Conference Call Begins at 4:30 p.m. Eastern
Time Today
Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today
reported financial results for the three and nine months ended
September 30, 2019 and provided an operating forecast and program
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 are very pleased with how the company is performing as we
approach the end of the year,” said John Higgins, Chief Executive
Officer of Ligand. “In the past quarter we had new products and
market launches from our partnered portfolio that we expect to
drive increased royalties. Substantial new data were announced for
late-stage or marketed products that hold the promise for further
revenue growth. In addition, we acquired a company to further
expand our antibody discovery business and closed new licensing
deals, adding to our large partner portfolio. Financially, the
business is strong in regards to both the balance sheet and the
financial growth outlook. We are doing well as a company and are
pleased to expand our Board last month with the addition of Sarah
Boyce, a talented and accomplished biotech executive.”
Third Quarter 2019 Financial Results
Total revenues for the third quarter of 2019 were $24.8 million,
compared with $45.7 million for the same period in 2018. Royalties
in the third quarter of 2019 were $9.8 million and primarily
consisted of royalties from Kyprolis and EVOMELA®. Royalties in the
third quarter of 2018 were $36.1 million and included royalties
from Promacta, which was sold to Royalty Pharma as of March 6,
2019, for $827 million; Ligand did not receive any Promacta
royalties in the third quarter of 2019 and will not receive any
Promacta royalties going forward. Material sales were $6.8 million
for the third quarter of 2019, compared with $7.0 million for the
same period in 2018. License fees, milestones and other revenues
were $8.2 million for the third quarter of 2019, compared with $2.5
million for the same period in 2018.
Cost of material sales was $3.1 million for the third quarter of
2019, compared with $1.5 million for the same period in 2018, with
higher costs due to the mix of Captisol sales. Amortization of
intangibles was $3.6 million for the third quarter of 2019,
compared with $5.7 million for the same period in 2018. Research
and development expense was $13.7 million for the third quarter of
2019, compared with $5.5 million for the same period of 2018, with
the increase due to costs associated with the Vernalis Design
Platform (“VDP”) research team and non-cash amortization of the
upfront investments in the Palvella and Novan programs. General and
administrative expense was $9.5 million, compared with $9.6 million
for the same period in 2018.
Net loss for the third quarter of 2019 was $15.3 million, or
$0.81 per diluted share, compared with net income of $67.4 million,
or $2.80 per diluted share, for the same period in 2018. The third
quarter of 2019 net loss was affected by a non-cash change in the
value of Ligand’s investments of $10.5 million, while the third
quarter of 2018 net income was affected by a net non-cash $59.3
million gain from the value of Ligand’s investments. Adjusted net
income for the third quarter of 2019 was $9.5 million, or $0.49 per
diluted share, compared with $31.7 million, or $1.32 per diluted
share, for the same period in 2018. The third quarter 2019 adjusted
diluted EPS was impacted by a change in tax assumptions resulting
in a reduction of EPS by $0.12 in the quarter. Please see the table
below for a reconciliation of net loss to adjusted net income.
As of September 30, 2019, Ligand had cash, cash equivalents and
short-term investments of $1.1 billion. Cash used for share
repurchases in the third quarter of 2019 was approximately $181.2
million, which repurchased approximately 1.8 million shares.
Year-to-Date Financial Results
Total revenues for the nine months ended September 30, 2019 were
$93.3 million, compared with $191.9 million for the same period in
2018. Royalties in the nine months ended September 30, 2019 were
$35.9 million, compared with $88.3 million for the nine months
ended September 30, 2018. Royalties for the nine months ended
September 30, 2019 primarily consisted of royalties from Promacta,
Kyprolis and EVOMELA and do not include contribution from Promacta
after March 6, 2019, whereas 2018 royalties included a full nine
months of Promacta royalties. Material sales were $24.4 million,
compared with $19.0 million for the same period in 2018, with the
change due to the timing of Captisol purchases for use in clinical
trials and commercial products. License fees, milestones and other
revenues were $33.0 million, compared with $84.5 million for the
same period in 2018, which included a $47 million payment from WuXi
Biologics to amend its OmniAb platform license agreement as well as
a $20 million upfront payment upon the licensing of Ligand’s GRA
program.
