Ligand Lifts 2026 Adjusted EPS After XOMA Close

The Tip Desk · October 31, 2026 · 4 min read

Third-quarter royalty revenue reached $70.3 million, up 51% from a year earlier, and the company now expects full-year adjusted diluted EPS of $9.50 to $9.75.

Ligand Pharmaceuticals Incorporated (LGND) reported third-quarter royalty revenue of $70.3 million, up 51% from $46.6 million a year earlier, and raised its 2026 full-year adjusted diluted earnings guidance to $9.50 to $9.75 from $9.00 to $9.50.

The biopharmaceutical royalty aggregator said the increase in royalty growth came after 32% year-over-year growth in the second quarter, and that royalties accounted for 89% of total revenues and income. Management attributed the lift to the newly acquired XOMA assets and continued commercial momentum on Travere Therapeutics’ Filspari and Merck’s Ohtuvayre.

Royalty revenue also rose sequentially, from $48.0 million in the second quarter and $43.0 million in the first quarter.

Total revenues and income were $78.7 million, down 32% from $115.5 million a year earlier. The prior-year period included $53.1 million of Pelthos divestiture-related income; excluding that income, total revenues and income increased 26%. Captisol sales were $7.9 million, compared with $10.7 million a year earlier, which the company said reflected the timing of customer orders. Contract revenue and income were $0.5 million, compared with $58.2 million, with the decrease primarily due to the prior-year Pelthos divestiture-related income.

GAAP results swung to a net loss of $28.5 million, or $1.43 a share, from net income of $117.3 million, or $5.68 a diluted share, a year earlier. The quarter included $39.5 million of pre-tax losses, consisting of a $35.7 million loss from changes in the fair value of equity-method and other investments and a $3.8 million net loss on short-term investments. Adjusted net income was $57.5 million, or $2.67 a diluted share, down 10% and 14% from $63.8 million, or $3.09 a diluted share, a year earlier. The company said the adjusted declines were primarily attributable to $24.5 million of Pelthos out-license income in the prior-year period and higher general and administrative expense excluding share-based compensation and transaction and integration costs, partially offset by the 51% increase in royalty revenue.

General and administrative expense was $72.6 million, compared with $28.4 million a year earlier. The company said the increase primarily reflected transaction and integration costs and share-based compensation associated with the XOMA acquisition, as well as higher employee-related costs from expanding its portfolio management and origination platform. Amortization of intangibles was $10.2 million, compared with $8.1 million, attributable to intangibles acquired from XOMA. Fair value adjustments to contingent liabilities resulted in a $6.3 million loss, compared with a $0.5 million gain a year earlier, primarily from contingent liabilities assumed in the XOMA deal.

On July 14, Ligand completed the acquisition of XOMA Royalty, adding seven commercial products, including Roche’s VABYSMO, Servier and Ipsen’s OJEMDA, and Zevra Therapeutics’ MIPLYFFA, plus 14 late-stage development programs and more than 100 additional assets. The company said the portfolio more than doubled, now comprising over 200 commercial, clinical, and preclinical-stage royalty assets.

Cash, cash equivalents, and short-term investments were $447.4 million as of September 30, 2026, compared with $733.5 million at December 31, 2025. The company said the decrease was primarily driven by cash used for the XOMA acquisition, partially offset by proceeds from convertible senior notes due 2031. Including equity investments and credit-facility availability, Ligand said it has approximately $750 million of deployable capital.

On September 22, Ligand acquired a milestone and royalty interest in Santen’s Ryjunea from Sydnexis for a $23 million upfront payment, including a tiered royalty on Ryjunea net sales in Europe, the Middle East and Africa. On September 24, it entered a financing agreement with AvenCell Therapeutics for up to $47 million, including up to $41 million in exchange for a royalty on worldwide annual net sales of current and future AvenCell pipeline assets.

Ligand reaffirmed 2026 revenue guidance, including royalty revenue of $225 million to $250 million, Captisol sales of $35 million to $40 million, contract revenue of $10 million to $20 million, and total revenue of $270 million to $310 million. Chief executive Todd Davis said the company looks forward to sharing an updated five-year outlook at an investor day on December 8.