On May 8, 2025 Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) reported financial results for the three months ended March 31, 2025, and provided an operating forecast and business update. Ligand management will host a conference call and webcast today at 8:30 a.m. Eastern Time to discuss this announcement and answer questions (Press release, Ligand, MAY 8, 2025, View Source [SID1234652750]).

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"Ligand delivered another strong quarter, reflecting the continued strength of our growing commercial royalty portfolio," said Todd Davis, CEO of Ligand. "We also took a significant strategic step to accelerate the commercial launch of ZELSUVMI through our recently announced transaction with Channel Therapeutics. This deal includes substantial financial backing from a group of strategic investors, and we believe it will create significant value for stockholders through both equity and royalty participation. In today’s challenging biopharmaceutical financing environment, our royalty aggregation model stands out as a resilient and proven strategy."

First Quarter 2025 Financial Results

Total revenues and other income for the first quarter of 2025 were $45.3 million, compared with $31.0 million for the same period in 2024, with the 46% increase primarily attributable to an increase in royalty revenue and Captisol sales. Royalties for the first quarter of 2025 were $27.5 million, compared with $19.1 million for the same period in 2024, with the 44% increase primarily attributable to royalties earned on Recordati’s Qarziba, and Travere Therapeutics’ Filspari. Captisol sales were $13.5 million for the first quarter of 2025, compared with $9.2 million for the same period in 2024, with the change due to the timing of customer orders. Contract revenue and other income was $4.4 million for the first quarter of 2025, compared with $2.7 million for the same period in 2024.

Cost of Captisol was $4.8 million for the first quarter of 2025, compared with $2.9 million for the same period in 2024, with the change due to an increase in Captisol sales. Amortization of intangibles was $8.3 million for the first quarter of 2025, compared with $8.2 million for the same period in 2024. Research and development expenses were $50.1 million for the first quarter of 2025, compared with $6.0 million for the same period in 2024, with the increase primarily attributable to a $44.3 million one-time charge in connection with our previously announced royalty financing agreement with Castle Creek Biosciences to fund the Phase 3 clinical study of D-Fi (FCX-007), which is accounted for as a research and development funding arrangement under ASC 730-20, Research and Development Arrangements. General and administrative expenses were $18.8 million for the first quarter of 2025, compared with $11.0 million for the same period in 2024, with the increase primarily attributable to employee related costs and operating costs associated with incubating the Pelthos business. Fair value adjustment to partner program derivatives was $(0.4) million for the first quarter of 2025 primarily due to mark to market adjustments to certain Agenus partnered programs.

GAAP net loss was $42.5 million, or $2.21 per share for the first quarter of 2025, compared with GAAP net income of $86.1 million, or $4.75 per diluted share, for the same period in 2024. Core adjusted net income for the first quarter of 2025 was $26.6 million, or $1.33 per diluted share, compared to $21.8 million, or $1.20 per diluted share, for the same period in 2024. Core adjusted net income excluded gains from the sale of Viking Therapeutics common stock in the first quarter of 2024. We did not sell any shares of Viking Therapeutics common stock in the first quarter of 2025. The increase in core adjusted net income was driven primarily by the 46% increase in revenue. Core adjusted net income represents a non-GAAP financial measure. See the table below for a reconciliation of net income (loss) to core adjusted net income.
As of March 31, 2025, Ligand had cash, cash equivalents and short-term investments of $208.9 million, which includes $24.2 million in Viking Therapeutics common stock.
2025 Financial Guidance
Ligand is reaffirming its 2025 full year financial guidance. The Company continues to expect 2025 royalty revenue ranging from $135 million to $140 million, revenue from sales of Captisol ranging from $35 million to $40 million and contract revenue ranging from $10 million to $20 million. These revenue components result in a total revenue forecast of $180 million to $200 million. Ligand notes that with total revenue of $180 million to $200 million, adjusted earnings per diluted share are anticipated to range from approximately $6.00 to $6.251.
First Quarter 2025 and Corporate Highlights

Pelthos Therapeutics Transaction

On April 17, Ligand announced the signing of a definitive merger agreement to combine Ligand’s wholly owned subsidiaries, Pelthos Therapeutics Inc. and LNHC, Inc. (collectively "Pelthos") with CHRO Merger Sub Inc., a wholly owned subsidiary of Channel Therapeutics. The merger will be supported by $50 million in capital raised from a group of strategic investors led by Murchinson ("Investor Group"). Upon completion of the transaction, the combined company will operate under the name Pelthos Therapeutics Inc. and trade on the NYSE American exchange under the ticker PTHS. The transaction is expected to close in the summer of 2025, subject to the fulfillment of customary closing conditions.
Under the terms of the merger agreement, Channel will acquire 100% of the issued and outstanding equity interests of Pelthos, and will change its name to Pelthos Therapeutics Inc. In connection with the transaction, Ligand has agreed to invest $18 million in the combined company and the Investor Group has agreed to invest $32 million for a total of $50 million.

The combined company will initially focus on accelerating the commercialization of Pelthos’ ZELSUVMI (berdazimer) topical gel, 10.3%, for the treatment of Molluscum contagiosum infections ("molluscum") in adults and pediatric patients one year of age and older. ZELSUVMI was approved by the U.S. Food and Drug Administration (FDA) in 2024 and is the first and only prescription therapy for molluscum infections approved for use at home by patients, parents, and caregivers.

