Teriparatide biosimilar (Alvogen)

Raising 2023 Guidance Investor and Analyst Day to be held on Tuesday December 12th in New York City Conference call begins at 4:30 p.m. Eastern Time today SAN DIEGO--(BUSINESS WIRE)-- Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today reported financial results for the three and nine months ended September 30, 2023, and provided an operating forecast and business updates. Ligand management will host a conference call today beginning at 4:30 p.m. Eastern Time to discuss this announcement and answer questions. “We're pleased to report another quarter of strong financial results and we are now actively executing on our investment strategy as evidenced by the recent Tolerance, Ovid, Novan and Primrose transactions, in which we collectively invested over $75 million in Q3 and early Q4 2023,” said Todd Davis, CEO of Ligand. "We have a strong balance sheet and are generating positive cash flow which positions us advantageously in this market to further build a robust portfolio of assets that are expected to drive future revenue growth. We look forward to sharing our long term financial forecast at our upcoming Investor and Analyst Day scheduled for December 12th in New York City.” Third Quarter 2023 Financial Results Total revenues for the third quarter of 2023 were $32.9 million. Revenues for the same period in 2022 excluding sales related to COVID-19 were $26.9 million. Total revenues for the third quarter of 2022 including COVID-19 related sales were $59.2 million. Royalties for the third quarter of 2023 were $23.9 million, compared with $19.3 million for the same period in 2022, with the increase primarily attributable to Amgen’s (Nasdaq: AMGN) Kyprolis, Jazz Pharmaceuticals' (Nasdaq: JAZZ) RYLAZE, Merck and Co.’s (NYSE: MRK) Vaxneuvance and Travere Therapeutics’ (Nasdaq: TVTX) FILSPARI. Core Captisol sales were $8.6 million for the third quarter of 2023, compared with $3.6 million for the same period in 2022, with the increase due to the timing of customer orders. There were no Captisol sales related to treatments for COVID-19 for the third quarter of 2023, compared with $32.4 million for the same period in 2022. Contract revenue was $0.4 million for the third quarter of 2023, compared with $4.0 million for the same period in 2022, with the difference due to the timing of partner milestone events. Cost of Captisol was $3.5 million for the third quarter of 2023, compared with $14.2 million for the same period in 2022, with the decrease due to lower total Captisol sales. Amortization of intangibles was $8.2 million, compared with $8.6 million for the same period in 2022. Research and development expense was $5.5 million, compared with $9.2 million for the same period in 2022, with the decrease attributed to lower stock-based compensation, employee related expenses and lab supply expenses. General and administrative expense was $14.7 million, compared with $14.9 million for the same period in 2022, with the transaction costs associated with the Novan acquisition and Pelican spin out included in the third quarter of 2023. Net loss from continuing operations for the third quarter of 2023 was $12.8 million, or $0.74 per share, compared with net income from continuing operations of $9.6 million, or $0.56 per diluted share, for the same period in 2022. The decrease in net income from the prior year period is due primarily to the decrease in COVID-19 related Captisol sales and the non-cash unrealized loss from short-term investments associated with Viking Therapeutics (Nasdaq: VKTX) stock of $11.5 million. Adjusted net income from continuing operations for the third quarter of 2023 was $18.0 million, or $1.02 per diluted share, compared with $10.5 million, or $0.60 per diluted share, for the same period in 2022. See the table below for a reconciliation of net income from continuing operations to adjusted net income from continuing operations. As of September 30, 2023, Ligand had cash, cash equivalents and short-term investments of $191.1 million. On October 12, 2023, Ligand entered into a credit agreement with Citibank, N.A., which provides for a $75 million revolving credit facility with a maturity date of October 12, 2026. Year-to-Date Financial Results Total revenues for the nine months ended September 30, 2023 were $103.2 million. Revenues