Ligand Pharmaceuticals Incorporated (LGND): Business Model Canvas [Dec-2025 Updated]

You're digging into the financial engine behind Ligand Pharmaceuticals Incorporated, trying to see past the stock ticker to the actual blueprint. Honestly, what you find is a masterclass in high-margin asset management: they are primarily a technology licensor and royalty aggregator, not a traditional drug developer. This model is designed for predictable cash flow, evidenced by their 2025 royalty guidance landing between $147 million and $157 million, plus another $40 million from Captisol product sales. With a lean corporate structure-Q3 G&A was only $28.4 million-and about $1 billion in deployable capital, they focus on acquiring economic rights and supplying their key formulation tech. Let's break down exactly how this low-risk, high-return structure is built, from their key partnerships to their revenue streams, right below.

Ligand Pharmaceuticals Incorporated (LGND) - Canvas Business Model: Key Partnerships

You're looking at the core of Ligand Pharmaceuticals Incorporated's (LGND) value creation engine-the Key Partnerships. This model isn't about building and selling drugs; it's about financing, licensing IP, and aggregating a diversified portfolio of economic rights. The numbers from the third quarter of 2025 definitely show this strategy is working, with total revenues and other income hitting $115.5 million for the quarter.

The engine driving this is the royalty stream. Royalties for Q3 2025 were $46.6 million, a 47% jump compared to the same period in 2024. Year-to-date through September 30, 2025, royalties reached $110.5 million, up 49% year-over-year. Management, as of November 2025, guided full-year 2025 royalties to be in the range of $147 million to $157 million.

Here's a look at the major players that make up this partnership ecosystem. Ligand Pharmaceuticals Incorporated maintains multiple alliances, licenses, and business relationships with the world's leading pharmaceutical companies.

The relationships with biotech firms are often structured as financing deals in exchange for economic rights. For instance, the merger of Pelthos Therapeutics with Channel Therapeutics to focus on ZELSUVMI means Ligand is set to receive up to an additional $5 million in commercial sales milestones on top of the 13% royalty. Also, Ligand led a $75 million investment in Castle Creek, committing $50 million for a net mid-single-digit royalty on D-Fi.

The Orchestra BioMed partnership is a prime example of the capital partner role. Ligand committed $35 million in total capital to advance AVIM therapy and Virtue SAB. This commitment breaks down into $20 million at closing, an additional $15 million funded at the nine-month anniversary (subject to conditions), plus another $5 million via an equity private placement. In return, Ligand secures a low-double-digit royalty on the first $100 million in commercial revenues from those programs, shifting to a mid-single-digit royalty on revenues exceeding $100 million in specific indications. Medtronic is also a key capital partner here, committing $30 million.

When it comes to the Captisol technology platform, Ligand Pharmaceuticals Incorporated licenses its IP to a broad network of partners.

• Captisol is manufactured under cGMP controls at two validated sites: one in Loures, Portugal, and one in Cork, Ireland.
• The technology is currently used in 15 FDA-approved products.
• Full year 2025 guidance for Captisol sales is set at $40 million, up from $35 million to $40 million previously.
• Sales for the first nine months of 2025 totaled $32.4 million.

You see, the whole structure is designed to be infrastructure-light, relying on others for late-stage development, regulatory management, and commercialization, which is why these partnership terms are so critical to the bottom line. Finance: draft the Q4 2025 partnership milestone projection by next Tuesday.

Ligand Pharmaceuticals Incorporated (LGND) - Canvas Business Model: Key Activities

You're looking at the core engine of Ligand Pharmaceuticals Incorporated-the things they absolutely must do well to keep the royalty machine running. It's about deal-making, technology stewardship, and keeping the overhead low. Here's the quick math on what those activities look like as of late 2025.

Strategic business development and royalty acquisition

This is the lifeblood: finding and funding promising late-stage assets in exchange for a slice of future success. Ligand Pharmaceuticals Incorporated is a biopharmaceutical royalty aggregator, focused on investing in differentiated late-stage assets and operating royalty-generating, infrastructure-light platform technologies. Since transitioning to this model in 2007, they have deployed over $1 billion of capital to build their diverse portfolio. You'll want to watch their deployable capital, which stood at approximately $1 billion at the end of Q3 2025, giving them plenty of dry powder for new deals. A recent example of this activity was the $25 million investment into Orchestra BioMed on August 4, 2025, with an additional $15 million contingent upon future conditions. As of September 30, 2025, the balance sheet held $664.5 million in cash, cash equivalents, and short-term investments.

