2023 Financial Guidance Raised
Conference Call Begins at 4:30 p.m. Eastern
Time Today
Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today
reported financial results for the three and 12 months ended
December 31, 2022, and provided an operating forecast and business
updates. These financial results are presented on a continued
operations basis as OmniAb was spun out on November 1, 2022 and is
reported as discontinued operations. Ligand management will host a
conference call today beginning at 4:30 p.m. Eastern time to
discuss this announcement and answer questions.
"2022 was a transformative year for Ligand, both operationally
and financially. Following Ligand’s spin out of OmniAb, we believe
we are well positioned to achieve significant revenue growth
coupled with a lean cost structure," said Todd Davis, CEO of
Ligand. "As we look to 2023 and beyond, we anticipate important
clinical and regulatory events from our partners, along with the
continued expansion of our portfolio through a focus on life
sciences royalty opportunities."
Fourth Quarter 2022 Financial Results
Total revenues for the fourth quarter of 2022 were $50.4
million, compared with $56.4 million for the same period in 2021.
Royalties for the fourth quarter of 2022 were $22.0 million,
compared with $17.6 million for the same period in 2021, with the
increase primarily attributable to the growth in sales of drugs
using the Pelican platform. Core Captisol sales were $3.3 million
for the fourth quarter of 2022, compared with $7.1 million for the
same period in 2021. The difference in sales was due to the timing
of customer orders. Captisol sales related to COVID-19 were $23.5
million for the fourth quarter of 2022, compared with $28.3 million
for the same period in 2021. Contract revenue was $1.5 million for
the fourth quarter of 2022, compared with $3.5 million for the same
period in 2021. The difference was due to the timing of partner
milestone events.
Cost of Captisol was $21.6 million for the fourth quarter of
2022, compared with $12.0 million for the same period in 2021, with
the increase primarily due to $9.8 million in accelerated
depreciation on Captisol manufacturing equipment during the fourth
quarter of 2022. Amortization of intangibles was $8.5 million,
compared with $8.6 million for the same period in 2021. Research
and development expense was $9.2 million, compared with $8.1
million for the same period in 2021, with the increase attributed
to stock based compensation and an increase in facility related
expenses in the fourth quarter of 2022. General and administrative
expense was $31.1 million, compared with $12.6 million for the same
period in 2021, with the increase primarily attributable to a
one-time stock compensation expense associated with the retirement
of our former CEO in the fourth quarter of 2022 and legal expenses
incurred in connection with the OmniAb spin out.
Net loss from continuing operations for the fourth quarter of
2022 was $14.5 million, or $0.86 per share, compared with $3.2
million, or $0.19 per share, for the same period in 2021. In
addition to the aforementioned Captisol equipment accelerated
depreciation and stock compensation expense, net loss for the
fourth quarter of 2022 was also impacted by a $24.8 million
deferred tax asset valuation allowance, offset by a non-cash gain
of $44.2 million from the value of Ligand’s short-term investments.
Net loss for the fourth quarter of 2021 was impacted by a non-cash
loss of $13.4 million from the value of Ligand’s short-term
investments. Adjusted net income from continuing operations for the
fourth quarter of 2022 was $23.5 million, or $1.36 per diluted
share, compared with $25.5 million, or $1.47 per diluted share, for
the same period in 2021. Excluding the impact of gross profit, net
of tax, for Captisol sales related to COVID-19, adjusted net income
for the fourth quarter of 2022 was $13.0 million, or $0.75 per
diluted share, compared with $10.7 million, or $0.62 per diluted
share, for the same period in 2021. See the table below for a
reconciliation of net income (loss) from continuing operations to
adjusted net income from continuing operations.
As of December 31, 2022, Ligand had cash, cash equivalents and
short-term investments of $211.9 million.
Full Year 2022 Financial Results
Total revenues for 2022 were $196.2 million, compared with
$241.5 million for 2021. Royalties for 2022 were $72.5 million,
compared with $48.9 million for 2021, with the increase primarily
attributable to the growth in sales of drugs using the Pelican
platform. Core Captisol sales were $16.4 million for 2022, compared
with $23.4 million for 2021. The difference in sales was due to the
timing of customer orders. Captisol sales related to COVID-19 were
$88.1 million for 2022, compared with $140.8 million for 2021. The
lower sales are due to reduced demand for the pandemic-related
treatment. Contract revenue for 2022 was $19.2 million, compared
with $28.4 million for 2021, with the change due to the timing of
partner milestone events.
