Back to top

Analyst Blog

Ligand Pharmaceuticals Incorporated (LGND - Free Report) reported third-quarter 2016 earnings of 39 cents per share, down 11.4% from the year-ago figure.

Moreover, including one-time and special items, earnings in the reported quarter came in at 3 cents per share, missing the Zacks Consensus Estimate of 9 cents.

Total revenue in the quarter surged 22.1% year over year to $21.6 million but fell short of the Zacks Consensus Estimate of $23.5 million.

Quarter Highlights

Royalty revenues were $15.7 million in the reported quarter, up approximately 61% year over year, reflecting higher royalties on sales of Promacta and Kyprolis, in addition to royalty income for CorMatrix.

Material sales came in at $4.2 million, down 30.2% due to the timing of Captisol purchases for clinical and commercial use.

License and milestone revenues came in at $1.7 million, down from $1.9 million in the year-ago period.

Research & development expenses shot up 224.2% to $6.3 million due to the addition of OMT-related expenses, timing of funding of internal development programs and stock-based compensation expense.

General & administrative expenses were up 26.8% year over year to $6.3 million due to costs associated with OMT and stock-based compensation expense.

2016 Outlook Lowered

Ligand has lowered its 2016 outlook for both earnings and revenues. The company now expects earnings in the range of $3.37 to $3.44 per share (old guidance: $3.41–$3.46 per share) on revenues of $110 million to $114 million (old guidance: $115 million–$119 million).

The company mentioned that its revenue outlook reflects expectations of a decline in Captisol sales due to the timing of certain regulatory and clinical events.

For the fourth quarter of 2016, Ligand expects earnings in the range of $1.29 to $1.36 per share on revenues of $39 million to $43 million (including approximately royalty revenues of $19 million).

For 2017, the company continues to expect revenues in excess of $160 million and earnings to be above $5.03 per share.

Meanwhile, Ligand continues to strike new licensing agreements and expand its portfolio. This year has been so far quite eventful on both the partnership and internal program fronts for Ligand and the company expects updates related to these during the upcoming months.

LIGAND PHARMA-B Price, Consensus and EPS Surprise

 

Zacks Rank & Stocks to Consider

Ligand is a Zacks Rank #4 (Sell) stock. Some better-ranked stocks in the health care sector include Exelixis, Inc. (EXEL - Free Report) , Infinity Pharmaceuticals, Inc. (INFI - Free Report) and Geron Corporation (GERN - Free Report) . While Infinity and Exelixis sport a Zacks Rank #1 (Strong Buy), Geron carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Infinity’s loss per share estimates narrowed from $3.84 to $3.79 for 2016 but remained unchanged for 2017 over the last 60 days. The company has posted a positive surprise in all of the four trailing quarters with an average beat of 67.62%.

Exelixis’ loss per share estimates narrowed from 71 cents to 61 cents for 2016 and from a loss of 16 cents to earnings of 4 cents for 2017 over the last 60 days. The company has posted an average positive surprise of 9.10% over the trailing four quarters. Its share price has surged more than 80% year to date.

Geron has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 20.78%.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>