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What changed in LIGAND PHARMACEUTICALS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LIGAND PHARMACEUTICALS INC's 2024 and 2025 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 2025 report.

+484 added−335 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in LIGAND PHARMACEUTICALS INC's 2025 10-K

484 paragraphs added · 335 removed · 242 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

90 edited+90 added−49 removed55 unchanged
Biggest changeThe 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.
Biggest changeThe following table provides an overview of royalty receipts on our commercial-stage revenue-generating royalty assets: 6 Product Partner Therapeutic Area Royalty Rate 2025 Royalty Receipts (in millions) Estimated 2025 Product Revenue (in millions) Kyprolis Amgen/Ono/Be One Medicines Oncology 1.5% - 3.0% $35.5 $1,529 Qarziba Recordati Oncology Tiered mid-teen $33.7 €159 Filspari Travere Nephropathy 9% $32.0 $355 Ohtuvayre 2 Merck Respiratory Disease 3% $14.8 $488 Rylaze Jazz Oncology Low single digit $13.3 $395 Capvaxive Merck Infectious Disease Low single digit $10.1 $752 Teriparatide Alvogen Women’s Health 25%-40% 1 $8.1 $34 Vaxneuvance Merck Infectious Disease Low single digit $7.4 $801 Evomela Acrotech/CASI Oncology 20% $5.9 $30 Nexterone Baxter Cardiovascular Low single digit $3.1 $81 Pneumosil SII Infectious Disease Low single digit $3.0 $129 16 Other Products $10.0 Total Royalty Receipts $176.9 Less: Amortization of Financial Royalty Assets 3 $15.9 GAAP Income from Royalty Assets $161.0 NOTES: (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.
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.
Kyprolis is formulated with Ligand’s Captisol technology and is approved in 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.
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.
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; 15 • 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.
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.
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; • 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.
Dinutuximab beta was approved by the European Medicines Agency in 2017 for the treatment of high-risk neuroblastoma in patients aged 12 months and above, who have previously received induction chemotherapy and achieved at least a partial response, followed by myeloablative therapy and stem cell transplantation, as well as patients with history of relapsed or refractory neuroblastoma, with or without residual disease.
Dinutuximab beta was approved by the European Medicines Agency in 2017 for the treatment of high-risk neuroblastoma in patients aged 12 months and above, who have previously received induction chemotherapy and achieved at least a partial response, followed by myeloablative therapy and stem cell transplantation, as well as in patients with history of relapsed or refractory neuroblastoma, with or without residual 7 disease.
However, it has been publicly reported that the U.S. launch date for at least Breckenridge Pharmaceuticals’ generic product will be on a date that is held as confidential in 2027 or sooner, depending on certain occurrences. One generic company, Cipla Limited/Cipla USA, Inc. chose not to settle the litigation with Amgen, and proceeded to trial.
However, it has been publicly reported that the U.S. launch date for at least Breckenridge Pharmaceuticals’ generic product will be on a date that is held as confidential in 2027 or sooner, depending on certain occurrences. One generic company, Cipla Limited/Cipla USA, Inc. chose not to settle the litigation with Amgen, and 17 proceeded to trial.
In September 2023, Jazz announced that the European Commission (EC) had granted marketing authorization for Rylaze, to be marketed as Enrylaze. Jazz began a rolling launch in the second half of 2023. We are eligible to receive tiered low-single digit royalties based on worldwide net sales of Rylaze, Enrylaze and any products resulting from this collaboration.
In 8 September 2023, Jazz announced that the European Commission (EC) had granted marketing authorization for Rylaze, to be marketed as Enrylaze. Jazz began a rolling launch in the second half of 2023. We are eligible to receive tiered low-single digit royalties based on worldwide net sales of Rylaze, Enrylaze and any products resulting from this collaboration.
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.
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. 14 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.
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.
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 these products are also subject to other federal, state, and local statutes and regulations.
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.
HepDirect and LTP 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.
For each product or product family, the patents and/or applications referred to are in force in at least the United States, and for most products and product families, the patents and/or applications are also in force in European jurisdictions, Japan and other jurisdictions. Captisol Patents and pending patent applications covering Captisol and methods of making Captisol are owned by us.
For each product or product family, the patents and/or applications referred to are in force in at least the United States, and for most products and product families, the patents and/or applications are also in force in European jurisdictions, Japan and other jurisdictions. 16 Captisol Patents and pending patent applications covering Captisol and methods of making Captisol are owned by us.
Capvaxive is the first pneumococcal conjugate vaccine specifically designed for adults, and its 21 covered serotypes account for approximately 85% of cases of invasive pneumococcal disease among individuals 50 and over, including 8 serotypes not covered by any currently approved vaccines.
Capvaxive is the first pneumococcal conjugate vaccine specifically designed for adults, and its 21 covered serotypes account for approximately 85% of cases of invasive pneumococcal disease among individuals 50 and over, including 8 serotypes not covered by any other currently approved vaccines.
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”).
Tzield/Teizeild (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”).
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
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.
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.
Third, we believe our business model significantly 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.
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.
Finally, with IP technology platform acquisitions, we look for platforms that are infrastructure-light with existing royalties in place while providing the potential for generating new royalties through operating those platforms. Ideal 2 technology IP platforms will be scalable and have broad applicability. Our Captisol and NITRICIL businesses are excellent examples of successful platform technology investments.
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.
Pneumosil achieved WHO Prequalification in December 2019, allowing the product to be procured by United Nations agencies and Gavi, the Vaccine Alliance, and following the Indian Marketing Authorization in July 2020, 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.
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.
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. 18 We value diversity at all levels and continue to focus on extending our diversity and inclusion initiatives across our workforce.
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.
We will continue our proactive shareholder and employee engagement in 2026. 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 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.
We expect to continue our effort and to refine our EHS policies and practices in 2026. 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.
Qtorin rapamycin is a novel, topical formulation of high-strength rapamycin currently in development for the treatment of Microcystic Lymphatic Malformations (“Microcystic LM”) and cutaneous venous malformations (“VMs”). The FDA has granted Breakthrough Therapy Designation, Fast Track Designation, and Orphan Designation to Qtorin rapamycin for the treatment of Microcystic LM.
Qtorin rapamycin is a novel, topical formulation of rapamycin currently in development for the treatment of Microcystic Lymphatic Malformations (“Microcystic LM”) and cutaneous venous malformations (“VMs”). The FDA has granted Breakthrough Therapy Designation, Fast Track Designation, and Orphan Designation to Qtorin rapamycin for the treatment of Microcystic LM.
Teriparatide Injection Product (PF708) (Alvogen/Adalvo) We acquired the teriparatide injection product with the acquisition of Pfenex in October 2020. Teriparatide injection is a drug indicated for various uses including the treatment of osteoporosis in certain patients at high risk for fracture.
Teriparatide Injection Product (PF708) (Alvogen/Adalvo) We acquired rights to the teriparatide injection product with the acquisition of Pfenex in October 2020. Teriparatide injection is a drug indicated for various uses including the treatment of osteoporosis in certain patients at high risk for fracture.
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.
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 broad portfolio of patents and 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.
D-Fi is an injectable autologous gene-modified cell therapy in development for the treatment of dystrophic epidermolysis bullosa (“DEB”), candidate for the treatment of DEB, a devastating, painful, and debilitating rare genetic skin disorder.
D-Fi is an injectable autologous gene-modified cell therapy in development for the treatment of dystrophic epidermolysis bullosa (“DEB”) a devastating, painful, and debilitating rare genetic skin disorder.
This IP portfolio provides material coverage for our platform technologies, licensed products and product candidates, in addition to ZELSUVMI, which was approved by the FDA on January 5, 2024.
This IP portfolio provides material coverage for our platform technologies, licensed products and product candidates, in addition to Zelsuvmi, which was approved in the U.S. by the FDA on January 5, 2024.
VK0214 has been evaluated in a Phase 1b clinical trial in patients with the adrenomyeloneuropathy (“AMN”) form of X-ALD. 10 Under the terms of the agreement with Viking, we may be entitled to up to $375 million of development, regulatory and commercial milestones and a tiered royalty of 3.5% to 7.5% on potential future net sales of VK-2809 and VK-0214.
VK0214 has been evaluated in a Phase 1b clinical trial in patients with the adrenomyeloneuropathy (“AMN”) form of X-ALD. Under the terms of the agreement with Viking, we may be entitled to up to $150 million of development, regulatory and commercial milestones and a tiered royalty of 3.5% to 7.5% on potential future net sales of VK-0214.
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.
Other Key Partnered Programs We have a highly diversified partnered pipeline of assets 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.
Following the FDA approval, the US Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (“ACIP”) voted to update the adult age-based pneumococcal vaccination guidelines to recommend Capvaxive for pneumococcal vaccination in adults 50 years of age and older.
Following the FDA approval, the US Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (“ACIP”) voted to update the adult age-based pneumococcal vaccination guidelines to recommend Capvaxive for pneumococcal vaccination in adults 50 years of age and older with certain health risks.
Sermonix is currently conducting the Phase 3 ELAINE-3 clinical trial to assess the efficacy of lasofoxifene in combination with Eli Lilly and Company’s CDK4/6 inhibitor abemaciclib (Verzenio ® ) compared to fulvestrant and abemaciclib in pre- and post-menopausal subjects with locally advanced or metastatic ER+/HER2- breast cancer with an ESR1 mutation.
The ongoing Phase 3 ELAINE-3 clinical trial will assess the efficacy of lasofoxifene in combination with Eli Lilly and Company’s CDK4/6 inhibitor abemaciclib (Verzenio ® ) compared to fulvestrant and abemaciclib in pre- and post-menopausal subjects with locally advanced or metastatic ER+/HER2- breast cancer with an ESR1 mutation.
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 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, 2025, we have 47 full-time employees, of whom seven are involved directly in scientific research and development activities. We rely on skilled, experienced, and innovative employees to conduct the operations of the Company.
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.
Rylaze, 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.
Botensilimab and Balstilimab (BOT/BAL) (Agenus) In May 2024, we entered into the Agenus Agreement to support BOT/BAL clinical development, confirmatory Phase 3 trial, and launch readiness activities. Botensilimab is an investigational multifunctional anti-CTLA-4 immune activator (antibody) designed to boost both innate and adaptive anti-tumor immune responses.