Cost of Captisol was $52.8 million for 2022, compared with $62.2
million for 2021, with the decrease due primarily to lower sales of
Captisol, partially offset by $9.8 million in accelerated
depreciation on Captisol manufacturing equipment during the year.
Amortization of intangibles was $34.2 million for both 2022 and
2021. Research and development expense was $36.1 million for 2022,
compared with $32.1 million for 2021, with the increase primarily
attributed to higher employee-related expenses and increased
facility related expenses. General and administrative expense was
$70.1 million for 2022, compared with $46.8 million for 2021, with
the increases primarily attributable to stock-compensation
expenses, headcount-related expenses and legal expenses.
There was no other operating income for 2022. Other operating
income was $37.6 million for 2021, which represented a non-cash
valuation adjustment related to eliminating the remaining Pfenex
CVR liability.
Net loss from continuing operations for 2022 was $5.2 million,
or $0.31 per share, compared with net income from continuing
operations of $76.4 million, or $4.43 per diluted share, for 2021.
In addition to the aforementioned Captisol equipment accelerated
depreciation and increased stock compensation expenses, net loss
from continuing operations for 2022 was also impacted by a $24.8
million deferred tax asset valuation allowance, which was partially
offset by a $28.8 million net non-cash gain from the value of
Ligand’s short-term investments. Net income from continuing
operations for 2021 included a net non-cash loss from the value of
Ligand’s short-term investments of $10.6 million. Adjusted net
income from continuing operations for 2022 was $82.2 million or
$4.79 per diluted share, compared with $108.0 million, or $6.27 per
diluted share, for 2021. Excluding the impact of gross profit, net
of tax, for Captisol sales related to COVID-19, adjusted net income
from continuing operations for 2022 was $41.9 million, or $2.44 per
diluted share, compared with $40.5 million, or $2.35 per diluted
share, for 2021. See the table below for a reconciliation of net
income (loss) from continuing operations to adjusted net income
from continuing operations.
2023 Financial Guidance
Ligand is increasing 2023 financial guidance introduced at its
Investor and Analyst Day held on December 13, 2022. We now expect
2023 royalties of $74 million to $78 million (previously $72
million to $76 million), sales of Captisol of $21 million
(unchanged) and contract revenue of $25 million (unchanged). These
revenue components result in total revenue of $120 million to $124
million (previously $118 million to $122 million). Ligand now
expects 2023 cash operating expenses of $43 million (previously $46
million), which combined with the increased revenue outlook results
in adjusted diluted EPS of $3.30 to $3.45 (previously $3.10 to
$3.30). Due to the unpredictable nature of the pandemic and related
Captisol sales, Ligand excludes Captisol for remdesivir from
guidance and will update investors as orders are received and
shipped each quarter.
Fourth Quarter 2022 and Recent Business Highlights
Travere Therapeutics received FDA accelerated approval for
FILSPARI (sparsentan) for the treatment of IgA nephropathy (IgAN).
FILSPARI is the first and only dual endothelin angiotensin receptor
antagonist in development for rare kidney diseases and is the first
non-immunosuppressive treatment indicated for IgAN. Travere
anticipates a review decision by the EMA on the potential approval
for sparsentan for the treatment of IgAN in Europe in the second
half of 2023. Additionally, Travere announced that they expect to
report top line results from the two-year confirmatory endpoints in
the ongoing Phase 3 DUPLEX Study of sparsentan in focal segmental
glomerulosclerosis (FSGS) in the second quarter of 2023, with
anticipated submission for full approval in the second half of 2023
in both the U.S. and Europe. Travere reported that it ended 2022
with approximately $450 million in cash, cash equivalents and
marketable securities, which would be available to support the
commercial launch of sparsentan.