Cost of material sales was $9.4 million for the nine months
ended September 30, 2019, compared with $3.4 million for the same
period in 2018, with the change due to higher sales and mix of
Captisol sales in 2019. Amortization of intangibles was $10.6
million, compared with $12.3 million for the same period in 2018.
Research and development expense was $37.2 million, compared with
$19.0 million for the same period of 2018, with the increase due to
costs associated with recent acquisitions. General and
administrative expense was $31.6 million, compared with $26.6
million for the same period in 2018, with the increase due to costs
associated with recent acquisitions and non-cash stock-based
compensation expense.
Net income for the nine months ended September 30, 2019 was
$636.7 million, or $31.29 per diluted share, compared with $185.8
million, or $7.61 per diluted share, for the same period in 2018.
Net income for the nine months ended September 30, 2019 was
impacted by an after-tax gain of approximately $643 million on the
sale of Ligand’s Promacta license to Royalty Pharma. Adjusted net
income from continuing operations for the nine months ended
September 30, 2019 was $48.2 million, or $2.37 per diluted share
after taking into account the tax changes primarily related to
Promacta, compared with $127.9 million, or $5.44 per diluted share,
for the same period in 2018. Please see the table below for a
reconciliation of net income to adjusted net income.
2019 Financial Guidance
Ligand is affirming its revenue guidance for 2019 with total
revenues expected to be approximately $118 million. Revenues, cost
of goods and operating expenses are all performing in line with
expectations and guidance. Ligand is updating its guidance for
adjusted diluted EPS to $3.00 per share from $3.20 per share
previously to account for changes in tax expense allocated to
adjusted EPS compared with initial estimates, primarily related to
the $827 million sale of the Promacta royalty earlier this
year.
Third Quarter 2019 and Recent Business Highlights
OmniAb Platform Updates
Acquisition and New Licenses
- Ligand acquired Ab Initio Biotherapeutics for $12 million. Ab
Initio has a patented antigen technology that is synergistic with
the OmniAb® therapeutic antibody discovery platform, providing
Ligand’s current and potential new partners enhanced capabilities
for the discovery of therapeutic antibodies against
difficult-to-access cellular targets. Ab Initio has a collaboration
agreement with Pfizer to discover novel therapeutic antibodies
against an undisclosed target in the G-protein coupled receptor
superfamily.
- Ligand entered into new OmniAb license agreements with Takeda,
GigaGen, Talem Therapeutics, Kira Pharma and AbVivo.
Select OmniAb Partner Updates
- CStone Pharmaceuticals released pooled safety data from the
Phase 1b (GEMSTONE-101) study of their anti-PD-L1 antibody CS1001
in a poster presentation at the European Society of Medical
Oncology 2019 Congress, demonstrating the promising safety and
tolerability profile of CS1001.
- CStone Pharmaceuticals announced results from the esophageal
squamous cell carcinoma cohort of a Phase 1b clinical trial of
CS1001 in an oral presentation at the 22nd Annual Meeting of the
Chinese Society of Clinical Oncology.
Recent OmniAb Publications
- A paper by Ligand scientists entitled “Discovery of high
affinity, pan-allelic, and pan-mammalian reactive antibodies
against the myeloid checkpoint receptor SIRPα” was published in the
journal mAbs.
Other Licensing and Acquisition Events
- Ligand entered a license and supply agreement with SQ
Innovation AG for use of Ligand’s Captisol® technology in the
formulation of high-concentration furosemide for the treatment of
edema in patients with heart failure. Ligand is eligible to receive
potential milestone payments and royalties, as well as revenue from
Captisol materials sales.