Botensilimab and Balstilimab (BOT/BAL) (Agenus) In May 2024, we entered into the Agenus Agreement to support BOT/BAL clinical development. Botensilimab is an investigational multifunctional anti-CTLA-4 immune activator (antibody) designed to boost both innate and adaptive anti-tumor 11 immune responses.
It is a CD3-directed antibody indicated to delay the onset of Stage 3 T1D in adults and children aged 8 years and older with Stage 2 T1D. Tzield was granted Breakthrough Therapy Designation in 2019 and was approved by the FDA in November 2022.
It is a CD3-directed antibody indicated to delay the onset of Stage 3 T1D in adults and children aged 8 years and older with Stage 2 T1D. Tzield was granted Breakthrough Therapy Designation in 2019 and was approved by the FDA in November 2022 and was also approved in China by the National Medical Products Administration (NMPA) in September 2025.
Ohtuvayre (Verona, Nuance) We acquired a royalty on Verona's Ohtuvayre (ensifentrine) through our acquisition of Vernalis in 2018 and acquired additional rights from Ohtuvayre inventors during the course of 2024 continuing through January 2025, bringing our royalty rate to 3% of global net sales.
Ohtuvayre (Merck, Nuance) We acquired a royalty on Merck’s Ohtuvayre (ensifentrine) through our acquisition of Vernalis in 2018 and acquired additional rights from Ohtuvayre inventors during the course of 2024 continuing through January 2025, bringing our royalty rate to 3% of global net sales. Verona originally developed Ohtuvayre before becoming acquired by Merck in October of 2025.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (3), Acquisitions. ” Filspari (Travere, CSL Vifor, Renalys) In early 2012, we licensed the world-wide rights to Filspari (sparsentan) to Travere Therapeutics. In September 2024, Travere received full approval from the FDA for Filspari , which was previously under accelerated approval, for the treatment of immunoglobulin A nephropathy (IgAN).
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 4, Acquisitions. ” Filspari (Travere, CSL Vifor, Chugai) In early 2012, we licensed the world-wide rights to Filspari (sparsentan) to Travere Therapeutics. Travere received accelerated approval in February 2023 and then full approval in September 2024 from the FDA for Filspari, for the treatment of immunoglobulin A nephropathy (IgAN).
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.
We supply Captisol to Baxter for use in accordance with the terms of this license agreement and a separate supply agreement. 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.
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.
Pelican Expression Technology Platform In connection with the merger of Pelican and Primrose, Pfenex assigned a substantial global patent portfolio consisting of numerous patents pending patent applications to Pelican, while retaining one patent family directed to methods of producing Erwinia asparaginase.
In January 2024, Sermonix entered into a strategic collaboration and exclusive license agreement with Henlius for the rights to develop, manufacture and commercialize lasofoxifene in China. Henlius is currently conducting a Phase 3 ELAINE-3 multi-regional clinical trial in China.
Henlius entered into a strategic collaboration and exclusive license agreement with our former partner, Sermonix, to develop, manufacture and commercialize lasofoxifene in China. Henlius is currently participating in the Phase 3 ELAINE-3 multi-regional clinical trial in China.
Hovione operates FDA-inspected sites in the United States, Macau, Ireland and Portugal. Manufacturing operations for Captisol are performed primarily at Hovione's Portugal and Ireland facilities. We believe we maintain adequate inventory of Captisol to meet our current partner needs and that our Captisol capacity will be sufficient to meet future partner needs.
Manufacturing operations for Captisol are performed primarily at Hovione’s Portugal and Ireland facilities. We believe we maintain adequate inventory of Captisol to meet our current partner needs and that our Captisol capacity will be sufficient to meet future partner needs.
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.
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 and similar agreements of confidentiality (“CDAs”), facilitating access to in-depth proprietary information and data.
Under the terms of the agreement, we have invested $50 million in exchange for a mid-single digit royalty on worldwide sales of D-Fi and a portion of a future milestone payment upon D-Fi achieving FDA approval. An additional $25 million was secured from a syndicate of co-investors in return for a high-single digit royalty on worldwide sales of D-Fi.
Under the terms of the agreement, we have invested $50 million in exchange for a mid-single digit royalty on worldwide sales of D-Fi and a portion of a future milestone payment upon D-Fi achieving FDA approval.
As of December 31, 2024, approximately 18% and 9% of our workforce are Asian and Hispanic, respectively. Additionally, 48% of our workforce is female and 52% is male. We believe that our business benefits from the different perspectives a diverse workforce brings.
As of December 31, 2025, approximately 21% and 11% of our workforce are Asian and Hispanic, respectively. Additionally, 51% of our workforce is female and 49% is male. We believe that our business benefits from the different perspectives a diverse workforce brings.
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.
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. 9 Under the terms of the license agreement, Acrotech Biopharma has marketing rights worldwide excluding China, and CASI Pharmaceuticals has marketing rights in China.
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.
NITRICIL Platform Through the 2023 Novan acquisition described herein, Ligand, through its then wholly owned subsidiary LNHC, 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.
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.
Following the spin-off of our OmniAb antibody discovery business in November 2022 and our Pelican Expression Technology subsidiary in September 2023, and continuing through and after the carve-out of our Pelthos Therapeutics business in July 2025 in connection with the Pelthos Transaction, our focus has been 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.
Qarziba is commercially available in more than 35 countries. We receive a tiered mid-teen royalty on worldwide sales of Qarziba from Recordati and are entitled to receive over $25 million in potential milestone payments. See “ Item 8.
Qarziba is commercially available in more than 35 countries outside of the U.S. We receive a tiered mid-teen royalty on worldwide sales of Qarziba from Recordati and are entitled to receive over $25 million in potential milestone payments. Clinical Development of Qarziba Qarziba is also in clinical development for additional territories and indications.
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.
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. In 10 February 2026, Palvella announced positive topline results from its Phase 3 SELVA study of Qtorin rapamycin for the treatment of microcystic LMs.
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; also referred to as metabolic dysfunction associated steatohepatitis, MASH). Viking completed a Phase 2b clinical trial (the VOYAGE study) in patients with biopsy-confirmed NASH.
VK2809 (Viking) Our partner, Viking, is developing VK2809, a novel selective thyroid hormone receptor beta (TR-beta) agonist with potential in metabolic dysfunction associated steatohepatitis (MASH). Viking completed a Phase 2b clinical trial (the VOYAGE study) in patients with MASH.
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.
We receive a 20% royalty on global net sales of the Captisol-enabled melphalan product and revenue from Captisol material sales. 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.
Risk Factors.” Kyprolis Patents protecting Kyprolis include those owned by Amgen and those owned by us. The United States patent listed in the Orange Book relating to Kyprolis owned by Amgen with the latest expiration date is not expected to expire until 2029.
The United States patent listed in the Orange Book relating to Kyprolis owned by Amgen with the latest expiration date is not expected to expire until 2029. Patents and applications owned by Ligand relating to the Captisol component of Kyprolis are not expected to expire until 2033.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (3), Acquisitions. ” Commercial and Clinical Stage Partnered Portfolio We have a large royalty portfolio including 12 major commercial-stage revenue-generating royalty assets and over 75 additional active programs with future revenue-generating potential, including over 85 that are programs that are fully-funded by our partners.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 2, Pelthos Transaction. ” Commercial and Clinical Stage Partnered Portfolio We have a large royalty portfolio including 12 major commercial-stage revenue-generating royalty assets and over 100 programs with future revenue-generating potential.
In February 2025, Travere announced completion of its Type C meeting with the FDA and plans to submit a supplemental New Drug Application (sNDA) seeking traditional approval of Filspari for focal segmental glomerulosclerosis (FSGS).
Additionally, in February 2025, Travere announced completion of its Type C meeting with the FDA and in March 2025 submitted a supplemental New Drug Application (sNDA) seeking traditional approval of Filspari for focal segmental glomerulosclerosis (FSGS). The sNDA is based on existing data from the Phase 3 DUPLEX and Phase 2 DUET studies of Filspari.
At the 52-week mark, the drug reduced liver fat content by an average of 37% to 55% compared to baseline, with all treatment arms showing statistically significant improvements compared to placebo. VK0214, another novel, orally available, TR-beta agonist, is in development for the potential treatment of X-linked adrenoleukodystrophy (“X-ALD”).
At the 52-week mark, the drug reduced liver fat content by an average of 37% to 55% compared to baseline, with all treatment arms showing statistically significant improvements compared to placebo.
Our patents and applications relating to the Captisol component of Kyprolis are not expected to expire until 2033. Qarziba (Recordati) We receive royalties on Qarziba (dinutuximab beta) sales through our acquisition of Apeiron, announced in July 2024. Qarziba is a monoclonal antibody that is specifically directed against the carbohydrate moiety of disialoganglioside 2 (GD2), which is overexpressed on neuroblastoma cells.
Our patents and applications relating to the Captisol component of Kyprolis are not expected to expire until at least 2033. Qarziba (Recordati) We receive royalties on Qarziba (dinutuximab beta) sales through our acquisition of Apeiron Biologics AG (“Apeiron”), announced in July 2024.
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.
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.
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.
Captisol is a patent-protected, chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. This unique technology has enabled 17 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.
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. VK0214 (Viking) VK0214, another novel, orally available, TR-beta agonist, is in development for the potential treatment of X-linked adrenoleukodystrophy (“X-ALD”).
Under the terms of our agreement with Sermonix, we are entitled to receive potential regulatory and commercial milestone payments, as well as a tiered royalty of 6% to 10% on potential future net sales. Xinshumu (pradefovir) (Xi'an Xintong) Xi'an Xintong received marketing approval from the Chinese National Medical Products Administration (NMPA) for Xinshumu (pradefovir mesylate tablets) in October 2024.
Under the terms of our agreement with LeonaBio and Sermonix, we are entitled to receive potential regulatory and commercial milestone payments, as well as a tiered royalty of 6% to 10% on potential future net sales of lasofoxifene.
Alvogen has exclusively licensed the rights to commercialize and manufacture the teriparatide injection product in the U.S., while Adalvo has the rights to commercialize in the E.U. and other territories outside the U.S..
