Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class: | Trading symbol: | Name of each exchange on which registered: | ||||||
☒ | Accelerated Filer | ☐ | ||||||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | ||||||||||||
Emerging Growth Company |
PART I. FINANCIAL INFORMATION | ||||||||
PART II. OTHER INFORMATION | ||||||||
GLOSSARY OF TERMS AND ABBREVIATIONS | |||||
Abbreviation | Definition | ||||
2023 Annual Report | Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024 | ||||
2023 Notes | $750.0 million aggregate principal amount of convertible senior unsecured notes due 2023 | ||||
APAC | Avista Public Acquisition Corp. II (prior to its domestication in Delaware and change of name to OmniAb, Inc.) | ||||
ASC | Accounting Standards Codification | ||||
ASU | Accounting Standards Update | ||||
Company | Ligand Pharmaceuticals Incorporated, including subsidiaries | ||||
CVR | Contingent value right | ||||
CyDex | CyDex Pharmaceuticals, Inc. | ||||
Distribution | The separation of OmniAb Business through a spin-off of OmniAb to Ligand’s shareholders of record as of October 26, 2022 on a pro rata basis | ||||
ESPP | Employee Stock Purchase Plan, as amended and restated | ||||
FASB | Financial Accounting Standards Board | ||||
FDA | Food and Drug Administration | ||||
GAAP | Generally accepted accounting principles in the United States | ||||
Ligand | Ligand Pharmaceuticals Incorporated, including subsidiaries | ||||
Merger Agreement | Agreement and Plan of Merger, dated as of March 23, 2022, among APAC, Ligand, OmniAb and Merger Sub | ||||
Merger Sub | Orwell Merger Sub, Inc., a wholly owned subsidiary of APAC | ||||
Metabasis | Metabasis Therapeutics, Inc. | ||||
NDA | New Drug Application | ||||
New OmniAb | OmniAb, Inc. (formerly known as Avista Public Acquisition Corp. II and after it domestication in Delaware) | ||||
OmniAb | OmniAb Operations, Inc. (formerly known as OmniAb, Inc. and prior to being spun off by the Company) | ||||
OmniAb Business | Ligand's antibody discovery business (prior to being spun off by the Company) | ||||
PDUFA | Prescription Drug User Fee Act | ||||
Q1 2023 | The Company's fiscal quarter ended March 31, 2023 | ||||
Q1 2024 | The Company's fiscal quarter ended March 31, 2024 | ||||
SBC | Share-based compensation expense | ||||
SEC | Securities and Exchange Commission | ||||
Separation Agreement | Separation and Distribution Agreement, dated as of March 23, 2022, among APAC, Ligand and OmniAb | ||||
Takeda | Takeda Pharmaceutical Company Limited | ||||
Travere | Travere Therapeutics, Inc. | ||||
Viking | Viking Therapeutics, Inc. |
March 31, 2024 | December 31, 2023 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, net | |||||||||||
Inventory | |||||||||||
Income taxes receivable | |||||||||||
Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Deferred income taxes, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Long-term portion of financial royalty assets, net | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Finance lease right-of-use assets | |||||||||||
Equity method investment in Primrose Bio | |||||||||||
Other investments | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Income taxes payable | |||||||||||
Deferred revenue | |||||||||||
Current contingent liabilities | |||||||||||
Current operating lease liabilities | |||||||||||
Current finance lease liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term deferred revenue | |||||||||||
Long-term contingent liabilities | |||||||||||
Deferred income taxes, net | |||||||||||
Long-term operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders' equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings | |||||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three months ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Revenues and other income: | |||||||||||
Revenue from intangible royalty assets | $ | $ | |||||||||
Income from financial royalty assets | |||||||||||
Royalties | |||||||||||
Captisol | |||||||||||
Contract revenue and other income | |||||||||||
Total revenues and other income | |||||||||||
Operating costs and expenses: | |||||||||||
Cost of Captisol | |||||||||||
Amortization of intangibles | |||||||||||
Research and development | |||||||||||
General and administrative | |||||||||||
Total operating costs and expenses | |||||||||||
Operating income from continuing operations | |||||||||||
Non-operating income and expenses: | |||||||||||
Gain from short-term investments | |||||||||||
Interest income | |||||||||||
Interest expense | ( | ( | |||||||||
Gain on derivative instruments | |||||||||||
Other non-operating income (expense), net | ( | ||||||||||
Total non-operating income and expenses, net | |||||||||||
Income before income taxes from continuing operations | |||||||||||
Income tax expense | ( | ( | |||||||||
Net income from continuing operations | |||||||||||
Net loss from discontinued operations | ( | ||||||||||
Net income | $ | $ | |||||||||
Basic net income from continuing operations per share | $ | $ | |||||||||
Basic net loss from discontinued operations per share | $ | $ | ( | ||||||||
Basic net income per share | $ | $ | |||||||||
Shares used in basic per share calculation | |||||||||||
Diluted net income from continuing operations per share | $ | $ | |||||||||
Diluted net loss from discontinued operations per share | $ | $ | ( | ||||||||
Diluted net income per share | $ | $ | |||||||||
Shares used in diluted per share calculation | |||||||||||
Three months ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net income | $ | $ | |||||||||
Unrealized net (loss) gain on available-for-sale securities, net of tax | ( | ||||||||||
Comprehensive income | $ | $ | |||||||||
Common Stock | Additional paid in capital | Accumulated other comprehensive loss | Retained earnings | Total stockholders' equity | ||||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | ( | $ | $ | ||||||||||||||
Issuance of common stock under employee stock compensation plans, net of shares withheld for payroll taxes | — | — | — | |||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||
Unrealized loss on available-for-sale securities, net of tax | — | — | — | ( | — | ( | ||||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | ( | $ | $ | ||||||||||||||
Common Stock | Additional paid in capital | Accumulated other comprehensive income (loss) | Retained earnings | Total stockholders' equity | ||||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | $ | ||||||||||||||
Issuance of common stock under employee stock compensation plans, net of shares withheld for payroll taxes | — | ( | — | — | ( | |||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||
Unrealized net gain on available-for-sale securities, net of tax | — | — | — | — | ||||||||||||||||
Final distribution of OmniAb | — | — | — | — | ||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | $ | ||||||||||||||
Three months ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Change in estimated fair value of contingent liabilities | ( | ( | |||||||||
Depreciation and amortization of intangible assets | |||||||||||
Amortization of premium on investments, net | ( | ( | |||||||||
Amortization of debt discount and issuance fees | |||||||||||
Non-cash income from financial royalty assets | ( | ||||||||||
CECL adjustment to financial royalty assets | ( | ||||||||||
Gain on derivative instruments | ( | ||||||||||
Losses from equity method investment in Primrose Bio | |||||||||||
Share-based compensation | |||||||||||
Deferred income taxes | |||||||||||
Gain from short-term investments | ( | ( | |||||||||
Lease amortization expense | |||||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities, net of acquisition: | |||||||||||
Accounts receivable | |||||||||||
Inventory | |||||||||||
Accounts payable and accrued liabilities | ( | ( | |||||||||
Income tax receivable and payable | |||||||||||
Deferred revenue | ( | ( | |||||||||
Other assets and liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchase of financial royalty assets | ( | ||||||||||
Proceeds from financial royalty assets | |||||||||||
Purchase of short-term investments | ( | ( | |||||||||
Proceeds from sale of short-term investments | |||||||||||
Proceeds from maturity of short-term investments | |||||||||||
Cash paid for investment in Primrose Bio | ( | ||||||||||
Purchase of property and equipment | ( | ( | |||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Payments under finance lease obligations | ( | ( | |||||||||
Net proceeds from stock option exercises and ESPP | |||||||||||
Taxes paid related to net share settlement of equity awards | ( | ( | |||||||||
Cash paid for debt issuance costs | ( | ||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Net increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ |
Supplemental disclosure of cash flow information: | |||||||||||
Interest paid | $ | $ | |||||||||
Supplemental schedule of non-cash activity: | |||||||||||
Accrued financial royalty asset purchases | $ | $ | |||||||||
Accrued fixed asset purchases | $ | $ | |||||||||
Unrealized gain (loss) on AFS investments, net of tax | $ | ( | $ |
Three months ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Royalties | |||||||||||
Kyprolis | $ | $ | |||||||||
Evomela | |||||||||||
Teriparatide injection | |||||||||||
Rylaze | |||||||||||
Filspari | |||||||||||
Vaxneuvance | |||||||||||
Other | |||||||||||
Revenue from intangible royalty assets | |||||||||||
Income from financial royalty assets | |||||||||||
$ | $ | ||||||||||
Captisol | $ | $ | |||||||||
Contract revenue and other income | |||||||||||
Milestone and other | |||||||||||
Other income | |||||||||||
Contract revenue and other income | $ | $ | |||||||||
Total | $ | $ |
March 31, 2024 | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | |||||||||||||||||||
Bond fund | $ | $ | $ | ( | $ | ||||||||||||||||||
Bank deposits | ( | ||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||
Commercial paper | ( | ||||||||||||||||||||||
U.S. government securities | ( | ||||||||||||||||||||||
Corporate equity securities | ( | ||||||||||||||||||||||
Municipal bonds | ( | ||||||||||||||||||||||
$ | $ | $ | ( | $ | |||||||||||||||||||
Viking common stock | |||||||||||||||||||||||
Total short-term investments | $ | ||||||||||||||||||||||
December 31, 2023 | |||||||||||||||||||||||
Bond fund | $ | $ | $ | ( | $ | ||||||||||||||||||
Bank deposits | ( | ||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||
Commercial paper | ( | ||||||||||||||||||||||
U.S. government securities | ( | ||||||||||||||||||||||
Municipal bonds | ( | ||||||||||||||||||||||
Corporate equity securities | ( | ||||||||||||||||||||||
$ | $ | $ | ( | $ | |||||||||||||||||||
Viking common stock | |||||||||||||||||||||||
Total short-term investments | $ | ||||||||||||||||||||||
March 31, 2024 | |||||||||||
Amortized Cost | Fair Value | ||||||||||
Within one year | $ | $ | |||||||||
After one year through five years | |||||||||||
Total | $ | $ |
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
Indefinite-lived intangible assets | |||||||||||
Goodwill | $ | $ | |||||||||
Definite lived intangible assets | |||||||||||
Complete technology | |||||||||||
Less: accumulated amortization | ( | ( | |||||||||
Trade name | |||||||||||
Less: accumulated amortization | ( | ( | |||||||||
Customer relationships | |||||||||||
Less: accumulated amortization | ( | ( | |||||||||
Contractual relationships | |||||||||||
Less: accumulated amortization | ( | ( | |||||||||
Total goodwill and other identifiable intangible assets, net | $ | $ | |||||||||
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
Equity securities in Primrose Bio | $ | $ | |||||||||
Neuritek warrants | |||||||||||
Palvella Series C preferred stock | |||||||||||
Total other investments | $ | $ |
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
Compensation | $ | $ | |||||||||
Subcontractor | |||||||||||
Professional fees | |||||||||||
Customer deposit | |||||||||||
Supplier | |||||||||||
Royalties owed to third parties | |||||||||||
Amounts owed to former licensees | |||||||||||
Acquisition related liabilities | |||||||||||
Other | |||||||||||
Total accrued liabilities | $ | $ |
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
Unrecognized tax benefits | $ | $ | |||||||||
Novan contract liability | |||||||||||
Other long-term liabilities | |||||||||||
$ | $ |
Three months ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
SBC - Research and development expenses | $ | $ | |||||||||
SBC - General and administrative expenses | |||||||||||
$ | $ |
Three months ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Risk-free interest rate | |||||||||||
Dividend yield | |||||||||||
Expected volatility | |||||||||||
Expected term (years) |
Three months ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Weighted average shares outstanding: | |||||||||||
Dilutive potential common shares: | |||||||||||
Restricted stock | |||||||||||
Stock options | |||||||||||
2023 convertible senior notes | |||||||||||
Shares used to compute diluted income per share | |||||||||||
Potentially dilutive shares excluded from calculation due to anti-dilutive effect |
Property and equipment, net | $ | ||||
Intangible assets | |||||
Other assets | |||||
Operating lease right-of-use assets | |||||
Finance lease right-of-use assets | |||||
Accrued liabilities | ( | ||||
Deferred revenue | ( | ||||
Long-term operating lease liabilities | ( | ||||
Other liabilities | ( | ||||
Net assets sold | |||||
Allocated goodwill | |||||
Cash consideration paid | |||||
$ |
Equity method investment | $ | ||||
Equity securities | |||||
Derivative assets | |||||
$ |
Restricted cash | $ | ||||
Property and equipment, net | |||||
Operating lease right-of-use asset | |||||
Other assets | |||||
Deferred tax asset | |||||
Intangible assets acquired | |||||
Goodwill | |||||
Deferred revenue | ( | ||||
Operating lease liabilities | ( | ||||
Other liabilities | ( | ||||
Cash paid for Novan, including restricted cash received | |||||
DIP loan fees and interest | |||||
Total consideration | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||
Gross carrying value(2) | Allowance (1) | Net carrying value (2) | Gross carrying value | Allowance (1) | Net carrying value | |||||||||||||||||||||||||||||||||
Elutia (CorMatrix) | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Selexis | ( | ( | ||||||||||||||||||||||||||||||||||||
Ovid (Soticlestat) | ( | ( | ||||||||||||||||||||||||||||||||||||
Tolerance Therapeutics (TZIELD) | ( | ( | ||||||||||||||||||||||||||||||||||||
Ensifentrine inventors | ( | |||||||||||||||||||||||||||||||||||||
