Ligand Reports Third Quarter 2016 Financial Results

Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today reported financial results for the three and nine months ended September 30, 2016, and provided an operating forecast and program updates. Ligand management will host a conference call today beginning at 4:30 p.m. Eastern time to discuss this announcement and answer questions.

"Our solid third quarter financial performance is highlighted by all-time high royalty revenues. In addition, we had a very active quarter with new licensings further increasing our portfolio of partnered assets," said John Higgins, Chief Executive Officer of Ligand. "Novartis continues to make excellent progress with growing sales, expanding indications and entering new geographies with Promacta ® . Amgen is focused on growing Kyprolis ® , and Spectrum's product Evomela ® is showing good momentum in sales growth following its launch earlier this year. Also, recent positive clinical and regulatory milestones were achieved with a few of our more important portfolio programs, notably for programs or technologies licensed to Retrophin, Lundbeck and Melinta. We also initiated a Phase 2 clinical trial with LGD-6972 for the treatment of type 2 diabetes mellitus."

Ligand is in the process of evaluating certain deferred tax assets (DTA) recorded in the third quarter of 2015. Ligand is reviewing the amount of net operating loss carryforwards recorded as a result of capitalized R&D expenses associated with two acquisitions accounted for in 2010. As a result, the amount of DTA Ligand recorded in connection with the release of its valuation allowance could be reduced by approximately 10% of the $217 million DTA booked in the third quarter of 2015. The impact of the reduction would reduce the one-time DTA gain and would reduce GAAP net income for that period by the same amount. The balance sheet for the third quarter of 2015 and every subsequent period would reflect the reduction in DTA. The 2015 GAAP net income and earnings per share, which would be impacted by the reduction in DTA, are not available at this time, but will be reported in Ligand's Form 10-Q for the third quarter of 2016, which will include Ligand's conclusion regarding the reduction in DTA. The GAAP and adjusted net income and EPS figures for the three and nine month periods ended September 30, 2016 would be unaffected by the changes.

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