for the same period in 2022 excluding sales related to COVID-19 were $81.4 million. Revenues for the nine months ended September 30, 2022 including COVID-19 related sales were $145.9 million. Royalties for the nine months ended September 30, 2023 were $61.4 million, compared with $50.5 million for the same period in 2022, with the increase primarily attributable to Kyprolis, Rylaze, Vaxnuevance, Pneumsil, and FILSPARI. Core Captisol sales were $24.5 million for the nine months ended September 30, 2023, compared with $13.1 million for the same period in 2022. The difference in sales was due to the timing of customer orders. There were no Captisol sales related to COVID-19 for the nine months ended September 30, 2023, compared with $64.5 million for the same period in 2022. Contract revenue was $17.3 million for the nine months ended September 30, 2023, compared with $17.7 million for the same period in 2022. Cost of Captisol was $8.9 million for the nine months ended September 30, 2023, compared with $31.2 million for the same period in 2022, with the decrease due to lower total Captisol sales. Amortization of intangibles was $25.3 million for the nine months ended September 30, 2023, compared with $25.7 million for the same period in 2022. Research and development expense for the nine months ended September 30, 2023 was $19.0 million, compared with $26.9 million for the same period in 2022, with the decrease attributed to lower employee related expenses and lab supply expenses. General and administrative expense for the nine months ended September 30, 2023 was $36.8 million, compared with $38.9 million for the same period in 2022, with the decrease primarily attributable to lower legal expenses. Net income from continuing operations for the nine months ended September 30, 2023 was $33.1 million, or $1.86 per diluted share, compared with net income from continuing operations of $9.3 million, or $0.54 per diluted share, for the same period in 2022. The increase in net income was driven by a gain from short term investments of $30.3 million in the current year period compared to a loss from short term investments of $15.7 million for the same period in 2022. Adjusted net income from continuing operations for the nine months ended September 30, 2023 was $83.0 million, or $4.71 per diluted share, compared with $28.9 million, or $1.69 per diluted share, for the same period in 2022. See the table below for a reconciliation of net income from continuing operations to adjusted net income from continuing operations. On May 15, 2023, the maturity date of the convertible senior unsecured notes due 2023 (the 2023 Notes), we paid off the remaining balance in amount of $77.1 million (including interest). In the second quarter of 2023, Ligand put in place a $50.0 million share repurchase program that expires in April 2026. The timing and amount of repurchase transactions, if any, will be determined by the Company’s management based on its evaluation of market conditions, share price, legal requirements and other factors. 2023 Financial Guidance Ligand is increasing its 2023 revenue guidance to be in the range of $126 million to $129 million (previously $124 million to $126 million) and is raising adjusted EPS guidance. Sales of Captisol are now expected to range from $27 million to $28 million (previously $25 million). Guidance for royalties is unchanged at $82 million to $84 million and contract revenue guidance is unchanged at $17 million. We now expect 2023 adjusted diluted EPS of $5.25 to $5.40 (previously $5.10 to $5.25). The increase in EPS guidance is driven primarily by the increase in revenue and lower operating expenses. Due to the unpredictable nature of the pandemic and related Captisol sales, Ligand excludes Captisol sales related to COVID-19 from guidance and will update investors each quarter as orders are received and shipped. Third Quarter 2023 Business Highlights On September 18, Ligand spun-out its Pelican subsidiary through a merger with Primordial Genetics, to form a privately held company, Primrose Bio. Ligand retained existing royalty rights from the Pelican Expression Technology, including Jazz’s Rylaze, Merck’s Vaxneuvance and V116 vaccines, Alvogen’s teriparatide, and Serum Institute of India’s Pneumosil and MenFive vaccines. Additionally, Ligand owns 49.9% of