Ligand Reports Fourth Quarter And Full Year 2012 Financial 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 receive expected revenue from material sales of Captisol, 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 2013 or beyond, that Ligand will deliver strong cash flow over the long-term, that Ligand's 2013 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.

[Tables to follow]

LIGAND PHARMACEUTICALS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
		Three Months Ended December 31,								Twelve Months Ended December 31,
			2012				2011				2012				2011
		(unaudited)								(unaudited)
Revenues:
Royalties		$	4,817			$	2,616			$	14,073			$	9,213
Material sales			5,282				6,460				9,432				12,123
Collaborative research and development and other revenues			3,536				3,861				7,883				8,701
Total revenues			13,635				12,937				31,388				30,037
Operating costs and expenses:
Cost of goods sold			2,328				2,059				3,601				4,909
Research and development			2,476				2,599				10,790				10,291
General and administrative			4,283				3,709				16,108				14,977
Write-off of in-process research and development			-				-				-				2,282
Lease exit and termination costs			156				147				315				(22	)
Total operating costs and expenses			9,243				8,514				30,814				32,437
Amortization of deferred gain on sale leaseback			-				426				-				1,702
Gain (loss) from operations			4,392				4,849				574				(698	)
Other income (expense), net			(601	)			(174	)			(2,789	)			(1,847	)
Decrease (increase) in contingent liabilities			(2,841	)			304				(1,650	)			(1,013	)
Income tax (expense) benefit			1,636				(289	)			1,191				13,270
Income (loss) from continuing operations			2,586				4,690				(2,674	)			9,712
Income (loss) from discontinued operations, net of taxes			(1,523	)			-				2,147				3
Net income		$	1,063			$	4,690			$	(527	)		$	9,715
Basic and diluted per share amounts:
Income (loss) from continuing operations		$	0.13			$	0.24			$	(0.13	)		$	0.49
Discontinued operations			(0.08	)			-				0.11				-
Net income		$	0.05			$	0.24			$	(0.03	)		$	0.49
Weighted average number of common shares-basic			20,034,558				19,674,945				19,853,095				19,655,632
Weighted average number of common shares-diluted			20,124,331				19,738,228				19,853,095				19,713,320

LIGAND PHARMACEUTICALS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
		December 31, 2012			December 31, 2011
Assets		(unaudited)
Current assets:
Cash, cash equivalents and short-term investments		$	12,381		$	17,041
Accounts receivable			4,589			6,110
Inventory			1,697			1,301
Other current assets			829			1,581
Current portion of co-promote termination asset			4,327			6,197
Total current assets			23,823			32,230
Restricted cash and investments			2,767			1,341
Property and equipment, net			788			455
Goodwill and other identifiable intangible assets			68,150			70,564
Long-term portion of co-promote termination asset			8,207			15,255
Other assets			525			738
Total Assets		$	104,260		$	120,583
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities		$	16,277		$	27,446
Current portion of co-promote termination liability			4,327			6,197
Current portion of note payable			14,835			-
Bank line of credit			-			10,000
Total current liabilities			35,439			43,643
Long-term portion of co-promote termination liability			8,207			15,255
Long-term portion of deferred revenue			2,369			3,466
Long-term debt			13,443			20,286
Other long-term liabilities			18,317			21,404
Total liabilities			77,775			104,054
Common stock subject to conditional redemption			-			8,344
Stockholders' equity			26,485			8,185
Total liabilities and stockholders' deficit		$	104,260		$	120,583

LIGAND PHARMACEUTICALS INCORPORATED
NON-GAAP FINANCIAL MEASURES
(in thousands, except share data)
		Three Months Ended December 31, 2012
		GAAP				CVR Adjustment				NON-GAAP
		(unaudited)
Gain (loss) from operations			4,392				-				4,392
Other income (expense), net			(601	)			-				(601	)
Decrease (increase) in contingent liabilities			(2,841	)			2,841				-
Income tax (expense) benefit			1,636				-				1,636
Income (loss) from continuing operations			2,586				2,841				5,427
Income (loss) from discontinued operations, net of taxes			(1,523	)			-				(1,523	)
Net income		$	1,063			$	2,841			$	3,904
Basic and diluted per share amounts:
Income (loss) from continuing operations		$	0.13			$	0.14			$	0.27
Discontinued operations			(0.08	)			-				(0.08	)
Net income		$	0.05			$	0.14			$	0.19
Weighted average number of common shares-basic			20,034,558				20,034,558				20,034,558
Weighted average number of common shares-diluted			20,124,331				20,124,331				20,124,331
		Three Months Ended December 31, 2011
		GAAP				CVR Adjustment				NON-GAAP
Gain (loss) from operations			4,849				-				4,849
Other income (expense), net			(174	)			-				(174	)
Decrease (increase) in contingent liabilities			304				(304	)			-
Income tax (expense) benefit			(289	)			-				(289	)
Income (loss) from continuing operations			4,690				(304	)			4,386
Income (loss) from discontinued operations, net of taxes			-				-				-
Net income		$	4,690			$	(304	)		$	4,386
Basic and diluted per share amounts:
Income (loss) from continuing operations		$	0.24			$	(0.02	)		$	0.22
Discontinued operations			-				-				-
Net income		$	0.24			$	(0.02	)		$	0.22
Weighted average number of common shares-basic			19,674,945				19,674,945				19,674,945
Weighted average number of common shares-diluted			19,738,228				19,738,228				19,738,228

LIGAND PHARMACEUTICALS INCORPORATED
NON-GAAP FINANCIAL MEASURES
(in thousands, except share data)
		Twelve Months Ended December 31, 2012
		GAAP				CVR Adjustment			NON-GAAP
		(unaudited)
Gain (loss) from operations			574				-			574
Other income (expense), net			(2,789	)			-			(2,789	)
Decrease (increase) in contingent liabilities			(1,650	)			1,650			-
Income tax (expense) benefit			1,191				-			1,191
Income (loss) from continuing operations			(2,674	)			1,650			(1,024	)
Income (loss) from discontinued operations, net of taxes			2,147				-			2,147
Net income		$	(527	)		$	1,650		$	1,123
Basic and diluted per share amounts:
Income (loss) from continuing operations		$	(0.13	)		$	0.08		$	(0.05	)
Discontinued operations			0.11				-			0.11
Net income		$	(0.03	)		$	0.08		$	0.06
Weighted average number of common shares-basic			19,853,095				19,853,095			19,853,095
Weighted average number of common shares-diluted			19,935,718				19,935,718			19,935,718
		Twelve Months Ended December 31, 2011
		GAAP				CVR Adjustment			NON-GAAP
Gain (loss) from operations			(698	)			-			(698	)
Other income (expense), net			(1,847	)			-			(1,847	)
Decrease (increase) in contingent liabilities			(1,013	)			1,013			-
Income tax (expense) benefit			13,270				-			13,270
Income (loss) from continuing operations			9,712				1,013			10,725
Income (loss) from discontinued operations, net of taxes			3				-			3
Net income		$	9,715			$	1,013		$	10,728
Basic and diluted per share amounts:
Income (loss) from continuing operations		$	0.49			$	0.05		$	0.55
Discontinued operations			-				-			-
Net income		$	0.49			$	0.05		$	0.55
Weighted average number of common shares-basic			19,655,632				19,655,632			19,655,632
Weighted average number of common shares-diluted			19,713,320				19,713,320			19,713,320

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