Total financial royalty assets, net | $ | $ | ( | $ | $ | $ | ( | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term investments, excluding Viking(1) | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Investment in Viking common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent liabilities - CyDex | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Contingent liabilities - Metabasis(3) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | $ | $ | $ | $ |
Assets | |||||
Fair value of level 3 financial instruments as of December 31, 2023 | $ | ||||
Fair value of level 3 financial instruments as of March 31, 2024 | $ | ||||
Liabilities | |||||
Fair value of level 3 financial instruments as of December 31, 2023 | $ | ||||
Payments to CVR holders and other contingent payments | ( | ||||
Fair value of level 3 financial instruments as of March 31, 2024 | $ |
Stock Options | Restricted Stock Awards | ||||||||||||||||||||||
Shares | Weighted-Average Exercise Price | Shares | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||
Balance as of December 31, 2023 | $ | $ | |||||||||||||||||||||
Granted | $ | $ | |||||||||||||||||||||
Options exercised/RSUs vested | ( | $ | ( | $ | |||||||||||||||||||
Forfeited | ( | $ | ( | $ | |||||||||||||||||||
Balance as of March 31, 2024 | $ | $ |
(Dollars in thousands) | Q1 2024 | Q1 2023 | Change | % Change | |||||||||||||||||||
Revenue from intangible royalty assets | $ | 18,357 | $ | 17,154 | $ | 1,203 | 7 | % | |||||||||||||||
Income from financial royalty assets | 738 | 493 | 245 | 50 | % | ||||||||||||||||||
Royalties | 19,095 | 17,647 | 1,448 | 8 | % | ||||||||||||||||||
Captisol | 9,212 | 10,622 | (1,410) | (13) | % | ||||||||||||||||||
Contract revenue and other income | 2,671 | 15,710 | (13,039) | (83) | % | ||||||||||||||||||
Total revenue and other income | $ | 30,978 | $ | 43,979 | $ | (13,001) | (30) | % |
(in millions) | Q1 2024 Estimated Partner Product Sales | Effective Royalty Rate | Q1 2024 Royalty Revenue | Q1 2023 Estimated Partner Product Sales | Effective Royalty Rate | Q1 2023 Royalty Revenue | |||||||||||||||||
Kyprolis | $ | 401.0 | 1.6 | % | $ | 6.6 | $ | 378.9 | 1.6 | % | $ | 6.2 | |||||||||||
Evomela | 7.0 | 20.0 | % | 1.4 | 13.0 | 20.0 | % | 2.6 | |||||||||||||||
Teriparatide injection(a) | 7.8 | 25.6 | % | 2.0 | 10.5 | 33.3 | % | 3.5 | |||||||||||||||
Rylaze | 102.8 | 2.9 | % | 3.0 | 83.0 | 3.1 | % | 2.6 | |||||||||||||||
Filspari | 20.0 | 9.0 | % | 1.8 | — | — | — | ||||||||||||||||
Vaxneuvance | 219.0 | 0.6 | % | 1.4 | 106.0 | 0.6 | % | 0.6 | |||||||||||||||
Other | 86.4 | 2.5 | % | 2.2 | 52.9 | 3.2 | % | 1.7 | |||||||||||||||
Total | $ | 844.0 | $ | 18.4 | $ | 644.3 | $ | 17.2 | |||||||||||||||
(Dollars in thousands) | Q1 2024 | % of Revenue | Q1 2023 | % of Revenue | |||||||||||||||||||
Cost of Captisol | $ | 2,882 | $ | 3,717 | |||||||||||||||||||
Amortization of intangibles | 8,186 | 8,539 | |||||||||||||||||||||
Research and development | 5,971 | 6,663 | |||||||||||||||||||||
General and administrative | 10,951 | 10,855 | |||||||||||||||||||||
Total operating costs and expenses | $ | 27,990 | 90% | $ | 29,774 | 68% |
(Dollars in thousands) | Q1 2024 | Q1 2023 | Change | ||||||||||||||
Gain from short-term investments | $ | 110,772 | $ | 39,533 | $ | 71,239 | |||||||||||
Interest income | 2,020 | 1,435 | 585 | ||||||||||||||
Interest expense | (141) | (240) | 99 | ||||||||||||||
Gain on derivative instruments | 196 | — | 196 | ||||||||||||||
Other non-operating income (expense), net | (2,388) | 603 | (2,991) | ||||||||||||||
Total non-operating income and expenses, net | $ | 110,459 | $ | 41,331 | $ | 69,128 |
(Dollars in thousands) | Q1 2024 | Q1 2023 | Change | ||||||||||||||
Income before income taxes | $ | 113,447 | $ | 55,536 | $ | 57,911 | |||||||||||
Income tax expense | (27,308) | (11,922) | (15,386) | ||||||||||||||
Income from operations | $ | 86,139 | $ | 43,614 | $ | 42,525 | |||||||||||
Effective tax rate | 24.1 | % | 21.5 | % |
(Dollars in thousands) | Q1 2024 | Q1 2023 | |||||||||
Net cash provided by (used in): | |||||||||||
Operating activities | $ | 18,732 | $ | 33,948 | |||||||
Investing activities | $ | (3,775) | $ | 10,549 | |||||||
Financing activities | $ | 12,182 | $ | (775) |
Incorporated by Reference | ||||||||||||||||||||
Exhibit Number | Description of Exhibit | Form | File Number | Date of Filing | Exhibit Number | Filed Herewith | ||||||||||||||
Fifth Amended and Restated Bylaws of the Company | 8-K | 001-33093 | 4/19/2024 | 3.1 | ||||||||||||||||
Certification by Principal Executive Officer, Pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | |||||||||||||||||||
Certification by Principal Financial Officer, Pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | |||||||||||||||||||
Certifications by Principal Executive Officer and Principal Financial Officer, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | |||||||||||||||||||
101 | The following financial information from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets, (ii) Consolidated Condensed Statements of Operations, (iii) Consolidated Condensed Statement of Comprehensive Income, (iv) Consolidated Condensed Statements of Stockholders' Equity, (v) Consolidated Condensed Statements of Cash Flows, and (vi) the Notes to Consolidated Condensed Financial Statements. | X | ||||||||||||||||||
104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL and contained in Exhibit 101. | X |
Date: | May 8, 2024 | By: | /s/ Octavio Espinoza | |||||||||||
Octavio Espinoza | ||||||||||||||
Chief Financial Officer | ||||||||||||||
Duly Authorized Officer and Principal Financial Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Ligand Pharmaceuticals Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 8, 2024 | /s/ Todd C. Davis | ||||||||||||
Todd C. Davis Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Ligand Pharmaceuticals Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 8, 2024 | /s/ Octavio Espinoza | ||||||||||||
Octavio Espinoza Chief Financial Officer (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and | ||||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 8, 2024 | /s/ Todd C. Davis | ||||||||||||
Todd C. Davis Chief Executive Officer (Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and | ||||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 8, 2024 | /s/ Octavio Espinoza | ||||||||||||
Octavio Espinoza Chief Financial Officer (Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
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Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized (in shares) | 5,000 | 5,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 60,000 | 60,000 |
Common stock issued (in shares) | 17,924 | 17,556 |
Common stock outstanding (in shares) | 17,924 | 17,556 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Statement of Comprehensive Income [Abstract] | ||
Net income | $ 86,139 | $ 41,949 |
Unrealized net (loss) gain on available-for-sale securities, net of tax | (93) | 49 |
Comprehensive income | $ 86,046 | $ 41,998 |
Basis of Presentation and Summary of Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Business We are a biopharmaceutical company enabling scientific advancement through supporting the clinical development of high-value medicines. We do this by providing financing, licensing our technologies or both. We operate in one reportable segment: development and licensing of biopharmaceutical assets. Basis of Presentation Our unaudited condensed consolidated financial statements include the financial statements of Ligand and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We have included all adjustments, consisting only of normal recurring adjustments, which we considered necessary for a fair presentation of our financial results. These unaudited condensed consolidated financial statements and accompanying notes should be read together with the audited consolidated financial statements included in our 2023 Annual Report. Interim financial results are not necessarily indicative of the results that may be expected for the full year. Reclassification Certain reclassifications have been made to the previously issued audited consolidated financial statements to conform with the current period presentation. Specifically, within the consolidated balance sheet as of December 31, 2023, our commercial license and other economic rights line has been reclassified to long-term portion of financial royalty assets, net, and to other assets, and a portion of other investments has been reclassified from other assets. In addition, within the unaudited condensed consolidated statement of operations for the three months ended March 31, 2023, royalties have been reclassified to revenue from intangible royalty assets, and a portion of the contract revenue has been reclassified to income from financial royalty assets. Discontinued Operations The Company determined that the spin-off of the OmniAb Business in November 2022 met the criteria for classification as a discontinued operation in accordance with ASC Subtopic 205-20, Discontinued Operations (“ASC 205-20”). Accordingly, the accompanying condensed consolidated financial statements have been updated to present the results of all discontinued operations reported as a separate component of loss in the condensed consolidated statements of operations and comprehensive loss (see Note 4, Spin-off of OmniAb). All disclosures have been adjusted to reflect continuing operations. Significant Accounting Policies We have described our significant accounting policies in Note 1, Basis of Presentation and Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in our 2023 Annual Report. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates. Revenue and Other Income Our revenue is generated primarily from royalties on sales of products commercialized by our partners, Captisol material sales, and contract revenue for license fees, regulatory and sales based milestone payments. Other operating income is primarily related to milestone income received for financial royalty assets that have been fully amortized or where there is no underlying asset recognized on the consolidated balance sheets. We apply the following five-step model in accordance with ASC 606, Revenue from Contracts with Customers, in order to determine the revenue: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Revenue from Intangible Royalty Assets We receive royalty revenue from intangible royalty assets on sales by our partners of products covered by patents that we or our partners own under contractual agreements. We do not have future performance obligations under these license arrangements. We generally satisfy our obligation to grant intellectual property rights on the effective date of the contract. However, we apply the royalty recognition constraint required under the guidance for sales-based royalties which requires a royalty to be recorded no sooner than the underlying sale occurs. Therefore, royalties on sales of products commercialized by our partners are recognized in the quarter the product is sold. Our partners generally report sales information to us on a one quarter lag. Thus, we estimate the expected royalty proceeds based on an analysis of historical experience and interim data provided by our partners including their publicly announced sales. Differences between actual and estimated royalty revenues, which have not been material, are adjusted in the period in which they become known, typically the following quarter. Income from Financial Royalty Assets Effective January 1, 2024, we introduced a new line item “income from financial royalty assets”, which was included in “contract revenue” in prior periods. Accordingly, the prior year period amounts have been reclassified to align with the current period presentation. We recognize income from financial royalty assets when there is a reasonable expectation about the timing and amount of cash flows expected to be collected. Income is calculated by multiplying the carrying value of the financial royalty asset by the periodic effective interest rate. We account for financial royalty assets related to developmental pipeline or recently commercialized products on a non-accrual basis. Developmental pipeline products are non-commercialized, non-approved products that require FDA or other regulatory approval, and thus have uncertain cash flows. Newly commercialized products typically do not have an established reliable sales pattern, and thus have uncertain cash flows. Captisol Sales Revenue from Captisol sales is recognized when control of Captisol material is transferred or intellectual property license rights are granted to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those products or rights. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. For Captisol material or intellectual property license rights, we consider our performance obligation satisfied once we have transferred control of the product or granted the intellectual property rights, meaning the customer has the ability to use and obtain the benefit of the Captisol material or intellectual property license right. We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. Sales tax and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. We have elected to recognize the cost of freight and shipping when control over Captisol material has transferred to the customer as an expense in cost of Captisol. We expense incremental costs of obtaining a contract when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We did not incur any incremental costs of obtaining a contract during the periods reported. Contract Revenue and Other Income Our contracts with customers often include variable consideration in the form of contingent milestone payments. We include contingent milestone payments in the estimated transaction price when it is probable a significant reversal in the amount of cumulative revenue recognized will not occur. These estimates are based on historical experience, anticipated results and our best judgment at the time. If the contingent milestone payment is based on sales, we apply the royalty recognition constraint and record revenue when the underlying sale has taken place. Significant judgments must be made in determining the transaction price for our sales of intellectual property. Because of the risk that products in development with our partners will not reach development milestones or receive regulatory approval, we generally recognize any contingent payments that would be due to us upon the development milestone or regulatory approval. Depending on the terms of the arrangement, we may also defer a portion of the consideration received if we have to satisfy a future obligation, which typically occurs with our contracts for R&D services. In general, for R&D services, which has not been significant, we recognize revenue over time and measure our progress using an input method. The input methods we use are based on the effort we expend or costs we incur toward the satisfaction of our performance obligation. Some customer contracts are sublicenses which require that we make payments to an upstream licensor related to license fees, milestones and royalties which we receive from customers. In such cases, we evaluate the determination of gross revenue as a principal versus net revenue as an agent reporting based on each individual agreement. Other income is primarily related to milestone income received for financial royalty assets that have been fully amortized or where there is no underlying asset recognized on the consolidated balance sheets. Deferred Revenue Depending on the terms of the arrangement, we may also defer a portion of the consideration received because we have to satisfy a future obligation. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the consolidated balance sheet. Except for royalty revenue and certain service revenue, we generally receive payment at the point we satisfy our obligation or soon after. Therefore, we do not generally carry any contract asset balance. Any fees billed in advance of being earned are recorded as deferred revenue. During the three months ended March 31, 2024 and 2023, the amount recognized as revenue that was previously deferred was $0.5 million and $0.1 million, respectively. Disaggregation of Revenue The following table represents disaggregation of royalties, Captisol and contract revenue (in thousands):