- Ligand entered into new Captisol clinical use or license and
supply agreements with Millennium/Takeda, BendaRx Corporation,
Hikma, the University of Edinburgh and Quadria Bio.
Additional Pipeline and Partner Developments
- Kyprolis® third quarter sales totaled $280 million, consisting
of Amgen-reported October 29, 2019 Q3 sales of Kyprolis of $266
million and Ono Pharmaceutical Co.-reported October 30, 2019 Q3
sales of Kyprolis in Japan of $14 million.
- On September 13, 2019 Amgen announced the Phase 3 CANDOR study
evaluating Kyprolis® in combination with dexamethasone and
Darzalex® compared to Kyprolis and dexamethasone alone met its
primary endpoint of progression-free survival. The regimen resulted
in a 37% reduction in the risk of progression or death in patients
with relapsed or refractory multiple myeloma treated with KdD and
the median PFS for patients treated with Kd alone was 15.8
months.
- Amgen announced on October 31 that it has entered into a
strategic collaboration with BeiGene to expand its oncology
presence in China. BeiGene is an oncology-focused biotechnology
company with an established commercial and clinical development
organization in China. Under the agreement, BeiGene will
commercialize Kyprolis in China over the next 5 to 7 years along
with two other oncology products, Xgeva® and Blincyto®. Amgen and
BeiGene will share the profits and losses equally. Kyprolis is
currently in a Phase 3 trial in China.
- CASI Pharmaceuticals launched Evomela® in China; Evomela uses
Ligand’s Captisol technology in its formulation.
- Retrophin announced that it will present new data from the
Phase 2 DUET Study examining the impact of sparsentan on quality of
life in focal segmental glomerulosclerosis at the American Society
of Nephrology (ASN) Kidney Week 2019.
- Novan completed patient recruitment in the B-SIMPLE (Berdazimer
Sodium In Molluscum Patients with Lesions) Phase 3 pivotal trials
with SB206 for the treatment of molluscum contagiosum. Novan
affirmed that topline data from these trials are expected in the
first quarter of 2020.
- Sage Therapeutics launched Zulresso® (brexanolone) injection.
With this launch, Zulresso is the 11th FDA-approved drug to use
Ligand’s Captisol technology.
- Sermonix Pharmaceuticals announced enrollment and dosing of the
first patient into a Phase 2 clinical trial of its lead
investigational drug, lasofoxifene, and announced completion of a
$26 million financing to fund the trial through to completion.
- Verona Pharma presented data from a Phase 2b trial with
nebulized ensifentrine in chronic obstructive pulmonary disease
(COPD) at the CHEST Annual Meeting and presented data from a Phase
2 trial with its dry powder inhaler formulation of ensifentrine in
COPD at the European Respiratory Society International
Congress.
- Marinus Pharmaceuticals announced that results from its Phase 2
trial of ganaxolone in Refractory Status Epilepticus (RSE) were
presented at the Neurocritical Care Society 17th Annual Meeting in
Vancouver, BC. Ganaxolone met the primary endpoint in the study
with none of the 17 patients progressing to IV anesthetics within
24 hours of treatment initiation.
- In September, results of a randomized Phase 2 study of M6620,
an ATR kinase inhibitor in development by Merck KGaA formulated
using Captisol, were presented at ESMO 2019 demonstrating that the
addition of M6620 to gemcitabine extended PFS without additional
toxicity in patients with platinum-resistant, high-grade serous
ovarian cancer.
- Takeda Pharmaceutical announced results of a Phase 1 clinical
proof-of-concept study of Captisol-enabled TAK-925, a selective
orexin type-2 receptor (OX2R) agonist, in individuals with
narcolepsy type 1.
- Opthea announced positive Phase 2b results demonstrating that
OPT-302 combination therapy met the primary endpoint of superiority
in mean visual acuity gain at 24 weeks compared to Lucentis
monotherapy in treatment-naïve patients with wet age-related
macular degeneration; these data were presented at the European
Society of Retina Specialists 2019 Congress.
