Back to top

Image: Bigstock

Ligand (LGND) Q3 Earnings & Sales Fall Short of Estimates

Read MoreHide Full Article

Ligand Pharmaceuticals Incorporated (LGND - Free Report) reported third-quarter 2020 adjusted earnings of $1.04 per share, which missed the Zacks Consensus Estimate of $1.06. The company had reported adjusted earnings of 49 cents in the year-ago quarter.

Total revenues increased 65.8% year over year to $41.8 million mainly due to higher Captisol revenues. However, the top line missed the Zacks Consensus Estimate of $46 million.

Shares of Ligand were down 0.8% following the results on Oct 30. The company’s shares have lost 20.9% so far this year compared with the industry’s 7.8% decrease.

Quarterly Highlights

Royalty revenues were $9 million in the third quarter compared with $9.8 million in the year-ago quarter. Ligand primarily earns royalties on sales of Amgen's (AMGN - Free Report) Kyprolis and Acrotech Biopharma’s Evomela, which were developed using its Captisol technology.

Captisol sales were $23.4 million compared with $6.8 million in the year-ago quarter. The significant increase was due to higher sales of Captisol to support availability of Gilead’s (GILD - Free Report) remdesivir as a treatment for patients with severe COVID-19. The drug received FDA’s Emergency Use Authorization on May 1. Remdesivir received FDA’s regular approval as Veklury in October for the same indication.

Contract revenues were $9.5 million in the third quarter compared with $8.2 million a year ago.

Provides 2021 Guidance

Ligand maintained its guidance for sales and earnings for 2020, announced at the Analyst Day event on Oct 20. The company expects total revenues and earnings for 2020 to be approximately $170 million and $3.95 per share, compared with the guidance of $165 million and $4.10 per share, respectively, provided on the second-quarter earnings call. The Zacks Consensus Estimate for revenues and earnings per share is pegged at $170.4 million and $4.00, respectively.

The company also provided guidance for 2021. It expects total revenues to be approximately $285 million and earnings to be $6.00 for the year. Revenues in 2021 will be mainly driven by Captisol sales, which are expected to be approximately $200 million. The Zacks Consensus Estimate for revenues and earnings per share is pegged at $293.2 million and $6.50, respectively.

Zacks Rank & Stock to Consider

Ligand currently has a Zacks Rank #3 (Hold).

Emergent Biosolutions (EBS - Free Report) is a better-ranked stock from the biotech sector, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Emergent’s earnings per share estimates have moved north from $6.58 to $6.61 for 2020 and from $7.62 to $8.42 for 2021 in the past 30 days. The company delivered an earnings surprise in three of the trailing four quarters, with the average being 127.41%. Share price of the company has increased 66.8% so far this year.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>