Alvogen has exclusively licensed the rights to commercialize and manufacture the teriparatide injection product in the U.S., while Adalvo has the rights to commercialize in the E.U. and other territories outside the U.S. In accordance with our agreements with Alvogen, we are eligible to receive tiered gross profit sharing of between 25% and 40% of quarterly profit.
Botensilimab augments immune responses across a wide range of tumor types by priming and activating T cells, downregulating intratumoral regulatory T cells, activating myeloid cells and inducing long-term memory responses. Over 900 patients have been treated with botensilimab in Phase 1 and Phase 2 clinical trials.
Botensilimab augments immune responses across a wide range of tumor types by priming and activating T cells, downregulating intratumoral regulatory T cells, activating myeloid cells and inducing long-term memory responses. Botensilimab alone, or in combination with Agenus’ investigational PD-1 antibody, balstilimab, has shown clinical responses across nine metastatic, late-line cancers.
(3) Ohtuvayre royalty receipts include an allocation of contractually earned milestones and royalties pertaining to financial royalty assets. (4) Amounts represent the adjustments to the effective interest income recognized to total contractual payments recognized in the period. Major Commercial-Stage Royalty Receipt Generating Assets The following programs represent important revenue-generating components of our current portfolio.
If therapeutic equivalence is achieved, quarterly profit changes to 50% of quarterly profits. (2) Ohtuvayre royalty receipts include an allocation of contractually earned milestones and royalties pertaining to financial royalty assets. (3) Amounts represent the adjustments to the effective interest income recognized to total contractual payments recognized in the period.
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.
We have a specific set of criteria we use to assess potential investments. The first is time to cash flow, as we typically seek products that are within a few years of regulatory approval and commercialization. We prioritize investments where the path to royalty monetization is clear and capital requirements beyond our investment is accessible.
Nexterone (Baxter) We have a license agreement with Baxter, related to Nexterone, a Captisol-enabled formulation of amiodarone, which is marketed in the United States and Canada. We supply Captisol to Baxter for use in accordance with the terms of a license agreement and a separate supply agreement between us and Baxter.
CASI can continue to distribute Evomela in China for a reasonable wind down period not to exceed 24 months. Nexterone (Baxter) We have a license agreement with Baxter, related to Nexterone, a Captisol-enabled formulation of amiodarone, which is marketed in the United States and Canada.
As described herein, we have entered into a settlement agreement with Teva and Acrotech Biopharma (the holder of the NDA for Evomela) which will allow Teva to market a generic version of Evomela in the United States in 2026, or earlier under certain circumstances. Absent early termination, the agreement will terminate upon expiration of the obligation to pay royalties.
Our patents and applications relating to the Captisol component of melphalan are not expected to expire until 2033. As described herein, we have entered into a settlement agreement with Teva and Acrotech Biopharma (the holder of the NDA for Evomela) which will allow Teva to market a generic version of Evomela in the United States in 2026.
Finally, we can target the size of our investments to achieve appropriate risk management across the portfolio. As an organization, we bring a highly experienced team and financial strength to execute on our strategy.
Finally, we can target the size of our investments to achieve appropriate diversification across the portfolio. Since refocusing the business in 2022, we have built a highly experienced business and investment team to execute our strategy.
Lasofoxifene is a selective estrogen receptor modulator in development for the treatment of breast cancer, discovered through the research collaboration between Pfizer and Ligand.
The ongoing Phase 3 trial, previously conducted by Sermonix, was over 50% enrolled at the time of the transaction, with data expected in mid-2027. 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 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. Qtorin rapamycin (Palvella) We acquired economic rights to Qtorin™ 3.9% rapamycin anhydrous gel (Qtorin rapamycin, formerly PTX-022) from Palvella in December 2018.
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.
Kyprolis (Amgen, Ono, BeOne Medicines) 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.
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.
With royalty monetization and other royalty monetization transactions, we purchase rights on existing royalty contracts that are owned by inventors, academic institutions or companies. There are advantages of royalty investing as a model because royalties 1) require minimal infrastructure, 2) are non-dilutable and 3) royalty flows are often protected in bankruptcy. 2.
Capvaxive utilizes CRM197 vaccine carrier protein, which is produced using the patent-protected Pelican Expression Technology platform, which we acquired in October 2020 through our acquisition of Pfenex. The FDA approval of Capvaxive triggered a $2 million milestone payment to Ligand, and we are entitled to a low single digit royalty on worldwide net sales.
The FDA approval of Capvaxive triggered a $2 million milestone payment to Ligand, and we are entitled to a low single-digit royalty on worldwide net sales.
In December 2024, Acrotech issued a termination process letter to CASI alleging the Company materially breached the license agreement and failed to cure such breach, thus terminating the license agreement. CASI can continue to distribute Evomela in China for a reasonable wind down period not to exceed 24 months.
Absent early termination, the agreement will terminate upon expiration of the obligation to pay royalties. In December 2024, Acrotech issued a termination process letter to CASI alleging the Company materially breached the license agreement and failed to cure such breach, thus terminating the license agreement.
In terms of an asset's clinical profile, we are looking for strong data supporting both efficacy and safety, and products which will ultimately deliver significant value to patients and to the healthcare system. We also look for strong market exclusivity, which can be achieved through intellectual property and/or regulatory protections.
Typically, this means we invest in Phase 3 assets, although we also evaluate opportunities to invest from Phase 2 to approved assets. In terms of an asset’s clinical profile, we are looking for strong data supporting both efficacy and safety, and products which will ultimately deliver significant value to patients.
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.
We maintain a broad global patent portfolio for Captisol with the latest expiration date in 2033. Other patent applications covering methods of making Captisol, if issued, extend the expiration date to 2041. In addition to solid Captisol powder, partners may access cGMP manufactured aqueous Captisol concentrate.
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.
This product offering was established in 2017 to reduce cycle time and increase Captisol production capacity for large-volume drug products. 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.
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.
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. Tzield met the study’s primary endpoint, significantly slowing the decline of C-peptide levels, compared to placebo.
The sNDA will be based on existing data from the Phase 3 DUPLEX and Phase 2 DUET studies of Filspari and is expected to be submitted around the end of the first quarter of 2025. Under our lic ense agreement with Travere, we are entitled to receive potential milestone payments, as well as a 9% royalty on worldwide sales.
Under our lic ense agreement with Travere, we are entitled to receive potential milestone payments, as well as a 9% royalty on worldwide sales. Clinical Development of Filspari Filspari is also in clinical development in additional territories and indications.
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.
Filspari 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. Travere has also partnered with Chugai Pharmaceuticals to develop and commercialize Filspari in Japan and other Asian countries.
Verona sublicensed the right to develop and commercialize Ohtuvayre in Hong Kong, Macau, Taiwan, and mainland China to Nuance Pharma. Verona is currently conducting Phase 2 trials for indication expansion in non-cystic fibrosis bronchiectasis, as well as a fixed-dose combination of ensifentrine + Long-Acting Muscarinic Antagonist (LAMA) for maintenance treatment of COPD.
Merck is also currently conducting Phase 2 trials for indication expansion in non-cystic fibrosis bronchiectasis, as well as a fixed-dose combination of ensifentrine + Long-Acting Muscarinic Antagonist (LAMA) for maintenance treatment of COPD. Rylaze (Jazz Pharmaceuticals) In July 2021, Jazz announced the U.S. launch of Rylaze (asparaginase erwinia chrysanthemi (recombinant)-rywn), previously referred to as JZP458.
Under the terms of our agreement with Palvella, we are entitled to milestones and a tiered royalty of 8.0% to 9.8%. Lasofoxifene (Sermonix) Our partner, Sermonix has a license for the development of oral lasofoxifene, its lead investigational drug, for the United States and additional territories.
Under the terms of our agreement with Palvella, we are entitled to milestones and a tiered royalty of 8.0% to 9.8% on any product containing Qtorin rapamycin.
Ohtuvayre was approved by the FDA in June 2024 for the maintenance treatment of chronic obstructive pulmonary disease ("COPD") in adult patients. Ohtuvayre is the first inhaled product with a novel mechanism of action available for the maintenance treatment of COPD in adult patients in more than 20 years.
Ohtuvayre is the first inhaled product with a novel mechanism of action approved for the maintenance treatment of COPD in adult patients in more than 20 years. Prior to its acquisition by Merck, Verona sublicensed the rights to develop and commercialize Ohtuvayre in Hong Kong, Macau, Taiwan, and mainland China to Nuance Pharma.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe principal risks and uncertainties affecting our business include, but are not limited to, the following: Risks related to our business operations and reliance on third parties, including : • Our ability to collect future revenue, including from sales of products from our collaboration partners, Captisol material sales and licensing relationships, and other collaboration relationships, is not guaranteed; • Our ability to source Captisol from our sole supplier may be impacted by a supply interruption; • The success of our partnered programs could be adversely affected by a change in our collaboration partners’ strategy or focus and/or development or regulatory hurdles, and market acceptance of such programs is not guaranteed; • Risks related to the biopharmaceutical product market in general, including changes in growth rate, competition resulting from new technologies and developments, and other sales risks; • Risks related to our ability to receive adequate information about the biopharmaceutical products we acquire and invest in and our underlying assumptions regarding future cash flow and revenue generation from such products; and • Our collaboration partners may become insolvent.
Biggest changeThe principal risks and uncertainties affecting our business include, but are not limited to, the following: Risks related to our business operations and reliance on third parties, including : • Our ability to collect future revenue, including from sales of products from our collaboration partners, Captisol material sales and licensing relationships, and other collaboration relationships, is not guaranteed; • Our ability to source Captisol from our sole supplier may be impacted by a supply interruption; • The success of our partnered programs could be adversely affected by a change in our collaboration partners’ strategy or focus and/or development or regulatory hurdles, and market acceptance of such programs is not guaranteed; • Risks related to the biopharmaceutical product market in general, including changes in growth rate, competition resulting from new technologies and developments, and other sales risks; • Risks related to our ability to receive adequate information about the biopharmaceutical products we acquire and invest in and our underlying assumptions regarding future cash flow and revenue generation from such products; and • Our collaboration partners may become insolvent. 19 Risks related to our intellectual property, including : • Third-party intellectual property rights may prevent us or our partners from developing our potential products; our and our partners’ intellectual property may not prevent competition; and any intellectual property issues may be expensive and time consuming to resolve; • Risks related to our ability to obtain and maintain sufficient intellectual property protection for our products, platforms and technology; • Risks related to the validity, scope and enforceability of our and our collaboration partners’ patents and other intellectual property; and • Other intellectual property-related risks, including the scope and validity of in-licenses from third parties, claims and disputes regarding patent infringement and other intellectual property rights that may be brought by third parties, changes in relevant patent and other intellectual property law, and the confidentiality of our trade secrets and other proprietary information.