- Nucorion Pharmaceuticals closed a $5 million Series B financing
to support the Phase 1 clinical development in the U.S. for its
lead program, NCO-1010, for the treatment of hepatitis B; NCO-1010
utilizes Ligand’s LTP Platform™ technology.
Internal R&D
- Ligand announced positive topline results from a Phase 1
clinical trial of its internal Captisol-enabled Iohexol program.
Clinical data will be presented at ASN Kidney Week 2019 in
Washington, DC on November 8th, 2019 and the 2019 Contrast Media
Research Symposium in Erice, Italy on November 11th, 2019.
Corporate Events
- Ligand announced the appointment of Sarah Boyce to the
Company's Board of Directors, increasing the total number of Ligand
directors to nine. Ms. Boyce brings a breadth of commercial and
business development experience that will be valuable as the
Company builds its portfolio of tools and drug discovery
technologies to help serve the pharmaceutical industry.
Adjusted Financial Measures
The Company 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 stock-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, unissued shares relating to
its Senior Convertible Notes, gain on the sale of Promacta and
others that are listed in the itemized reconciliations between GAAP
and adjusted financial measures included at the end of this press
release. However, other than with respect to total revenues, the
Company only provides financial guidance on an adjusted basis and
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, stock-based compensation
expense and 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 (833) 591-4752 from the U.S. or (720) 405-1612 from
outside the U.S., using the conference ID 6093759. To participate
via live or replay webcast, a link is available at
www.ligand.com.
About Ligand Pharmaceuticals
Ligand is a biopharmaceutical company focused on developing or
acquiring technologies that help pharmaceutical companies discover
and develop medicines. 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, diversified and lower-risk
business than a typical biotech company. Our business model is
based on doing what we do best: drug discovery, early-stage drug
development, product reformulation and partnering. We partner with
other pharmaceutical companies to leverage what they do best
(late-stage development, regulatory management and
commercialization) to ultimately generate our revenue. Ligand’s
OmniAb® technology platform is a patent-protected transgenic animal
platform used in the discovery of fully human mono- and bispecific
therapeutic antibodies. The Captisol® platform technology is a
patent-protected, chemically modified cyclodextrin with a structure
designed to optimize the solubility and stability of drugs The
Vernalis Design Platform (VDP) integrates protein structure
determination and engineering, fragment screening and molecular
modeling, with medicinal chemistry, to help enable success in novel
drug discovery programs against highly-challenging targets. Ligand
has established multiple alliances, licenses and other business
relationships with the world’s leading pharmaceutical companies
including Amgen, Merck, Pfizer, Gilead, Janssen, Baxter
International and Eli Lilly. For more information, please visit
www.ligand.com. Follow Ligand on Twitter @Ligand_LGND.
