Ligand Pharmaceuticals reported a sharp increase in third-quarter royalty revenue and raised its full-year adjusted diluted EPS outlook. Total revenue and income fell from a year earlier, but that comparison was weighed down by income from the prior-year sale of Pelthos; excluding that item, the company said total revenue and income grew 26%.
The results reflect growth in Ligand’s royalty portfolio, including contributions from assets acquired from XOMA, alongside continued commercial momentum from key products. Ligand also highlighted recent investments in new royalty and financing arrangements.
Key details
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Royalty revenue rose 51% to $70.3 million, from $46.6 million a year earlier. Royalties made up 89% of the quarter’s total revenue and income. Growth was driven by newly acquired XOMA assets and continued momentum from Travere Therapeutics’ Filspari and Merck’s Ohtuvayre.
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Total revenue and income were $78.7 million, down 32% from $115.5 million. The prior-year quarter included $53.1 million of Pelthos divestiture-related income. Excluding that income, total revenue and income increased 26%.
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Captisol sales were $7.9 million, compared with $10.7 million a year earlier. Ligand attributed the decrease to the timing of customer orders. Captisol costs also declined, to $2.7 million from $3.8 million, mainly because sales were lower.
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Contract revenue and income were $0.5 million, versus $58.2 million in the prior-year quarter. The decrease primarily reflects the Pelthos-related income recorded a year earlier.
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Amortization of intangibles increased to $10.2 million from $8.1 million, reflecting intangible assets acquired in the XOMA transaction. Research and development expense fell to $2.8 million from $21.0 million; the prior-year period included a $17.8 million charge.
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Ligand raised its 2026 adjusted diluted EPS guidance to $9.50–$9.75, from $9.00–$9.50, and reaffirmed its full-year revenue guidance.
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The company cited two recent portfolio investments: a royalty interest in Santen’s Ryjunea and a structured financing agreement with AvenCell Therapeutics to support its next-generation CAR-T pipeline. Ligand said its portfolio contains more than 200 assets.
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Management plans to present an updated five-year outlook at an investor day on Dec. 8.
Plain-English implications
The quarter’s headline revenue decline does not reflect the trend in Ligand’s recurring royalty business: the prior-year comparison included a sizable Pelthos-related gain, while royalty revenue grew strongly. The higher EPS outlook accompanies that royalty growth, while the company continues to deploy capital into additional royalty and financing opportunities.