Ligand Pharmaceuticals (LGND) Q1 Earnings Miss Estimates

Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) reported first-quarter 2017 earnings of 31 cents per share (including the impact of stock-based compensation expenses), down 32.5% from the year-ago figure. The bottom line also missed the Zacks Consensus Estimate of 55 cents per share.

However, Ligand’s stock outperformed the Zacks classified Medical-Biomed/Genetics industry year to date. The company’s shares gained 13.3% compared with the industry’s increase of 2%.



Including one-time and special items, earnings in the reported quarter came in at 22 cents per share compared with 30 cents a year ago.

Total revenue in the quarter dipped 1% year over year to $29.3 million and also fell short of the Zacks Consensus Estimate of $34 million.

Quarter Highlights

Royalty revenues were $24.2 million in the reported quarter, up approximately 68.1% year over year. Higher royalties on sales of Novartis AG’s (NYSE:NVS) Promacta and Amgen Inc.’s (NASDAQ:AMGN) Kyprolis as well Spectrum Pharmaceuticals’ (NASDAQ:SPPI) Evomela drove the upside.

Material sales plunged to $1.1 million from the year-ago figure of $5.3 million due to the unfavorable timing of Captisol purchases for clinical and commercial use.

License and milestone revenues were $3.9 million compared with $9.9 million in the year-ago period. The decrease was due to a $6 million milestones payment the company received in the first quarter of 2016 as a result of the Evomela approval, which was absent in the first quarter of 2017.

Research & development expenses increased to $8.7 million from $4 million a year ago, primarily due to the completion of enrollment in its ongoing phase II study with Ligand’s novel, small-molecule GRA program (LGD-6972) for the treatment of type 2 diabetes mellitus.

General & administrative expenses increased 2.8% year over year to $7.3 million.

2017 Outlook

Ligand continues to expect 2017 earnings of approximately $2.70 per share on revenues of $130 million. The core revenues are expected to comprise of royalties of approximately $87 million, material sales of approximately $23 million and contract payments of at least $20 million.

The company mentioned that this amount is expected to increase if additional contract revenues are received in 2017.

Zacks Rank

Ligand currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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