Novan announced it has submitted an NDA to the FDA seeking
marketing approval for berdazimer gel, 10.3% (SB206) for the
topical treatment of molluscum contagiosum (MC). MC is an infection
that causes skin lesions and affects approximately six million
people in the U.S. annually. Novan anticipates a potential first
quarter 2024 approval assuming the filing is accepted by the FDA
and standard review timelines.
Verona Pharma announced positive results of its Phase 3
ENHANCE-1 trial evaluating nebulized ensifentrine for the
maintenance treatment of COPD. The ENHANCE-1 trial met its primary
and key secondary endpoints demonstrating significant improvements
in lung function, symptoms and quality of life measures. In
addition, ensifentrine substantially reduced the rate and risk of
COPD exacerbations. Ensifentrine was well tolerated over 24 and 48
weeks. In 2022 Verona announced that the Phase 3 ENHANCE-2 trial
successfully met its primary endpoint and secondary endpoints
evaluating lung function and symptoms, and also significantly
reduced the rate and risk of COPD exacerbations. Verona plans to
file an NDA for inhaled ensifentrine for the maintenance treatment
of COPD with the FDA in the first half of 2023.
Viking Therapeutics announced the completion of patient
enrollment in its Phase 2b clinical trial of VK2809, a novel
liver-selective thyroid hormone receptor beta agonist, in patients
with biopsy-confirmed non-alcoholic steatohepatitis (NASH). Viking
expects to report data for the study's primary endpoint in the
first half of 2023.
Palvella Therapeutics announced its initial closing of up to
$37.7 million in financing with proceeds to be used to advance the
development of QTORIN rapamycin for the treatment of pachyonychia
congenita, microcystic lymphatic malformations (MLM), and for the
prevention of basal cell carcinomas in Gorlin syndrome. Palvella
expects top-line data in mid-2023 from the Phase 3 pivotal study
evaluating QTORIN rapamycin in pachyonychia congenita. Palvella is
currently enrolling patients in a multicenter Phase 2b clinical
study in the U.S. and Europe for the prevention of basal cell
carcinomas in patients with Gorlin syndrome, with data expected in
the first half of 2023. Additionally, Palvella expects to report
data in the first quarter of 2023 from a multicenter Phase 2 study
in the U.S. investigating QTORIN rapamycin for the treatment of
MLM.
In 2022, Jazz Pharmaceuticals announced FDA approval of
Monday/Wednesday/Friday intramuscular dosing of Rylaze
(asparaginase erwinia chrysanthemi (recombinant)-rywn) and
submission of a supplemental BLA under the Real-time Oncology
Review Program seeking approval for IV administration. Jazz also
completed the Marketing Authorization Application submission to the
EMA for both IV and IM administration, with a potential approval in
2023. Jazz is also advancing the program for potential submission,
approval and launch in Japan.
Xi'an Xintong Pharmaceuticals announced pradefovir reached the
primary and secondary endpoints in its Phase 3 clinical trial in
China for the treatment of chronic hepatitis B. The 48-week
statistical analysis showed that pradefovir was comparable to the
first-line drug, tenofovir disoproxil fumarate, with a better
safety profile. Xi'an Xintong has submitted a pre-NDA conference
communication application with China’s National Medical Products
Administration (NMPA) and expects to submit an NDA in the first
quarter of 2023.
China Resources Double-Crane Pharmaceuticals announced the IND
for CX2101A, a small molecule, RNA-dependent RNA polymerase
inhibitor of SARS-CoV-2 that utilizes Ligand's proprietary BEPro
prodrug technology, was approved by the NMPA for use in clinical
trials for the treatment of novel coronavirus pneumonia in
China.
Aldeyra announced the submission of an NDA to the FDA for
topical ocular reproxalap for the treatment of signs and symptoms
of dry eye disease. Reproxalap is a small-molecule modulator of
RASP (reactive aldehyde species), which are elevated in ocular and
systemic inflammatory disease.
Arcellx initiated a Phase 1 study of ARCL-002 in acute myeloid
leukemia and myelodysplastic syndromes. ARCL-002 utilizes the
Pelican Expression Technology.