the equity of Primrose Bio. Simultaneous with the merger, Ligand entered into a Purchase and Sale Agreement with Primrose Bio and invested $15 million to acquire economic rights in future programs including two contracts previously entered into by Primordial Genetics and an economic interest in future revenue generated from PeliCRM197. Primrose Bio is a leading synthetic biology company with solutions to the industry’s protein design, formulation and expression challenges. The transaction is expected to reduce ongoing cash expenses and be immediately accretive to Ligand's adjusted EPS. On October 18, Ligand invested $30 million to acquire 13% of Ovid Therapeutics’ interest in the royalties and milestones owed to Ovid Therapeutics Inc. on soticlestat, a program Takeda Pharmaceutical Company is developing in two pivotal Phase 3 trials in Lennox-Gastaut and Dravet syndromes, respectively, both rare disease conditions. Under the terms of the 2021 agreement between Ovid and Takeda, Ovid is eligible to receive regulatory and commercial milestone payments of up to $660 million, as well as tiered royalties on global net sales of soticlestat at percentages ranging from the low double-digits up to 20%. If soticlestat is approved. Ligand’s 13% purchase entitles the Company to receive up to $86 million in regulatory and commercial milestones, and tiered royalties up to 2.6%. On September 27, Ligand acquired certain assets of Novan Inc. for $12.2 million. As part of the transaction, Ligand acquired the NDA-stage berdazimer gel 10.3% program, all the assets related to the NITRICIL delivery technology platform, and the rights to the Sitavig program. Berdazimer gel 10.3% remains on track for a PDUFA goal date of January 5, 2024, as the first potential at-home treatment for molluscum contagiosum. The Novan team is preparing to commercialize berdazimer gel 10.3% in the second half of 2024. Ligand is incubating the business to prepare for a spin-out or strategic partnering. On October 31, Ligand acquired Tolerance Therapeutics, a private company which owns a less than 1% royalty on worldwide net sales of TZIELD (teplizumab-mzwv). Ligand invested $20 million to acquire Tolerance Therapeutics and expects it to be immediately accretive to Ligand's royalty revenue. TZIELD is the first disease-modifying therapy in type 1 diabetes (“T1D”). It is a CD3-directed antibody indicated to delay the onset of Stage 3 T1D in adults and in children ages 8 years and older with Stage 2 T1D. TZIELD was granted Breakthrough Therapy Designation in 2019 and was approved by the U.S. Food and Drug Administration ("FDA") in November 2022. TZIELD is marketed by Sanofi S.A. following its acquisition of Provention Bio, Inc., in 2023 for $2.9 billion. Sanofi recently announced new data from TZIELD’s PROTECT Phase 3 trial which showed TZIELD’s potential to slow the progression of Stage 3 type 1 diabetes in newly diagnosed children and adolescents. TZIELD met the study’s primary endpoint, significantly slowing the decline of C-peptide levels, compared to placebo. Portfolio Updates On November 7, 2023 Travere Therapeutics (Nasdaq: TVTX) announced that 430 new patient start forms (PSFs) were received in the third quarter and a total of 990 PSFs have been received since the accelerated approval of FILSPARI was obtained in the first quarter of 2023. Additionally, Travere previously announced topline two-year confirmatory secondary endpoint results from the pivotal Phase 3 PROTECT Study of FILSPARI versus irbesartan in IgA nephropathy ("IgAN"). FILSPARI demonstrated long-term kidney function preservation and achieved a clinically meaningful difference in estimated glomerular filtration rate ("eGFR") total and chronic slope versus irbesartan, narrowly missing statistical significance in eGFR total slope while achieving statistical significance in eGFR chronic slope for purposes of regulatory review in the EU. All topline efficacy endpoints favored FILSPARI and patients treated with FILSPARI over two years exhibited one of the slowest annual rates of kidney function decline seen in a clinical trial of IgAN patients. Travere will engage with regulators and expects to submit a supplemental New Drug Application ("sNDA") in the first half of 2024 for full approval in the U.S. On October 26, 2023 Merck (NYSE: MRK) announced third quarter 