Short-term Investments Our short-term investments consist of the following at March 31, 2024 and December 31, 2023 (in thousands):
During the three months ended March 31, 2024, we sold 0.7 million shares of Viking common stock and recognized a realized gain of $60.0 million in total. Gain (loss) from short-term investments in our condensed consolidated statements of operations includes both realized and unrealized gain (loss) from our short-term investments in public equity and warrant securities. Allowances are recorded for available-for-sale debt securities with unrealized losses. This limits the amount of credit losses that can be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The provisions of the credit losses standard did not have a material impact on our available-for-sale debt securities during the three months ended March 31, 2024. The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands):
Our investment policy is capital preservation and we only invest in U.S.-dollar denominated investments. We held a total of 109 investments which were in an unrealized loss position with a total of $0.1 million unrealized losses as of March 31, 2024. We believe that we will collect the principal and interest due on our debt securities that have an amortized cost in excess of fair value. The unrealized losses are largely due to changes in interest rates and not to unfavorable changes in the credit quality associated with these securities that impacted our assessment on collectability of principal and interest. We do not intend to sell these securities and it is not more-likely-than-not that we will be required to sell these securities before the recovery of the amortized cost basis. Accordingly, no credit losses were recognized for the three months ended March 31, 2024. Accounts Receivable and Allowance for Credit Losses Our accounts receivable arise primarily from sales on credit to customers. We establish an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The allowance is determined by using the loss-rate method, which requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivable. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables and credit and liquidity quality indicators for industry groups, customer classes or individual customers. During the three months ended March 31, 2024 and 2023, we considered the current and expected future economic and market conditions and concluded a decrease of $0.3 million and an increase of $0.1 million in the allowance for credit losses, respectively. Inventory Inventory, which consists of finished goods, is stated at the lower of cost or net realizable value. We determine cost using the specific identification method. We analyze our inventory levels periodically and write down inventory to net realizable value if it has become obsolete, has a cost basis in excess of its expected net realizable value or is in excess of expected requirements. There were no write-downs recorded against inventory for the three months ended March 31, 2024 and 2023. In addition to finished goods, as of March 31, 2024 and December 31, 2023, inventory included prepayments of $4.2 million and $4.6 million, respectively, to our supplier for Captisol. Goodwill and Other Identifiable Intangible Assets Goodwill and other identifiable intangible assets consist of the following (in thousands):
Financial Royalty Assets, net (formerly known as Commercial License Rights) Financial royalty assets (formerly known as “Commercial License Rights”) represent a portfolio of future milestone and royalty payment rights acquired that are passive in nature (i.e., we do not own the intellectual property or have the right to commercialize the underlying products). Although a financial royalty asset does not have the contractual terms typical of a loan (such as contractual principal and interest), we account for financial royalty assets under ASC 310, Receivables. Our financial royalty assets are classified similar to loans receivable and are measured at amortized cost using the prospective effective interest method described in ASC 835-30 Imputation of Interest. The effective interest rate is calculated by forecasting the expected cash flows to be received over the life of the asset relative to the initial invested amount. The effective interest rate is recalculated in each reporting period as the difference between expected cash flows and actual cash flows are realized and as there are changes to expected future cash flows. The gross carrying value of a financial royalty asset is made up of the opening balance, or net purchase price for a new financial royalty asset, which is increased by accrued interest income (except for assets under the non-accrual method) and decreased by cash receipts in the period to arrive at the ending balance. We evaluate financial royalty assets for recoverability on an individual basis by comparing the effective interest rate at each reporting date to that of the prior period. If the effective interest rate is lower for the current period than the prior period, and if the gross cash flows have declined (expected and collected), we record provision expense for the change in expected cash flows. The provision is measured as the difference between the financial royalty asset’s amortized cost basis and the net present value of the expected future cash flows, calculated using the prior period’s effective interest rate. In addition to the above allowance, we recognize an allowance for current expected credit losses under ASC 326, Financial Instruments – Credit Losses on our financial royalty assets. The credit rating, which is primarily based on publicly available data and updated quarterly, is the primary credit quality indicator used to determine the credit loss provision. The carrying value of financial royalty assets is presented net of the cumulative allowance for changes in expected future cash flows and expected credit losses. The initial amount and subsequent revisions in allowances for changes in expected future cash flows and expected credit losses are recorded as part of general and administrative expenses on the consolidated statements of operations. When we are reasonably certain that a part of a financial royalty asset’s net carrying value (or all of it) is not recoverable, we recognize a permanent impairment which is recorded as part of general and administrative expenses on the consolidated statements of operations. To the extent there was an allowance previously recorded for this asset, the amount of such impairment is written off against the allowance at the time that such a determination is made. Any future recoveries from such impairment are recognized when cash is collected. The current portion of financial royalty assets represents an estimation for current quarter royalty receipts which are collected during the subsequent quarter. This portion is presented in other current assets on our consolidated balance sheets, net of the allowance for expected credit losses. For additional information, see Note 5, Financial Royalty Assets, net (formerly known as Commercial License Rights). Equity Method Investment Investments that we do not consolidate but in which we have significant influence over the operating and financial policies of the investee are classified as equity method investments and are accounted for using the equity method of accounting. In applying the equity method of accounting, investments are initially recorded at cost and are subsequently adjusted based on our proportionate share of net income or loss of the investee, net of any distributions received from the investee. Other Investments Other investments represent our investments to equity securities of third parties in which we do not have control or significant influence. All our equity securities investments do not have a readily determinable or estimable fair values and are measured using the measurement alternative, which is cost less impairment, if any, and adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Other investments consist of the following (in thousands):
Other Assets Other assets include economic rights related to 2023 expansion of our strategic partnership with Palvella to accelerate Phase 3 development of QTORIN rapamycin for the treatment of Microcystic Lymphatic Malformations (“Microcystic LMs”). According to the terms of the second amendment to the development funding and royalties agreement, Palvella received an upfront payment of $5 million from Ligand. In return for the upfront payment, among other contractual changes, the tiered royalty payable by Palvella to Ligand was increased to between 8.0% and 9.8% based on annual aggregate worldwide net sales of QTORIN rapamycin. We are not obligated to provide additional funding to Palvella for development or commercialization of QTORIN. We determined the economic rights related to Palvella should be characterized as a funded research and development arrangement, thus we account for them in accordance with ASC 730-20, Research and Development Arrangement, and reduce our asset as the funds are expended by Palvella. As of March 31, 2024, of the $5 million upfront funding related to the second amendment with Palvella, none of the funding to Palvella was expended. Our CEO and director, Todd Davis, is a director of Palvella. Mr. Davis recused himself from all of the board's consideration of the agreement between us and Palvella, including any financial analysis, the terms of the amendment and the vote to approve the purchase agreement and the related transactions. Other current assets primarily include Employee Retention Credit in the amount of $2.3 million in addition to the $2.6 million current portion of Elutia financial royalty assets which is disclosed in Note 5, Financial Royalty Assets, net (formerly known as Commercial License Rights). Accrued Liabilities Accrued liabilities consist of the following (in thousands):
Other Long-Term Liabilities Other long-term liabilities consist of the following (in thousands):
Share-Based Compensation Share-based compensation expense for awards to employees and non-employee directors is a non-cash expense and is recognized on a straight-line basis over the vesting period. The following table summarizes share-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands):
The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:
A limited amount of performance-based restricted stock units (“PSUs”) contain a market condition based on our relative total shareholder return ranked on a percentile basis against the Nasdaq Biotechnology Index over a three year performance period, with a range of 0% to 200% of the target amount granted to be issued under the award. Share-based compensation cost for these PSUs is measured using the Monte-Carlo simulation valuation model and is not adjusted for the achievement, or lack thereof, of the performance conditions. Net Income Per Share Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of shares issuable under the 2023 Notes, stock options and restricted stock. Although we paid off the 2023 Notes in May 2023, it would have a dilutive impact when the average market price of our common stock exceeds the maximum conversion price during the three months ended March 31, 2023. It was our intent and policy to settle conversions through combination settlement, which involved payment in cash equal to the principal portion and delivery of shares of common stock for the excess of the conversion value over the principal portion. Potentially dilutive common shares from stock options and restricted stock are determined using the average share price for each period under the treasury stock method. In addition, the following amounts are assumed to be used to repurchase shares: proceeds from exercise of stock options and the average amount of unrecognized compensation expense for the awards. See Note 9, Stockholders’ Equity. In accordance with ASC 260, Earnings per Share, if a company had a discontinuing operation, the company uses income from continuing operations, adjusted for preferred dividends and similar adjustments, as its control number to determine whether potential common shares are dilutive. The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands):
Accounting Standards Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The update, among other things, requires disclosure of certain significant segment expenses. We will adopt the updated accounting guidance in our Annual Report on Form 10-K for the year ending December 31, 2024. We do not expect the adoption of the new accounting guidance will have a material impact to our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update requires a public business entity to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. Adoption of the ASU allows for either the prospective or retrospective application of the amendment and is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company has not yet completed its assessment of the impact of ASU 2023-09 on our consolidated financial statements. We do not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on our consolidated financial statements or disclosures.