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 belief that recent events in its partnered
programs will enhance value; Ligand’s pipeline providing a source
of growth and future diversified cash flow; Ligand’s entry into new
license or partnering agreements; 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 2019 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 2019; 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; there may not be a market for the
product(s) even if successfully developed and approved; Amgen,
Acrotech Biopharma, Sage Therapeutics or other Ligand partners, may
not execute on their sales and marketing plans for marketed
products for which Ligand has an economic interest; 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 product(s)
could delay or prevent regulatory approval or commercialization;
Ligand may not be able to successfully implement its strategic
growth plan and continue the development of its proprietary
programs; 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, EVOMELA, an Acrotech Biopharma 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 OmniAb®. 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,
2019
2018
2019
2018
Revenues:
Royalties
$
9,767
$
36,127
$
35,931
$
88,343
Material sales
6,849
7,027
24,357
19,030
License fees, milestones and other
revenues
8,192
2,509
32,991
84,490
Total revenues
24,808
45,663
93,279
191,863
Operating costs and expenses:
Cost of material sales
3,147
1,460
9,410
3,382
Amortization of intangibles
3,552
5,725
10,560
12,309
Research and development
13,742
5,483
37,244
19,023
General and administrative
9,525
9,633
31,607
26,571
Total operating costs and expenses
29,966
22,301
88,821
61,285
Gain from sale of Promacta license
—
—
812,797
—
Income (loss) from operations
(5,158
)
23,362
817,255
130,578
Gain (loss) from Viking
(10,520
)
62,398
(5,592
)
124,206
Interest expense, net
(1,597
)
(5,726
)
(4,321
)
(19,022
)
Other expense, net
(2,596
)
(808
)
(2,528
)
(5,643
)
Total other income (loss), net
(14,713
)
55,864
(12,441
)
99,541
Income (loss) before income taxes
(19,871
)
79,226
804,814
230,119
Income tax benefit (expense)
4,620
(11,864
)
(168,147
)
(44,316
)
Net income (loss):
$
(15,251
)
$
67,362
$
636,667
$
185,803
Basic net income (loss) per share
$
(0.81
)
$
3.19
$
32.51
$
8.77
Shares used in basic per share
calculation
18,770
21,148
19,586
21,189
Diluted net income (loss) per share
$
(0.81
)
$
2.80
$
31.29
$
7.61
Shares used in diluted per share
calculations
18,770
24,052
20,349
24,430
LIGAND PHARMACEUTICALS
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited, in thousands)
September 30, 2019
December 31, 2018
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments
$
1,099,685
$
718,381
Investment in Viking
49,856
55,448
Accounts receivable, net
21,958
55,850
Inventory
6,565
7,124
Derivative asset
—
22,576
Other current assets
5,039
11,161
Total current assets
1,183,103
870,540
Deferred income taxes, net
—
46,521
Goodwill and other identifiable intangible
assets, net
309,781
306,439
Commercial license and other economic
rights, net
35,413
31,460
Other assets
19,179
5,843
Total assets
$
1,547,476
$
1,260,803
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
15,100
$
23,383
Income tax payable
16,571
—
Current contingent liabilities
1,794
5,717
Deferred revenue
2,230
3,286
Derivative liability
—
23,430
2019 convertible senior notes, net
—
26,433
Total current liabilities
35,695
82,249
2023 convertible senior notes, net
631,533
609,864
Long-term contingent liabilities
7,995
6,825
Deferred income taxes, net
3,761
—
Other long-term liabilities
17,911
951
Total liabilities
696,895
699,889
Total stockholders' equity
850,581
560,914
Total liabilities and stockholders'
equity
$
1,547,476
$
1,260,803
LIGAND PHARMACEUTICALS
INCORPORATED
ADJUSTED FINANCIAL
MEASURES
(Unaudited, in thousands, except
per share amounts)
Three months ended September
30,
Nine months ended September
30,
2019
2018
2019
2018
Net income (loss)
$
(15,251
)
$
67,362
$
636,667
$
185,803
Share-based compensation expense
6,297
5,470
18,215
14,837
Non-cash interest expense(1)
7,560
9,701
22,562
25,162
Amortization related to acquisitions and
intangible assets
3,552
5,725
10,560
14,309
Amortization of commercial license and
other economic rights(2)
4,595
(496
)
10,048
(1,407