Adjusted Financial Measures
Ligand reports adjusted net income and adjusted net income per
diluted share in addition to, and not as a substitute for, or
superior to, financial measures calculated in accordance with GAAP.
The Company’s financial measures under GAAP include share-based
compensation expense, amortization of debt-related costs,
amortization related to acquisitions and intangible assets, changes
in contingent liabilities, mark-to-market adjustments for amounts
relating to its equity investments in public companies, excess tax
benefit from share-based compensation, transaction costs, income
tax affect of adjusted reconciling items and others that are listed
in the itemized reconciliations between GAAP and adjusted financial
measures included at the end of this press release. However, the
Company does not provide reconciliations of such forward-looking
adjusted measures to GAAP due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliation, including adjustments that could be made for
changes in contingent liabilities, changes in the market value of
its investments in public companies, share-based compensation
expense and the effects of any discrete income tax items.
Management has excluded the effects of these items in its adjusted
measures to assist investors in analyzing and assessing the
Company’s past and future core operating performance. Additionally,
adjusted earnings per diluted share is a key component of the
financial metrics utilized by the Company’s board of directors to
measure, in part, management’s performance and determine
significant elements of management’s compensation.
Conference Call
Ligand management will host a conference call today beginning at
4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss this
announcement and answer questions. To participate via telephone,
please dial (888) 350-3452 using the conference ID 6501694. To
participate via live or replay webcast, a link is available at
www.ligand.com.
About Captisol®
Captisol is a patent-protected, chemically modified cyclodextrin
with a structure designed to optimize the solubility and stability
of drugs. Captisol was invented and initially developed by
scientists in the laboratories of Dr. Valentino Stella, University
Distinguished Professor at the University of Kansas’ Higuchi
Biosciences Center for specific use in drug development and
formulation. This unique technology has enabled several
FDA-approved products, including Gilead Sciences' VEKLURY®, Amgen’s
KYPROLIS®, Baxter International’s NEXTERONE®, Acrotech Biopharma
L.L.C.’s and CASI Pharmaceuticals’ EVOMELA®, Melinta Therapeutics’
BAXDELA™ and Sage Therapeutics’ ZULRESSO™. There are many
Captisol-enabled products currently in various stages of
development. Ligand maintains a broad global patent portfolio for
Captisol with approximately 390 issued patents worldwide relating
to the technology (including over 40 in the U.S.) and with the
latest expiration date in 2033. Other patent applications covering
methods of making Captisol, if issued, extend to 2040.
About the Pelican Expression Technology™ Platform
Pelican is a robust, validated, cost-effective and scalable
platform for recombinant protein production that is especially
well-suited for complex, large-scale protein production where
traditional systems are not. Multiple global manufacturers have
demonstrated consistent success with the platform and the
technology is currently out-licensed for numerous commercial and
development-stage programs. The versatility of the platform has
been demonstrated in the production of enzymes, peptides, antibody
derivatives and engineered non-natural proteins. Partners seek the
platform as it can contribute significant value to
biopharmaceutical development programs by reducing development
timelines and costs for manufacturing therapeutics and vaccines.
Given pharmaceutical industry trends toward large molecules with
increasing structural complexities, Pelican is well positioned to
meet these growing needs as one of the most comprehensive broadly
available protein production platforms in the industry.
About Ligand Pharmaceuticals
Ligand is a biopharmaceutical company focused on funding,
enabling and supporting clinical development that allows
pharmaceutical companies to create high impact medicines. Ligand
does this by licensing our platform technologies, providing project
financing or both. Our business model creates value for
stockholders by providing a diversified portfolio of biotech and
pharmaceutical product revenue streams that are supported by an
efficient and low corporate cost structure. Our goal is to offer
investors an opportunity to participate in the promise of the
biotech industry in a profitable and diversified manner while
mitigating the binary clinical risk associated with developing a
single program. Our business model is based on funding mid to
late-stage drug development in return for economic rights and
licensing our technology platforms to help partners discover and
develop medicines. We partner with other pharmaceutical companies
to leverage what they do best (late-stage development, regulatory
management and commercialization) ultimately to generate our
revenue. Our Captisol platform technology is a chemically modified
cyclodextrin with a structure designed to optimize the solubility
and stability of drugs. For our Captisol partners, our team
supplies our Captisol material needed for their programs. Our
Pelican Expression Technology is a robust, validated,
cost-effective and scalable platform for recombinant protein
production that is especially well-suited for complex, large-scale
protein production where traditional systems are not. We have
established multiple alliances, licenses and other business
relationships with the world’s leading pharmaceutical companies
including Amgen, Merck, Pfizer, Jazz, Takeda, Gilead Sciences and
Baxter International. For more information, please visit
www.ligand.com.