Licensing proprietary drug formulation technologies (Captisol)

A major key activity involves licensing out their two infrastructure-light technology Intellectual Property platforms: Captisol® and NITRICIL™. Captisol, a chemically modified cyclodextrin, is used to optimize drug solubility and stability. The success of this licensing is seen directly in the revenue figures. For the nine months ended September 30, 2025, revenue from Captisol sales reached $32.4 million. The company is guiding for full-year 2025 Captisol sales to hit $40 million. Still, the royalty stream from products enabled by these technologies is the bigger driver, with Q3 2025 royalties hitting $46.6 million.

Managing a diversified portfolio of partnered assets

Ligand Pharmaceuticals Incorporated manages a portfolio of economic rights, which are passive in nature, meaning they don't own the IP or commercialize the products themselves. They partner with world-leading biopharmaceutical companies like Amgen, Merck, Pfizer, and Gilead Sciences to leverage their expertise in late-stage development and commercialization. The performance of this diversified portfolio is evident in the royalty growth. Royalties for the nine months ending September 30, 2025, totaled $110.5 million, a significant jump from $74.0 million the prior year period. This growth is being driven by commercial products like Travere Therapeutics' Filspari, Merck/Verona Pharma's Ohtuvayre, and Recordati's Qarziba. They are projecting full-year 2025 royalties to be in the range of $147 million to $157 million.

Supplying Captisol material for commercial products

Beyond licensing the technology, Ligand Pharmaceuticals Incorporated actively supplies the Captisol material itself to partners for use in their commercial products. This is a direct revenue component. For the first nine months of 2025, Captisol sales were $32.4 million, up from $23.0 million for the same period in 2024. The associated cost of this material for that nine-month period was $3.8 million. This activity is expected to contribute a total of $40 million to the full-year 2025 revenue guidance.

Financial management of a low corporate cost structure

The entire model hinges on coupling high-margin royalty assets to an efficiently lean corporate cost structure. This focus on efficiency is crucial for maximizing the bottom line. For the third quarter of 2025, General and Administrative (G&A) expenses were $28.4 million, up from $24.5 million in the prior year quarter, primarily due to transaction costs related to the Pelthos transaction. Research and Development (R&D) expenses for Q3 2025 rose to $21 million from $5.7 million in Q3 2024, driven by a $17.8 million one-time charge tied to the Orchestra Biomed investment. The goal here is to maintain profitability while aggressively funding business development. Here are the key operational expense figures for the first half of 2025:

The company is guiding for full-year 2025 total core revenue between $225 million and $235 million, with core adjusted earnings per diluted share projected to be between $7.40 and $7.65.

Ligand Pharmaceuticals Incorporated (LGND) - Canvas Business Model: Key Resources

You're analyzing the core assets that make Ligand Pharmaceuticals Incorporated run, and honestly, it's all about intellectual property and financial firepower. The company's key resources aren't manufacturing plants; they're the rights to future cash flows and the technology that enables those cash flows.

The proprietary Captisol technology for drug solubility/stability is central. This chemically modified cyclodextrin has enabled a significant number of approved drugs. As of the latest data, the technology has enabled 15 FDA-approved products, including Veklury and Kyprolis.

The patent protection around Captisol is a critical, long-dated asset. Ligand Pharmaceuticals Incorporated maintains a broad global patent portfolio. The latest expiration date for the core Captisol patents is in 2035, with other patent applications covering methods of making Captisol potentially extending expiration to 2041.

The royalty portfolio is the engine of the business. Ligand Pharmaceuticals Incorporated manages one of the largest and most diverse royalty portfolios in the industry. This diversification helps mitigate the risk associated with any single product failure. The portfolio includes economic rights to more than 30 commercial programs that are marketed in over 70 countries.

Here's a quick look at the quantitative anchors of these resources as of late 2025:

The company's financial strength provides substantial deployable capital for acquisitions and investments, which is how the portfolio grows. Following a convertible notes offering in August 2025, the net proceeds were approximately $445 million. The reported cash balance as of September 30, 2025, was $664.5 million. This capital base supports the infrastructure-light model, which relies on external partners for late-stage development and commercialization.