2023 Vaxneuvance sales of $214 million. Merck previously reported Vaxneuvance sales of $168 million and $106 million in the second and first quarter of 2023, respectively. Additionally, Merck previously announced its Phase 3 clinical trial of V116, an investigational 21-valent pneumococcal conjugate vaccine, met key immunogenicity and safety endpoints in two Phase 3 trials. If approved, V116 would be the first pneumococcal conjugate vaccine specifically designed for adults. Results from the STRIDE-3 trial demonstrated statistically significant immune responses compared to PCV20 (pneumococcal 20-valent conjugate vaccine) in vaccine-naïve adults for serotypes common to both vaccines. Positive immune responses were also observed for serotypes unique to V116. Additionally, results from STRIDE-6 demonstrated that V116 was immunogenic for all 21 pneumococcal serotypes in the vaccine among adults who previously received a pneumococcal vaccine at least one year prior to the study. In both studies, V116 had a safety pro to the comparator in the studies. Jazz Pharmaceuticals announced that the European Commission has granted marketing authorization for Enrylaze® for use as a component of a multi-agent chemotherapeutic regimen for the treatment of acute lymphoblastic leukemia and lymphoblastic lymphoma in adult and pediatric patients (1 month and older) who developed hypersensitivity or silent inactivation to E. coli-derived asparaginase. Enrylaze, approved as Rylaze in the US and Canada, is a new Erwinia-derived asparaginase developed using the Pfenex Expression Technology with a safety pro with that of other asparaginase preparations. Enrylaze may be given by either intravenous infusion or intramuscular injection and is dosed on either alternate days (every 48 hours) or via a Monday/Wednesday/Friday dosing schedule. The use of the Pfenex Expression Technology to manufacture Enrylaze delivers a scalable supply, able to meet global demand, and a ready-to-use solution that avoids the need for reconstitution in the clinic. Verona Pharma plc (Nasdaq: VRNA) announced that the FDA has accepted for review its New Drug Application seeking approval of ensifentrine for the maintenance treatment of patients with COPD. The FDA has assigned a PDUFA date of June 26, 2024, and is not currently planning to hold an advisory committee meeting to discuss the application. Anebulo Pharmaceuticals Inc. (Nasdaq: ANEB) announced positive feedback from the FDA following a Type B meeting in July. The FDA indicated that a single well-controlled study of ANEB-001 in Acute Cannabinoid Intoxication patients presenting to the emergency department combined with a larger THC challenge study in volunteers could potentially provide substantial evidence to support a new drug application. 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, 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. Callers outside the U.S. may dial 1 (646) 960-0369. To participate via live or replay webcast, a link is available at . About Ligand Pharmaceuticals Ligand is a biopharmaceutical company enabling scientific advancement through supporting the clinical development of high-value medicines. Ligand does this by providing financing, licensing our technologies or both. Our business model generates value for stockholders by creating 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. Our business model is based on funding programs in mid- to late-stage drug development in return for economic rights and licensing our technology 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) in order 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. 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 at . 