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Sale of Pelican Business and Investment in Primrose Bio |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of Pelican Business and Investment in Primrose Bio | Sale of Pelican Business and Investment in Primrose Bio On September 18, 2023, we entered into a merger agreement, pursuant to which our subsidiary, Pelican Technology Holdings, Inc. (“Pelican”) became a wholly owned subsidiary of Primrose Bio. Primrose Bio is a private company focused on synthetic biology. Pelican has developed technology related to PET (protein expression technology) and PelicCRM197 (vaccine material), and has property and equipment, as well as leased property in San Diego, CA. As part of the transaction, we received 2,146,957 common shares, 4,278,293 preferred shares and 474,746 restricted shares of Primrose Bio. Simultaneous with the merger, we entered into a purchase and sale agreement with Primrose Bio and contributed $15.0 million in exchange for 50.0% of potential development milestones and certain commercial milestones from two contracts previously entered into by Primordial Genetics. In addition, starting January 1, 2025, we will receive 25% of sales revenue of PeliCRM197 above $3.0 million and 35% of all PeliCRM197 licensing revenue in perpetuity. We retained contractual relationships utilizing the Pelican Expression Technology, including the commercial royalty rights to Jazz’s Rylaze, Merck’s Vaxneuvance and V116 vaccines, Alvogen’s Teriparatide, Serum Institute of India’s vaccine programs, including Pneumosil and MenFive vaccines, among others. We determined that the sale of Pelican meets the definition of a deconsolidation of a business. Net assets sold together with allocated goodwill and cash consideration paid were as follows (in thousands):
Fair value of the consideration received includes the following (in thousands):
Goodwill allocated to the selling business based on the relative fair value of the Pelican business and Ligand that was written off was $4.1 million, resulting in a $2.1 million gain on sale of Pelican recorded to income (loss) from operations for the year ended December 31, 2023. Transaction costs of $1.2 million were allocated to the equity method investment and equity securities based on the relative fair value. As described above, we will receive 25% of sales revenue of PeliCRM197 above $3.0 million and 35% of all PeliCRM197 licensing revenue in perpetuity. T onsideration under the loss recovery model and they will be measured based on the gain contingency model under ASC 450, Contingencies, and thus, will be recognized as the underlying contingencies are resolved. In addition, we will receive 50.0% of potential development milestones and certain commercial milestones from two contracts previously entered into by Primordial Genetics. The considerations were recognized as derivative assets with a fair value of $3.2 million, at the disposition date, which was included under other long-term asset in our condensed consolidated balance sheet. They are recognized as derivative assets under ASC 815, Derivatives and Hedging, as they have two underlyings (development and commercial milestones) and (i) the commercial milestones are dependent on the development milestones and (ii) the commercial milestone underlying is not determined to be predominate. The derivative assets are recorded at fair value as of September 18, 2023, and will be marketed to fair value at each reporting period going forward. During the three months ended March 31, 2024, a gain of $0.2 million was recorded to market the derivative assets to fair value. Any change in fair value is recorded to other non-operating income (expense) in our consolidated statement of operations. For additional information, see Note 6, Fair Value Measurement. Investment in Primrose Bio We account for our common stock investment in Primrose Bio under the equity method as we have the ability to exercise significant influence over its operating and financial results. In applying the equity method, we record the investment at fair value. Our proportionate share of net loss of Primrose Bio is recorded in our consolidated statements of operations. Our equity method investments are reviewed for indicators of impairment at each reporting period and are written down to fair value if there is evidence of a loss in value that is other-than-temporary. Our share of the net loss of Primrose Bio for three months ended March 31, 2024 was $2.4 million, which reduced Ligand's equity method investment accordingly. Any income of loss from our equity method investments are recorded to other non-operating income (expense) in our consolidated statement of operations. We determined that the Series A preferred stock investment in Primrose Bio did not have a readily determinable fair value and therefore elected the measurement alternative in ASC 321 to subsequently record the investment at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. When fair value becomes determinable, from observable price changes in orderly transactions, our investment will be marked to fair value. There have been no observable price changes or impairments identified for the three months ended March 31, 2024. During the fourth quarter of 2023, our President and Chief Operating Officer, Matt Korenberg, became a board member of Primrose Bio. Spin-off of OmniAbOn March 23, 2022, we entered into the Separation Agreement to separate our OmniAb Business and the Merger Agreement, pursuant to which APAC would combine with OmniAb, and acquire Ligand's OmniAb Business, in a Reverse Morris Trust transaction (collectively, the “Transactions”). After the closing date of the Transactions on November 1, 2022, the historical financial results of OmniAb have been reflected in our consolidated financial statements as discontinued operations under GAAP for all periods presented through the date of the Distribution. Pursuant to the Transaction Agreements, Ligand contributed to OmniAb cash and certain specific assets and liabilities constituting the OmniAb Business. Pursuant to the Distribution, Ligand distributed on a pro rata basis to its shareholders as of October 26, 2022 shares of the common stock of OmniAb representing 100% of Ligand’s interest in OmniAb. Immediately following the Distribution, Merger Sub merged with and into OmniAb, with OmniAb continuing as the surviving company in the merger and as a wholly owned subsidiary of New OmniAb. The entire transaction was completed on November 1, 2022, and following the merger, New OmniAb is an independent, publicly traded company whose common stock trades on Nasdaq under the symbol “OABI.” After the Distribution, we do not beneficially own any shares of common stock in OmniAb and no longer consolidate OmniAb into our financial results for periods ending after November 1, 2022. Discontinued operations In connection with the merger, the Company determined its antibody discovery business qualified for discontinued operations accounting treatment in accordance with ASC 205-20. We recognized a $1.7 million tax provision adjustment related to deferred taxes, during the year ended December 31, 2023, that was attributable to the discontinued operations.
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Acquisition |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition Novan On September 27, 2023, we closed the transaction to acquire certain assets of Novan, Inc. (“Novan”) pursuant to the agreement we entered into with Novan on July 17, 2023 for $15.0 million in cash (which agreement contemplated Novan filing for bankruptcy relief) and provide up to $15.0 million in debtor-in-possession (“DIP”) financing inclusive of a $3.0 million bridge loan funded on the same day. Novan filed for Chapter 11 reorganization on July 17, 2023. On September 27, 2023, the bankruptcy court approved our $12.2 million bid to purchase from Novan its lead product candidate berdazimer gel, 10.3%, all other assets related to the NITRICIL technology platform and the rights to one commercial stage asset. The remaining commercial assets of Novan will be sold to other parties. The approved $12.2 million bid was credited to the $15.0 million DIP financing, with the balance of $2.8 million and accrued interest repaid to us. The acquisition was accounted for as business combination. We recorded $3.1 million of acquisition-related costs for legal, due diligence and other costs in connection with the acquisition within operating expenses in our condensed consolidated statement of operations for the year ended December 31, 2023. During the three months ended March 31, 2024, we finalized purchase accounting for Novan acquisition. The following table sets forth an allocation of the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed, with the excess recorded to goodwill (in thousands):
None of the goodwill is deductible for tax purposes. Acquired intangible assets of $10.7 million related to core technology. The fair value of the core technology was based on the discounted cash flow method that estimated the present value of the potential royalties, milestones, and collaboration revenue streams derived from the licensing of the related technologies. These projected cash flows were discounted to present value using a discount rate of 29%. The fair value of the core technology is being amortized on a straight-line basis over the estimated useful life of 15 years. Acquired other liabilities of $13.7 million related to a royalty and milestone payments purchase agreement, entered by Novan in 2019 and assumed as part of the acquisition, which previously provided Novan $25.0 million of funding used primarily in the clinical development of berdazimer gel, 10.3%. Pursuant to the purchase agreement, Novan will pay ongoing quarterly payments, calculated based on an applicable percentage per product of any upfront fees, milestone payments, royalty payments or equivalent payments received by Novan pursuant to any out-license agreement, net of any upfront fees, milestone payments, royalty payments or equivalent payments paid by Novan to third parties pursuant to any agreements under which Novan has in-licensed intellectual property with respect to such products. If Novan decides to commercialize any product on its own following regulatory approval, as opposed to commercializing through an out-license agreement or other third-party arrangement, Novan will be obligated to pay a low single digits royalty on net sales of such products. This contract liability was fair valued based on the discounted cash flow method that estimated the present value of the potential royalties, milestones, and collaboration revenue streams derived from the related programs mentioned above, by applying a discount rate of 14.0% (revenue risk-adjusted discount rate).
