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Why Is Ligand (LGND) Down 21.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Ligand Pharmaceuticals (LGND - Free Report) . Shares have lost about 21.3% in that time frame, underperforming the S&P 500.

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

Ligand Beats on Q4 Earnings & Sales

Ligand reported fourth-quarter 2020 adjusted earnings of $1.62 per share, which significantly beat the Zacks Consensus Estimate of $1.07. The company had reported adjusted earnings of 71 cents in the year-ago quarter.

Total revenues were $70 million compared with $27 million in the year-ago quarter. The significant increase was mainly due to higher Captisol revenues. The top line comfortably beat the Zacks Consensus Estimate of $54.27 million.

Quarterly Highlights

Royalty revenues remained flat year over year at $11 million in the fourth quarter. Ligand primarily earns royalties on sales of Kyprolis and Acrotech Biopharma’s Evomela, which were developed using its Captisol technology. Royalties remained flat as sales of the partnered drugs were hurt due to COVID-19.

Captisol sales were $41 million compared with $7.1 million in the year-ago quarter. The significant increase was due to higher sales of Captisol to support availability of Veklury, which is approved for treating severe COVID-19 patients in the United States.

Contract revenues were $18 million in the fourth quarter compared with $8.8 million a year ago.

Full Year Results

Ligand reported revenues of $186.4 million, up 54.9% year over year. The company’s adjusted earnings for 2020 were $4.55 per share, up 47.2% from the year-ago period.

Raises 2021 Guidance

Ligand raised its previously announced guidance for sales and earnings for 2021. It now expects total revenues to be approximately $291 million (previously $285 million) and earnings to be $6.15 (previously $6.00) for the year.

Key Partnered Pipeline Progress

The leading OmniAb-derived antibody candidate, CStone Pharmaceuticals’ sugemalimab, is under review in China as a potential first-line treatment of advanced squamous and non-squamous non-small cell lung cancer.

During the quarter, Ligand’s partner, Sedor Pharmaceuticals, received FDA approval for Sesquient for treating status epilepticus.

Meanwhile, Ligand plans to start a pivotal study on its wholly-owned pipeline candidate, Captisol-enabled Iohexol, by the end of the first quarter. It is being developed as a contrast agent for hospital-based imaging procedures.

During the fourth quarter, Merck and Jazz filed regulatory applications in the United States seeking approval for a pneumococcal conjugate vaccine and blood cancer candidate, respectively, developed using Ligand’s protein expression technology platform. Serum Institute of India launched a pneumococcal vaccine, also developed using the same technology, in December.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

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