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Ligand (LGND) Q1 Earnings & Sales Fall Y/Y, Stock Down

Zacks Equity Research

Ligand Pharmaceuticals Incorporated LGND reported first-quarter 2019 adjusted earnings of $1.16 per share, down from the year-ago figure of $1.55. Adjusted earnings exclude the impact of one-time tax gain of $640 million related to sales of Promacta rights. Including this gain, the company reported earnings of $31.32 per share. The Zacks Consensus Estimate was $28.42.

In March, Ligand sold all rights to Promacta, including royalty rights to worldwide net sales, to privately-held Royalty Pharma for $827 million.

Shares of Ligand were down almost 5.7% in after-market trading on May 2 following the news. Shares of the company have declined 51.3% so far this year compared with the industry’s 13.8% decrease.

Total revenues in the quarter decreased to $43.2 million from $56.2 million in the year-ago period. However, the top line surpassed the Zacks Consensus Estimate of $38.31 million.

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Quarterly Highlights

Royalty revenues were $19.5 million in the reported quarter, down approximately 6.3% year over year. Ligand primarily earns royalties on sales of Novartis' NVS Promacta, Amgen's AMGN Kyprolis and CASI Pharmaceuticals' CASI Evomela, which were developed using its Captisol technology.

License fees, milestones and other revenues were $15 million in the first quarter compared with $30.9 million in the year-ago period. The company had recorded an upfront milestone payment related to the out-licensing of its glucagon receptor antagonist program to Roivant Sciences in year-ago quarter.

Material sales were $9 million compared with $4.4 million in the year-ago quarter due to the favorable timing of Captisol purchases for clinical and commercial use.

Ligand announced completion of enrollment in a phase I study evaluating its internal Captisol-enabled Iohexol program. Top-line data is expected in the third quarter of 2019.

Business Developments

During the quarter, Ligand completed six new deals related to its OmniAb and Captisol technology platforms. It also acquired a new technology company, Dianomi. Moreover, a drug developed using Ligand’s technology received approval and the first OmniAb partnered program entered late-stage development.

In March, Sage Therapeutics received approval from the FDA for its postpartum depression drug, Zulresso. Zulresso has been developed using Ligand’s Captisol technology. Ligand received $3 million in milestone payment following the approval. The drug will be launched in June this year, which may generate potential royalties for Ligand.

2019 Guidance Maintained

Ligand reiterated its guidance for 2019 following the completion of sale of Promacta rights. It expects revenues to be approximately $118 million including royalties of nearly $48 million, material sales of roughly $27 million and license fees and milestones of almost $43 million. Adjusted earnings, excluding one-time gain from Promacta sale, are estimated to be $3.20 per share for 2019.

Ligand Pharmaceuticals Incorporated Price, Consensus and EPS Surprise

 

Ligand Pharmaceuticals Incorporated Price, Consensus and EPS Surprise | Ligand Pharmaceuticals Incorporated Quote

Zacks Rank

Ligand currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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