Ligand Pharmaceuticals (LGND) Investor Day 2024 summary

Strategic transformation and business model

• Undertook major restructuring, spinning out OmniAb and Primrose Bio, reducing headcount from 170 in 2022 to 42 in 2024, and OpEx from $92M to $35M, while building a senior deal team focused on royalty finance and company formation.

• Focuses on biopharma royalty aggregation, project finance, and operating company acquisitions, leveraging a small, expert team to build a diversified, scalable business with high-margin, predictable, compounding growth.

• Royalty investing is highlighted as non-dilutive, uncorrelated to capital markets, and protected in bankruptcy, providing steady cash flows.

• Deep biopharma relationships and a seasoned investment team enable proprietary deal sourcing, rigorous due diligence, and creative, tax-efficient deal structures.

• Positioned to capture a larger share of the underpenetrated royalty finance market, with a unique focus on late-stage development, M&A, and platform investments.

Financial performance and guidance

• 2024 revenue guidance increased twice to $160–$165M, with royalty revenue of $105–$108M (up 27%) and adjusted core EPS of $5.50–$5.70 (up 38%).

• 2025 guidance projects total revenue of $180–$200M (up 17%), royalty revenue of $140M (up 30%), and adjusted EPS of $6–$6.25.

• Operating expenses are expected to rise to just under $40M in 2025 due to full-year investment team costs, while other income will decline as cash is deployed.

• Five-year outlook projects royalty receipts CAGR of 22% from 2024–2029, with FILSPARI and Ohtuvayre as key growth drivers and $350M in available capital.

• After 2028, cash generation is expected to exceed investment pace, potentially enabling a dividend strategy.

Investment activity and pipeline

• Deployed nearly $200M across eight transactions in 2024, including Qarziba, Ohtuvayre, Palvella, and others, with a robust pipeline of 30+ actionable opportunities and $1B in investable capital.

• Investment team expanded to 12 professionals across three locations, reviewing over 200 opportunities and closing 8 deals in 2024.

• Investment criteria focus on clinical differentiation, structural alignment, near-term cash flow, exclusivity, and superior risk-reward, with diligence covering clinical, regulatory, commercial, IP, and legal aspects.

• New portfolio management system tracks over 90 partnered programs, enabling proactive communication and collaboration.

• Portfolio includes 12 major commercial-stage royalty assets and over 75 active programs, with robust management aligning assets by contribution and tracking catalysts.