Analyst Conference Summary

biotechnology

conference date: August 7, 2025
for quarter ending: June 30, 2025 (second quarter, Q2 2025)

Forward-looking statements

Overview:

Basic data (GAAP):

Revenue was $47.6 million, up 15% from $41.5 million year-earlier.

Net Income was $4.8 million, up from negative $51.9 million year-earlier.

EPS (Earnings per Share), diluted, were $0.24, up from negative $2.88 year-earlier.

Guidance:

Increased 2025 revenue range to between $200 and $225 million. Non-GAAP EPS diluted $6.70 to $7.00.

Conference Highlights:

CEO Todd Davis said, "We are pleased to announce an increase to our 2025 guidance reflecting the continued strength and growth of our commercial-stage royalty portfolio. This quarter there were several key milestones across our portfolio including the commercial launch of Zelsuvmi by our partner Pelthos and Merck's recently announced acquisition of our partner, Verona, which is expected to further accelerate the launch trajectory of Ohtuvayre in COPD and its clinical development in other indications. These achievements reflect the significant value of our partnerships and our comprehensive asset selection process, which continue to validate our robust and differentiated royalty aggregation model." Characterized the fundraising market for biotech as 'tough.' Currently has 25 investment opportunities under review.

Cash and equivalents ended at $245 million (including $26.5 million in Viking Therapeutics stock). Combined with credit available, has $450 million in deployable capital.

Revenue consisted of $30.1 million for intangible royalty assets; $6.3 million from financial royalty assets; $8.3 million Captisol; and $2.9 million contract and other.

In Q3 2025 Ligand completed its merger of Pelthos with a subsidiary of Channel Therapeutics, to operate as Pelthos Therapeutics (PTHS). Pelthos raised $50 million capital. In July 2025 Pelthos launched Zelsumvmi (berdazimer) topical gel for molluscum contagiosum, and Ligand earned at $5 million milestone payment. Will also get a 13% royalty on sales and $5 million in possible milestones.

In August 2025 Ligand invested $25 million to fund Orchestra BioMed's cardiopathy device programs.

In July (Q3 2025) Merck announced it would, through a subsidiary, acquire Verona for $107 per American Depository Share (ADS), each representing eight Verona ordinary shares, for a total transaction value of approximately $10 billion. Verona's portfolio includes Ohtuvayre, approved by the FDA for the maintenance treatment of COPD in adult patients. Ligand receives a 3% royalty on Ohtuvayre sales.

In July (Q3 2025) Agenus announced its botensilimab and balstilimab (BOT/BAL) combination achieved a two-year survival rate of 42%, along with a more mature 21-month median overall survival, in an expanded cohort of 123 patients with microsatellite-stable (MSS) metastatic colorectal cancer (mCRC) without active liver metastases (NLM). An agreement was reached with the FDA for the Phase 3 trial design. Agenus also, in June, partnered with Zydus, trading its biologics facility for $75 million upfront and a possible $50 million milestone.

In Q2 2025 Palvella Therapeutics fully enrolled, a Phase 3 trial of Qtorin 3.9% rapamycin anhydrous gel for the treatment of microcystic lymphatic malformations. Top-line results from are expected Q1 2026, and a NDA submission is planned for the second half of 2026.

In Q2 2025 Vifor announced that NICE recommended that Filspari can be used in in England as an option to treat primary IgA nephropathy in adults with a urine protein excretion of 1.0 g/day or more, or a urine protein-to-creatinine ratio of 0.75 g/g or more.

In q2 2025, Nuance announced top-line results from the Phase 3 trial of nebulized ensifentrine (marketed as Ohtuvayre in the U.S.) for the maintenance treatment of chronic obstructive pulmonary disease (COPD). The trial successfully met its primary and secondary endpoints.

In Q2, 2025, the FDA accepted the Travere sNDA for approval of Filspari (sparsentan) for the treatment of focal segmental glomerulosclerosis (FSGS). PDUFA target action date is January 13, 2026. An advisory committee meeting to discuss the application is planned. Additionally, the PDUFA date is August 28, 2025 for the sNDA for modification of liver monitoring, and removal of embryo-fetal toxicity monitoring REMS, for Filspari for adults with primary immunoglobulin A nephropathy (IgAN) at risk for disease progression.

Operating costs of $39.2 million consisted of: $2.9 million cost of goods sold, $8.3 million amortizationof intangibles, $20.2 million G&A, $1.3 million fair value adjustments. Leaving income from operations of $8.4 million. Other income $2.8 million. Income tax $6.4 million.

Q&A selective summary:

Pelthos launch demand? Optimistic about Zelsumvmi. Believe has a good launch team. Demand appears high, is a take-home prescription, believes parents are eager for a therapy. Our sales forecast is conservative.

Filspari expectations? Travere has not shared their projections. But use in earlier stage patients is expanding on label change.

Guidance operating leverage? Op ex estimates are a bit cautious. We are investing in business development. Also foreign revenue generates a higher tax rate. Share count is going up as our stock price goes up.

We do not intend to sell any of our royalties at this point, long term holding is core to our strategy.

Government policy effects on your pipeline? We have seen 15 years of price pressure on the pharma industry, and we expect that to continue. Whatever the specifics, we want to invest in drugs with very high value, giving a strong position to negotiate with payers. So especially only treatment in a category.

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