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Spin-off of OmniAb |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Spin-off of OmniAb | Sale of Pelican Business and Investment in Primrose Bio On September 18, 2023, we entered into a merger agreement, pursuant to which our subsidiary, Pelican Technology Holdings, Inc. (“Pelican”) became a wholly owned subsidiary of Primrose Bio. Primrose Bio is a private company focused on synthetic biology. Pelican has developed technology related to PET (protein expression technology) and PelicCRM197 (vaccine material), and has property and equipment, as well as leased property in San Diego, CA. As part of the transaction, we received 2,146,957 common shares, 4,278,293 preferred shares and 474,746 restricted shares of Primrose Bio. Simultaneous with the merger, we entered into a purchase and sale agreement with Primrose Bio and contributed $15.0 million in exchange for 50.0% of potential development milestones and certain commercial milestones from two contracts previously entered into by Primordial Genetics. In addition, starting January 1, 2025, we will receive 25% of sales revenue of PeliCRM197 above $3.0 million and 35% of all PeliCRM197 licensing revenue in perpetuity. We retained contractual relationships utilizing the Pelican Expression Technology, including the commercial royalty rights to Jazz’s Rylaze, Merck’s Vaxneuvance and V116 vaccines, Alvogen’s Teriparatide, Serum Institute of India’s vaccine programs, including Pneumosil and MenFive vaccines, among others. We determined that the sale of Pelican meets the definition of a deconsolidation of a business. Net assets sold together with allocated goodwill and cash consideration paid were as follows (in thousands):
Fair value of the consideration received includes the following (in thousands):
Goodwill allocated to the selling business based on the relative fair value of the Pelican business and Ligand that was written off was $4.1 million, resulting in a $2.1 million gain on sale of Pelican recorded to income (loss) from operations for the year ended December 31, 2023. Transaction costs of $1.2 million were allocated to the equity method investment and equity securities based on the relative fair value. As described above, we will receive 25% of sales revenue of PeliCRM197 above $3.0 million and 35% of all PeliCRM197 licensing revenue in perpetuity. T onsideration under the loss recovery model and they will be measured based on the gain contingency model under ASC 450, Contingencies, and thus, will be recognized as the underlying contingencies are resolved. In addition, we will receive 50.0% of potential development milestones and certain commercial milestones from two contracts previously entered into by Primordial Genetics. The considerations were recognized as derivative assets with a fair value of $3.2 million, at the disposition date, which was included under other long-term asset in our condensed consolidated balance sheet. They are recognized as derivative assets under ASC 815, Derivatives and Hedging, as they have two underlyings (development and commercial milestones) and (i) the commercial milestones are dependent on the development milestones and (ii) the commercial milestone underlying is not determined to be predominate. The derivative assets are recorded at fair value as of September 18, 2023, and will be marketed to fair value at each reporting period going forward. During the three months ended March 31, 2024, a gain of $0.2 million was recorded to market the derivative assets to fair value. Any change in fair value is recorded to other non-operating income (expense) in our consolidated statement of operations. For additional information, see Note 6, Fair Value Measurement. Investment in Primrose Bio We account for our common stock investment in Primrose Bio under the equity method as we have the ability to exercise significant influence over its operating and financial results. In applying the equity method, we record the investment at fair value. Our proportionate share of net loss of Primrose Bio is recorded in our consolidated statements of operations. Our equity method investments are reviewed for indicators of impairment at each reporting period and are written down to fair value if there is evidence of a loss in value that is other-than-temporary. Our share of the net loss of Primrose Bio for three months ended March 31, 2024 was $2.4 million, which reduced Ligand's equity method investment accordingly. Any income of loss from our equity method investments are recorded to other non-operating income (expense) in our consolidated statement of operations. We determined that the Series A preferred stock investment in Primrose Bio did not have a readily determinable fair value and therefore elected the measurement alternative in ASC 321 to subsequently record the investment at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. When fair value becomes determinable, from observable price changes in orderly transactions, our investment will be marked to fair value. There have been no observable price changes or impairments identified for the three months ended March 31, 2024. During the fourth quarter of 2023, our President and Chief Operating Officer, Matt Korenberg, became a board member of Primrose Bio. Spin-off of OmniAbOn March 23, 2022, we entered into the Separation Agreement to separate our OmniAb Business and the Merger Agreement, pursuant to which APAC would combine with OmniAb, and acquire Ligand's OmniAb Business, in a Reverse Morris Trust transaction (collectively, the “Transactions”). After the closing date of the Transactions on November 1, 2022, the historical financial results of OmniAb have been reflected in our consolidated financial statements as discontinued operations under GAAP for all periods presented through the date of the Distribution. Pursuant to the Transaction Agreements, Ligand contributed to OmniAb cash and certain specific assets and liabilities constituting the OmniAb Business. Pursuant to the Distribution, Ligand distributed on a pro rata basis to its shareholders as of October 26, 2022 shares of the common stock of OmniAb representing 100% of Ligand’s interest in OmniAb. Immediately following the Distribution, Merger Sub merged with and into OmniAb, with OmniAb continuing as the surviving company in the merger and as a wholly owned subsidiary of New OmniAb. The entire transaction was completed on November 1, 2022, and following the merger, New OmniAb is an independent, publicly traded company whose common stock trades on Nasdaq under the symbol “OABI.” After the Distribution, we do not beneficially own any shares of common stock in OmniAb and no longer consolidate OmniAb into our financial results for periods ending after November 1, 2022. Discontinued operations In connection with the merger, the Company determined its antibody discovery business qualified for discontinued operations accounting treatment in accordance with ASC 205-20. We recognized a $1.7 million tax provision adjustment related to deferred taxes, during the year ended December 31, 2023, that was attributable to the discontinued operations.
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Financial Royalty Assets, net (formerly known as Commercial License Rights) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Royalty Assets, net (formerly known as Commercial License Rights) | Financial Royalty Assets, net (formerly known as Commercial License Rights) Financial royalty assets consist of the following (in thousands):
(1) The amounts of allowance include cumulated allowance for changes in expected cash flows and cumulated allowance for current expected credit losses. (2) The amounts include $2.6 million current portion of Elutia financial royalty assets which represents an estimation for current quarter royalty receipts that are collected during the subsequent quarter. This portion is presented in other current assets on our condensed consolidated balance sheet as of March 31, 2024. Financial royalty assets represent a portfolio of future milestone and royalty payment rights acquired from Selexis, S.A. (“Selexis”) in April 2013 and April 2015, CorMatrix Cardiovascular, Inc. (“CorMatrix”) in May 2016, which was later acquired by Aziyo (Aziyo changed its corporate name to Elutia Inc. (“Elutia”) in September 2023) in 2017, Ovid Therapeutics Inc. (“Ovid”) in October 2023, Tolerance Therapeutics, Inc. (“Tolerance Therapeutics”) in November 2023, and from certain ensifentrine inventors in March 2024. There was no impairment loss for the three months ended March 31, 2024 and 2023. Elutia Agreement In 2016, Ligand entered into a purchase agreement to acquire certain financial royalty assets from CorMatrix. In 2017, CorMatrix sold its marketed products to Elutia where Elutia assumed the Ligand royalty obligation. In 2017, we amended the terms of the royalty agreement with Elutia where we received $10 million to buydown the royalty rates on the products CorMatrix sold to Elutia (the “CorMatrix Asset Sale”). Per the amended agreement with Elutia, we will receive a 5% royalty, with certain annual minimum payments, on the products Elutia acquired in the CorMatrix Asset Sale and up to $10 million of milestones tied to cumulative net sales of these products. The royalty agreement will terminate on May 31, 2027. During 2023, due to Elutia's nonpayment of the minimum payments over several quarters, we placed the Elutia asset on the non-accrual method. During the three months ended March 31, 2024, the Company executed an amendment to our agreement with Elutia which allowed us to reliably estimate future cash flows. As such, the Elutia asset was switched from the non-accrual method to the effective interest method during the three months ended March 31, 2024. As of March 31, 2024, we further considered the current and expected future economic and market conditions, current company performance and recent payments received from Elutia, and recorded a $3.0 million reduction to Elutia allowance of expected credit loss. This credit loss adjustment was recorded as a gain in general and administrative expense in our consolidated statement of operations for the three months ended March 31, 2024. Soticlestat Agreement In October 2023, we made an investment of $30 million to acquire a 13% portion of the royalties and milestones owed to Ovid Therapeutics related to the potential approval and commercialization of soticlestat. As soticlestat is in Phase 3 clinical trials, management has placed the investment on the non-accrual method until we are able to reliably estimate future cash flows. TZIELD Agreement In November 2023, we acquired Tolerance Therapeutics for $20 million in cash. Tolerance Therapeutics is a holding company, owned by the inventors of TZIELD (teplizumab), and is owed a royalty of less than 1% on worldwide net sales. TZIELD is marketed by Sanofi in 2023. Due to the early stages of TZIELD's commercialization, management has placed the investment on the non-accrual method until we are able to reliably estimate future cash flows. Ensifentrine Inventors Agreements In March 2024, we acquired future milestone and royalty rights related to ensifentrine from certain ensifentrine inventors for a total of $3.8 million. Such future milestones and royalties will be due from Verona Pharma plc (Nasdaq: VRNA) who anticipates a PDUFA action date of June 26, 2024 for review of ensifentrine for the maintenance treatment of patients with chronic obstructive pulmonary disease (“COPD”). If approved, ensifentrine is planned for a commercial launch by Verona in the U.S. market in the second half of 2024. As FDA approval is not yet obtained, management has placed the investment on the non-accrual method until we are able to reliably estimate future cash flows.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured on a Recurring Basis The following table presents the hierarchy for our assets and liabilities measured at fair value (in thousands):
(1) Excluding our investment in Viking, corporate equity securities, and US government securities, our short-term investments in marketable debt and equity securities are classified as available-for-sale securities based on management's intentions and are at level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Short-term investments in bond funds are valued at their net asset value (NAV) on the last day of the period. We have classified marketable securities with original maturities of greater than one year as short-term investments based upon our ability and intent to use any and all of those marketable securities to satisfy the liquidity needs of our current operations. In addition, we had investment in warrants resulting from Seelos Therapeutics Inc. milestone payments that were settled in shares during the first quarter of 2019 and were at level 3 of the fair value hierarchy, based on Black-Scholes value estimated by management on the last day of the period. This investment in warrants expired in January 2024. (2) In connection with the Purchase and Sale Agreement with Primrose Bio, we will receive 50.0% of potential development milestones and certain commercial milestones from two contracts previously entered into by Primordial Genetics. The considerations were recognized as derivative assets included under other long-term asset in our condensed consolidated balance sheet. They are recognized as derivative assets under ASC 815, Derivatives and Hedging, as they have two underlyings (development and commercial milestones) and (i) the commercial milestones are dependent on the development milestones and (ii) the commercial milestone underlying is not determined to be predominate. The fair value of the derivative assets was determined using a discounted cash flow approach using a discount rate inline with the stages of the underlying contracts. (3) In connection with our acquisition of Metabasis in January 2010, we issued Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs entitle Metabasis stockholders to cash payments as frequently as every six months as cash is received by us from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The liability for the CVRs is determined using quoted prices in a market that is not active for the underlying CVR. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. Several of the Metabasis drug development programs have been outlicensed to Viking, including VK2809. VK2809 is a novel selective TR-β agonist with potential in multiple indications, including hypercholesterolemia, dyslipidemia, NASH, and X-ALD. Under the terms of the agreement with Viking, we may be entitled to up to $375 million of development, regulatory and commercial milestones and tiered royalties on potential future sales including a $10 million payment upon initiation of a Phase 3 clinical trial. During the three months ended March 31, 2024, we adjusted the balance of the Metabasis CVR liability by decreasing $0.1 million to mark to market. A reconciliation of the level 3 financial instruments as of March 31, 2024 is as follows (in thousands):
Assets Measured on a Non-Recurring Basis We apply fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to our goodwill, indefinite-lived intangible assets and long-lived assets. We evaluate goodwill and indefinite-lived intangible assets annually for impairment and whenever circumstances occur indicating that goodwill might be impaired. We determine the fair value of our reporting unit based on a combination of inputs, including the market capitalization of Ligand, as well as Level 3 inputs such as discounted cash flows, which are not observable from the market, directly or indirectly. We determine the fair value of our indefinite-lived intangible assets using the income approach based on Level 3 inputs. There was no impairment of our goodwill, indefinite-lived assets, or long-lived assets recorded during the three months ended March 31, 2024 and March 31, 2023. Fair Value of Financial Instruments Our cash and cash equivalents, accounts receivable, other current assets, financial royalty assets, accounts payable, accrued liabilities, deferred revenue, current operating lease liabilities, current finance lease liabilities and Novan other long-term liabilities are financial instruments and are recorded at cost in the consolidated balance sheets. The estimated fair value of these financial instruments approximates their carrying value due to their short-term nature.
