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Ligand Pharmaceuticals Announces Second Quarter Results

Forward-Looking Statements

This news release contains certain forward-looking statements by Ligand that involve risks and uncertainties and reflect Ligand's judgment as of the date of this release. Actual events or results may differ from Ligand's expectations. For example, we may not be profitable or cash-flow positive before the end of 2012, we may not receive expected revenue from material sales of Captisol, we may not be able to effectively integrate CyDex’s business into our current business, expected royalties on partnered products or from research and development milestones may not be received, and we and our partners may not be able to timely or successfully advance any product(s) in Ligand's internal or partnered pipeline. In addition, there can be no assurance that Ligand will achieve its guidance for 2012 or beyond, that Ligand will deliver strong cash flow over the long-term, that Ligand will realize the expected benefits of the acquisition of CyDex, that Ligand's 2012 revenues will be at the levels or be broken down as currently anticipated or that Captisol sales will be sufficiently strong, that Ligand will be able to create future revenues and cash flows by developing innovative therapeutics, that results of any clinical study will be timely, favorable or confirmed by later studies, that products under development by Ligand or its partners will receive regulatory approval, or that there will be a market for the product(s) if successfully developed and approved. Also, Ligand and its partners may experience delays in the commencement, enrollment, completion or analysis of clinical testing for its product candidates, or significant issues regarding the adequacy of its clinical trial designs or the execution of its clinical trials, which could result in increased costs and delays, or limit Ligand's ability to obtain regulatory approval. Further, unexpected adverse side effects or inadequate therapeutic efficacy of Ligand's product(s) could delay or prevent regulatory approval or commercialization. Ligand may also have indemnification obligations to King Pharmaceuticals or Eisai in connection with the sales of the Avinza and oncology product lines. In addition, Ligand may not be able to successfully implement its strategic growth plan and continue the development of its proprietary programs. The failure to meet expectations with respect to any of the foregoing matters may reduce Ligand's stock price. Additional information concerning these and other risk factors affecting Ligand's business can be found in prior press releases available via www.ligand.com as well as in Ligand's public periodic filings with the Securities and Exchange Commission at www.sec.gov. Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

LIGAND PHARMACEUTICALS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)

(in thousands, except share data)

       
 

Three Months Ended June 30,

Six Months Ended June 30,
  2012     2011     2012     2011  
 
Revenues:
Royalties $ 2,983 $ 2,172 $ 6,043 $ 4,165
Material sales 1,665 2,984 2,332 4,034
Collaborative research and development and other revenues   1,094     2,307     3,003     3,160  
Total revenues 5,742 7,463 11,378 11,359
 
Operating costs and expenses:
Cost of goods sold 435 1,623 590 2,148
Research and development 2,850 3,237 5,668 5,223
General and administrative 3,940 3,855 7,442 7,299
Lease exit and termination costs   247     (16 )   173     (168 )
Total operating costs and expenses 7,472 8,699 13,873 14,502
Amortization of deferred gain on sale leaseback   -     426     -     851  
Loss from operations (1,730 ) (810 ) (2,495 ) (2,292 )
Other income (expense), net (1,998 ) 37 (1,755 ) (2,038 )
Income tax (expense) benefit   (338 )   (141 )   (303 )   13,444  
Income (loss) from continuing operations   (4,066 )   (914 )   (4,553 )   9,114  
Income from discontinued operations, net of taxes   1,799     -     3,670     4  
Net income $ (2,267 ) $ (914 ) $ (883 ) $ 9,118  
Basic and diluted per share amounts:
Income (loss) from continuing operations $ (0.20 ) $ (0.05 ) $ (0.23 ) $ 0.46
Discontinued operations   0.09     -     0.19     0.00  
Net income $ (0.11 ) $ (0.05 ) $ (0.04 ) $ 0.46  
 
Weighted average number of common shares 19,749,266 19,650,260 19,728,852 19,623,249
 

 LIGAND PHARMACEUTICALS INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)

 
  June 30, 2012   December 31, 2011
Assets (unaudited)
Current assets:
Cash, cash equivalents and short-term investments $ 10,385 $ 17,041
Accounts receivable 817 6,110
Inventory 2,698 1,301
Other current assets 2,262 1,581
Current portion of co-promote termination asset 4,934 6,197
Total current assets 21,096 32,230
 
Restricted cash and investments 1,341 1,341
Property and equipment, net 644 455
Goodwill and other identifiable intangible assets 71,167 72,331
Long-term portion of co-promote termination asset 9,822 15,255
Other assets 524 738
Total Assets $ 104,594 $ 122,350
 
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities 18,179 $ 27,446
Current portion of co-promote termination liability 4,934 6,197
Current portion of note payable 5,806 -
Bank line of credit 1,500 10,000
Total current liabilities 30,419 43,643
Long-term portion of co-promote termination liability 9,822 15,255
Long-term portion of deferred revenue 2,722 3,466
Long-term debt 22,211 20,286
Other long-term liabilities 20,968 22,710
Total liabilities 86,142 105,360
Common stock subject to conditional redemption - 8,344
Stockholders' equity 18,452 8,646
Total liabilities and stockholders' deficit $ 104,594 $ 122,350
 




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