Analyst Conference Summary

biotechnology

conference date: August 6, 2026 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2026 (second quarter, Q2 2026)

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

Overview: Strong revenue growth, completed Xoma acquisition.

Basic data (GAAP):

Revenue was $64 million, up 23% sequentially from $52 million, and up 33% from $48 million year-earlier.

Net Income was $48.5 million, up sequentially from negative $13.3 million, and up from $4.9 million year-earlier.

EPS (Earnings per Share), diluted, were $2.42, up sequentially from negative $0.67, and up from $0.25 year-earlier.

Guidance:

Raised the low end of 2026 guiance, so non-GAAP EPS (diluted) range is $9.00 to $9.50. Total revenue estimate remains $270 to $310 million.

Conference Highlights:

CEO Todd Davis said, "Ligand delivered another strong quarter, with royalty revenue growing 32% year-over-year and continued momentum from Filspari following its FSGS approval by the FDA. During the quarter, we also completed a $700 million convertible debt financing at a 0% interest rate, giving us access to low cost capital while maintaining a disciplined capital structure. Shortly after quarter-end, we closed our acquisition of XOMA Royalty, adding more than 120 commercial, clinical and preclinical-stage assets to our portfolio and further diversifying our royalty base across therapeutic areas, development stages, and partners. This transaction meaningfully strengthens our position as a leading biopharma royalty aggregator and, combined with our broadened portfolio, positions Ligand for a strong second half of 2026 and beyond." G&A expense increase was mainly due to Xoma acquisition. Increased income was mainly from by a $35.7 million non-cash gain in the fair value of the investments in Pelthos Therapeutics common stock and Series A convertible preferred stock, plus a $10.8 million increase in gains on short-term investments.

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

Revenue consisted of $37 million for intangible royalty assets; $11 million from financial royalty assets; $8 million Captisol; and $8 million contract and other. Ligand has a pure royalty aggregation model. In Q2 royalty revenue increase 32% y/y. This was primarily due to royalties on Travere Therapeutics Filspari, Pelthos Therapeutics Zelsuvmi, and Merck Ohtuvayre.

At the beggining of Q3 2026 announced Ligand completed acquisition of XOMA, also a biotech royalty aggregtor, for $39 pershare plus a CVR. The deal had been announced in April.

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

Filspari to reduce proteinuria in focal segmental glomerulosclerosis (FSGS) patients was approved by the FDA on April 13, 2026. Marketed by Travere, which reported Q2 product sales of $141 million.

Numerous other drugs and potential therapies in which Ligand has a stake reported updates in Q2 2026. Includes Ohtuvayre, Qtorin rapamycin, Capvaxive, Tzield, AVIM Therapy/VIRTUE SAB, BOT/BAL, Lasofoxifene, Ojemda, Volixibat and Ersodetug.

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.

Cash and equivalents ended at $1.36 billion, up sequentially from $na million. In June 2026 completed a $700 million note offering.

Non-GAAP diluted EPS was $2.37, up sequentially from $1.63, and up from $1.60 year-earlier. Adjusted net income was $51 million, up 59% y/y from $32 million.

Operating costs of $55 million consisted of: $3 million cost of goods sold, $8 million amortization of intangibles, $15 million R&D, $29 million G&A, $0 million fair value adjustments. Leaving income from operations of $8.6 million. Gain from short-term investments $12 million; gain in equity investments $36 million; interest $6 million; other $3 million. Income tax expense $16 million.

Q&A selective summary:

Any Xoma suprises? There were some positive surprises due to the size of the Xoma portfolio. Mostly early and mid-stage opportunities. We could provide further investment in those.

Financial royalties v. Ligand traditional investments? Referring to the Xoma strategy of acquiring tax assets and net cash. We have looked at that strategy. They did a good job with a number of these. We are looking at a number of companies that would provide tax benefits. But our main strategy is to look for quality assets that will provide good cash flows downstream.

Deal types going forward? Despite scaling the portfolio, the size of the market available is much larger than the size of the capital we can deploy. We believe we can invest consistently $200 million or so per year. So more of the same.

Early stage assets? Some are pretty interesting, for a small, say $2 to $3 million value. It is a target rich portfolio, will take some time to sort through. Looking for efficacy and safety, etc.

14 late stage Xoma assets, most interesting of them? Some of the assets with upcoming pivotal readouts were highlighted in the presentation. Many shots on goal.

Target for returns remains unchanged, despite the lower cost of capital. Deal size should remain the same, it spreads the risk and is a good fit to asset owners needs.

Xoma v. organic growth? Reflected already in guidance, including cost synergies.

Partners have other forms of access to funds, but our method can be beneficial compared to other access to capital markets.

Tax assets can be realized in a lump, but most of the partners choose to do it over five years, per tax law options.

Monetization by spinoff? No plans immediately. Many assets were valued at zero. Lauren is going through the full partnered portfolio. Upside could come from technologies that require a minimal amount of further investment to make them viable. In some cases we will participate in financing to support the development, as we did with Agenus. Even though equity investment is not our core business.

Capital Creek deal? We have a lot of conviction for these products. Still a great opportunity for combination therapy.

At investor day we will give more detail on investments in late stage pipelines.

OpenIcon Analyst Conference Summaries Main Page

Search

More Analyst Conference Pages: