Analyst Conference Summary

biotechnology

conference date: November 6, 2025 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2025 (third quarter, Q3 2025)

Forward-looking statements

Overview: Continued rapid execution of deals.

Basic data (GAAP):

Revenue was $115 million, up 140% sequentially from $48 million, and up 121% from $52 million year-earlier.

Net Income was $117 million, up sequentially from $4.8 million, and up from negative $7 million year-earlier.

EPS (Earnings per Share), diluted, were $5.68, up sequentially from $0.24, and up from negative $0.39 year-earlier.

Guidance:

Increase 2025 guidance to core revenue of $225 to $235 million. Core adjusted EPS, diluted, $7.40 to $7.65.

Conference Highlights:

CEO Todd Davis said, "We are pleased to report an increase in our financial guidance for the second time this year, as a result of the continued strength and momentum of our growing commercial royalty portfolio. This was a pivotal quarter for Ligand. We successfully completed a convertible debt financing, providing us with additional resources to pursue strategic investment opportunities that support our growth initiatives. Additionally, I am proud of our investment team's ability to create superior returns through transactions such as the strategic merger of Pelthos with Channel Therapeutics, which has driven substantial value creation for our shareholders." Now owns 12 major commercial stage royalty assets. Expects a 22% growth rate in royalty revenue through 2029. So far in 2025 reveiwed 135 investment opportunies, 32 remain under review, 5 have closed.

Ligand's near 50% equity interest in Pelthos valued at $138M as of 9/30. Ligand is entitled to a 13% royalty on Zelsuvmi sales.

Cash and equivalents ended at $664 million, up sequentially from $245 million (including $26.5 million in Viking Therapeutics stock).

Revenue consisted of $47 million for royalty assets; $6 million from financial royalty assets; $11 million Captisol; and $58 million contract and other.

Non-GAAP diluted EPS was $3.09, up from $1.84 year-earlier.

In August 2025, Ligand completed its offering of $460 million of 0.75% convertible senior notes due 2030. The net proceeds were approximately $445 million after fees and expenses.

In Q3 2025 Ligand acquired global royalty rights to AT200, an Arestat-enhanced biosimilar product. Also all potential milestone and technology access fees related to AT292, (Sanofi's SAR447537) from Arecor Therapeutics for $7 million in cash. Committed an additional $4 million, payable upon the achievement of certain commercial milestones for AT220 and AT292.

In Q3 2025 Ligand invested $25 million in Orchestra BioMed’s late-stage partnered cardiology programs, with an additional $15 million to be funded, subject to conditions, at the nine-month anniversary of the transaction closing date.

In Q4 2025, re Filspari (sparsentan) for proteinuria from primary immunoglobin A nephropathy, which Ligand has licenced to Travere, with Renalys. Chugai is purchasing Renalys, and so rights to commercialize in Japan, S. Korea, and Taiwan.

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.

Other program updates can be found in the Ligand Q3 results press release.

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, 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 $61 million consisted of: $4 million cost of goods sold, $8 million amortizationof intangibles, $21 million R&D, $28 million G&A, $1 million fair value adjustments. Leaving income from operations of $55 million. Gain from short-term investments $8 million; change in equity investments $76 million; interest $3 million. Income tax $24 million.

Q&A selective summary:

Special situations presently? Opportunities are quite robust. If they just need access capital, we can provide it for royalties. We like to see strong management and infrastructure, if some of that is lacking we provide restructuring. Access to capital is crucial, they cannot rely solely or even mainly on us. Zelsuvmi was an example of where they needed management help, not just capital.

We don't want to put any more than $50 million into a binary risk situation. We size by asset. We can sometimes catalyze a broader investment round. Royalty capital is what is most needed in the market right now.

FDA personalized gene therapy announcement? We focus on high-value assets for severe clinical needs. That matches the FDA core reorientation. We like to invest within 3 or 4 years of a potential approval. We sometimes invest in Phase 2, if it seems derisked.

Zelsuvmi launch? They report on the 13th. General script data is encouraging. Estimated peak sales of $175 million, which may be conservative.

AT292? We are excited about it, it is highly differentiated v. standard of care. Sanofi has conviction around it, and are introducing a more convenient dosing. We get technology asset fees.

Most royalty capital that is available from other players, who are typically larger than us, goes to commercially approved drugs, not therapies under development.

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