)
Change in contingent liabilities(3)
(222
)
907
772
3,638
Acquisition and integrations costs(4)
—
—
445
—
Loss (gain) from Viking
10,520
(62,398
)
5,592
(124,206
)
Realized gain from Viking
—
3,107
—
3,107
Other(5)
3,043
67
2,628
2,697
Income tax effect of adjusted reconciling
items above
(8,200
)
8,317
(15,342
)
13,808
Valuation allowance release(6)
—
—
—
(1,666
)
Excess tax benefit from share-based
compensation(7)
—
(6,105
)
(1,371
)
(8,188
)
11,894
31,657
690,776
127,894
Gain from sale of Promacta license, net of
tax(8)
(2,350
)
—
(642,615
)
—
Adjusted net income
$
9,544
$
31,657
$
48,161
$
127,894
Diluted per-share amounts attributable
to common shareholders:
Net income (loss)
$
(0.81
)
$
2.80
$
31.29
$
7.61
Share-based compensation expense
0.34
0.23
0.90
0.61
Non-cash interest expense(1)
0.40
0.40
1.11
1.03
Amortization related to acquisitions and
intangible assets
0.19
0.24
0.52
0.59
Amortization of commercial license and
other economic rights(2)
0.24
(0.02
)
0.49
(0.06
)
Change in contingent liabilities(3)
(0.01
)
0.04
0.04
0.15
Acquisition and integrations costs(4)
—
—
0.02
—
Loss (gain) from Viking
0.56
(2.60
)
0.27
(5.09
)
Realized gain from Viking
—
0.13
—
0.13
Other(5)
0.16
—
0.13
0.10
Income tax effect of adjusted reconciling
items above
(0.44
)
0.35
(0.75
)
0.57
Valuation allowance release(6)
—
—
—
(0.07
)
Excess tax benefit from share-based
compensation(7)
—
(0.25
)
(0.07
)
(0.34
)
Adjustment for shares excluded due to
anti-dilution effect on GAAP net loss
(0.02
)
—
—
—
2019 Senior Convertible Notes share count
adjustment
—
—
—
0.21
0.61
1.32
33.95
5.44
Gain from sale of Promacta license, net of
tax(8)
(0.12
)
—
(31.58
)
—
Adjusted net income
$
0.49
$
1.32
$
2.37
$
5.44
GAAP - Weighted average number of common
shares-diluted
18,770
24,052
20,349
24,430
Add: Shares excluded due to anti-dilutive
effect on GAAP net loss
695
—
—
—
Less: 2019 Senior Convertible Notes share
count adjustment
—
—
—
924
Adjusted weighted average number of common
shares-diluted
19,465
24,052
20,349
23,506
(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) For the three months ended September 30, 2019, the amounts
represent the amortization of commercial license and other economic
rights to revenue and research and development expenses in amounts
of $(170) and $4,765, respectively. For the nine months ended
September 30, 2019, the amounts represent the amortization of
commercial license and other economic rights to revenue and
research and development expenses in amounts of $913 and $9,135,
respectively. For the three and nine months ended September 30,
2018, the amounts represent the accretion of the commercial license
and other economic rights based on estimated future cash flows that
were recorded to revenue.
(3) Amounts represent changes in fair value of contingent
consideration related to Crystal, CyDex and Metabasis
transactions.
(4) Amounts represent severance costs and certain contract
termination costs in connection with the acquisition of Vernalis
plc.
(5) Amounts represent mark to market adjustments associated with
our equity investments in Retrophin, Seelos and Nucorion, net of
amounts due to a third party licensor, and net change in fair value
of derivatives.
(6) Amount represents release of a valuation allowance relating
to our investment in Viking Therapeutics during the first quarter
of 2018.
(7) Excess tax benefits from share-based compensation are
recorded as a discrete item within the provision for income taxes
on the consolidated statement of income 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) Amounts represent gain from sale of Promacta license, net of
tax. As we are updating our tax provision during the third quarter
of 2019, the year-to-date non-GAAP effective tax rate gets updated,
which results an updated tax impact on this item during the three
and nine months ended September 30, 2019. We expect to finalize the
impact during the fourth quarter of 2019 when we finalize our 2019
tax provision.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191105005995/en/
Ligand Pharmaceuticals Incorporated Patrick O’Brien Email:
investors@ligand.com Phone: (858) 550-7893 Twitter:
@Ligand_LGND
LHA Investor Relations Bruce Voss Email: bvoss@lhai.com Phone:
(310) 691-7100
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