Follow Ligand on Twitter @Ligand_LGND.
We use Twitter and our investor relations website as a means of
disclosing material non-public information and for complying with
our disclosure obligations under Regulation FD. Investors should
monitor our Twitter account and our website, in addition to
following our press releases, SEC filings, public conference calls
and webcasts.
Forward-Looking Statements
This news release contains forward-looking statements by Ligand
that involve risks and uncertainties and reflect Ligand's judgment
as of the date of this release. Words such as “plans,” “believes,”
“expects,” “anticipates,” and “will,” and similar expressions, are
intended to identify forward-looking statements. These
forward-looking statements include, without limitation, statements
regarding: Ligand’s ability to achieve significant revenue growth;
the timing of clinical and regulatory events of Ligand’s partners;
the expansion of Ligand’s portfolio with life sciences royalty
opportunities; the timing of the initiation or completion of
preclinical studies and clinical trials by Ligand and its partners;
the timing of product launches by Ligand or its partners; and
guidance regarding the full-year 2023 financial results. Actual
events or results may differ from Ligand's expectations due to
risks and uncertainties inherent in Ligand’s business, including,
without limitation: Ligand may not receive expected revenue from
royalties, Captisol material sales and license fees and milestone
revenue; Ligand and its partners may not be able to timely or
successfully advance any product(s) in its internal or partnered
pipeline; Ligand may not achieve its guidance for 2023; Ligand may
not be able to create future revenues and cash flows by developing
innovative therapeutics; results of any clinical study may not be
timely, favorable or confirmed by later studies; products under
development by Ligand or its partners may not receive regulatory
approval; the total addressable market for our partners’ products
may be smaller than estimated; Ligand faces competition with
respect to its technology platforms which may demonstrate greater
market acceptance or superiority; remdesivir may be later shown to
not be effective or safe for the treatment of COVID-19 and could
materially and adversely affect the commercial opportunity for
remdesivir; additional alternative COVID-19 therapies or vaccines
may be approved, along with the risk of coronavirus infection
continuing to diminish, any of which could materially and adversely
affect the commercial opportunity for remdesivir; Gilead may
develop an alternative formulation of remdesivir that does not
incorporate Captisol or uses less Captisol in such formulation;
Ligand is currently dependent on a single source sole supplier for
Captisol and failures by such supplier may result in delays or
inability to meet the Captisol demands of its partners; there may
not be a market for the product(s) even if successfully developed
and approved; Ligand’s partners may not execute on their sales and
marketing plans for marketed products for which Ligand has an
economic interest; Ligand’s and its partners’ products may not be
proved to be safe and efficacious and may not perform as expected
and uncertainty regarding the commercial performance of such
products; Ligand relies on collaborative partners for milestone
payments, royalties, materials revenue, contract payments and other
revenue projections; Ligand or its partners may not be able to
protect their intellectual property and patents covering certain
products and technologies may be challenged or invalidated;
Ligand's partners may terminate any of its agreements or
development or commercialization of any of its products; Ligand may
not generate expected revenues under its existing license
agreements and may experience significant costs as the result of
potential delays under its supply agreements; Ligand and its
partners may experience delays in the commencement, enrollment,
completion or analysis of clinical testing for its product
candidates, or significant issues regarding the adequacy of its
clinical trial designs or the execution of its clinical trials,
which could result in increased costs and delays, or limit Ligand's
ability to obtain regulatory approval; unexpected adverse side
effects or inadequate therapeutic efficacy of Ligand's or its
partners’ product(s) could delay or prevent regulatory approval or
commercialization; challenges, costs and charges associated with
integrating recently completed acquisitions with Ligand’s existing
businesses; risks associated with management changes; Ligand may
not be able to successfully implement its strategic growth plan and
continue the development of its proprietary programs; the COVID-19
pandemic and any future epidemic diseases could adversely impact
the business of Ligand and its partners and impair global economic
activity; changes in general economic conditions, including as a
result of the war between Russia and Ukraine; the spin-off of
OmniAb may not achieve the intended strategic, operational and
financial benefits; and ongoing or future litigation could expose
Ligand to significant liabilities and have a material adverse
effect on the company. . The failure to meet expectations with
respect to any of the foregoing matters may reduce Ligand's stock
price. Additional information concerning these and other risk
factors affecting Ligand can be found in prior press releases
available at www.ligand.com as well as in Ligand's public periodic
filings with the Securities and Exchange Commission available at
www.sec.gov. Ligand disclaims any intent or obligation to update
these forward-looking statements beyond the date of this release,
including the possibility of additional license fees and milestone
revenues we may receive. This caution is made under the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995.
