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Ligand (LGND) Up 3.4% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Ligand Pharmaceuticals (LGND - Free Report) . Shares have added about 3.4% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ligand due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ligand Misses on Q3 Earnings & Sales

Ligand 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.

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 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 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 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 be driven by Captisol sales, which are expected to be approximately $200 million. However, the numbers fell short of the Zacks Consensus Estimate.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Ligand has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Ligand has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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