The team itself is a key resource, characterized by its focus on finance and deal-making, which is necessary to manage this asset-light structure. The number of employees reported in 2024 was 68, underscoring the lean operational structure.

The value generated by these resources is evident in recent performance:

• Portfolio royalty revenue for the nine months ended September 30, 2025, reached $110.5 million.
• Captisol material sales for the same nine-month period were $32.4 million.
• Q3 2025 royalty revenue alone was $46.6 million, a 47% increase year-over-year.

Finance: draft 13-week cash view by Friday.

Ligand Pharmaceuticals Incorporated (LGND) - Canvas Business Model: Value Propositions

You're looking at the core reasons why partners choose Ligand Pharmaceuticals Incorporated-it's about de-risking and accelerating value capture from drug assets. The value proposition centers on a capital-light, high-margin structure that benefits both Ligand's stockholders and its development partners.

High-margin, diversified revenue stream for stockholders

Ligand Pharmaceuticals Incorporated generates value through a diversified portfolio of royalty streams and technology licensing, which provides a high-margin revenue base. This is evident in the company's raised 2025 guidance, showing strong momentum from commercial assets. For instance, Q3 2025 royalty revenue hit $46.6 million, a 47% increase year-over-year. The royalty portfolio, which now includes 12 major commercial stage royalty assets, is projected to drive long-term growth. As of September 30, 2025, Ligand Pharmaceuticals Incorporated held $664.5 million in cash and short-term investments, with total financial capacity reaching roughly $1 billion including its credit facility. This financial strength supports the low corporate cost structure that underpins the high-margin nature of the business.

Here's a look at the updated 2025 financial expectations:

Accelerated drug development via Captisol's formulation solution

The Captisol technology platform offers a direct, tangible benefit by optimizing drug solubility and stability, which helps speed up development timelines. You see this value reflected directly in material sales. Ligand Pharmaceuticals Incorporated is now guiding for $40 million in Captisol sales for the full year 2025. For the nine months ending September 30, 2025, Captisol sales reached $32.4 million. This platform has already enabled numerous commercial products; for example, Lasix ONYU is the 17th Captisol enabled approved product.

Non-dilutive financing for biotech partners' late-stage programs

Ligand Pharmaceuticals Incorporated acts as a crucial source of capital, often structured to be non-dilutive to the partner's equity. The business model centers on funding mid- to late-stage development in exchange for economic rights, such as royalties. To fuel this, the company capitalized on debt markets in August 2025, completing an offering of $460 million in convertible senior notes due 2030, with net proceeds of approximately $445 million. This liquidity allows Ligand Pharmaceuticals Incorporated to be an active partner, having closed 5 new investments in 2025 alone, supporting partners through royalty monetization and project financing.

Reduced R&D and commercialization risk for partners

By taking on economic rights, Ligand Pharmaceuticals Incorporated allows its partners to focus on what they do best-late-stage development, regulatory work, and commercialization-while sharing the inherent risk. This is a clear trade-off for partners seeking capital without equity dilution. For instance, following the merger of Pelthos, Ligand Pharmaceuticals Incorporated is entitled to a 13% royalty on Zelsuvmi sales. Furthermore, in one recent investment, Ligand committed $50 million for a net mid-single digit royalty in exchange for funding a syndicated round, effectively transferring development and commercial risk for that specific asset.

Access to a broad, proven technology platform (Captisol, NITRICIL)

Partners gain immediate access to established, validated platforms that solve formulation and delivery challenges. The value here is the proven track record and reduced need for internal platform development.

The core technologies include:

• Captisol®: Chemically modified cyclodextrin used to optimize drug solubility and stability.
• NITRICIL™: Platform enabling tunable dosing with an adjustable drug release profile.
• Proven Partnerships: Alliances exist with major firms like Amgen, Merck, Pfizer, Jazz, Takeda, Gilead Sciences, and Baxter International.

Finance: review the Q4 2025 cash flow projections based on the raised guidance by next Tuesday.

Ligand Pharmaceuticals Incorporated (LGND) - Canvas Business Model: Customer Relationships

You're looking at how Ligand Pharmaceuticals Incorporated manages its relationships with the key players-its partners and investors-which is central to its royalty aggregation model. This isn't about direct-to-consumer sales; it's about deep, strategic alliances.