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. Follow Ligand on X - formerly known as 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 expectations regarding future revenue growth and whether the transaction with Primrose Bio and the acquisition of Tolerance will be accretive to adjusted EPS and revenue, respectively; the timing of clinical and regulatory events of Ligand’s partners; the commercialization efforts and potential market opportunity of products marketed by Ligand’s partners; the ability to generate revenue from a diversified portfolio; 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 through its partnerships or otherwise; 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; 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 acquisitions with Ligand’s existing businesses; Ligand may not be able to acquire, stabilize, outlicense or sell Novan's programs or assets; Ligand may not be able to successfully implement its strategic growth plan and continue the development of its proprietary programs; restrictions under Ligand's credit agreement may limit its flexibility in operating its business and a default under the agreement could result in a foreclosure of the collateral securing such obligations; pandemics and other 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 and between Israel and Hamas; 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 as well as in Ligand's public periodic filings with the Securities and Exchange Commission available at . 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, Vaxneuvance, a Merck product, FILSPARI, a Travere Therapeutics product, QTORIN, a Palvella Therapeutics product, Pneumosil, a Serum Institute of India product, Veklury, a Gilead Sciences product, and other programs described herein, 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 TechnologyTM. 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 September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Revenues: Royalties $ 23,863 $ 19,255 $ 61,447 $ 50,507 Captisol - Core 8,608 3,582 24,450 13,133 Captisol - COVID — 32,367 — 64,483 Contract revenue 397 4,017 17,316 17,740 Total revenues 32,868 59,221 103,213 145,863 Operating costs and expenses: Cost of Captisol 3,485 14,153 8,871 31,213 Amortization of intangibles 8,238 8,568 25,316 25,698 Research and development 5,532 9,239 19,049 26,885 General and administrative 14,656 14,920 36,798 38,931 Total operating costs and expenses 31,911 46,880 90,034 122,727 Loss from sale of Pelican 1,079 — 1,079 — Income (loss) from operations (122 ) 12,341 12,100 23,136 Gain (loss) from short-term investments (13,184 ) (923 ) 30,340 (15,709 ) Interest income (expense), net 2,262 259 5,493 (536 ) Other income, net (4,300 ) 677 (4,570 ) 4,980 Total other income (expense), net (15,222 ) 13 31,263 (11,265 ) Income before income taxes (15,344 ) 12,354 43,363 11,871 Income tax expense 2,552 (2,709 ) (10,251 ) (2,556 ) Net income from continuing operations (12,792 ) 9,645 33,112 9,315 Net loss from discontinued operations — (9,241 ) (1,665 ) (25,191 ) Net income (loss): $ (12,792 ) $ 404 $ 31,447 $ (15,876 ) Basic net income from continuing operations per share $ (0.74 ) $ 0.57 $ 1.92 $ 0.55 Basic net loss from discontinued operations per share $ — $ (0.55 ) $ (0.10 ) $ (1.49 ) Basic net income (loss) per share $ (0.74 ) $ 0.02 $ 1.82 $ (0.94 ) Shares used in basic per share calculation 17,380 16,888 17,241 16,860 Diluted net income from continuing operations per share $ (0.74 ) $ 0.56 $ 1.86 $ 0.54 Diluted net loss from discontinued operations per share $ — $ (0.54 ) $ (0.09 ) $ (1.47 ) Diluted net income (loss) per share $ (0.74 ) $ 0.02 $ 1.77 $ (0.93 ) Shares used in diluted per share calculation 17,380 17,132 17,784 17,128 LIGAND PHARMACEUTICALS INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) September 30, 2023 December 31, 2022 Assets Current assets: Cash, cash equivalents and short-term investments $ 191,085 $ 211,870 Accounts receivable, net 36,003 30,424 Inventory 25,392 13,294 Income tax receivable 3,184 4,614 Other current assets 2,097 3,399 Total current assets 257,761 263,601 Deferred income taxes, net 8,530 8,530 Goodwill and other identifiable intangible assets, net 418,613 448,128 Commercial license and other economic rights, net 6,602 10,182 Operating lease right-of-use assets 6,235 10,914 Finance lease 3,566 4,095 Equity method investment in Primrose Bio 14,009 — Equity securities in Primrose Bio 33,154 — Other assets 20,740 17,218 Total assets $ 769,210 $ 762,668 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 13,110 $ 20,988 Income tax payable 4,343 — Current operating lease liabilities 497 670 2023 convertible senior notes, net — 76,695 Other current liabilities 916 457 Total current liabilities 18,866 98,810 Long-term contingent liabilities 3,515 3,456 Long-term operating lease liabilities 5,832 10,336 Deferred income taxes, net 31,925 30,615 Other long-term liabilities 43,670 21,966 