New Royalty Investment
On February 25, Ligand announced that it closed a royalty financing agreement with Castle Creek Biosciences, a late-stage cell and gene therapy company, to support Castle Creek’s planned D-Fi (FCX-007) Phase 3 clinical study. D-Fi is an injectable autologous gene-modified cell therapy in development for the treatment of dystrophic epidermolysis bullosa (DEB), a devastating, painful, and debilitating rare genetic skin disorder. D-Fi has been granted Orphan Drug Designation from the U.S. Food and Drug Administration (FDA). Ligand led a $75 million investment in D-Fi by committing $50 million to the syndicated round. An additional $25 million was secured from a syndicate of co-investors. In return for the $75 million investment, investors will receive a high-single digit royalty which is shared on a pro-rated basis; therefore Ligand will net a mid-single digit royalty.

Portfolio Updates

On April 29, Verona announced Ohtuvayre net sales of $71.3 million for the first quarter 2025, representing an increase of 95% compared to the prior quarter. This growth was driven by significant increases in prescriptions, prescribers, new patients and refills.
On April 29, Travere and its European partner, CSL Vifor, announced that the European Commission approved the conversion of the conditional marketing approval into standard marketing authorization for Filspari for the treatment of adults with primary IgA nephropathy.
On April 26, UroGen announced encouraging safety data from its Phase 1 dose-escalation study for UGN-301 (zalifrelimab) intravesical solution, an investigational drug in development for the treatment of recurrent non-muscle

On April 24, Merck announced Capvaxive sales of $107 million for the first quarter of 2025, a 120% increase over the prior quarter. Merck reiterated that there has been continued uptake of Capvaxive since the product’s launch in the third quarter of 2024.

On April 11, Palvella announced Qtorin rapamycin 3.9% anhydrous gel for the treatment of microcystic lymphatic malformations (microcystic LMs) was featured by Dr. Amy Paller, a widely recognized key opinion leader in dermatology, in an oral presentation at the 15th World Congress of Pediatric Dermatology. In January, Palvella announced that the first patients were dosed in TOIVA, a multicenter, Phase 2 clinical trial designed to evaluate the safety and efficacy of Qtorin 3.9% rapamycin anhydrous gel for the treatment of cutaneous venous malformations (cutaneous VMs). In addition, in February Palvella announced that it will expand SELVA, the Phase 3 clinical trial of Qtorin 3.9% rapamycin anhydrous gel for the treatment of microcystic LMs, to include patients ages 3 to 5 years old. Previously, trial participants were required to be at least six years old.

On March 26, Merck, announced that the European Commission (EC) approved Capvaxive (pneumococcal 21-valent conjugate vaccine) for active immunization for the prevention of invasive disease and pneumonia in individuals 18 years of age and older. Capvaxive is a pneumococcal vaccine specifically designed to help protect adults from the serotypes responsible for the majority of invasive pneumococcal disease (IPD) cases. This decision authorizes the marketing of Capvaxive in all 27 European Union (EU) member states, as well as Iceland, Liechtenstein and Norway.
On March 17, Travere Therapeutics announced it has submitted a supplemental New Drug Application (sNDA) to the FDA seeking priority review for traditional approval of Filspari (sparsentan) for the treatment of focal segmental glomerulosclerosis (FSGS), a rare proteinuric kidney disorder in both children and adults. Travere expects to receive notice regarding the acceptance for review of the sNDA submission as well as the timeline for sNDA review from the FDA in the second quarter of 2025. Additionally, the FDA recently notified Travere that Risk Evaluation and Mitigation Strategy (REMS) monitoring for embryo-fetal toxicity is no longer necessary. Travere plans to submit a REMS modification. The FDA indicated that the amendment is not expected to impact the review timeline and Travere continues to expect a REMS modification target action date under the Prescription Drug User Act of August 28, 2025.

Adjusted Financial Measures

Ligand reports adjusted net income from continuing operations, adjusted net income per diluted share and adjusted earnings per diluted share in addition to, not as a substitute for, and does not consider such measures superior to, financial measures calculated in accordance with GAAP. The Company also reports a core calculation for each of the foregoing measures which excludes any realized gain from sales of Viking Therapeutics common stock. 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. 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 effect of adjusted reconciling items and others that are listed in the itemized reconciliations between GAAP and non-GAAP adjusted financial measures included at the end of this press release. A reconciliation of forward-looking non-GAAP adjusted earnings per diluted share to the most directly comparable GAAP measures is not available without unreasonable effort, as certain items cannot be reasonably predicted because of their high variability, complexity and low visibility. Specifically, non-cash 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, directly impact the calculations of our adjusted earnings per diluted share, which we expect to have a significant impact on our future GAAP financial results.
Conference Call and Webcast

Ligand management will host a conference call today beginning at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss this announcement and answer questions. To participate via telephone, please dial (800) 715-9871 using the conference ID 3661098. International participants outside of Canada may use the toll number +1(646) 307-1963. To participate via live or replay webcast, a link is available at www.ligand.com.invasive bladder cancer.