Furthermore, under the Tax Act, although the treatment of tax losses generated in tax years beginning before December 31, 2017 has generally not changed, tax losses generated in tax years beginning after December 31, 2017 may only offset 80% of our taxable income.
Furthermore, under the Tax Act, although the treatment of tax losses generated in taxable years beginning before December 31, 2017 has generally not changed, tax losses generated in tax years beginning after December 31, 2017 may only offset 80% of our taxable income.
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.
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 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.
Fraudulent conveyance laws generally provide that an entity engages in a constructive fraudulent conveyance when (i) the entity transfers assets and does not receive fair consideration or reasonably equivalent value in return; and (ii) the entity: (a) is insolvent at the time of the transfer or is rendered insolvent by the transfer; (b) has unreasonably small capital with which to carry on its business; or (c) intends to incur or believes it will incur debts beyond its ability to repay its debts as they mature.
Fraudulent conveyance laws generally provide that an entity engages in a constructive fraudulent conveyance when (i) the entity transfers assets and does not receive fair consideration or reasonably equivalent value in return; and (ii) the entity: (a) is insolvent at the time of the transfer or is rendered insolvent by the transfer; (b) has unreasonably small capital with which to carry on its business; or (c) intends to incur or believes it will incur debts beyond its ability to repay its debts as they 42 mature.
The affirmative covenants include, among others, covenants requiring us to maintain a leverage ratio of no greater than 2.50 to 1.00 (increasing to 3.00 to 1.00 with respect to the fiscal quarter in which a material permitted acquisition is consummated and the immediately subsequent three fiscal quarters thereafter) and maintain minimum consolidated EBITDA (as defined in the Credit Agreement) for any trailing four-quarter period of not less than $45 million.
The affirmative covenants include, among others, covenants requiring us to maintain a leverage ratio of no greater than 2.50 to 1.00 (increasing to 3.00 to 1.00 with respect to the fiscal quarter in which a material permitted acquisition is consummated and the immediately subsequent three fiscal quarters thereafter) and maintain minimum consolidated EBITDA (as defined in the Credit Agreement) for any trailing four-quarter period of not less than $45 44 million.
Setbacks for the products could include problems with shipping, distribution, manufacturing, product safety, marketing, government regulation or reimbursement, licenses and approvals, intellectual property rights, including failure by any of the foregoing partners to enforce their respective intellectual property rights, competition with existing or new products and physician or patient acceptance of the products, as well as higher than expected total rebates, returns, discounts, or unfavorable exchange rates.
Setbacks for the products could include problems with shipping, distribution, manufacturing, product safety, marketing, government regulation or reimbursement, licenses and approvals, intellectual property rights, including failure by any of the foregoing 20 partners to enforce their respective intellectual property rights, competition with existing or new products and physician or patient acceptance of the products, as well as higher than expected total rebates, returns, discounts, or unfavorable exchange rates.
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 26 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 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, the former 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.
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.
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.
Even if we do obtain orphan drug designations and are the first to obtain marketing approval of our product candidates 34 for the applicable indications, we will not be able to rely on these designations to exclude other companies from manufacturing or selling biological products using the same principal molecular structural features for the same indication beyond these timeframes.
Even if we do obtain orphan drug designations and are the first to obtain marketing approval of our product candidates for the applicable indications, we will not be able to rely on these designations to exclude other companies from manufacturing or selling biological products using the same principal molecular structural features for the same indication beyond these timeframes.
These products also are or may become subject to generic competition. For example, we entered into a settlement agreement with Teva and Acrotech Biopharma (the holder of the NDA for Evomela) which will allow Teva to market a generic version of Evomela in the United States on June 1, 2026, or earlier under certain circumstances.
These products also are or may become subject to generic competition. For example, we entered into a settlement agreement with Teva and Acrotech Biopharma (the holder of the NDA for Evomela) which will allow Teva to market a generic version of Evomela in the United States starting on June 1, 2026, or earlier under certain circumstances.
A number of companies have suffered significant setbacks in advanced clinical trials or in seeking regulatory approvals, despite promising results in earlier trials. The FDA may also require additional clinical trials after regulatory approvals are received. Such additional trials may be expensive and time-consuming, and failure to successfully conduct those trials could jeopardize continued commercialization of a product.
A number of companies have suffered significant setbacks in advanced clinical trials or in seeking 23 regulatory approvals, despite promising results in earlier trials. The FDA may also require additional clinical trials after regulatory approvals are received. Such additional trials may be expensive and time-consuming, and failure to successfully conduct those trials could jeopardize continued commercialization of a product.
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.
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.
If our partners report incorrect sales, or if our partners delay reporting of their earnings release, our royalty estimates may need to be revised and/or our financial reporting may be delayed. 37 Changes in tax laws or regulations that are applied adversely to us may have a material adverse effect on our business, cash flow, financial condition, or results of operations.
If our partners report incorrect sales, or if our partners delay reporting of their earnings release, our royalty estimates may need to be revised and/or our financial reporting may be delayed. Changes in tax laws or regulations that are applied adversely to us may have a material adverse effect on our business, cash flow, financial condition, or results of operations.
If the OmniAb Transactions are ultimately determined not to qualify as a reorganization, we and our stockholders that are subject to U.S. federal income tax could incur significant U.S. federal income tax liabilities. The OmniAb Separation and OmniAb Distribution may expose Ligand to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.
If the OmniAb Transactions are ultimately determined not to qualify as a tax-free reorganization, we and our stockholders that are subject to U.S. federal income tax could incur significant U.S. federal income tax liabilities. The OmniAb Separation and OmniAb Distribution may expose Ligand to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.
The commercial success of our products, if approved for marketing, will depend in part on the medical community, patients and third-party payers accepting our product candidates as effective and safe. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable.
The commercial success of our products, if approved for marketing, will depend in part on the medical community, patients and third-party payers accepting our product candidates as effective and safe. If these products do not achieve an 25 adequate level of acceptance, we may not generate significant product revenue and may not become profitable.
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.
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.
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.
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.
This exemption, however, creates some uncertainty as to which loans could be deemed as incidental to our business. In addition, there is another exemption that would allow a person without a CFL finance lenders license to make a single commercial loan with a California nexus in a 12-month period.
This exemption, however, creates some uncertainty as to which 39 loans could be deemed as incidental to our business. In addition, there is another exemption that would allow a person without a CFL finance lenders license to make a single commercial loan with a California nexus in a 12-month period.
No assurance can be given that other patent applications will not have priority over our patent applications. In addition, changes to the patent laws of the United States allow for various post-grant opposition proceedings that have not been extensively tested, and their outcome is therefore uncertain.
No assurance can be given that other patent applications will not have priority over our patent applications. In addition, changes to the patent laws of the United States allow for various post-grant opposition proceedings that have not been extensively tested, and their outcome is therefore 29 uncertain.
In the event of a Captisol supply interruption, we are permitted to designate and, with Hovione’s assistance, qualify one or more alternate suppliers, although there is no assurance that we could do so timely or at acceptable costs, if at all.
In the event of a Captisol supply interruption, we are permitted to designate and, with Hovione’s assistance, qualify one or more alternate suppliers, although there is no assurance that we could do so 21 timely or at acceptable costs, if at all.
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 would result in increased competition for our 22 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.
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.
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 24 to know but do not have and may not be able to obtain.
For example, as a result of the settlement of one such matter, Teva will be permitted to market a generic version of Evomela in the United States on June 1, 2026 or earlier under certain circumstances. The terms of the settlement agreement are otherwise confidential.
For example, as a result of the settlement of one such matter, Teva will be permitted to market a generic version of Evomela in the United States starting on June 1, 2026 or earlier under certain circumstances. The terms of the settlement agreement are otherwise confidential.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees, and certain partners or partners may defer engaging with us until the particular dispute is resolved.
Even if we 31 are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees, and certain partners or partners may defer engaging with us until the particular dispute is resolved.
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.
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.
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.
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 and/or other collateral, which may improve our risk profile in an insolvency proceeding.
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.
The opinion was delivered in connection with the closing of the OmniAb Merger and was based on, among other things, certain facts, 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.
In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
In the event that we are subject to or affected by HIPAA, the CCPA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
Additionally, federal and state consumer protection laws are increasingly being applied by FTC and states’ attorneys general to regulate the collection, use, storage, and disclosure of personal or personally identifiable information, through websites or otherwise, and to regulate the presentation of website content.
Federal and state consumer protection laws are increasingly being applied by FTC and states’ attorneys general to regulate the collection, use, storage, and disclosure of personal or personally identifiable information, through websites or otherwise, and to regulate the presentation of website content.
If one or more of these analysts cease to cover our industry or fail to publish reports about the Company regularly, our common stock could lose visibility in the financial markets, which could also cause our stock price or trading volume to decline.
If one or more of these analysts cease to cover our industry or fail to publish reports about the Company regularly, our common stock could lose visibility in the financial markets, which could also cause our stock price or 48 trading volume to decline.
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.
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.
It may be necessary for us to pursue litigation or adversarial proceedings before the patent office in order to enforce our patent and proprietary rights or to determine the scope, coverage and validity of the proprietary rights of others.
It may be necessary for us to pursue litigation or adversarial proceedings before the 27 patent office in order to enforce our patent and proprietary rights or to determine the scope, coverage and validity of the proprietary rights of others.
In addition, we rely on Hovione to expand manufacturing capacity 20 of Captisol and any failure by Hovione to timely implement such increased capacity could adversely affect our ability to supply Captisol to our partners.
In addition, we rely on Hovione to expand manufacturing capacity of Captisol and any failure by Hovione to timely implement such increased capacity could adversely affect our ability to supply Captisol to our partners.
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.
Concerns over inflation, energy costs, geopolitical issues, the current 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.