Long-term, strategic licensing and royalty agreements

The core relationship is built on long-term economic rights, often structured as royalties on partner product sales. Ligand Pharmaceuticals Incorporated is focused on securing these streams from mid- to late-stage assets. The success of this approach is reflected in the upward revisions to financial expectations.

For the full year 2025, Ligand Pharmaceuticals Incorporated now anticipates royalty revenue in the range of $147 million to $157 million, up from previous guidance of $140 million to $150 million. This latest projection comes after the third quarter of 2025, where royalty revenue hit $46.6 million, a 47% increase over the $31.7 million earned in the third quarter of 2024. Ligand Pharmaceuticals Incorporated projects a royalty receipts compound annual growth rate (CAGR) exceeding 22% through 2029.

The portfolio underpinning these agreements is diverse, featuring 12 major commercial-stage royalty assets as of the second quarter of 2025, part of a total of over 85 partnered programs. For example, Ligand Pharmaceuticals Incorporated holds a 3% royalty on Ohtuvayre sales, following Merck's acquisition of Verona Pharma. Similarly, the Zelsuvmi partnership entitles Ligand Pharmaceuticals Incorporated to a 13% royalty on worldwide sales, excluding Japan.

Here's a look at the royalty revenue trajectory and guidance:

High-touch business development for new royalty acquisitions

The relationship with new partners is forged through a high-touch business development effort focused on sourcing and structuring creative, nondilutive capital solutions. Ligand Pharmaceuticals Incorporated's experienced team is key here, though the CFO noted that in 2025, they were limited by human capital, not dollars, due to the robust deal flow.

The activity level in 2025 has been high. In the first half of 2025 alone, Ligand Pharmaceuticals Incorporated closed 5 new investments. This follows a very active 2024, where $192 million was deployed across eight investments. The company is actively evaluating more than $1 billion in actionable opportunities.

These deals often involve direct investment alongside royalty acquisition. For instance, the Orchestra BioMed investment included a $25 million cash payment, a $5 million equity investment, and an additional $15 million contingent on future conditions. Another example is the royalty financing with Castle Creek Biosciences, where Ligand Pharmaceuticals Incorporated committed $50 million of a total $75 million syndicated round for a high-single-digit royalty stake.

• New investments closed in H1 2025: 5
• Capital deployed in 2024: $192 million across 8 investments
• Actionable opportunities under review (as of late 2024): over $1 billion
• Orchestra BioMed investment structure: $20 million cash + $5 million equity + $15 million contingent

Dedicated supply chain management for Captisol customers

For customers utilizing the Captisol technology, the relationship centers on reliable, high-quality supply and formulation support. Ligand Pharmaceuticals Incorporated manufactures Captisol under current Good Manufacturing Practice (cGMP) controls at two validated sites in Loures, Portugal, and Cork, Ireland. This focus on quality is important because any supply chain interruption could significantly impair operating results.

Captisol sales remain a key component of the business, with the full-year 2025 guidance raised to $40 million. For the nine months ended September 30, 2025, Captisol sales totaled $32.4 million. This technology is already embedded in the market, having enabled 15 FDA-approved products to date.

The relationship extends beyond mere supply; Ligand Pharmaceuticals Incorporated can perform formulation studies, advise on safety studies, and guide regulatory strategies for partners using Captisol.

Investor relations focused on the low-risk, royalty-driven model

Investor relations communication heavily emphasizes the stability and efficiency of the royalty aggregation model, positioning it as a counter-cyclical force in biotech financing. The model is designed to generate value through a diversified portfolio supported by a low corporate cost structure. This focus on revenue streams, rather than R&D pipelines, is highlighted as a source of resilience.

The financial strength supporting this relationship narrative is substantial. As of September 30, 2025, Ligand Pharmaceuticals Incorporated reported cash, cash equivalents, and short-term investments of $664.5 million. This forms part of approximately $1 billion in total deployable capital, which includes an undrawn credit facility. This capital position allows the company to pursue growth initiatives without relying on dilutive equity raises. The raised 2025 full-year guidance for adjusted earnings per diluted share is $7.40 to $7.65.