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Debt |
3 Months Ended |
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Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt Revolving Credit Facility On October 12, 2023, we entered into a $75.0 million revolving credit facility (the “Revolving Credit Facility”) with Citibank, N.A. as the Administrative Agent (as defined in the Credit Agreement). We, our material domestic subsidiaries, as Guarantors (as defined in the Credit Agreement), and the Lenders (as defined in the Credit Agreement) entered into a credit agreement (the “Credit Agreement”) with the Administrative Agent, under which the Lenders, the Swingline Lender and the L/C Issuer (each as defined in the Credit Agreement) agreed to make loans and other financial accommodations to us in an aggregate amount of up to $75.0 million. Borrowings under the Revolving Credit Facility accrue interest at a rate equal to either Term Secured Overnight Financing Rate ("Term SOFR") or a specified base rate plus an applicable margin linked to our leverage ratio, ranging from 1.75% to 2.50% per annum for Term SOFR loans and 0.75% to 1.50% per annum for base rate loans. The Revolving Credit Facility is subject to a commitment fee payable on the unused Revolving Credit Facility commitments ranging from 0.30% to 0.45%, depending on our leverage ratio. During the term of the Revolving Credit Facility, we may borrow, repay and re-borrow amounts available under the Revolving Credit Facility, subject to voluntary reductions of the swing line, letter of credit and revolving credit commitments. Borrowings under the Credit Agreement are secured by certain of our collateral and that of the Guarantors. In specified circumstances, additional guarantors are required to be added. The Credit Agreement contains customary affirmative and negative covenants, including certain financial maintenance covenants, and events of default applicable to us. In the event of violation of the representations, warranties and covenants made in the Credit Agreement, we may not be able to utilize the Revolving Credit Facility or repayment of amounts owed thereunder could be accelerated. As of March 31, 2024, we had $74.4 million in available borrowing under the Revolving Credit Facility, after utilizing $0.6 million for letter of credit. The maturity date of the Revolving Credit Facility is October 12, 2026. As of March 31, 2024, there were no events of default or violation of any covenants under our financing obligations.
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Income Tax |
3 Months Ended |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Income Tax Our effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in various state jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses, stock award activities and other permanent differences between income before income taxes and taxable income. The effective tax rate for continuing operations for the three months ended March 31, 2024 and 2023 was 24.1% and 21.5%, respectively. The variance from the U.S. federal statutory tax rate of 21% for the three months ended March 31, 2024 was primarily due to Internal Revenue Code Section 162(m) limitation on deduction for officer compensation, non-deductible incentive stock option (ISO) related stock compensation expense, which were partially offset by foreign derived intangible income tax benefit during the period. The variance from the U.S. federal statutory tax rate of 21% for the three months ended March 31, 2023 was primarily due to Internal Revenue Code Section 162(m) limitation on deduction for officer compensation, non-deductible ISO related stock compensation expense, which were partially offset by foreign derived intangible income tax benefit during the period. during the period.
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Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity We grant options and awards to employees and non-employee directors pursuant to a stockholder approved stock incentive plan, which is described in further detail in Note 10, Stockholders’ Equity, of the Notes to Consolidated Financial Statements in our 2023 Annual Report. The following is a summary of our stock option and restricted stock activity and related information:
As of March 31, 2024, outstanding options to purchase 1.6 million shares were exercisable with a weighted average exercise price per share of $67.37. Employee Stock Purchase Plan The price at which common stock is purchased under the Amended Employee Stock Purchase Plan, or ESPP, is equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. As of March 31, 2024, 30,801 shares were available for future purchases under the ESPP. At-the Market Equity Offering Program On September 30, 2022, we filed a registration statement on Form S-3 (the “Shelf Registration Statement”), which became automatically effective upon filing, covering the offering of common stock, preferred stock, debt securities, warrants and units. On September 30, 2022, we also entered into an At-The-Market Equity Offering Sales Agreement (the “Sales Agreement”) with Stifel, Nicolaus & Company, Incorporated (the “Agent”), under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100.0 million in “at the market” offerings through the Agent (the “ATM Offering”). The Shelf Registration Statement included a prospectus covering the offering, issuance and sale of up to $100.0 million of our common stock from time to time through the ATM Offering. The shares to be sold under the Sales Agreement may be issued and sold pursuant to the Shelf Registration Statement. As of March 31, 2024, we have not issued any shares of common stock in the ATM Offering. Share Repurchases Our Board of Directors (the “Board”) has approved a stock repurchase program authorizing, but not requiring, the repurchase of up to $50.0 million of our common stock from time to time through April 2026. We expect to acquire shares, if at all, primarily through open-market transactions in accordance with all applicable requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing and amount of repurchase transactions will be determined by management based on our evaluation of market conditions, share price, legal requirements and other factors. Authorization to repurchase $50.0 million of our common stock remained available as of March 31, 2024.
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Commitment and Contingencies |
3 Months Ended |
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Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | Commitment and Contingencies Legal Proceedings We record an estimate of a loss when the loss is considered probable and estimable. Where a liability is probable and there is a range of estimated loss and no amount in the range is more likely than any other number in the range, we record the minimum estimated liability related to the claim in accordance with ASC 450, Contingencies. As additional information becomes available, we assess the potential liability related to our pending litigation and revises our estimates. Revisions in our estimates of potential liability could materially impact our results of operations. On October 31, 2019, we received three civil complaints filed in the U.S. District Court for the Northern District of Ohio on behalf of several Indian tribes. The Northern District of Ohio is the Court that the Judicial Panel on Multi-District Litigation (“JPML”) has assigned more than one thousand civil cases which have been designated as a Multi-District Litigation (“MDL”) and captioned In Re: National Prescription Opiate Litigation. The allegations in these complaints focus on the activities of defendants other than the Company and no individualized factual allegations have been advanced against us in any of the 3 complaints. We reject all claims raised in the complaints and intend to vigorously defend these matters. From time to time, we may also become subject to other legal proceedings or claims arising in the ordinary course of our business. We currently believe that none of the claims or actions pending against us is likely to have, individually or in aggregate, a material adverse effect on our business, financial condition or results of operations. Given the unpredictability inherent in litigation, however, we cannot predict the outcome of these matters.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On May 7, 2024, we announced a $75 million royalty financing agreement (the “Agenus Agreement”) with Agenus Inc. (“Agenus”). Under the terms of the Agenus Agreement, we will receive (i) 18.75% of the licensed royalties and 31.875% of the future licensed milestones paid to Agenus on six-partnered oncology programs, including BMS-986442 (Bristol Myers Squibb), AGEN2373 (Gilead Sciences), INCAGN2385 and INCAGN2390 (Incyte), MK-4830 (Merck), and UGN-301 (UroGen Pharma), and (ii) a synthetic 2.625% royalty on future global net sales of Agenus’ novel immuno-oncology botensilimab in combination with balstilimab (“BOT/BAL”) program, collectively subject to certain events which will adjust the royalty and milestone percentages paid to us. In addition, we have the option to commit an additional $25 million in the same assets on a pro rata basis. We have also agreed to allow Agenus to raise up to an additional $125 million bringing the total syndicated purchase price up to an aggregate of $200 million. As part of the Agenus Agreement, Agenus will grant us security over certain assets related to the programs included in the Agenus Agreement, subject to certain customary exceptions. Closing of the transaction is subject to customary conditions, including execution of customary ancillary documents for a transaction of this type. The transaction is expected to close in May 2024. In connection with entry into the Agenus Agreement, Agenus issued us a warrant (“Warrant”) to purchase 867,052 shares of its common stock, at an exercise price equal to $17.30. The exercise price of the Warrant and the number of shares issuable upon exercise of the Warrant are subject to adjustments for stock splits, combinations, stock dividends or similar events. The Warrant is exercisable until May 6, 2029. Agenus’ BOT/BAL program received Fast Track Designation from the U.S. FDA in April 2023 for patients with metastatic, refractory colorectal cancer that is not microsatellite instability high or deficient mismatch repair, who do not have liver metastases, and who failed first and second line standard of care treatments. The capital will support Agenus’ upcoming Phase 3 BOT/BAL colorectal cancer trial and other key commercialization activities.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net income | $ 86,139 | $ 41,949 |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business We are a biopharmaceutical company enabling scientific advancement through supporting the clinical development of high-value medicines. We do this by providing financing, licensing our technologies or both. We operate in one reportable segment: development and licensing of biopharmaceutical assets.
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Basis of Presentation | Basis of Presentation Our unaudited condensed consolidated financial statements include the financial statements of Ligand and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We have included all adjustments, consisting only of normal recurring adjustments, which we considered necessary for a fair presentation of our financial results. These unaudited condensed consolidated financial statements and accompanying notes should be read together with the audited consolidated financial statements included in our 2023 Annual Report. Interim financial results are not necessarily indicative of the results that may be expected for the full year.
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Reclassification | Reclassification Certain reclassifications have been made to the previously issued audited consolidated financial statements to conform with the current period presentation. Specifically, within the consolidated balance sheet as of December 31, 2023, our commercial license and other economic rights line has been reclassified to long-term portion of financial royalty assets, net, and to other assets, and a portion of other investments has been reclassified from other assets. In addition, within the unaudited condensed consolidated statement of operations for the three months ended March 31, 2023, royalties have been reclassified to revenue from intangible royalty assets, and a portion of the contract revenue has been reclassified to income from financial royalty assets.
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Discontinued Operations | Discontinued Operations The Company determined that the spin-off of the OmniAb Business in November 2022 met the criteria for classification as a discontinued operation in accordance with ASC Subtopic 205-20, Discontinued Operations (“ASC 205-20”). Accordingly, the accompanying condensed consolidated financial statements have been updated to present the results of all discontinued operations reported as a separate component of loss in the condensed consolidated statements of operations and comprehensive loss (see Note 4, Spin-off of OmniAb). All disclosures have been adjusted to reflect continuing operations.
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Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates.