In the event that it is determined that we have in the past experienced additional ownership changes, or if we experience one or more ownership changes as a result future transactions in our stock, then we may be further limited in our ability to use our NOLs and other tax assets to reduce taxes owed on the net taxable income that we earn in the event that we attain profitability.
In the event that it is determined that we have in the past experienced additional ownership changes, or if we experience one or more ownership changes as a result future transactions in our stock, then we may be further limited in our ability to use our NOLs and other tax assets to reduce taxes owed on the net taxable income that we earn.
We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.
We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider 28 appropriate for, patent protection.
New tax laws, statutes, rules, regulations, or ordinances could be enacted at any time. For instance, the recently enacted Inflation Reduction Act imposes, among other rules, a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases.
New tax laws, statutes, rules, regulations, or ordinances could be enacted at any time. For instance, the Inflation Reduction Act of 2022 imposes, among other rules, a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases.
We expect that these and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage and payment criteria and in additional downward pressure on the prices that can be realized for any approved drug.
We expect that these and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage and payment criteria, new payment methodologies and additional downward pressure on the prices that can be realized for any approved drug.
The FDA or comparable foreign regulatory authorities, as the case may be, may also require us or our partners to conduct additional preclinical studies or clinical trials for our product candidates either prior to or post-approval, or may object to elements of clinical development programs.
The FDA or comparable foreign regulatory authorities, as the case may be, may also require us or our partners to conduct additional nonclinical studies or 36 clinical trials for our product candidates either prior to or post-approval, or may object to elements of clinical development programs.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • the royalties from the sales of Kyprolis, Evomela and other products sold by our partners; • the success of our collaboration partners’ preclinical and clinical programs; • the timing of Captisol purchases for use in clinical trials and commercial products; • the timing and cost of, and level of investment in, research, development, regulatory approval and commercialization activities relating to our internal development programs, which may change from time to time; • expenditures that we may incur to acquire or develop additional product candidates and platform technologies; and • future accounting pronouncements or changes in our accounting policies.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • the royalties from the sales of Kyprolis, Qarziba, Filspari, Evomela, Teriparatide, Vaxneuvance, Ohtuvayre, Capvaxive and Rylaze and other products sold by our partners; • the success of our collaboration partners’ preclinical and clinical programs; • the timing of Captisol purchases for use in clinical trials and commercial products; • the timing and cost of, and level of investment in, research, development, regulatory approval and commercialization activities relating to our internal development programs, which may change from time to time; • expenditures that we may incur to acquire or develop additional product candidates and platform technologies; and • future accounting pronouncements or changes in our accounting policies.
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.
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.
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.
Risks Related to Our Business Operations and Reliance on Third Parties: Future revenue based on Kyprolis, Qarziba, Filspari, Evomela, Teriparatide, Vaxneuvance, Ohtuvayre, Capvaxive and Rylaze, as well as royalties from our other partnered products, may be lower than expected.
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.
Even though the FDA has resumed standard inspection operations of domestic facilities where feasible, any 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.
If additional funds are required to support our operations and we are unable to obtain them on terms favorable to us, we may be required to cease or reduce further development or commercialization of our products, to sell some or all of our technology or assets or to merge with another entity. Biopharmaceutical products are subject to sales risks.
If additional funds are required to support our operations and we are unable to obtain them on terms favorable to us, we may be required to cease or reduce further development or commercialization of our products, to sell some or all of our technology or assets or to merge with another entity.
Future pandemics, including the residual effects of the COVID-19 pandemic, or other public health epidemics, pose the risk that we or our employees, contractors, including our CROs, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to spread of the disease within these groups or due to shutdowns that may be requested or mandated by governmental authorities.
Future pandemics or other public health epidemics, pose the risk that we or our employees, contractors, including our CROs, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to spread of the disease within these groups or due to shutdowns that may be requested or mandated by governmental authorities.
Many factors may have a significant impact on the market price of our common stock, including, but not limited to, the following factors: results of or delays in our preclinical studies and clinical trials; the success of our collaboration agreements; publicity regarding actual or potential medical results relating to products under development by us or others; announcements of technological innovations or new commercial products by us or others; developments in patent or other proprietary rights by us or others; comments or opinions by securities analysts or major stockholders or changed securities analysts’ reports or recommendations; future sales or shorting of our common stock by existing stockholders; regulatory developments or changes in regulatory guidance; litigation or threats of litigation; economic and other external factors or other disaster or crises; the departure of any of our officers, directors or key employees; period-to-period fluctuations in financial results; and price and volume fluctuations in the overall stock market.
Many factors may have a significant impact on the market price of our common stock, including, but not limited to, the following factors: results of or delays in our preclinical studies and clinical trials; the success of our collaboration agreements; publicity regarding actual or potential medical results relating to products under development by us or others; announcements of technological innovations or new commercial products by us or others; developments in patent or other proprietary rights by us or others; comments or opinions by securities analysts or major stockholders or changed securities analysts’ reports or recommendations; future sales or shorting of our common stock by existing stockholders; regulatory developments or changes in regulatory guidance; litigation or threats of litigation; economic and other external factors or other disaster or crises; the departure of any of our officers, directors or key employees; period-to-period fluctuations in financial results; and price and volume fluctuations in the overall stock market. 47 Unfavorable global economic and political conditions could adversely affect our business, financial condition or results of operations.
Our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income may be subject to certain limitations. As of December 31, 2024, we had U.S. federal and state net operating loss carryforwards (“NOLs”) of approximately $21.4 million and $162.8 million, respectively.
Our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income may be subject to certain limitations. As of December 31, 2025, we had U.S. federal and state net operating loss carryforwards (“NOLs”) of approximately $4.3 million and $162.1 million, respectively.
Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form.
Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
If we were to encounter problems maintaining our inventory, such as natural disasters, at one or more of these locations, it could lead to supply interruptions.
If we were to encounter problems maintaining our inventory, due to factors such as natural disasters, tariffs or trade restrictions at one or more of these locations, it could lead to supply interruptions.
The extent to which the emergence of new variants of COVID-19, or any other outbreak of a pandemic or epidemic disease, impacts our results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.
To the extent there is any outbreak of a pandemic or epidemic disease impacts our results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.
In general, an “ownership change” occurs if there is a cumulative change in our ownership by “5% shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws.
In general, an “ownership change” occurs if there is a cumulative change in our ownership by “5% shareholders,” as defined in the Code, that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws.
Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents, and may diminish our ability to protect our inventions, obtain, maintain, enforce and protect our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our future owned and licensed patents.
Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products, platform and technology. 30 Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents, and may diminish our ability to protect our inventions, obtain, maintain, enforce and protect our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our future owned and licensed patents.
These and any other cost controls or any significant additional taxes or fees that may be imposed on the biopharmaceutical industry as part of deficit reduction efforts could reduce cash flows from our royalties and therefore adversely affect our business, financial condition or results of operations. Item 1B. Unresolved Staff Comments None.
These and any other cost controls or any significant additional taxes or fees that may be imposed on the biopharmaceutical industry as part of deficit reduction efforts could reduce cash flows from our royalties and therefore adversely affect our business, financial condition or results of operations. Legal claims and proceedings could adversely affect our business.
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.
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.
In addition, to the extent that interest rates at which we borrow increase, our borrowing costs will increase and our leveraging strategy will become more costly, which could lead to diminished net profits.
In addition, to the extent that interest rates at which we borrow increase, our borrowing costs will increase and our leveraging strategy will become more costly, which could lead to diminished net profits. Our ability to satisfy debt obligations depends on our future performance.
A significant portion of our royalty revenue is based on sales of Kyprolis by Amgen, sales of Qarziba by Recordati, sales of Filspari by Travere, sales of Evomela by Acrotech Biopharma, sales of Teriparatide by Alvogen/Adalvo and sales of Rylaze by Jazz.
A significant portion of our royalty revenue is based on sales of Kyprolis by Amgen, sales of Qarziba by Recordati, sales of Filspari by Travere, sales of Evomela by Acrotech Biopharma, sales of Teriparatide by Alvogen/Adalvo, sales of Vaxneuvance and Capvaxive by Merck, sales of Ohtuvayre by Verona Pharma, now a subsidiary of Merck, and sales of Rylaze by Jazz.
As of December 31, 2024, we had federal and California research and development tax credit carryforwards of approximately $6.2 million and $29.5 million, respectively. The federal research and development tax credit carryforwards expire in various years through 2040, if not utilized. The California research and development credit will carry forward indefinitely.
As of December 31, 2025, we had federal and California research and development tax credit carryforwards of approximately $0 million and $24.3 million, respectively. The federal research and development tax credit 41 carryforwards expire in various years through 2040, if not utilized. The California research and development credit will carry forward indefinitely.
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.
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.” Biopharmaceutical products are subject to sales risks.
Our directors, officers and certain of our institutional investors collectively beneficially own a significant portion of our outstanding common stock. Such provisions and issuances may have the effect of delaying or preventing a 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 directors, officers and certain of our institutional investors collectively beneficially own a significant portion of our outstanding common stock. Such provisions and issuances may have the effect of delaying or preventing a change in our ownership.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. For example, beginning April 1, 2013, Medicare payments to providers were reduced under the sequestration required by the Budget Control Act of 2011, which will remain in effect through 2032, unless additional Congressional action is taken.
For example, beginning April 1, 2013, Medicare payments to providers were reduced under the sequestration required by the Budget Control Act of 2011, which will remain in effect through 2032, unless additional Congressional action is taken.
While we do not believe that we have experienced any significant system failures, accidents or security breaches, if such an event were to occur and cause interruptions in our or our critical third parties’ operations, it could lead to the loss of trade secrets or other intellectual property, as well as the public exposure of personal information of our employees and others, and could result in a material disruption of our clinical and commercialization activities and business operations, in addition to possibly requiring substantial expenditures to remedy.
If such events were to occur and cause interruptions in our or our critical third parties’ operations, it could lead to the loss of trade secrets or other intellectual property, as well as the public exposure of personal information of our employees and others, and could result in a material disruption of our clinical and commercialization activities and business operations, in addition to possibly requiring substantial expenditures to remedy.
Consequently, we do not know if physicians or patients will adopt or use products in which we have an ownership or royalty interest for their approved indications.
