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Ligand (LGND) Up 12.4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Ligand Pharmaceuticals . Shares have added about 12.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ligand due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Q3 Earnings & Sales Beat Estimates
Ligand reported adjusted diluted earnings of $1.02 per share in third-quarter 2023 from continuing operations, beating the Zacks Consensus Estimate of 68 cents. The company reported adjusted earnings of 60 cents in the year-ago quarter.
Total revenues of $32.9 million were down 45% from the year-ago quarter’s levels. The downside was due to the absence of COVID-19-related Captisol sales during the quarter. Revenues beat the Zacks Consensus Estimate of $27 million.
Quarterly Highlights
Royalty revenues were up 24% year over year to $23.9 million in the third quarter. The upside was mainly driven by increased royalties from Amgen’s Kyprolis, Jazz Pharmaceuticals’ Rylaze and Merck’s Vaxneuvance.
Total Captisol sales were down 76% year over year to $8.6 million in the reported quarter. Ligand reports Captisol sales separately for core assets and COVID-related sales. Core Captisol sales rose 27% to $8.6 million due to the favorable timing of customer orders. During the quarter, the company did not record any Captisol sales related to COVID-19.
Contract revenues were down 90% year over year to $0.4 million in the third quarter, owing to the unfavorable timing of partner milestone events.
Research and development (R&D) expenses fell 40% to $5.5 million due to lower stock-based compensation, employee-related expenses and lab supply expenses. General and administrative (G&A) expenses were down 2% to $14.7 million, which included transaction costs associated with the Novan acquisition and Pelican spin-out.
Cash, cash equivalents and short-term investments amounted to $190.5 million as of Sep 30, 2023, compared with $219.0 million as of Jun 30, 2023.
2023 Guidance
Ligand revised its guidance for 2023. Total revenues are now expected to be in the range of $126-$129 million, up from the previously issued guidance of $124-$126 million.
Royalty revenues expectations remained unchanged in the $82-$84 million range, while contract revenues are expected to be $17 million (unchanged). The company expects Captisol sales between $27-$28 million (previously: $25 million).
The company also increased its expectation for adjusted diluted EPS to $5.25-$5.40, which was expected in the range of $5.10-$5.25. This increased EPS guidance is driven primarily by the increase in revenues and lower operating expenses.
The guidance excludes Captisol sales related to COVID-19 and its impact on gross profit. Management will update investors as and when orders for COVID-19-related products are received.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -14.82% due to these changes.
VGM Scores
Currently, Ligand has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Ligand has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ligand belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Prothena (PRTA - Free Report) , has gained 15.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Prothena reported revenues of $84.87 million in the last reported quarter, representing a year-over-year change of +5483.6%. EPS of $0.38 for the same period compares with -$0.97 a year ago.
For the current quarter, Prothena is expected to post a loss of $1.07 per share, indicating a change of -991.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.2% over the last 30 days.
Prothena has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Ligand (LGND) Up 12.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Ligand Pharmaceuticals . Shares have added about 12.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ligand due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Q3 Earnings & Sales Beat Estimates
Ligand reported adjusted diluted earnings of $1.02 per share in third-quarter 2023 from continuing operations, beating the Zacks Consensus Estimate of 68 cents. The company reported adjusted earnings of 60 cents in the year-ago quarter.
Total revenues of $32.9 million were down 45% from the year-ago quarter’s levels. The downside was due to the absence of COVID-19-related Captisol sales during the quarter. Revenues beat the Zacks Consensus Estimate of $27 million.
Quarterly Highlights
Royalty revenues were up 24% year over year to $23.9 million in the third quarter. The upside was mainly driven by increased royalties from Amgen’s Kyprolis, Jazz Pharmaceuticals’ Rylaze and Merck’s Vaxneuvance.
Total Captisol sales were down 76% year over year to $8.6 million in the reported quarter. Ligand reports Captisol sales separately for core assets and COVID-related sales. Core Captisol sales rose 27% to $8.6 million due to the favorable timing of customer orders. During the quarter, the company did not record any Captisol sales related to COVID-19.
Contract revenues were down 90% year over year to $0.4 million in the third quarter, owing to the unfavorable timing of partner milestone events.
Research and development (R&D) expenses fell 40% to $5.5 million due to lower stock-based compensation, employee-related expenses and lab supply expenses. General and administrative (G&A) expenses were down 2% to $14.7 million, which included transaction costs associated with the Novan acquisition and Pelican spin-out.
Cash, cash equivalents and short-term investments amounted to $190.5 million as of Sep 30, 2023, compared with $219.0 million as of Jun 30, 2023.
2023 Guidance
Ligand revised its guidance for 2023. Total revenues are now expected to be in the range of $126-$129 million, up from the previously issued guidance of $124-$126 million.
Royalty revenues expectations remained unchanged in the $82-$84 million range, while contract revenues are expected to be $17 million (unchanged). The company expects Captisol sales between $27-$28 million (previously: $25 million).
The company also increased its expectation for adjusted diluted EPS to $5.25-$5.40, which was expected in the range of $5.10-$5.25. This increased EPS guidance is driven primarily by the increase in revenues and lower operating expenses.
The guidance excludes Captisol sales related to COVID-19 and its impact on gross profit. Management will update investors as and when orders for COVID-19-related products are received.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -14.82% due to these changes.
VGM Scores
Currently, Ligand has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Ligand has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ligand belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Prothena (PRTA - Free Report) , has gained 15.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Prothena reported revenues of $84.87 million in the last reported quarter, representing a year-over-year change of +5483.6%. EPS of $0.38 for the same period compares with -$0.97 a year ago.
For the current quarter, Prothena is expected to post a loss of $1.07 per share, indicating a change of -991.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.2% over the last 30 days.
Prothena has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.