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Revenue and Other Income | Revenue and Other Income Our revenue is generated primarily from royalties on sales of products commercialized by our partners, Captisol material sales, and contract revenue for license fees, regulatory and sales based milestone payments. Other operating income is primarily related to milestone income received for financial royalty assets that have been fully amortized or where there is no underlying asset recognized on the consolidated balance sheets. We apply the following five-step model in accordance with ASC 606, Revenue from Contracts with Customers, in order to determine the revenue: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Revenue from Intangible Royalty Assets We receive royalty revenue from intangible royalty assets on sales by our partners of products covered by patents that we or our partners own under contractual agreements. We do not have future performance obligations under these license arrangements. We generally satisfy our obligation to grant intellectual property rights on the effective date of the contract. However, we apply the royalty recognition constraint required under the guidance for sales-based royalties which requires a royalty to be recorded no sooner than the underlying sale occurs. Therefore, royalties on sales of products commercialized by our partners are recognized in the quarter the product is sold. Our partners generally report sales information to us on a one quarter lag. Thus, we estimate the expected royalty proceeds based on an analysis of historical experience and interim data provided by our partners including their publicly announced sales. Differences between actual and estimated royalty revenues, which have not been material, are adjusted in the period in which they become known, typically the following quarter. Income from Financial Royalty Assets Effective January 1, 2024, we introduced a new line item “income from financial royalty assets”, which was included in “contract revenue” in prior periods. Accordingly, the prior year period amounts have been reclassified to align with the current period presentation. We recognize income from financial royalty assets when there is a reasonable expectation about the timing and amount of cash flows expected to be collected. Income is calculated by multiplying the carrying value of the financial royalty asset by the periodic effective interest rate. We account for financial royalty assets related to developmental pipeline or recently commercialized products on a non-accrual basis. Developmental pipeline products are non-commercialized, non-approved products that require FDA or other regulatory approval, and thus have uncertain cash flows. Newly commercialized products typically do not have an established reliable sales pattern, and thus have uncertain cash flows. Captisol Sales Revenue from Captisol sales is recognized when control of Captisol material is transferred or intellectual property license rights are granted to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those products or rights. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. For Captisol material or intellectual property license rights, we consider our performance obligation satisfied once we have transferred control of the product or granted the intellectual property rights, meaning the customer has the ability to use and obtain the benefit of the Captisol material or intellectual property license right. We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. Sales tax and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. We have elected to recognize the cost of freight and shipping when control over Captisol material has transferred to the customer as an expense in cost of Captisol. We expense incremental costs of obtaining a contract when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We did not incur any incremental costs of obtaining a contract during the periods reported. Contract Revenue and Other Income Our contracts with customers often include variable consideration in the form of contingent milestone payments. We include contingent milestone payments in the estimated transaction price when it is probable a significant reversal in the amount of cumulative revenue recognized will not occur. These estimates are based on historical experience, anticipated results and our best judgment at the time. If the contingent milestone payment is based on sales, we apply the royalty recognition constraint and record revenue when the underlying sale has taken place. Significant judgments must be made in determining the transaction price for our sales of intellectual property. Because of the risk that products in development with our partners will not reach development milestones or receive regulatory approval, we generally recognize any contingent payments that would be due to us upon the development milestone or regulatory approval. Depending on the terms of the arrangement, we may also defer a portion of the consideration received if we have to satisfy a future obligation, which typically occurs with our contracts for R&D services. In general, for R&D services, which has not been significant, we recognize revenue over time and measure our progress using an input method. The input methods we use are based on the effort we expend or costs we incur toward the satisfaction of our performance obligation. Some customer contracts are sublicenses which require that we make payments to an upstream licensor related to license fees, milestones and royalties which we receive from customers. In such cases, we evaluate the determination of gross revenue as a principal versus net revenue as an agent reporting based on each individual agreement. Other income is primarily related to milestone income received for financial royalty assets that have been fully amortized or where there is no underlying asset recognized on the consolidated balance sheets. Deferred Revenue Depending on the terms of the arrangement, we may also defer a portion of the consideration received because we have to satisfy a future obligation. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the consolidated balance sheet. Except for royalty revenue and certain service revenue, we generally receive payment at the point we satisfy our obligation or soon after. Therefore, we do not generally carry any contract asset balance. Any fees billed in advance of being earned are recorded as deferred revenue.
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Short-term Investments | Gain (loss) from short-term investments in our condensed consolidated statements of operations includes both realized and unrealized gain (loss) from our short-term investments in public equity and warrant securities. Allowances are recorded for available-for-sale debt securities with unrealized losses. This limits the amount of credit losses that can be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The provisions of the credit losses standard did not have a material impact on our available-for-sale debt securities during the three months ended March 31, 2024. Our investment policy is capital preservation and we only invest in U.S.-dollar denominated investments.
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Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Our accounts receivable arise primarily from sales on credit to customers. We establish an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The allowance is determined by using the loss-rate method, which requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivable. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables and credit and liquidity quality indicators for industry groups, customer classes or individual customers.
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Inventory | Inventory Inventory, which consists of finished goods, is stated at the lower of cost or net realizable value. We determine cost using the specific identification method. We analyze our inventory levels periodically and write down inventory to net realizable value if it has become obsolete, has a cost basis in excess of its expected net realizable value or is in excess of expected requirements.
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Financial Royalty Assets, net (formerly known as Commercial License Rights) | Financial Royalty Assets, net (formerly known as Commercial License Rights) Financial royalty assets (formerly known as “Commercial License Rights”) represent a portfolio of future milestone and royalty payment rights acquired that are passive in nature (i.e., we do not own the intellectual property or have the right to commercialize the underlying products). Although a financial royalty asset does not have the contractual terms typical of a loan (such as contractual principal and interest), we account for financial royalty assets under ASC 310, Receivables. Our financial royalty assets are classified similar to loans receivable and are measured at amortized cost using the prospective effective interest method described in ASC 835-30 Imputation of Interest. The effective interest rate is calculated by forecasting the expected cash flows to be received over the life of the asset relative to the initial invested amount. The effective interest rate is recalculated in each reporting period as the difference between expected cash flows and actual cash flows are realized and as there are changes to expected future cash flows. The gross carrying value of a financial royalty asset is made up of the opening balance, or net purchase price for a new financial royalty asset, which is increased by accrued interest income (except for assets under the non-accrual method) and decreased by cash receipts in the period to arrive at the ending balance. We evaluate financial royalty assets for recoverability on an individual basis by comparing the effective interest rate at each reporting date to that of the prior period. If the effective interest rate is lower for the current period than the prior period, and if the gross cash flows have declined (expected and collected), we record provision expense for the change in expected cash flows. The provision is measured as the difference between the financial royalty asset’s amortized cost basis and the net present value of the expected future cash flows, calculated using the prior period’s effective interest rate. In addition to the above allowance, we recognize an allowance for current expected credit losses under ASC 326, Financial Instruments – Credit Losses on our financial royalty assets. The credit rating, which is primarily based on publicly available data and updated quarterly, is the primary credit quality indicator used to determine the credit loss provision. The carrying value of financial royalty assets is presented net of the cumulative allowance for changes in expected future cash flows and expected credit losses. The initial amount and subsequent revisions in allowances for changes in expected future cash flows and expected credit losses are recorded as part of general and administrative expenses on the consolidated statements of operations. When we are reasonably certain that a part of a financial royalty asset’s net carrying value (or all of it) is not recoverable, we recognize a permanent impairment which is recorded as part of general and administrative expenses on the consolidated statements of operations. To the extent there was an allowance previously recorded for this asset, the amount of such impairment is written off against the allowance at the time that such a determination is made. Any future recoveries from such impairment are recognized when cash is collected. The current portion of financial royalty assets represents an estimation for current quarter royalty receipts which are collected during the subsequent quarter. This portion is presented in other current assets on our consolidated balance sheets, net of the allowance for expected credit losses. For additional information, see Note 5, Financial Royalty Assets, net (formerly known as Commercial License Rights).
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Equity Method Investment | Equity Method Investment Investments that we do not consolidate but in which we have significant influence over the operating and financial policies of the investee are classified as equity method investments and are accounted for using the equity method of accounting. In applying the equity method of accounting, investments are initially recorded at cost and are subsequently adjusted based on our proportionate share of net income or loss of the investee, net of any distributions received from the investee.
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Other Investments | Other Investments Other investments represent our investments to equity securities of third parties in which we do not have control or significant influence. All our equity securities investments do not have a readily determinable or estimable fair values and are measured using the measurement alternative, which is cost less impairment, if any, and adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer.
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Other Assets | Other Assets Other assets include economic rights related to 2023 expansion of our strategic partnership with Palvella to accelerate Phase 3 development of QTORIN rapamycin for the treatment of Microcystic Lymphatic Malformations (“Microcystic LMs”). According to the terms of the second amendment to the development funding and royalties agreement, Palvella received an upfront payment of $5 million from Ligand. In return for the upfront payment, among other contractual changes, the tiered royalty payable by Palvella to Ligand was increased to between 8.0% and 9.8% based on annual aggregate worldwide net sales of QTORIN rapamycin. We are not obligated to provide additional funding to Palvella for development or commercialization of QTORIN. We determined the economic rights related to Palvella should be characterized as a funded research and development arrangement, thus we account for them in accordance with ASC 730-20, Research and Development Arrangement, and reduce our asset as the funds are expended by Palvella.
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Share-Based Payment Arrangement | Share-Based Compensation Share-based compensation expense for awards to employees and non-employee directors is a non-cash expense and is recognized on a straight-line basis over the vesting period.
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Net Income Per Share | Net Income Per Share Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of shares issuable under the 2023 Notes, stock options and restricted stock. Although we paid off the 2023 Notes in May 2023, it would have a dilutive impact when the average market price of our common stock exceeds the maximum conversion price during the three months ended March 31, 2023. It was our intent and policy to settle conversions through combination settlement, which involved payment in cash equal to the principal portion and delivery of shares of common stock for the excess of the conversion value over the principal portion. Potentially dilutive common shares from stock options and restricted stock are determined using the average share price for each period under the treasury stock method. In addition, the following amounts are assumed to be used to repurchase shares: proceeds from exercise of stock options and the average amount of unrecognized compensation expense for the awards.
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Accounting Standards Not Yet Adopted | Accounting Standards Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The update, among other things, requires disclosure of certain significant segment expenses. We will adopt the updated accounting guidance in our Annual Report on Form 10-K for the year ending December 31, 2024. We do not expect the adoption of the new accounting guidance will have a material impact to our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update requires a public business entity to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. Adoption of the ASU allows for either the prospective or retrospective application of the amendment and is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company has not yet completed its assessment of the impact of ASU 2023-09 on our consolidated financial statements. We do not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on our consolidated financial statements or disclosures.
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Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Source | The following table represents disaggregation of royalties, Captisol and contract revenue (in thousands):
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Schedule of Short-Term Investments | Our short-term investments consist of the following at March 31, 2024 and December 31, 2023 (in thousands):
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Schedule of Available-for-Sale Debt Securities | The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands):
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Schedule of Goodwill and Other Identifiable Intangible Assets | Goodwill and other identifiable intangible assets consist of the following (in thousands):
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Schedule of Other Investment | Other investments consist of the following (in thousands):
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Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands):
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Schedule of Other Long Term Liabilities | Other long-term liabilities consist of the following (in thousands):
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Schedule of Accounting for Share-Based Compensation | The following table summarizes share-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands):
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Schedule of Fair-Value Options Awarded to Employees and Directors | The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:
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Schedule of Computation of Basic and Diluted Earnings per Share | The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands):
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Sale of Pelican Business and Investment in Primrose Bio (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts of Major Classes of Assets and Liabilities Related to Assets Held for Sale | We determined that the sale of Pelican meets the definition of a deconsolidation of a business. Net assets sold together with allocated goodwill and cash consideration paid were as follows (in thousands):
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Schedule of Fair Value of the Consideration | Fair value of the consideration received includes the following (in thousands):
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Acquisition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table sets forth an allocation of the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed, with the excess recorded to goodwill (in thousands):
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Financial Royalty Assets, net (formerly known as Commercial License Rights) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Royalty Assets | Financial royalty assets consist of the following (in thousands):
(1) The amounts of allowance include cumulated allowance for changes in expected cash flows and cumulated allowance for current expected credit losses. (2) The amounts include $2.6 million current portion of Elutia financial royalty assets which represents an estimation for current quarter royalty receipts that are collected during the subsequent quarter. This portion is presented in other current assets on our condensed consolidated balance sheet as of March 31, 2024.