Total liabilities 103,808 165,183 Total stockholders' equity 665,402 597,485 Total liabilities and stockholders' equity $ 769,210 $ 762,668 LIGAND PHARMACEUTICALS INCORPORATED ADJUSTED FINANCIAL MEASURES (Unaudited, in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) from continuing operations $ (12,792 ) $ 9,645 $ 33,112 $ 9,315 Adjustments: Share-based compensation expense 6,884 9,107 20,022 23,217 Non-cash interest expense (1) — 138 159 639 Amortization related to acquisitions and intangible assets 8,238 8,568 25,316 25,698 Amortization of commercial license and other economic rights (2) (25 ) (86 ) (1,026 ) (323 ) Change in contingent liabilities (3) 24 96 132 (843 ) Loss (gain) from short-term investments 13,184 923 (30,340 ) 15,709 Realized gain from short-term investments — — 37,197 (288 ) Transaction costs 3,288 — 3,288 — Loss from sale of Pelican 1,079 — 1,079 — Credit losses and impairment charges for commercial license rights 4,114 — 4,114 — Other (4) 895 1,428 1,091 (1,938 ) Income tax effect of adjusted reconciling items above (6,966 ) (3,985 ) (10,641 ) (12,654 ) Excess tax benefit from share-based compensation (5) 36 42 (529 ) 129 Adjusted net income from continuing operations $ 17,959 $ 25,876 $ 82,974 $ 58,661 Captisol - COVID gross profit, net of tax (6) — (15,370 ) — (29,754 ) Adjusted net income from continuing operations excluding Captisol - COVID $ 17,959 $ 10,506 $ 82,974 $ 28,907 Diluted per-share amounts attributable to common shareholders: Diluted net income (loss) per share from continuing operations $ (0.74 ) $ 0.56 $ 1.86 $ 0.54 Adjustments: Share-based compensation expense 0.39 0.53 1.14 1.36 Non-cash interest expense (1) — 0.01 0.01 0.04 Amortization related to acquisitions and intangible assets 0.47 0.50 1.44 1.50 Amortization of commercial license and other economic rights (2) — (0.01 ) (0.06 ) (0.02 ) Change in contingent liabilities (3) — 0.01 0.01 (0.05 ) (Gain)/Loss from short-term investments 0.75 0.05 (1.72 ) 0.92 Realized gain from short-term investments — — 2.11 (0.02 ) Transaction costs 0.19 — 0.19 — Loss from sale of Pelican 0.06 — 0.06 — Credit losses and impairment charges for commercial license rights 0.23 — 0.23 — Other (4) 0.06 0.08 0.05 (0.11 ) Income tax effect of adjusted reconciling items above (0.39 ) (0.23 ) (0.60 ) (0.74 ) Excess tax benefit from share-based compensation (5) — — (0.03 ) 0.01 Adjustment for shares excluded using the if-converted method under ASU 2020-06 (7) — — 0.02 — Adjusted diluted net income per share from continuing operations $ 1.02 $ 1.50 $ 4.71 $ 3.43 Captisol - COVID gross profit, net of tax (6) — (0.90 ) — (1.74 ) Adjusted diluted net income per share from continuing operations excluding Captisol - COVID $ 1.02 $ 0.60 $ 4.71 $ 1.69 GAAP - weighted average number of common shares - diluted 17,380 17,132 17,784 17,128 Shares excluded due to anti-dilutive effect on GAAP net loss 272 — — — Diluted effect of the 2023 Notes (7) — — (159 ) — Adjusted weighted average number of common shares - diluted 17,652 17,132 17,625 17,128 (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. (3) Amounts represent changes in fair value of contingent consideration related to CyDex and Metabasis transactions. (4) Amounts primarily relate to losses associated with our equity investments, operating losses from Novan since the acquisition date, as well as gain on debt extinguishment in the prior year period. (5) 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. (6) 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. (7) Excluding the impact from the adoption of accounting pronouncement (ASU 2020-06) on January 1, 2022 as the Company has intended to settle the principal balance in cash. Under the standard, the Company is required to reflect the dilutive effect of the 2023 Notes by application of the if-converted method, The 2023 Notes were fully paid off on May 15, 2023, the debt maturity date. View source version on businesswire.com: Contacts Ligand Pharmaceuticals Incorporated Simon Latimer investors@ligand.com (858) 550-7766 Twitter: @Ligand_LGND LifeSci Advisors Bob Yedid bob@lifesciadvisors.com (516) 428-8577 Source: Ligand Pharmaceuticals Incorporated View this news release online at:

