up to three years. Our $500.0 million stock repurchase program expired in September 2022.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+9 added−2 removed1 unchanged
Biggest changeOur investment policy and strategy are focused on the preservation of capital and supporting our liquidity requirements. We use a combination of internal and external management to execute our investment strategy. We typically invest in highly rated securities, with the primary objective of minimizing the risk of principal loss.
Biggest changeWe use a combination of internal and external management to execute our investment strategy. We typically invest in highly rated securities, with the primary objective of minimizing the risk of principal loss. Our investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer.
We have historically maintained a relatively short average maturity for our investment portfolio, and we believe a hypothetical 100 basis point adverse move in interest rates across all maturities would not materially impact the fair market value of the portfolio in either period. 56
We have historically maintained a relatively short average maturity for our investment portfolio, and we believe a hypothetical 100 basis point adverse move in interest rates across all maturities would not materially impact the fair market value of the portfolio in either period. 55
We purchase Captisol from Hovione, located in Lisbon, Portugal. Payments to Hovione are denominated and paid in U.S. dollars; however, the unit price of Captisol contains an adjustment factor which is based on the sharing of foreign currency risk between the two parties.
Payments to Hovione are denominated and paid in U.S. dollars; however, the unit price of Captisol contains an adjustment factor which is based on the sharing of foreign currency risk between the two parties. Currently, we do not hedge our exposure to foreign currency fluctuations.
Investment Portfolio Risk At December 31, 2023, our investment portfolio included investments in available-for-sale securities of $147.4 million, including the investment in Viking common stock of $32.2 million. These securities are subject to market risk and may decline in value based on market conditions. Foreign Currency Risk Through our licensing and business operations, we are exposed to foreign currency risk.
Investment Portfolio Risk At December 31, 2024, our investment portfolio included investments in available-for-sale securities of $183.9 million, including the investment in Viking common stock of $40.2 million. These securities are subject to market risk and may decline in value based on market conditions.
Foreign currency exposures arise from transactions denominated in a currency other than the functional currency and from foreign denominated revenues and profit translated into U.S. dollars. Our license partners sell our products worldwide in currencies other than the U.S. dollar. Because of this, our revenues from royalty payments are subject to risk from changes in exchange rates.
Foreign currency exposures arise from transactions denominated in a currency other than the functional currency and from foreign denominated revenues and profit translated into U.S. dollars. As a result, our revenues from royalty payments are exposed to risks associated with fluctuations in foreign exchange rates.
Removed
The effect of an immediate 10% change in foreign exchange rates would not have a material impact on our financial condition, results of operations or cash flows. We do not currently hedge our exposures to foreign currency fluctuations. Interest Rate Risk We are exposed to changes in interest rates related primarily to our investment portfolio.
Added
Credit Risk We are exposed to credit risk through our counterparties, including risks associated with royalty assets, receivables, and financial instruments such as derivatives and available-for-sale debt securities. Most of our royalty assets and receivables come from contractual agreements that generate royalties based on sales of pharmaceutical products across the United States, Europe, and other regions.
Removed
Our investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer.
Added
This risk is primarily mitigated by the broad range of marketers responsible for paying royalties and the geographic diversity of product sales. Our royalty portfolio includes products marketed by leading biopharmaceutical companies such as Amgen, Merck, Jazz, Recordati, and Sanofi.
Added
As of December 31, 2024, Recordati was the largest individual marketer and payor of our financial royalty assets, representing 54% of these assets. We actively monitor the financial performance and creditworthiness of counterparties to our royalty agreements, derivative financial instruments, and available-for-sale debt securities to assess and respond to changes in their credit profiles.
Added
So far, we have not incurred any significant losses related to the collection of income or revenue from royalty assets, available-for-sale debt securities, or the settlement of derivative financial instruments.
Added
However, if a counterparty faces bankruptcy or financial difficulties and fails to meet its obligations under a derivative financial instrument, we could face substantial difficulties or delays in recovering amounts owed during bankruptcy or reorganization. 54 Foreign Currency Risk Through our licensing and business operations, we are exposed to foreign currency risk.
Added
These currency fluctuations could cause our operating results to differ materially from expectations, potentially leading to substantial gains or losses from the remeasurement of company balances. While historically we have primarily transacted with customers and vendors in U.S. dollars, as our international operations expand, our exposure to the effects of fluctuations in currency exchange rates increase.
Added
We expect to continue to expand the number of transactions with our customers that are denominated in foreign currencies in the future. We purchase Captisol from Hovione, located in Lisbon, Portugal and Cork, Ireland.
Added
Also, we generate Qarziba royalty revenue and incur operating expenses at our non-U.S. locations in the local currency for such locations. Fluctuations in the exchange rates between the U.S. dollar and other currencies could result in an increase to the U.S. dollar equivalent of related income and expenses.
Added
These fluctuations in currency exchange rates may affect the reported value of foreign-denominated revenues, expenses, assets, and liabilities when translated into U.S. dollars. Interest Rate Risk We are exposed to changes in interest rates related primarily to our investment portfolio. Our investment policy and strategy are focused on the preservation of capital and supporting our liquidity requirements.

Other LGND 10-K year-over-year comparisons