Collaborative support for partner's regulatory filings

Ligand Pharmaceuticals Incorporated supports its partners by leveraging its extensive regulatory experience related to its technologies, particularly Captisol. The company has regulatory experience supporting the use of Captisol in more than 500 clinical trials evaluated by regulatory bodies worldwide.

For the Captisol excipient, Ligand Pharmaceuticals Incorporated maintains two types of Drug Master Files (DMFs) with the FDA to support partner filings: Type I, V for Chemistry, Manufacturing, and Controls (CMC) information, and Type V for regulatory safety information supporting all routes of delivery. This established regulatory foundation helps partners streamline their own submissions. Furthermore, the success of recent partner approvals, such as Zelsuvmi in 2024, which received FDA approval for molluscum contagiosum, demonstrates the successful navigation of the regulatory pathway for assets in the portfolio. Ohtuvayre also received FDA approval on June 26, 2024.

• Captisol regulatory data supports use in over 500 clinical trials
• Captisol has two types of DMFs on file with the FDA
• Number of FDA-approved Captisol-enabled medications: 15

Finance: draft 13-week cash view by Friday.

Ligand Pharmaceuticals Incorporated (LGND) - Canvas Business Model: Channels

You're looking at how Ligand Pharmaceuticals Incorporated (LGND) gets its value-the money and the tech-out to the market and partners as of late 2025. It's a model built on licensing, strategic capital deployment, and a key proprietary material.

Direct licensing and technology transfer agreements

This is the core of the royalty engine. Ligand Pharmaceuticals Incorporated doesn't sell the final drug; it licenses its technology platform, often in exchange for upfront payments, milestones, and, most importantly, royalties on future sales. You see this channel's strength clearly in the latest numbers.

For the nine months ended September 30, 2025, royalty revenue hit $110.5 million. That's a massive 49% jump from the same period in 2024, driven by products like Travere Therapeutics' Filspari and Merck/Verona Pharma's Ohtuvayre. The third quarter alone brought in $46.6 million in royalties, a 47% increase year-over-year. Contract revenue and other income was also strong in Q3 2025 at $58.2 million, which included $24.5 million from the Zelsuvmi out-license.

The company's 2025 full-year guidance, updated in November 2025, projects royalty revenue in the range of $147 million to $157 million, with core contract revenue anticipated to be $38 million. These agreements aren't just one-offs; for instance, Ligand Pharmaceuticals Incorporated is entitled to a low-double-digit royalty on the first $100 million in commercial revenues from Orchestra's AVIM therapy, stepping up to a mid-single-digit royalty thereafter for certain indications.

Strategic investments and royalty purchases (M&A)

Ligand Pharmaceuticals Incorporated uses its capital to buy into the upside, which is a key channel for future revenue diversification. They aren't just waiting for organic licensing deals; they are actively acquiring economic rights. This strategy was bolstered by a significant financing event.

On August 14, 2025, Ligand Pharmaceuticals Incorporated completed an offering of 0.75% convertible senior notes due 2030, securing an aggregate principal amount of $460 million, resulting in net proceeds of approximately $445 million. This capital fuels their investment channel. A prime example is the investment in Castle Creek Biosciences' D-Fi program, where Ligand committed $50 million of a total $75 million syndicated round, netting a mid-single-digit royalty. Also, the strategic merger of Pelthos with Channel Therapeutics, forming Pelthos Therapeutics Inc., saw Ligand agree to invest $18 million in the combined entity. As of the Q2 2025 presentation, the portfolio included 12 major commercial-stage royalty assets.

The validation of this channel was underscored when Merck announced in July 2025 its plan to acquire Verona Pharma for $10 billion, a partner on which Ligand holds a 3% royalty on Ohtuvayre.

Direct sales and supply chain for Captisol product

The Captisol excipient is a tangible product channel that complements the intangible royalty streams. This provides a more direct revenue component, though it's smaller than the royalty engine.

For the nine months ended September 30, 2025, sales of Captisol reached $32.4 million, up from $23.0 million in the prior year period. The third quarter of 2025 saw Captisol sales of $10.7 million, with the associated cost of Captisol being $3.8 million. The company is projecting full-year 2025 Captisol sales to hit $40 million, an increase from earlier guidance of $35 million to $40 million.

Here's a quick look at the Captisol financials through Q3 2025:

Investor presentations and financial disclosures

The results of the other channels are synthesized and communicated through regular disclosures, which directly impact market perception and access to capital. The market reacted strongly to the Q3 2025 report.

Ligand Pharmaceuticals Incorporated's stock hit a 52-week high of $197.78 on November 6, 2025, following the Q3 earnings release. Total revenues and other income for Q3 2025 were $115.5 million, a 123% increase over Q3 2024. Adjusted net income for that quarter was $63.8 million, or $3.09 per diluted share. The company raised its 2025 full-year guidance again, now expecting total core revenue between $225 million to $235 million and core adjusted EPS between $7.40 to $7.65.

The balance sheet strength, a direct result of these channels, is clear:

• As of September 30, 2025, cash, cash equivalents, and short-term investments stood at $664.5 million.
• The company maintained approximately $450 million in deployable capital as of Q2 2025, including a $200 million credit facility.
• The projected 2025 royalty receipts CAGR through 2029 is at least 22%.

You can track the ongoing narrative through their regular updates, such as the Q3 2025 results released on November 6, 2025.

Finance: update the 13-week cash view to reflect the $445 million net proceeds from the August 2025 convertible debt offering by Wednesday.

Ligand Pharmaceuticals Incorporated (LGND) - Canvas Business Model: Customer Segments

You're looking at the core partners that fuel Ligand Pharmaceuticals Incorporated's asset-light, royalty-driven engine. Honestly, the customer segments aren't traditional buyers of a single product; they are the entities that create the revenue streams Ligand then monetizes through technology licensing, capital investment, or direct royalty purchases. It's a sophisticated ecosystem.

The business model relies on partnering with entities across the biopharma spectrum, from the giants to the smaller, capital-hungry players. As of late 2025, Ligand Pharmaceuticals Incorporated is tracking toward a full-year 2025 core revenue guidance between $225 million and $235 million, with royalty revenue specifically guided to be between $147 million and $157 million. This revenue is generated directly from these distinct customer groups.

Here's a breakdown of the primary customer segments Ligand Pharmaceuticals Incorporated engages with:

• Global pharmaceutical and large biotech companies that commercialize licensed products.
• Small-to-mid-cap biotech firms needing development capital in exchange for economic rights.
• Royalty sellers looking to offload future revenue streams for immediate, upfront cash.
• Financial investors seeking exposure to a diversified, infrastructure-light biopharma revenue model.

The engagement with small-to-mid-cap firms often involves direct capital deployment. For example, in August 2025, Ligand Pharmaceuticals Incorporated invested $25 million in cash plus an additional $5 million in an equity private placement to fund Orchestra BioMed's late-stage cardiology programs, securing a low-double-digit royalty on the first $100 million in commercial revenues from their AVIM therapy and Virtue SAB programs. Also, Ligand purchased global royalty rights from Arecor Therapeutics plc on September 25, 2025, paying $7 million in cash at closing, plus an additional $4 million payable upon milestones.

The relationships with large pharma are validated by the success of their partnered assets. Consider Ohtuvayre; Merck announced its acquisition of Verona Pharma, the developer, for $10 billion in July 2025, validating Ligand Pharmaceuticals Incorporated's 3% royalty stake in that product. Filspari, from Travere Therapeutics, became Ligand Pharmaceuticals Incorporated's largest royalty-generating asset on an annualized run rate basis as of Q3 2025.

You can see the scale of the financial interactions across these segments in the table below, based on recent activity and guidance:

The technology licensing segment, primarily through the Captisol excipient, is a steady revenue base. Captisol sales were projected to hit $40 million for the full year 2025. Contract revenue, which includes milestone payments from out-licenses like Zelsuvmi, was guided to be $38 million for 2025. It's defintely a diversified approach to securing revenue from different types of partners.

The sheer volume of active royalty streams supports the financial investor segment's interest in Ligand Pharmaceuticals Incorporated's predictable cash flow. The portfolio includes 12 major commercial-stage royalty assets as of Q2 2025. Finance: draft 13-week cash view by Friday.

Ligand Pharmaceuticals Incorporated (LGND) - Canvas Business Model: Cost Structure

Ligand Pharmaceuticals Incorporated's business model seeks to generate value for stockholders by creating a diversified portfolio of biotech and pharmaceutical product revenue streams that are supported by an efficient and low corporate cost structure. This focus on keeping overhead lean is defintely a core tenet of how Ligand Pharmaceuticals Incorporated operates.