Other Disclaimers and Trademarks
The information in this press release regarding certain
third-party products and programs, including Kyprolis, an Amgen
product, Rylaze, a Jazz Pharmaceuticals product, FILSPARI, a
Travere Therapeutics product, EVOMELA, an Acrotech Biopharma and
CASI Pharmaceuticals product, and ZULRESSO, a Sage Therapeutics
product, comes from information publicly released by the owners of
such products and programs. Ligand is not responsible for, and has
no role in, the development of such products or programs.
Ligand owns or has rights to trademarks and copyrights that it
uses in connection with the operation of its business including its
corporate name, logos and websites. Other trademarks and copyrights
appearing in this press release are the property of their
respective owners. The trademarks Ligand owns include Ligand®,
Captisol® and Pelican Expression Technology™ Solely for
convenience, some of the trademarks and copyrights referred to in
this press release are listed without the ®, © and ™ symbols, but
Ligand will assert, to the fullest extent under applicable law, its
rights to its trademarks and copyrights.
LIGAND PHARMACEUTICALS
INCORPORATED
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except
per share amounts)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Revenues:
Royalties
$
22,019
$
17,551
$
72,527
$
48,927
Captisol - Core
3,347
7,112
16,429
23,423
Captisol - COVID
23,533
28,263
88,066
140,827
Contract revenue
1,483
3,478
19,223
28,367
Total revenues
50,382
56,404
196,245
241,544
Operating costs and expenses:
Cost of Captisol
21,614
11,984
52,827
62,176
Amortization of intangibles
8,539
8,553
34,237
34,222
Research and development
9,197
8,147
36,082
32,105
General and administrative
31,131
12,596
70,062
46,790
Other operating income
—
—
—
(37,600
)
Total operating costs and expenses
70,481
41,280
193,208
137,693
Income from operations
(20,099
)
15,124
3,037
103,851
Gain (loss) from short-term
investments
44,248
(13,398
)
28,540
(5,263
)
Interest income (expense), net
783
(4,283
)
247
(18,733
)
Other income (expense), net
(792
)
(1,589
)
4,187
(7,650
)
Total other income (expense), net
44,239
(19,270
)
32,974
(31,646
)
Income (loss) before income taxes
24,140
(4,146
)
36,011
72,205
Income tax benefit (expense)
(38,674
)
952
(41,230
)
4,148
Net income (loss) from continuing
operations
(14,534
)
(3,194
)
(5,219
)
76,353
Net loss from discontinued operations
(2,951
)
(2,223
)
(28,142
)
(19,215
)
Net income (loss):
$
(17,485
)
$
(5,417
)
$
(33,361
)
$
57,138
Basic net income (loss) from continuing
operations per share
$
(0.86
)
$
(0.19
)
$
(0.31
)
$
4.59
Basic net loss from discontinued
operations per share
$
(0.17
)
$
(0.13
)
$
(1.67
)
$
(1.16
)
Basic net income (loss) per share
$
(1.04
)
$
(0.32
)
$
(1.98
)
$
3.44
Shares used in basic per share
calculation
16,890
16,733
16,868
16,630
Diluted net income (loss) from continuing
operations per share
$
(0.86
)
$
(0.19
)
$
(0.31
)
$
4.43
Diluted net loss from discontinued
operations per share
$
(0.17
)
$
(0.13
)
$
(1.67
)
$
(1.11
)
Diluted net income (loss) per share
$
(1.04
)
$
(0.32
)
$
(1.98
)
$
3.31
Shares used in diluted per share
calculation
16,890
16,733
16,868
17,246
LIGAND PHARMACEUTICALS
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in thousands)
December 31, 2022
December 31, 2021
Assets
Current assets:
Cash, cash equivalents and short-term
investments
$
211,870
$
341,108
Accounts receivable, net
30,424
85,453
Inventory
13,294
27,326
Income tax receivable
4,614
