Ligand Pharmaceuticals Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Trevor Allred - Oppenheimer & Co Inc - Analyst : What can you tell us about your expectations for the Pelthos launch? Are these most severe kids seen at pediatric dermatologists? Can you say anything about your prior market research that might suggest initial market demand?

Question: Trevor Allred - Oppenheimer & Co Inc - Analyst : And can you also share some expectations for what you think the Filspari [removal] might do to improve uptake? Have you guys done any internal diligence there to see what the potential step-up in revenue could be?

Question: Douglas Miehm - RBC Capital Markets Inc - Analyst : Good quarter. Tavo, when you think about the guidance that you provided, where it looks like at the middle of the range we're up both around 12% for revenue and EPS, can you tell us why we're not seeing, perhaps maybe a little bit more operating leverage in the model? The products are doing better than anticipated. And I'm just curious why this isn't falling more down to the bottom line and to cash flow.

Question: Douglas Miehm - RBC Capital Markets Inc - Analyst : Okay. That's really helpful. And then, Todd, the Ohtuvayre situation is very attractive, obviously. But we have seen some cases in this market of royalty ownership where we've seen an acquisition by a big pharma company that the big pharma company has also approached the royalty holder. Have you been approached by Merck to buy back the royalty on this asset?

Question: Matthew Hewitt - Craig-Hallum Holdings LLC - Analyst : Congratulations on the strong quarter. Maybe first up, a little more higher level, but given all of the changes and nuances coming out of Washington, how is that impacting your pipeline? How are you looking at opportunities given the constant news flow regarding various products and markets?

Question: Matthew Hewitt - Craig-Hallum Holdings LLC - Analyst : Got it. And then maybe a question for Tavo. But with the increase in contract guidance here for the rest of the year, roughly $15 million, how should we be thinking about the cadence? It sounds like the bulk of that will hit in Q3 with the Pelthos transaction, but how should we split up that $15 million of incremental revenues there?

Question: Lawrence Solow - CJS Securities Inc - Analyst : Joined a little late. Just a follow-up on the guidance question. In terms of the bottom-line increase, are you changing anything in terms of operating expenses? I know you guys have been investing more in the business development team. But it looks like just if I do the math, actually, the revenue increase, if I kind of flow that through the normalized tax rate, it should be about $0.75. So it looks like maybe that's all pretty much flowing to the bottom line, right? It doesn't look like there's much change on the expense assumption. Is that fair? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, LGND.OQ - Q2 2025 Ligand Pharmaceuticals Inc Earnings Call

Question: Lawrence Solow - CJS Securities Inc - Analyst : Got you. And on the Zelsuvmi, I know you talked about $175 million kind of target ultimate sales goal. I imagine that's like a three- to five-year, maybe five-year target or something like that. Just curious, are you actually building much into the back half this year? I imagine it takes a little while to gain traction, or just anything anecdotally you could provide?

Question: Lawrence Solow - CJS Securities Inc - Analyst : Got you. And just lastly, just on M&A and business development. Obviously, you guys have been super active in the last couple of years, and kudos to you on that, and an interesting recent deal as well. Just how is the pipeline looking? Obviously, your balance sheet remains really strong. Just curious if lots of opportunities in front of you. Any thoughts on that?

Question: John Vandermosten - Zacks Investment Research Inc - Analyst : And I appreciate all the detail on the movement there in the income statement coming up in the future. I wanted to ask a question about Merck's ownership of Verona and how it will add to Ohtuvayre's potential? And specifically, what can they do to expand the market given their dominance is one of the largest pharmas?

Question: John Vandermosten - Zacks Investment Research Inc - Analyst : Okay. And a question on Orchestra BioMed. Is it, I guess, assumed that Medtronic is going to provide the commercialization pathway for their pipeline therapies?