Analyst Conference Summary

biotechnology

conference date: February 26, 2026 @ 5:30 AM Pacific Time
for quarter ending: December 31, 2025 (fourth quarter, Q4 2025)

I took an initial position 5/7/2026 Forward-looking statements

Overview: Nose dive on earnings due to $49 million loss in equity investment.

Basic data (GAAP):

Revenue was $51.7 million, down 14% sequentially from $60 million, and up 14% from $45.3 million year-earlier.

Net Income was negative $13.3 million, down sequentially from $45 million, and up from negative $42.5 million year-earlier.

EPS (Earnings per Share), diluted, were negative $0.67, down sequentially from $2.12, and up from negative $2.21 year-earlier.

Predicts a 23% CAGR (compound growth rate) for royalty receipts through 2030.

Guidance:

Updated 2026 full-year to reflect acquisition of XOMA. Non-GAAP earnings per diluted share approximately $8.50 to $9.50. Royalty revenue to be in the range of $225 to $250 million. Revenue from sales of Captisol is unchanged at $35 to $40 million and contract revenue is unchanged at $10 million to $20 million, resulting in total revenue of $270 to $310 million.

Conference Highlights:

CEO Todd Davis said, "The first few months of 2026 have already proven to be highly productive and transformative for Ligand. In April, we announced a definitive agreement to acquire XOMA Royalty Corporation (XOMA Royalty or XOMA), a highly complementary business that we expect to accelerate both near and long-term growth. Upon closing, the transaction will add more than 120 commercial, clinical and preclinical-stage assets to our royalty portfolio, including seven commercial assets and 14 late-stage programs, and meaningfully diversify Ligand across therapeutic areas, stages of development, and biopharma partners. We were also pleased to see the full FDA approval of Filspari in focal segmental glomerulosclerosis (FSGS), a transformative milestone that further strengthens one of our most valuable royalty assets. Filspari is now the largest royalty contributor within our commercial portfolio and, as the first and only FDA-approved medicine for this rare and serious kidney disease, is well positioned to be a key driver of long-term royalty growth." Q1 performance included 56% y/y royalty revenue growth. In 2026 expects 12 key royalty assets to grow to 15, adding Vabysmo, Ojemda and Miplyffa.

Revenue consisted of $43 million for royalty assets; $10 million from financial royalty assets; $8.6 million Captisol; and $0.1 million contract and other. Ligand has a pure royalty aggregation model.

Q1 results included a $49.2 million non-cash loss from changes in the fair value of the Company's equity-method investment in Pelthos Therapeutics and Pelthos Series A Preferred Shares.

On April 27, 2026 announced Ligand will acquire XOMA, also a biotech royalty aggregtor, for $39 pershare plus a CVR.

In Q2 2026, Filspari (sparsentan) for proteinuria from primary immunoglobin A nephropathy was approved by the FDA. Ligand licenced to Travere, with Renalys. Chugai is purchasing Renalys, and so rights to commercialize in Japan, S. Korea, and Taiwan. In November 2025 topline positive results for IgAN were announced. Plans to submit an NDA in Japan. Product sales in the U.S. reached $105 million in Q1 2026. The SPARX Study evaluating Filspari in post-transplant patients with recurrent IgAN or FSGS is on track to complete enrollment in Q2 2026

In January 2026 Nuance Pharma announced the National Medical Products Administration (NMPA) of China accepted for review the NDA for Ohtuvayre (ensifentrine) for the maintenance treatment of chronic obstructive pulmonary disease.

Q1 results included a $49.2 million non-cash loss from changes in the fair value of the Company's equity-method investment in Pelthos Therapeutics and Pelthos Series A Preferred Shares.

In April 2026 Sanofi announced the FDA approved Tzield to delay the progression of stage 3 type 1 diabetes in adults and pediatric patients eight years of age and older recently diagnosed with stage 3 T1D. And in January 2026 the EU granted approval.

In Q1 2026 Palvella announced positive topline results from the Phase 3 study of Qtorin rapamycin for microcystic lymphatic malformations. Ligand has a stake in royalties: potential $100 to $300 million annual royalties (including for treating cutaneous venus malformations).

In Q2 2026 Agenus enrolled its first patient in the Phase 3 botensilimab plus balstilimab trial ofr microsatellite stable (MSS) metastatic colorectal cancer. Ligand has a stake in bot/bal.

In December 2025 Leona Bio announced that it acquired the development and commercialization rights to lasofoxifene. It is in a registrational Phase 3 trial for the treatment of metastatic breast cancer. The trial is greater than 50% enrolled with data expected in mid-2027. Ligand is entitled to a tiered 6-10% royalty on future net sales of lasofoxifene.

Ligand had $1 billion in deployable capital at the end of 2025.

In Q1 2026 launched an improved portfolio management process.

Cash and equivalents ended at $ million, up sequentially from $733 million.

Non-GAAP diluted EPS was $1.63, down sequentially from $2.02, and up from $1.33 year-earlier. Adjusted net income was $34.6 million, up y/y from $26.6 million.

Operating costs of $34 million consisted of: $3 million cost of goods sold, $8 million amortization of intangibles, $2 million R&D, $21 million G&A, $0 million fair value adjustments. Leaving income from operations of $17 million. Gain from short-term investments $4 million; loss in equity investments $49 million; interest $5 million; other expense $ million. Income tax benefit $11 million.

Q&A selective summary:

XOMA color? We have had a long standing relationship with their team. We did considerable due diligence in 2025. We reached alignment on terms in April. Gives Xoma investors liquidity, gives us long term appreciation.

Any further acquisitions like Xoma? No portfolio is single or double assets. Could be larger deals, but Xoma is pretty unique in the market.

Earlier stage Xoma vs. own shopping for new deals? We do not need to do additional deals, we have great growth embedded in the portfolio, but there is a lot of opportunity too. New deals would compound the growth.

FSGS sales will be minimal in 2026, more a 2028 story.

2809 goal is to move development forward, it has high potential to be a differentiated product for a large market.

Captisol guidance? We have visibility into early 2027, we are confident in $35 to $40 million in 2026, but will vary by quarter. Contract revenue is also lumpy as milestones are reached.

Challenge integrating Xoma? Synergies should be high, we will pick off some of their team, and will assume their lease obligations. Tax benefits will be immediate. Near 100% synergy. We will still have about $200 million to invest post transaction, but are largely self funded through revenue. Opportunities currently are significant.

Do you have any assets you might want to offload? We don't just do new deals, we manage our portfolio. We could engage in outlicensing or new partnering for an asset.

Milestones from Zoma in 2026? Yes, possible milestones are part of the portfolio, including in 2026, but more in 2027 and 2028.

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