Ligand (LGND) Stock Down Despite Q2 Earnings & Sales Beat
Zacks Investment Research | Jul 30, 2019 10:44PM ET
Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) reported second-quarter 2019 adjusted earnings of 68 cents per share, which beat the Zacks Consensus Estimate of 61 cents. The company had reported adjusted earnings of $2.59 in the year-ago quarter. Second-quarter adjusted earnings exclude the impact of non-cash charge of $12.4 million related to Ligand’s investment in Viking Therapeutics, stock-based compensation and non-cash charges.
Total revenues in the quarter decreased to $25 million from $90 million in the year-ago period. However, the top line surpassed the Zacks Consensus Estimate of $22.9 million.
The company mentioned that all contracts previously signed with other companies related to the use of its technology platforms may not be active. Deals with Stemcentrx and ARMO BioSciences were not renewed, following their acquisition by AbbVie (NYSE:ABBV) and Eli Lilly (NYSE:LLY), respectively. Moreover, a deal with Celgene (NASDAQ:CELG) is currently inactive and Ligand does not expect a renewal due to the proposed acquisition of Celgene by Bristol-Myers. These developments may have spooked investors and presumably resulted in share price decline of 11.4% on Jul 30.
Shares of Ligand have declined 29.8% so far this year compared with the granted rights to develop and commercialize Chk1 kinase inhibitor – VER250840 – discovered using Vernalis Design Platform to privately-held UK-based Cumulus Oncology. It also acquired economic rights to a late-stage candidate SB206 from Novan, Inc. The candidate is being developed for treating skin infections, including molluscum contagiosum.
In July, the company acquired a privately held antigen-discovery company, Ab Initio, for $12 million in cash.
In July, Sage Therapeutics announced the launch of its postpartum depression drug, Zulresso. The drug has been developed using Ligand’s Captisol technology. In June, Melinta Therapeutics announced that the FDA granted priority review to a supplemental new drug application for Baxdela, seeking label expansion in community-acquired bacterial pneumonia.
2019 Guidance Maintained
Ligand reiterated its guidance for 2019. It expects revenues to be approximately $118 million. Adjusted earnings are estimated to be $3.20 per share for 2019.
Ligand Pharmaceuticals Incorporated Price, Consensus and EPS Surprise
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