You're looking at the operational expenses that keep the lights on and fund future growth, so let's break down the reported numbers from the third quarter of 2025.

General and Administrative (G&A) expenses for the third quarter of 2025 were reported at $28.4 million. This was up from $24.5 million in the prior year quarter, primarily due to the recognition of transaction costs related to the Pelthos transaction.

Research and Development (R&D) expenses for the third quarter of 2025 totaled $21 million. A significant driver here was a $17.8 million one-time charge tied to the R&D funding arrangement with Orchestra BioMed, which supports late-stage partnered cardiology programs. This funding is accounted for as an R&D funding arrangement fully expensed in the period of investment.

For the Cost of Goods Sold (COGS) related to the Captisol product sales, the cost for the third quarter of 2025 was $3.8 million, compared with $2.4 million for the same period in 2024, reflecting an increase in Captisol sales volume. Full-year 2025 guidance for total Captisol sales was raised to $40 million.

Regarding the debt load, Ligand Pharmaceuticals Incorporated completed an offering of 0.75% convertible senior notes due 2030 with an aggregate principal amount of $460 million. The interest expense on this debt accrues at a rate of 0.75% per annum, payable semiannually in arrears. Here's the quick math for the annual interest obligation based on the principal amount: the annual interest expense is $3.45 million ($460,000,000 multiplied by 0.0075). What this estimate hides is that the actual quarterly expense might be slightly different due to timing or accounting treatment, but the underlying cost is fixed by the coupon.

You can see the key cost components side-by-side here:

The cost structure is heavily influenced by these operating expenses and the specific, non-recurring charges related to business development activities, such as the R&D funding arrangement.

The structure also involves specific contractual obligations:

• Convertible Senior Notes Principal: $460.0 million.
• Convertible Note Coupon Rate: 0.75% per annum.
• Warrant Strike Price (Potential Dilution Threshold): $294.02 per share.

Ligand Pharmaceuticals Incorporated (LGND) - Canvas Business Model: Revenue Streams

You're looking at the hard numbers for Ligand Pharmaceuticals Incorporated's revenue engine as of late 2025. It's all about the recurring, high-margin streams, so let's break down where the money is expected to land for the full year.

The core of Ligand Pharmaceuticals Incorporated's revenue model relies on several distinct, yet interconnected, streams:

• Royalties on net sales of partnered products (2025 guidance: $147M to $157M)
• Captisol product sales (2025 guidance: $40 million)
• Core contract revenue (milestones, license fees) (2025 guidance: $38 million)
• Gains from strategic transactions (e.g., Zelsuvmi out-license income of $24.5 million in Q3 2025)
• Interest income from a strengthened cash position

The third quarter of 2025 showed significant momentum, with royalty revenue hitting $46.6 million for the quarter, marking a 47% increase year-over-year. This performance helped drive the full-year royalty guidance up to the $147 million to $157 million range.

Here's a look at the updated full-year 2025 financial guidance for the core revenue components:

The core contract revenue stream saw a notable boost, partly due to the strategic transaction gains. Specifically, the income associated with the out-license of Zelsuvmi was $24.5 million recognized in the third quarter of 2025. This single event significantly contributed to the overall revenue picture, as total GAAP revenue and other income for Q3 2025 reached $115.5 million.

The balance sheet is definitely looking healthier, which feeds directly into another revenue line. Ligand Pharmaceuticals Incorporated closed the third quarter of 2025 with cash, cash equivalents, and short-term investments totaling $664.5 million. This strong cash position, further bolstered by securing a $460 million convertible note in August 2025, results in higher interest income. What this estimate hides is the variable nature of interest rates, but the base is solid.

To put the Q3 performance in context against the full-year targets, the company raised its total core revenue forecast to a range of $225 million to $235 million. The drivers for this confidence include:

• Strong launch trajectory of partnered products like Merck/Verona Pharma's Ohtuvayre and Travere Therapeutics' FILSPARI.
• The recognition of the Zelsuvmi out-license component.
• The overall resilience of the royalty aggregation model.

Finance: Finance needs to model interest income based on the $665 million closing cash balance for the next 13-week forecast by Friday.