LIGAND PHARMACEUTICALS INC Q1 FY2025 earnings call

• Strong start to 2025 with 46% top line revenue growth and 11% adjusted EPS growth. • Royalty portfolio driven by 10 new investments and 4 FDA approvals, with assets like Merck’s Capvaxive, Verona’s Ohtuvayre, etc., contributing to growth. • Record-setting origination activity with 38 active investment opportunities under review. • Executed complex strategic transaction merging Pelthos Therapeutics with Channel Therapeutics, securing $50 million in equity capital. • Highlighted strategic differentiation including focus on profitable growth, diversified royalty asset base, and experienced team.

Total revenue for the first quarter was just over $45 million, a 46% increase from the same period last year. Royalty revenue totaled $27.5 million, representing a 44% growth. Captisol sales were $13.5 million in Q1 2025 compared to $9.2 million in Q1 2024. Royalty revenue contributed significantly to the top line growth, driven by strong performances from Verona’s Ohtuvayre, Travere’s Filspari, Recordati’s Qarziba, and Merck’s Capvaxive.

• Reaffirmed 2025 financial guidance: royalty revenue between $135 million and $140 million, Captisol sales between $35 million and $40 million, contract revenue between $10 million and $20 million, total revenue between $180 million and $200 million, and core adjusted EPS between $6 and $6.25. • Long-term view: commercial portfolio expected to drive mid-teens growth through early 2030s, with development stage portfolio adding to EPS growth over 20%.

• Biopharmaceutical financing environment with fewer IPOs and difficult private fundraising, creating challenges for biotech companies. • Regulatory changes and potential disruption from government institution restructurings, though new FDA leadership shows intent to reduce unnecessary regulation but uncertainty remains. • Potential impact of trade policies and pricing regulations on partners' launch and pricing strategies.

Q: Doubts on whether there are more special situations and implications for the company?

A: Todd Davis said there are increasing special situations due to difficult biotech financing markets, providing good opportunity set for Ligand, but a healthy biotech market is needed long-term.

Q: Impact of potential most favored nation status on partners' launch and pricing?

A: Todd Davis said there will be short-term disruption as trade policies are negotiated, but long-term it's probably a good thing, with most partners focused on U.S. market initially.

Q: Investment capacity and plans for NITRICIL platform?

A: Todd Davis said likely to invest above normal pace this year due to good opportunities, and on NITRICIL platform, looking at developing multiple therapies with potential for commercial products.