Consequently, we do not know if physicians or patients will adopt or use products in which we have an ownership or royalty interest for their approved indications. The success of our business depends on key members of our team.
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.
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.
On July 8, 2024, we entered into the first amendment (the “Amendment”) to the Credit Agreement, which amends the Credit Agreement to increase the aggregate revolving credit facility amount from $75 million to $125 million. As of the date of this report, we have been borrowed approximately $0.6 million under the Revolving Credit Facility.
On July 8, 2024, we entered into the first amendment (the “Amendment”) to the Credit Agreement, which amends the Credit Agreement to increase the aggregate revolving credit facility amount from $75 million to $125 million.
Our patent position is uncertain and involves complex legal and technical questions for which legal principles are unresolved. Even if we or our partners do obtain patents, such patents may not adequately protect the technology we own or have licensed. We permit our partners to list our patents that cover their branded products in the Orange Book.
Even if we or our partners do obtain patents, such patents may not adequately protect the technology we own or have licensed. We permit our partners to list our patents that cover their branded products in the Orange Book.
Our success depends in part on our ability to obtain and maintain adequate protection of the intellectual property we may own solely and jointly with others or otherwise have rights to, particularly patents, in the United States and in other countries with respect to our platform, our software and our technologies, without infringing the intellectual property rights of others. 26 We strive to protect and enhance the proprietary technologies that we believe are important to our business, including seeking patents intended to cover our platform and related technologies and uses thereof, as we deem appropriate.
Our success depends in part on our ability to obtain and maintain adequate protection of the intellectual property we may own solely and jointly with others or otherwise have rights to, particularly patents, in the United States and in other countries with respect to our platform, our software and our technologies, without infringing the intellectual property rights of others.
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.
The EU-US Data Privacy Framework (“DPF”) also introduced a transfer mechanism for transfers between the E.U. and U.S. with a new redress mechanism for E.U. citizens which addresses a key concern in the previous Court of Justice of the European Union judgments and may mean transfers under standard contractual clauses are less likely to be challenged in future.
In addition, we rely on our partners to generate most of our revenues through royalties, Captisol sales and development activities and any disruptions to their business as a result of such disasters could negatively impact our revenues. 39 We rely on information technology system and any failure, inadequacy, interruption or security lapse of our information technology systems, including any cyber security incidents, could harm our ability to operate our business effectively.
In addition, we rely on our partners to generate most of our revenues through royalties, Captisol sales and development activities and any disruptions to their business as a result of such disasters could negatively impact our revenues.
Further, we may need to share our trade secrets and confidential know-how with current or future partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors. 29 We also seek to preserve the integrity and confidentiality of our confidential proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems, but it is possible that these security measures could be breached.
Further, we may need to share our trade secrets and confidential know-how with current or future partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors.
The biopharmaceutical industry is a highly competitive and rapidly evolving industry. New developments by others may render our potential milestone and royalty providers’ product candidates or technologies obsolete or uncompetitive. Current marketers of products may undertake these development efforts in order to improve their products or to avoid paying our royalty.
New products and technologies of other companies may render some or all of our or our potential milestone and royalty providers’ product candidates noncompetitive or obsolete. The biopharmaceutical industry is a highly competitive and rapidly evolving industry. New developments by others may render our potential milestone and royalty providers’ product candidates or technologies obsolete or uncompetitive.
If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown occurs, or if there are other significant changes in funding, it could significantly impact the ability of the FDA to provide feedback on clinical trials and development programs, to meet with sponsors and to otherwise timely review and process our regulatory submissions, which could have a material adverse effect on our business.
In order to service any indebtedness we may incur in the future, we would need to generate cash from our operating activities or other financings. Our ability to generate cash is subject, in part, to our ability to successfully execute our business strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control.
Our ability to generate cash is subject, in part, to our ability to successfully execute our business strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control.
If we are sued for any injury caused by our product candidates, partnered products or any future products, our liability could exceed our total assets.
If we are sued for any injury caused by our product candidates, partnered products or any future products, our liability could exceed our total assets. We face risks related to handling of hazardous materials and other regulations governing environmental safety.
We face risks related to handling of hazardous materials and other regulations governing environmental safety. 35 Our operations are subject to complex and stringent environmental, health, safety and other governmental laws and regulations that both public officials and private individuals may seek to enforce.
Our operations are subject to complex and stringent environmental, health, safety and other governmental laws and regulations that both public officials and private individuals may seek to enforce. Our activities that are subject to these regulations include, among other things, our use of hazardous materials and the generation, transportation and storage of waste.
In addition, these payments may be delayed, causing our near-term financial performance to be weaker than expected which could have an adverse effect on our business. New products and technologies of other companies may render some or all of our or our potential milestone and royalty providers’ product candidates noncompetitive or obsolete.
In addition, these payments may be delayed, causing our near-term financial performance to be weaker than expected which could have an adverse effect on our business.
If our partners do not receive regulatory approval for a sufficient number of therapeutic candidates originating from our partnerships, we may not be able to sustain our business model. 21 Our product candidates, and the product candidates of our partners, face significant development and regulatory hurdles prior to partnering and/or marketing which could delay or prevent licensing, sales-based royalties and/or milestone revenue.
Our product candidates, and the product candidates of our partners, face significant development and regulatory hurdles prior to partnering and/or marketing which could delay or prevent licensing, sales-based royalties and/or milestone revenue.
Adverse competition, obsolescence or governmental and regulatory action or healthcare policy changes could significantly affect the revenues, including royalty-related revenues, of the products which generate our potential milestones and royalties.
Adverse competition, obsolescence or governmental and regulatory action or healthcare policy changes could significantly affect the revenues, including royalty-related revenues, of the products which generate our potential milestones and royalties. Finally, because many of the companies with which we do business also are in the biotechnology industry, the volatility of that industry can affect us indirectly as well as directly.
Where we acquire equity securities as all or part of the consideration for M&A acquisitions or other business development activities, the value of those securities will fluctuate, and may depreciate. We may not control the companies in which we acquire securities, and as a result, we may have limited ability to determine management, operational decisions or policies of such companies.
We may also seek to expand our market opportunity by acquiring securities issued by biopharmaceutical companies. Where we acquire equity securities as all or part of the consideration for M&A acquisitions or other business development activities, the value of those securities will fluctuate, and may depreciate.
Further, such transactions may face risks and liabilities that due diligence efforts fail to discover, that are not disclosed to us, or that we inadequately assess. In addition, as a result of our business model, we may receive material non-public information about other companies.
We may not control the companies in which we acquire securities, and as a result, we may have limited ability to determine management, operational decisions or policies of such companies. Further, such transactions may face risks and liabilities that due diligence efforts fail to discover, that are not disclosed to us, or that we inadequately assess.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise information technology environment; • a security team principally responsible for managing (i) our cybersecurity risk assessment processes, (ii) our security controls, and (iii) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers, and vendors.
Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise information technology environment; • a security team principally responsible for managing (i) our cybersecurity risk assessment processes, (ii) our security controls, and (iii) our response to cybersecurity incidents; 49 • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers, and vendors.
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.
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.

Item 2. Properties

Properties — owned and leased real estate

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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
Biggest changeLocation 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 9,200 Office May 2032 Las Vegas, NV 4,100 Office April 2028 Lawrence, KS 3,700 Office and laboratory August 2032
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.
Item 2. Properties The following table summarizes our principal facilities leased as of December 31, 2025, 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 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAny 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.
Biggest changeAny 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. 51 During the fiscal year ended December 31, 2025, 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.
The Northern District of Ohio is the Court that the Judicial Panel on Multi-District Litigation (“JPML”) has assigned more than one thousand civil cases which have been designated as a Multi-District Litigation (“MDL”) and captioned In Re: National Prescription Opiate Litigation.
The Northern District of Ohio is the Court that the Judicial Panel on Multi-District Litigation 50 (“JPML”) has assigned more than one thousand civil cases which have been designated as a Multi-District Litigation (“MDL”) and captioned In Re: National Prescription Opiate Litigation.
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 25, 2025, there were approximately 320 holders of record of the common stock.
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 24, 2026, there were approximately 305 holders of record of the common stock.
CyDex alleges that Bexson breached its obligations under the In Vivo Agreement, including by misusing confidential information and materials provided by CyDex and by using CyDex’s confidential information and materials to file patent applications that purport to cover formulations that are “not ketamine.” CyDex also asserts that Bexson failed to return and destroy Cydex’s confidential information and materials as required by the Agreement.
CyDex alleges that Bexson breached its obligations under the In Vivo Agreement, including by misusing confidential information and materials provided by CyDex and by using CyDex’s confidential information and materials to file patent applications that purport to cover formulations that are “not ketamine”.
CyDex seeks relief including specific performance of certain co-ownership provisions of the Agreement and disgorgement from Bexson for any benefits obtained in violation of the In Vivo Agreement. On September 27, 2024, Bexson filed a Motion to Dismiss the Verified Complaint.
CyDex also asserts that Bexson failed to return and destroy CyDex’s confidential information and materials as required by the In Vivo Agreement. CyDex seeks relief including specific performance of certain co-ownership provisions of the In Vivo Agreement and disgorgement from Bexson for any benefits obtained in violation of the In Vivo Agreement.
A Verified Amended Complaint was filed by CyDex on November 6, 2024, and a Motion to Dismiss the Verified Amended Complaint was filed by Bexson on January 17, 2025. From time to time, we may also become subject to other legal proceedings or claims arising in the ordinary course of our business.
On September 27, 2024, Bexson filed a Motion to Dismiss the Verified Complaint. A Verified Amended Complaint was filed by CyDex on November 6, 2024, and a Motion to Dismiss the Verified Amended Complaint was filed by Bexson on January 17, 2025.
Item 3. Legal Proceedings On October 31, 2019, we received three civil complaints filed in the U.S. District Court for the Northern District of Ohio on behalf of several Indian tribes.
As additional information becomes available, we assess the potential liability related to our pending litigation and revise our estimates. Revisions in our estimates of potential liability could materially impact our results of operations. On October 31, 2019, we received three civil complaints filed in the U.S. District Court for the Northern District of Ohio on behalf of several Indian tribes.
During the fiscal year ended December 31, 2024, 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. 46 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.
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.