Ligand retains all Pelican commercial royalties and will own 49.9% of Primrose Bio, Inc. as a stand-alone private company with leading technologies in synthetic biology Ligand contributes $15 million in exchange for economic interest in select Primrose programs Ligand improves cash expense outlook and raises EPS guidance SAN DIEGO--(BUSINESS WIRE)-- Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) (“Ligand,” the “Company” or “we”) announced that it has entered into a merger agreement, pursuant to which its subsidiary, Pelican Technology Holdings, Inc., (“Pelican”) has become a wholly owned subsidiary of Primrose Bio, Inc. (“Primrose Bio”, formerly known as Primordial Genetics, Inc.). Primrose Bio is a stand-alone private company focused on synthetic biology. As part of the transaction, Ligand retains the existing commercial royalties related to the Pelican Expression Technology® and will own 49.9% of Primrose Bio. Simultaneous with the merger, Ligand entered into a Purchase and Sale Agreement with Primrose Bio and contributed $15 million in exchange for a portion of the economic rights from two contracts previously entered into by Primordial Genetics and an economic interest in potential future revenues generated from PeliCRM197®. Primrose Bio combines the Primordial Genetics’ Function Generator™ and Ligand’s Pelican Expression Technology® platform (formerly known as Pfenex Expression Technology®) to create a revolutionary way of enhancing biological productivity to enable the next generation of therapeutics. Function Generator is designed to systematically generate tens of millions of novel genes in an ultra-high-throughput fashion, to enable the discovery of enzymes and microbes with improved function. The Pelican Expression Technology is a robust and scalable production platform used in five approved medicines that is especially well-suited for large-scale protein production of complex proteins. These proprietary technologies have been leveraged to create Prima RNApols™ and PeliCRM197, two manufacturing and formulation solutions licensed to biopharma companies to develop mRNA therapeutics and conjugate vaccines, respectively. “The acquisition of Pfenex in 2020 was a successful and accretive deal for Ligand that continues to pay dividends. After incubating Pfenex and its Pelican Expression Technology for three years, we now have five commercial royalties from the technology platform, and with today’s announcement, we retain a significant equity stake in an exciting new company pushing the frontiers of synthetic biology,” said Todd Davis, CEO of Ligand. “With the spinout of Pelican, retention of economic rights to commercial royalties, and subsequent purchase of economic rights, we are delivering on our strategy to streamline the Company’s operations and focus on accretive high-margin businesses and royalties. We believe this will accelerate profitability and growth for our investors and add multiple new royalty ‘shots-on-goal’ for Ligand while realizing lower infrastructure costs within our efficient high growth business model.” About the Pelican - Primordial Genetics Transaction Pelican, which holds the Pelican Expression Technology®, related patents, employees and operating business, has merged into a subsidiary wholly owned by Primordial Genetics As part of the transaction, Primordial Genetics has changed its name to “Primrose Bio, Inc.” Ligand owns 49.9% of the equity of Primrose Bio, Inc. Ligand retains the existing royalty rights from the Pelican Expression Technology, including economic rights to Jazz’s RYLAZE®, Merck’s VAXNEUVANCE® and V116 vaccines, Alvogen’s Teriparatide, Serum Institute of India’s Pneumosil® and MenFive® vaccines, among others. Simultaneous with the merger, Ligand entered into a Purchase and Sale Agreement with Primrose Bio and contributed $15 million in exchange for economic rights in future programs As part of the Purchase and Sale Agreement, Ligand receives a portion of the economic rights from two contracts previously entered into by Primordial Genetics related to proprietary RNA polymerase enzymes (Prima RNApols) and an economic interest in future revenue generated from PeliCRM197®. Financial Guidance Ligand is increasing adjusted EPS guidance and modifying revenue guidance. As a result of the divestiture and given the pro the Pelican business, Ligand will have lower contract revenue than previously expected but increased adjusted earnings. In