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Ligand (LGND) Beats on Q4 Earnings, Raises 2016 Outlook

Ligand Pharmaceuticals Inc.LGND reported fourth-quarter 2015 earnings of 52 cents per share, a penny above the Zacks Consensus Estimate and up 8.3% from the year-ago period.

Excluding the impact of non-cash stock-based compensation expense, earnings in the fourth quarter came in at 66 cents per share, up 10% from a year ago.

Total revenue in the quarter declined 7.8% year over year to $21.2 million and missed the Zacks Consensus Estimate of $24.6 million.

Full-year earnings shot up almost 181% to $2.78 per share while revenues increased 11.4% to approximately $72 million.

Quarter in Details

Royalty revenues were $11.5 million in the reported quarter, up 22.3% from the year-ago quarter, reflecting higher royalties on sales of Promacta and Kyprolis. Label expansion for these drugs should bring in additional royalties.

Material sales came in at $7.2 million in the reported quarter, down 44.6% due to the timing of Captisol purchases for clinical and commercial use.

Research & development expenses declined 9.3% to $2.9 million primarily due to the timing of funding of internal development programs.

General & administrative expenses surged 10.7% year over year to $6.2 million, reflecting costs associated with business development activities and non-cash stock-based compensation expense.

During the quarter, Ligand continued to expand its partnership portfolio by inking deals with new partners and expanding relationships with existing ones.

2016 Guidance Upped

Ligand raised its 2016 outlook for both earnings and revenues on its expectations of higher revenues. The geographical and label expansions of Promacta and Kyprolis, the anticipated approval and launch of five new partnered products and continued development of the partnership portfolio are likely to boost the top line.

New products that could be approved, launched this year and generate new revenues for Ligand include Zydus Cadila's Vivitra (a herceptin bio-similar launched in Jan 2016 in India), Evomela (FDA action date in May 2016), Carbella, Albagen's generic Vfend (voriconazole). A pricing approval for Duavee is also expected in Europe.

Our Take

Ligand's quarter results were mixed, with the company beating earnings estimates but missing on revenues. However, Ligand raised its outlook for 2016. Kyprolis and Promacta should continue to perform well.

Investor focus is expected to remain on the upcoming pipeline-related events, regulatory milestones for partners in the coming quarters and the para IV filing for Merck & Co. Inc.'s MRK Noxafil IV involving one of the U.S patents related to Captisol.

Ligand is a Zacks Rank #1 (Strong Buy) stock. Baxalta Inc. BXLT and Anika Therapeutics Inc. ANIK are the top-ranked stocks in the health care sector, sporting the same Zacks Rank.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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