Removed
Value of $100 Invested Over Time 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Ligand $ 100.00 $ 95.36 $ 148.11 $ 94.04 $ 100.53 $ 150.81 NASDAQ Composite-Total Return $ 100.00 $ 144.92 $ 177.06 $ 119.45 $ 172.77 $ 223.87 NASDAQ Biotechnology Index $ 100.00 $ 126.42 $ 126.45 $ 113.65 $ 118.87 $ 118.20
Added
Item 3. Legal Proceedings We record an estimate of a loss when the loss is considered probable and estimable.
Added
Where a liability is probable and there is a range of estimated loss and no amount in the range is more likely than any other number in the range, we record the minimum estimated liability related to the claim in accordance with ASC 450, Contingencies .
Added
On May 23, 2025, Bexson withdrew its pending Motion to Dismiss and filed a Verified Counterclaim, Answer, and Affirmative Defenses. On July 17, 2025, CyDex and Bexson agreed to a joint stipulation for a schedule on judgment on the pleadings, providing for briefing to be complete by November 17, 2025.
Added
CyDex filed its reply to Bexson’s counterclaim on July 23, 2025. On August 22, 2025, Bexson filed its opening brief in support of its motion for judgment on the pleadings.
Added
On September 25, 2025, CyDex filed its partial cross-motion for judgment on the pleadings and opposition to Bexson’s motion, and on October 27, 2025 Bexson filed its combined answering brief in opposition to CyDex’s motion and reply in support of its motion. CyDex filed a reply brief on November 17, 2025.
Added
Oral argument on the pending motions for judgment on the pleadings is scheduled to occur on April 22, 2026.
Added
On July 18, 2025, CyDex received a letter (the “Notice Letter”) from PH Health Limited (“PH Health”), a wholly-owned indirect subsidiary of Endo, Inc., stating that PH Health had submitted to the FDA an Abbreviated New Drug Application (“ANDA”) referencing New Drug Application No. 022235, owned by Baxter Healthcare Corp.
Added
(“Baxter”) for Captisol®-enabled Nexterone® (amiodarone hydrochloride, 150 mg/100 mL, premixed for injection). In its Notice Letter, PH Health stated that its ANDA includes a certification under 21 U.S.C. § 355(j)(2)(A)(vii)(IV) that, in PH Health’s opinion, CyDex’s U.S. Patent No. 7,635,773 (“the ’773 patent”) is invalid, unenforceable and/or will not be infringed by Par Heath’s ANDA product.
Added
The Notice Letter included an explanation intended to support PH Health’s position that its ANDA product would not infringe the ’773 patent but did not include detailed explanations regarding invalidity or unenforceability.
Added
On August 29, 2025, during the 45 day period for filing a lawsuit pursuant to the Hatch-Waxman Act, Baxter and CyDex filed a lawsuit in the United States District Court for the Distinct of New Jersey against Par Health Ltd., Par Health USA, Endo USA, Inc., Endo Operations Limited, and Endo, Inc., asserting that the ANDA filing infringed the ’773 patent.
Added
See Case No. 3:25-cv-15120-MCA. An Answer was filed on October 27, 2025. Discovery has started but a trial date has not yet been set. From time to time, we may also become subject to other legal proceedings or claims arising in the ordinary course of our business.
Added
In connection with the issuance of the 2030 Notes in August 2025, we used approximately $15 million of the net proceeds from the offering to repurchase 102,034 shares of Ligand’s common stock at a price of $147.01 per share. Refer to Note 9, Debt for information on the 2030 Notes offering.
Added
Value of $100 Invested Over Time 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Ligand $ 100.00 $ 155.31 $ 98.62 $ 105.43 $ 158.15 $ 279.02 NASDAQ Composite-Total Return $ 100.00 $ 122.18 $ 82.43 $ 119.22 $ 154.48 $ 187.14 NASDAQ Biotechnology Index $ 100.00 $ 100.02 $ 89.90 $ 94.03 $ 93.49 $ 124.75 Item 6. [RESERVED]

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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.
Biggest changeCash Flow Summary (Dollars in thousands) 2025 2024 2023 Net cash provided by (used in): Operating activities $ 49,359 $ 97,047 $ 49,577 Investing activities $ (377,322) $ (143,664) $ (11,682) Financing activities $ 428,223 $ 97,141 $ (59,947) In 2025, we generated cash from operations primarily from revenue and operating income which was partially offset by our investments in Castle Creek and Orchestra R&D funding arrangements, and cash operating expenses.
We believe that existing funds, cash generated from operations and existing sources of and access to financing are adequate to satisfy our needs for working capital; capital expenditure and debt service requirements; continued advancement of research and development efforts; potential stock repurchases; and other business initiatives we plan to strategically pursue, including acquisitions and strategic investments.
We believe that our existing funds, cash generated from operations and existing sources of and access to financing are adequate to satisfy our needs for working capital; capital expenditure and debt service requirements; continued advancement of research and development efforts; potential stock repurchases; and other business initiatives we plan to strategically pursue, including acquisitions and strategic investments.
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.
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 58 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.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchase of Equity Securities .” On October 12, 2023, we entered into a $75 million Revolving Credit Facility with Citibank, N.A. as the Administrative Agent.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchase of Equity Securities .” 56 On October 12, 2023, we entered into a $75 million Revolving Credit Facility with Citibank, N.A. as the Administrative Agent.
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).
Financial Royalty Assets - Recognition of Income 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).
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.
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.
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.
As of December 31, 2025, 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 September 12, 2028. As of December 31, 2025, there were no events of default or violation of any covenants under the Revolving Credit Facility.
In specified circumstances, additional guarantors are required to be added. The Credit Agreement contains customary affirmative and negative covenants, including certain financial maintenance covenants, and events of default applicable to us.
Borrowings under the Credit Agreement are secured by certain of our collateral and that of the Guarantors. In specified circumstances, additional guarantors are required to be added. The Credit Agreement contains customary affirmative and negative covenants, including certain financial maintenance covenants, and events of default applicable to us.
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.
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.
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.
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. 57 In 2023, we generated cash from operations primarily from revenue and operating income.
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.
We used cash in financing activities primarily for the repayment of the remaining $76.9 million principal amount of the 2023 Notes upon maturity, partially offset by net proceeds from stock options exercises and ESPP.
Removed
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.
Added
In connection with the offering of the 2030 Notes, on August 11, 2025, we entered into the second amendment to the Credit Agreement, to permit, among other things, certain cash settlement payments on the 2030 Notes, subject to customary conditions set forth therein.
Removed
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.
Added
On September 12, 2025, we entered into the third amendment to the Credit Agreement to, among other things, extend the maturity date to September 12, 2028 and modify the minimum consolidated EBITDA (as defined in the Credit Agreement) covenant to require us to maintain not less than $55 million of consolidated EBITDA (as defined in the Credit Agreement) for the trailing four-quarter period ended September 30, 2025 and each trailing four-quarter period ending thereafter.
Removed
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.
Added
As of December 31, 2025, we had $3.2 million in fair value of contingent consideration liabilities related to our business combinations to be settled in future periods.
Added
We used cash in investing activities primarily for purchases of short-term and other investments, financial royalty assets, and derivative assets, as well as cash outflow on deconsolidation of LNHC, Inc., partially offset by cash proceeds from sale and maturity of short-term investments, and cash proceeds from financial royalty assets.
Added
We generated cash from financing activities primarily due to net proceeds from the issuance of the 2030 Notes and related transactions (i.e., purchase of hedge, issuance of warrants, and repurchase of shares), stock options exercises and ESPP, as well as proceeds from Pelthos investors bridge loans.
Added
Refer to Note 2, Pelthos Transaction , for more information on the Pelthos Transaction, and Note 9, Debt , for more information on the 2030 Notes. In 2024, we generated cash from operations primarily from revenue and operating income. We used cash for investing activities primarily for the Apeiron Acquisition and Agenus Transaction.

Item 7. Management's Discussion & Analysis

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

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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.
Biggest changeThe following table represents revenue from intangible royalty assets by program (in millions): (in millions) 2025 Estimated Partner Product Sales Effective Royalty Rate 2025 Royalty Revenue 2024 Estimated Partner Product Sales Effective Royalty Rate 2024 Royalty Revenue Kyprolis $ 1,529 2.3% $ 35.5 $ 1,627 2.4% $ 38.4 Filspari 355 9.0% 32.0 136 9.0% 12.2 Rylaze 395 3.4% 13.4 409 3.3% 13.7 Capvaxive 752 1.3% 10.1 96 0.6% 0.6 Ohtuvayre (1) 488 2.0% 9.8 42 1.9% 0.8 Teriparatide injection (2) 34 23.8% 8.1 30 27.3% 8.2 Vaxneuvance 801 0.9% 7.4 791 0.7% 5.2 Evomela 30 20.0% 5.9 44 20.0% 8.7 Other 441 2.3% 10.3 314 2.4% 7.5 Total $ 4,825 $ 132.5 $ 3,489 $ 95.3 (1) Our royalty rate on Ohtuvayre is 3%, of which 2% is recognized in revenue from intangible royalty assets and the remaining 1% is accounted for as financial royalty asset.
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 “
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, 2025. See “
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”).
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 were able to sell, from time to time, 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”).
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Our Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) will help readers understand our results of operations, financial condition, and cash flows. It is provided in addition to the accompanying consolidated financial statements and notes.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) will help readers understand our results of operations, financial condition, and cash flows. It is provided in addition to the accompanying consolidated financial statements and notes.
Our short-term investments include U.S. government debt securities, investment-grade corporate debt securities, bond funds and certificates of deposit. We have established guidelines relative to diversification and maturities of our investments in order to provide both safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates.
Our short-term investments include U.S. government debt securities, shares of publicly traded companies, investment-grade corporate debt securities, commercial paper and certificates of deposit. We have established guidelines relative to diversification and maturities of our investments in order to provide both safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates.
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.
It is also affected by discrete items that may occur in any given year, but are not consistent from year to year. In 2025, the variance from the US federal statutory rate of 21% was primarily attributable to increase in foreign includable income, non-deductible stock-based compensation and change in valuation allowance.
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.
Cash and cash equivalents and short-term investments increased by $477.4 million from last year, due to mark-to-market adjustments and 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.
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.
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. During 2025, we did not issue any shares of common stock in the ATM Offering. We are obligated to make payments under operating leases, including rental commitments on leases that have not yet commenced.
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.
The total purchase obligation as of December 31, 2025 was $25.4 million, of which $12.6 million is expected to be paid within a year and the remaining amount is expected to be paid between 1 to 3 years.
The 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.
The increase in royalties in 2025 was primarily due to income from Qarziba financial royalty asset acquired in the third quarter of 2024 and an increase in sales of Filspari, Ohtuvayre and Capvaxive. Captisol sales increased by $9.3 million to $40.2 million in 2025 compared to $30.9 million in 2024.
Refer to “ Item 1A. Risk Factors ” for additional discussion of the uncertainties surrounding our research and development initiatives.
Refer to “ Item 1A. Risk Factors ” for additional discussion of the uncertainties surrounding our research and development initiatives. Non-operating Income and Expenses FY 2025 vs.
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.
For information on these obligations, see detail in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 10, Leases.” We also have commitments under our supply agreement with Hovione for Captisol purchases.
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.
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 and Income FY 2025 vs.
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.
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. 2025 • Refer to Note 13, Income Taxes , for tax rate reconciliation. 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 55 • $0.6 million (23.9%) increase from the return to provision • $0.2 million (9.1%) decrease from research & development tax credit Liquidity and Capital Resources At December 31, 2025, we had approximately $733.5 million in cash, cash equivalents, and 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.
Also, in 2025, we recorded an unrealized loss on Viking common stock of $5.1 million as compared to an unrealized gain of $9.0 million in 2024. In addition, in 2024, we recorded 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.
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.
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. As of the date hereof, the Shelf Registration statement is no longer effective and the ATM Offering has expired.
We do not provide forward-looking estimates of costs and time to complete our ongoing research and development projects as such estimates would involve a high degree of uncertainty.
The $15.1 million gain recognized in 2024 was due to certain Agenus partners discontinuing development of their partnered programs. We do not provide forward-looking estimates of costs and time to complete our ongoing research and development projects as such estimates would involve a high degree of uncertainty.
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.
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.
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.
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), mark-to-market adjustments on CVRs and absorbed losses for equity method investment in Primrose Bio.
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.
The loss from change in fair value of equity method investments and other investments was $34.6 million for 2024, attributable to the fair value adjustment of $25.8 million to Primrose Bio securities investment, the $5.8 million impairment to Primrose Bio equity method investment, and the $3.0 million impairment loss related to Neuritek warrants.
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.
FY 2024 (Dollars in thousands) 2025 2024 Change % Change Cost of Captisol $ 14,549 $ 11,074 $ 3,475 31 % Amortization of intangibles 32,708 32,959 (251) (1) % Research and development 81,182 21,425 59,757 279 % General and administrative 92,449 78,654 13,795 18 % Financial royalty assets impairment 6,197 30,572 (24,375) (80) % Fair value adjustment to partner program derivatives — 15,055 (15,055) (100) % Total operating costs and expenses $ 227,085 $ 189,739 $ 37,346 20 % Total operating costs and expenses for 2025 increased by $37.3 million or 20% compared with 2024.
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.
Our MD&A is organized as follows: 52 • Results of Operations. Detailed discussion of our revenue and expenses for twelve months ended December 31, 2025 and 2024. A comparison of our results of operations for twelve months ended December 31, 2025 and 2024 can be found under “Item 7.
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.
FY 2024 (Dollars in thousands) 2025 2024 Change % Change Income before income tax from continuing operations $ 158,960 $ 2,518 $ 156,442 6,213 % Income tax expense (34,507) (6,550) (27,957) 427 % Net income (loss) from continuing operations $ 124,453 $ (4,032) $ 128,485 (3,187) % Effective Tax Rate 22 % 260 % Our effective tax rate for 2025 and 2024 was 22% and 260%, respectively.
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.
FY 2024 (Dollars in thousands) 2025 2024 Change % Change Revenue from intangible royalty assets $ 132,534 $ 95,329 $ 37,205 39 % Income from financial royalty assets 28,467 13,444 15,023 112 % Royalties 161,001 108,773 52,228 48 % Captisol 40,213 30,883 9,330 30 % Contract revenue and income 66,873 27,477 39,396 143 % Total revenue and income $ 268,087 $ 167,133 $ 100,954 60 % Total revenue and income increased by $101.0 million, or 60%, to $268.1 million in 2025 compared to $167.1 million in 2024 primarily due to the $52.2 million increase in royalties and $39.4 million increase in contract revenue and income.
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.
Interest expense consists primarily of 1) 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 2030 Notes issued in August 2025, and 2) interest accrued related to a royalty and milestone payments purchase agreement entered into by Novan, Inc. in 2019, assumed by Ligand as part of the Novan acquisition in September 2023, and deconsolidated on July 1, 2025.
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.
Revenue from intangible royalty assets is a function of our partners’ product sales and the applicable royalty rate.
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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report. • 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.
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 2024 (Dollars in thousands) 2025 2024 Change % Change Gain from short-term investments $ 18,433 $ 75,024 $ (56,591) (75) % Gain (loss) from change in fair value of equity method investments and other investments 90,670 (34,601) $ 125,271 (362) % Interest income 13,659 8,055 5,604 70 % Interest expense (4,715) (3,037) (1,678) 55 % Other non-operating expense, net (89) (20,317) 20,228 (100) % Total non-operating income (expense), net $ 117,958 $ 25,124 $ 92,834 370 % 54 The gain from short-term investments was $18.4 million in 2025 as compared to the gain from short-term investments of $75.0 million in 2024.
Removed
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.
Added
The increase in Captisol sales were due to the timing of customer orders. Contract revenue and income increased by $39.4 million, with the change primarily due to income from the Pelthos Transaction. During the third quarter of 2025, we recognized $53.1 million in total income related to the divestiture of LNHC in connection with the Pelthos Transaction.
Removed
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.
Added
(2) 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. 53 Operating Costs and Expense FY 2025 vs.
Removed
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.
Added
Cost of Captisol increased year over year in 2025 primarily due to an increase in sales of Captisol during 2025 compared to 2024.
Removed
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”).
Added
Amortization of intangibles remained relatively steady in 2025 at $32.7 million compared to $33.0 million in 2024, with the change due to the deconsolidation of LNHC, Inc. on July 1, 2025 in connection with the closing of the Pelthos Transaction. At any one time, we are working on multiple programs.
Removed
We also contributed to OmniAb cash and certain specific assets and liabilities constituting the OmniAb Business.
Added
As such, we generally do not track our R&D expenses on a specific program basis.
Removed
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”).
Added
Our R&D expenses increased by $59.8 million in 2025 compared to 2024, with the increase primarily due to a $44.3 million research and development funding arrangement related to the D-Fi royalty rights acquired with the Castle Creek Investment transaction and a $17.8 million research and development funding arrangement related to the Orchestra transaction.
Removed
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.
Added
Both transactions are discussed in Note 3, Investment Transactions . General and administrative expenses increased by $13.8 million in 2025 compared to 2024, with the increase primarily due to transaction costs. Financial royalty asset impairment decreased by $24.4 million in 2025 compared to 2024. The 2025 impairment of $6.2 million is primarily due to UGN-301 and other Agenus partner programs.
Removed
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.
Added
The 2024 impairment of $30.6 million was primarily due to Takeda’s decision to discontinue the soticlestat program. Fair value adjustment to partner program derivatives are not recognized in 2025 with the adoption of ASU 2025-07. Refer to Note 1, Basis of Presentation and Summary of Significant Accounting Policies, for additional information on the ASU 2025-07 adoption.
Removed
The Rylaze and Vaxnuevance royalty rates are in the low single digits. Filspari has a fixed royalty rate of 9%.
Added
The change is primarily driven by 1) sale of 0.7 million shares of Viking common stock in 2024 upon which we recognized a realized gain of $60.0 million in 2024, while we did not sell any shares of Viking common stock in 2025, and 2) $22.5 million unrealized gain on 2025 change in fair value of Palvella common stock that we received in December 2024.
Removed
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.
Added
The gain from change in fair value of equity method investments and other investments was $90.7 million for 2025, attributable to the fair value changes of the shares of Pelthos common stock and Pelthos Series A convertible preferred stock that we acquired in connection with the Pelthos Transaction. For additional information, see Note 2, Pelthos Transaction.
Removed
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.
Added
Interest income consists primarily of interest earned on our short-term investments. The increase over the prior year period was due to the increase in average investment balances in 2025 compared to 2024.
Removed
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.
Added
Other non-operating expense, net, decreased by $20.2 million in 2025 compared to 2024, primarily due to an insignificant change in Agenus Warrant fair value in 2025 ($0.5 million increase) compared to $7.1 million decrease in 2024, no change in Agenus Upsize Option fair value in 2025 compared to $4.9 million decrease in 2024, and no losses absorbed losses from equity method investment in Primrose Bio in 2025 compared to $7.0 million losses absorbed in 2024.
Removed
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.
Added
On August 14, 2025, we issued the 2030 Notes. The $460 million aggregate principal balance of the 2030 Notes includes the purchase of an additional $60 million aggregate principal amount of the 2030 Notes by the initial purchasers pursuant to the full exercise of their overallotment option.
Removed
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.
Added
The net proceeds from the 2030 Notes offering were approximately $445.1 million, after deducting the initial purchasers’ discounts and commissions and the debt issuance costs incurred by Ligand. Refer to Note 9, Debt, for more information on the 2030 Notes.
Removed
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.
Removed
In 2023, the variance from the U.S. federal statutory rate of 21% was primarily due the decrease in unrecognized tax benefits.
Removed
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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed10 unchanged
Biggest changeInvestment 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.
Biggest changeInvestment Portfolio Risk At December 31, 2025, our investment portfolio included investments in available-for-sale securities of $558.6 million, including the investment in Viking common stock of $35.2 million. These securities are subject to market risk and may decline in value based on market conditions.
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.
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. Foreign Currency Risk Through our licensing and business operations, we are exposed to foreign currency risk.
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.
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 increases.
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.
As of December 31, 2025, 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.
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 have historically maintained a relatively short average maturity 59 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. 60

Other LGND 10-K year-over-year comparisons