addition, Ligand is updating royalty revenue guidance based upon the latest product sales estimates. Ligand’s updated guidance is now revenue of $124 million to $126 million (previously $124 to $128 million) and adjusted diluted EPS of $5.10 to $5.25 (previously $4.85 to $5.00). Guidance for royalties is now $82 million to $84 million (previously $78 to $82 million). Sales of Captisol are expected to be $25 million (previously $24 million) and contract revenue is now expected to be $17 million (previously $22 million). About Primrose Bio, Inc. Primrose Bio was formed in 2023 with the merger between Primordial Genetics, Inc. and Pelican Technology Holdings, Inc. Primrose Bio combines the Function Generator™ and Pelican Expression Technology® platforms to create a novel way of enhancing biological productivity to enable the next generation of therapeutics. These combined technologies are designed to create and express some of the largest sets of genetic diversity available in the industry, to enable customers to discover new biological molecules and cells that with levels of productivity that were previously unachievable, economically prohibitive, or otherwise inaccessible. Primrose has leveraged its technology to create Prima RNApols™ and PeliCRM197®, two manufacturing and formulation solutions licensed to biopharma companies to develop mRNA medicines and conjugate vaccines, respectively. Several of the world’s leading pharmaceutical companies use Primrose Bio’s technology, including Merck, Jazz Pharmaceuticals, Alvogen, Serum Institute of India, Arcellx, Arcturus and others. For more information, please visit . About Ligand Pharmaceuticals Ligand is a biopharmaceutical company enabling scientific advancement through supporting the clinical development of high-value medicines. Ligand does this by providing financing, licensing our technologies or both. Our business model generates value for stockholders by creating 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. Our business model is based on funding programs in mid- to late-stage drug development in return for economic rights and licensing our technology 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) in order 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. 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 . Follow Ligand on X (f/k/a Twitter) @Ligand_LGND. We use X 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 X account and our website, in addition to following our press releases, SEC filings, public conference calls and webcasts. Adjusted Financial Measures Ligand reports 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, income tax affect of adjusted reconciling items and others that are listed in the itemized reconciliations between GAAP and adjusted financial measures included in the Company’s earnings press release for the second quarter of 2023 available on the Company’s website. 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. 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: Ligand’s expectations that the spin-off of Pelican will accelerate profitability and growth, the potential for new revenue from the economic rights purchased from Primordial Genetics and guidance regarding the full-year 2023 financial results. Actual events or results may differ from Ligand’s or its partner’s expectations due to risks and uncertainties inherent in Ligand’s and its partner’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 will be dependent on Primrose Bio to leverage the Pelican Expression Technology and Function Generator platforms and to generate revenue from its commercial contracts; Ligand may not be able to create future revenues and cash flows through its partnerships or otherwise; the spin-off of Pelican Holdings, Inc. may not achieve the intended strategic, operational and financial benefits; and other risks described in Ligand’s prior press releases and filings with the Securities and Exchange Commission available at . Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. View source version on businesswire.com: Contacts Ligand Pharmaceuticals Incorporated Simon Latimer investors@ligand.com (858) 550-7766 X Handle: @Ligand_LGND LifeSci Advisors Bob Yedid bob@lifesciadvisors.com (516) 428-8577 Source: Ligand Pharmaceuticals Incorporated View this news release online at: