Ligand Pharmaceuticals Incorporated Q3 FY2025 earnings call

• Strong financial results with royalty revenue up 47% and adjusted EPS up 68%.
• Successfully completed a $460 million convertible debt financing, strengthening the balance sheet.
• Key products performing well: Ohtuvayre had Q3 sales growth, CAPVAXIVE saw significant sales increase, FILSPARI's sales grew 26% sequentially, and ZELSUVMI is in early launch phase.
• Deal activity: Invested $35 million in Orchestra Bio for royalty interest, $11 million in Arecor for royalty rights, and participated in other transactions like the merger of Pelthos with Channel Therapeutics.
• Portfolio updates: TZIELD received FDA Commissioner's National Priority Voucher, BOT/BAL in development, FILSPARI's FSGS PDUFA date set for Jan 13, 2026, and Palvella's QTORIN rapamycin program progressing with Phase II/III trials.

Royalty revenue grew 47% year-over-year to $46.6 million. Captisol sales for the quarter were $10.7 million, up from $6.3 million in Q3 2024. Contract revenue was $58.2 million, including $24.5 million from the ZELSUVMI out-license. Key contributors to royalty revenue growth include Travere's FILSPARI (9% royalty, ~$9M in Q3 2025), Merck's Ohtuvayre, Merck's CAPVAXIVE, and Recordati's QARZIBA. Royalty revenue contribution from these products has been strong, driving the 47% growth.

• Raised full-year 2025 core revenue guidance to $225 million to $235 million.
• Adjusted earnings per share expected to be between $7.40 and $7.65, a ~30% increase from 2024.
• Royalty revenue projected to be $147 million to $157 million, Captisol sales expected at $40 million, and contract revenue at $38 million.

• Volatility at the FDA could impact approvals and review timelines for portfolio assets.
• Dependence on key products' continued strong performance for royalty revenue growth.
• Competition in the royalty asset space, with most royalty capital focused on commercial stage assets rather than development stage.

Q: Any additional color on ZELSUVMI launch and future expectations?

A: ZELSUVMI launch is in early phase, peak sales guidance is $175M, more specifics available on Pelthos' Nov 13 earnings call.

Q: Details on Arecor transaction and AT292 royalty rate?

A: Arecor deal includes royalty rights to AT220 and milestone/technology access fees for AT292, specifics on royalty rate related to AT292 are tied to technology access fees.

Q: Thoughts on FDA's speed-up of personalized gene therapy and its impact?

A: FDA's reorientation towards severe clinical needs aligns with Ligand's investment strategy, potentially shortening review timelines for assets targeted at severe diseases.

Q: Competition in royalty asset space and recent Lasix ONYU approval?

A: Competition expected in royalty space with most capital in commercial assets; Lasix ONYU is a positive introduction with potential for outpatient use and differentiated features.