6,193
Other current assets
3,399
3,571
Current assets of discontinued
operations
—
1,100
Total current assets
263,601
464,751
Deferred income taxes, net
8,530
35,729
Goodwill and other identifiable intangible
assets, net
448,128
482,364
Commercial license and other economic
rights, net
10,182
10,110
Operating lease right-of-use assets
10,914
3,210
Finance lease
4,095
16,201
Other assets
17,218
14,442
Non-current assets of discontinued
operations
—
270,783
Total assets
$
762,668
$
1,297,590
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
20,988
$
25,982
Current contingent liabilities
57
50
Current operating lease liabilities
670
1,368
Current finance lease liabilities
45
45
Deferred revenue
355
654
2023 convertible senior notes, net
76,695
—
Current liabilities of discontinued
operations
—
13,566
Total current liabilities
98,810
41,665
2023 convertible senior notes, net
—
320,717
Long-term contingent liabilities
3,456
3,657
Long-term operating lease liabilities
10,336
2,256
Deferred income taxes, net
30,615
30,856
Other long-term liabilities
21,966
21,752
Non-current liabilities of discontinued
operations
—
55,528
Total liabilities
165,183
476,431
Total stockholders' equity
597,485
821,159
Total liabilities and stockholders'
equity
$
762,668
$
1,297,590
LIGAND PHARMACEUTICALS
INCORPORATED
ADJUSTED FINANCIAL
MEASURES
(Unaudited, in thousands, except
per share amounts)
Three months ended December
31,
Year ended December
31,
2022
2021
2022
2021
Net income (loss) from continuing
operations
$
(14,534
)
$
(3,194
)
$
(5,219
)
$
76,353
Adjustments:
Share-based compensation expense
27,664
8,304
50,881
29,326
Finance lease impairment charge and
other
10,821
—
10,821
—
Non-cash interest expense (1)
95
3,828
734
16,692
Amortization related to acquisitions and
intangible assets
8,539
8,553
34,237
34,222
Amortization of commercial license and
other economic rights (2)
(32
)
(72
)
(355
)
79
Change in contingent liabilities (3)
698
660
(144
)
(38,170
)
Acquisition and integrations costs (4)
—
105
—
472
Loss (gain) from short-term
investments
(44,248
)
13,398
(28,540
)
5,263
Realized gain from short-term
investments
—
1
(288
)
5,382
Other (5)
1,904
929
(34
)
8,218
Income tax effect of adjusted reconciling
items above
8,093
(6,309
)
(4,561
)
(19,520
)
Tax expense related to increase in
valuation allowance (6)
24,799
—
24,799
—
Excess tax benefit from share-based
compensation (7)
(267
)
(706
)
(138
)
(10,309
)
Adjusted net income from continuing
operations
$
23,532
$
25,497
$
82,193
$
108,008
Captisol - COVID gross profit, net of tax
(8)
(10,514
)
(14,771
)
(40,268
)
(67,551
)
Adjusted net income from continuing
operations excluding Captisol - COVID
$
13,018
$
10,726
$
41,925
$
40,457
Diluted per-share amounts attributable
to common shareholders:
Diluted net income (loss) per share from
continuing operations
$
(0.86
)
$
(0.19
)
$
(0.31
)
$
4.43
Adjustments:
Share-based compensation expense
1.60
0.48
2.96
1.70
Finance lease impairment charge and
other
0.63
—
0.63
—
Non-cash interest expense (1)
0.01
0.22
0.04
0.97
Amortization related to acquisitions and
intangible assets
0.49
0.49
1.99
1.98
Amortization of commercial license and
other economic rights (2)
—
—
(0.02
)
—
Change in contingent liabilities (3)
0.04
0.04
(0.01
)
(2.21
)
Acquisition and integrations costs (4)
—
0.01
—
0.03
(Gain)/Loss from short-term
investments
(2.56
)
0.77
(1.66
)
0.31
Realized gain from short-term
investments
—
—
(0.02
)
0.31
Other (5)
0.10
0.05
0.01
0.48
Income tax effect of adjusted reconciling
items above
0.48
(0.36
)
(0.27
)
(1.13
)
Tax expense related to increase in
valuation allowance (6)
1.44
—
1.44
—
Excess tax benefit from share-based
compensation (7)
(0.02
)
(0.04
)
(0.01
)
(0.60
)
Adjustment for shares excluded due to
anti-dilution effect on GAAP net loss
0.01
—
0.02
—
Adjusted diluted net income per share
from continuing operations
$
1.36
$
1.47
$
4.79
$
6.27
Captisol - COVID gross profit, net of tax
(8)
(0.61
)
(0.85
)
(2.35
)
(3.92
)
Adjusted diluted net income per share
from continuing operations excluding Captisol - COVID
$
0.75
$
0.62
$
2.44
$
2.35
GAAP - weighted average number of common
shares - diluted
16,890
16,733
16,868
17,246
Shares excluded due to anti-dilutive
effect on GAAP net loss (9)
390
688
298
—
Adjusted weighted average number of common
shares - diluted
17,280
17,421
17,166
17,246
(1) Amounts represent non-cash debt
related costs that are calculated in accordance with the
authoritative accounting guidance for convertible debt instruments
that may be settled in cash.
(2) Amounts represent the amortization of
commercial license and other economic rights to revenue and
research and development expenses.
(3) Amounts represent changes in fair
value of contingent consideration related to Pfenex, CyDex and
Metabasis transactions.
(4) Amounts represent severance costs,
legal fees, and certain contract termination costs in connection
with the acquisitions.
(5) Amounts primarily relate to
restructuring costs, loss on debt extinguishment and adjustments
associated with our equity investment in Nucorion.
(6) Amounts represent discrete tax expense
related to the valuation allowance established during the fourth
quarter of 2022 against deferred tax asset for California research
and development credits and net operating losses.
(7) Excess tax benefits from share-based
compensation are recorded as a discrete item within the provision
for income taxes on the consolidated statements of operations as a
result of the adoption of an accounting pronouncement (ASU 2016-09)
on January 1, 2017. Prior to the adoption, the amount was
recognized in additional paid-in capital on the consolidated
statement of stockholders' equity.
(8) Captisol - COVID gross profit, net of
tax, represents gross profit, net of tax, for Captisol supplied for
use in formulation with remdesivir, an antiviral treatment for
COVID-19. Prior period adjusted net income and adjusted net income
per diluted share amount have been adjusted to exclude the impact
of COVID-related Captisol gross profit, net of tax, to conform to
the current period presentation. Certain commission cost included
in the general and administrative expenses that were related to the
Gilead Consortium sales were included in the calculation for the
twelve months ended December 31, 2021.
(9) Excluding the impact from the adoption
of accounting pronouncement (ASU 2020-06) on January 1, 2022 as the
Company intends to settle the principal balance in cash. Under the
new standard, the Company is required to reflect the dilutive
effect of the 2023 Notes by application of the if-converted method,
which resulted an additional 452,905 and 1,847,893 potentially
dilutive shares for the three and twelve months ended December 31,
2022, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230222005940/en/
Ligand Pharmaceuticals Incorporated Simon Latimer
investors@ligand.com (858) 550-7766 Twitter: @Ligand_LGND
LHA Investor Relations Bruce Voss bvoss@lhai.com (310)
691-7100
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