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value | The following table presents the hierarchy for our assets and liabilities measured at fair value (in thousands):
(1) Excluding our investment in Viking, corporate equity securities, and US government securities, our short-term investments in marketable debt and equity securities are classified as available-for-sale securities based on management's intentions and are at level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Short-term investments in bond funds are valued at their net asset value (NAV) on the last day of the period. We have classified marketable securities with original maturities of greater than one year as short-term investments based upon our ability and intent to use any and all of those marketable securities to satisfy the liquidity needs of our current operations. In addition, we had investment in warrants resulting from Seelos Therapeutics Inc. milestone payments that were settled in shares during the first quarter of 2019 and were at level 3 of the fair value hierarchy, based on Black-Scholes value estimated by management on the last day of the period. This investment in warrants expired in January 2024. (2) In connection with the Purchase and Sale Agreement with Primrose Bio, we will receive 50.0% of potential development milestones and certain commercial milestones from two contracts previously entered into by Primordial Genetics. The considerations were recognized as derivative assets included under other long-term asset in our condensed consolidated balance sheet. They are recognized as derivative assets under ASC 815, Derivatives and Hedging, as they have two underlyings (development and commercial milestones) and (i) the commercial milestones are dependent on the development milestones and (ii) the commercial milestone underlying is not determined to be predominate. The fair value of the derivative assets was determined using a discounted cash flow approach using a discount rate inline with the stages of the underlying contracts. (3) In connection with our acquisition of Metabasis in January 2010, we issued Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs entitle Metabasis stockholders to cash payments as frequently as every six months as cash is received by us from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The liability for the CVRs is determined using quoted prices in a market that is not active for the underlying CVR. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. Several of the Metabasis drug development programs have been outlicensed to Viking, including VK2809. VK2809 is a novel selective TR-β agonist with potential in multiple indications, including hypercholesterolemia, dyslipidemia, NASH, and X-ALD. Under the terms of the agreement with Viking, we may be entitled to up to $375 million of development, regulatory and commercial milestones and tiered royalties on potential future sales including a $10 million payment upon initiation of a Phase 3 clinical trial. During the three months ended March 31, 2024, we adjusted the balance of the Metabasis CVR liability by decreasing $0.1 million to mark to market.
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Schedule of Reconciliation of Level 3 Financial Instruments | A reconciliation of the level 3 financial instruments as of March 31, 2024 is as follows (in thousands):
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Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Plan Activity | The following is a summary of our stock option and restricted stock activity and related information:
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Schedule of Restricted Stock Activity | The following is a summary of our stock option and restricted stock activity and related information:
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Basis of Presentation and Summary of Significant Accounting Policies - Available-for-Sale Debt Securities by Contractual Maturity (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
|
---|---|
Amortized Cost | |
Within one year | $ 109,615 |
After one year through five years | 18,355 |
Total | 127,970 |
Fair Value | |
Within one year | 109,577 |
After one year through five years | 18,339 |
Total | $ 127,916 |
Basis of Presentation and Summary of Significant Accounting Policies - Other Investment (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Summary of Investment Holdings [Line Items] | ||
Other investments | $ 36,500 | $ 36,726 |
Equity securities in Primrose Bio | ||
Summary of Investment Holdings [Line Items] | ||
Other investments | 32,500 | 32,726 |
Neuritek warrants | ||
Summary of Investment Holdings [Line Items] | ||
Other investments | 3,000 | 3,000 |
Palvella Series C preferred stock | ||
Summary of Investment Holdings [Line Items] | ||
Other investments | $ 1,000 | $ 1,000 |
Basis of Presentation and Summary of Significant Accounting Policies - Accrued Liabilities and Other Long-Term Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Accrued Liabilities | ||
Compensation | $ 1,904 | $ 4,682 |
Subcontractor | 1,756 | 1,756 |
Professional fees | 2,736 | 2,394 |
Customer deposit | 621 | 621 |
Supplier | 276 | 303 |
Royalties owed to third parties | 1,252 | 900 |
Amounts owed to former licensees | 0 | 45 |
Acquisition related liabilities | 2,118 | 0 |
Other | 1,767 | 1,766 |
Accrued liabilities | $ 12,430 | $ 12,467 |
Basis of Presentation and Summary of Significant Accounting Policies - Other Long-term Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Unrecognized tax benefits | $ 14,047 | $ 14,039 |
Novan contract liability | 13,700 | 13,700 |
Other long-term liabilities | 33 | 19 |
Other long-term liabilities | $ 27,780 | $ 27,758 |
Basis of Presentation and Summary of Significant Accounting Policies - Accounting for Share-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Basis of Presentation | ||
Share-based compensation expense | $ 7,334 | $ 5,931 |
SBC - Research and development expenses | ||
Basis of Presentation | ||
Share-based compensation expense | 678 | 1,707 |
SBC - General and administrative expenses | ||
Basis of Presentation | ||
Share-based compensation expense | $ 6,656 | $ 4,224 |
Basis of Presentation and Summary of Significant Accounting Policies - Fair Value Valuation Assumptions (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Risk-free interest rate (as a percent) | 4.30% | 4.10% |
Dividend yield (as a percent) | 0.00% | 0.00% |
Expected volatility (as a percent) | 44.60% | 53.00% |
Expected term (years) | 4 years 8 months 12 days | 5 years 3 months 18 days |
Basis of Presentation and Summary of Significant Accounting Policies - Earnings (Loss) Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
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Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Weighted average shares outstanding (in shares) | 17,732 | 17,063 |
Dilutive potential common shares: | ||
Shares used to compute diluted income per share (in shares) | 18,122 | 17,974 |
Potentially dilutive shares excluded from calculation due to anti-dilutive effect (in shares) | 2,007 | 4,359 |
Restricted stock | ||
Dilutive potential common shares: | ||
Dilutive potential common shares (in shares) | 118 | 86 |
Stock Options | ||
Dilutive potential common shares: | ||
Dilutive potential common shares (in shares) | 272 | 341 |
2023 convertible senior notes | ||
Dilutive potential common shares: | ||
Dilutive potential common shares (in shares) | 0 | 484 |
Sale of Pelican Business and Investment in Primrose Bio - Net Asset (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Pelican Technology Holdings, Inc. $ in Thousands |
Sep. 18, 2023
USD ($)
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |
Property and equipment, net | $ 8,250 |
Intangible assets | 19,895 |
Other assets | 717 |
Operating lease right-of-use assets | 8,693 |
Finance lease right-of-use assets | 20 |
Accrued liabilities | (630) |
Deferred revenue | (495) |
Long-term operating lease liabilities | (8,445) |
Other liabilities | (74) |
Net assets sold | 27,931 |
Allocated goodwill | 4,132 |
Cash consideration paid | 15,000 |
Total | $ 47,063 |
Sale of Pelican Business and Investment in Primrose Bio - Fair Value of the Consideration (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Pelican Technology Holdings, Inc. $ in Thousands |
Sep. 18, 2023
USD ($)
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |
Cash consideration paid | $ 49,184 |
Equity method investment | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |
Cash consideration paid | 13,706 |
Equity securities | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |
Cash consideration paid | 32,278 |
Derivative assets | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |
Cash consideration paid | $ 3,200 |
Acquisition - Narrative (Details) - Novan, Inc. $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 27, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
|
Business Acquisition | ||
Cash payments for acquisition | $ 15,000 | |
Liabilities incurred | $ 15,000 | |
Acquired (as a percent) | 10.30% | |
Intangible assets acquired | $ 10,700 | |
Cash acquired from acquisition | $ 2,800 | |
Acquisition related costs | $ 3,100 | |
Discount rate used to value intangible assets acquired (as a percent) | 29.00% | |
Weighted-average estimated useful life of finite-lived intangible assets acquired (in years) | 15 years | |
Other liabilities | $ 13,700 | |
Research and development | $ 25,000 | |
Discount Rate | Valuation Technique, Discounted Cash Flow | ||
Business Acquisition | ||
Contingent liability measurement input (as a percent) | 0.14 | |
Core Technology | ||
Business Acquisition | ||
Intangible assets acquired | $ 12,200 | |
Bridge Loan | ||
Business Acquisition | ||
Liabilities incurred | $ 3,000 |
Acquisition - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 27, 2023 |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|---|
Business Acquisition | |||
Goodwill | $ 105,250 | $ 103,370 | |
Novan, Inc. | |||
Business Acquisition | |||
Restricted cash | $ 583 | ||
Property and equipment, net | 13,054 | ||
Operating lease right-of-use asset | 3,683 | ||
Other assets | 137 | ||
Deferred tax asset | 1,013 | ||
Intangible assets acquired | 10,700 | ||
Goodwill | 3,709 | ||
Deferred revenue | (4,508) | ||
Operating lease liabilities | (3,683) | ||
Other liabilities | (13,700) | ||
Cash paid for Novan, including restricted cash received | 10,988 | ||
DIP loan fees and interest | 1,162 | ||
Total consideration | $ 12,150 |
Spin-off of OmniAb - Narrative (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023
USD ($)
|
Oct. 26, 2022 |
|
Segment Reporting, Revenue Reconciling Item | ||
Deferred tax asset adjustment | $ (1.7) | |
Discontinued operations | ||
Segment Reporting, Revenue Reconciling Item | ||
Percentage of voting interests disposed (as a percent) | 1 |
Fair Value Measurements - Reconciliation of Level 3 Financial Instruments (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Assets | |
Beginning balance | $ 3,531 |
Fair value adjustments to derivative assets | 196 |
Ending balance | $ 3,727 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Investments |
Liabilities | |
Beginning balance | $ 320 |
Payments to CVR holders and other contingent payments | (150) |
Fair value adjustments to contingent liabilities | 48 |
Ending balance | $ 218 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Non Cash Change In Estimated Fair Value Of Contingent Value Rights |
Fair Value Measurements - Narrative (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Fair Value Disclosures [Abstract] | ||
Goodwill and intangible asset impairment | $ 0 | $ 0 |
Tangible asset impairment charges | $ 0 | $ 0 |
Income Tax (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (as a percent) | 24.10% | 21.50% |
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Sep. 30, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award | ||
Outstanding options that are exercisable (in shares) | 1,600,000 | |
Outstanding options that are exercisable, weighted average exercise price (in USD per share) | $ 67.37 | |
Employee Stock Purchase Plan | ||
Authorized stock repurchase amount | $ 50.0 | |
Remaining authorized stock repurchase amount | $ 50.0 | |
At-the Market Equity Offering | ||
Employee Stock Purchase Plan | ||
Sale of stock, authorized offering amount | $ 100.0 | |
Amended ESPP | ||
Employee Stock Purchase Plan | ||
Share purchase price as percent of market price (as a percent) | 85.00% | |
Shares available for future purchases (in shares) | 30,801 |
Commitment and Contingencies (Details) |
Oct. 31, 2019
complaint
|
---|---|
US District Court for the Northern District of Ohio | |
Loss Contingencies [Line Items] | |
Number of civil complaints filed against entity | 3 |
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