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Investing.com - Oppenheimer raised its price target on Ligand Pharma (NASDAQ:LGND) to $162.00 from $145.00 on Wednesday, while maintaining an Outperform rating on the stock. The company’s shares have shown strong momentum, delivering a 22.8% return year-to-date, with analysts maintaining a Strong Buy consensus.
The price target increase follows virtual non-deal roadshows with Ligand management earlier this week, where CEO Todd Davis highlighted several successful investments, including the company’s initial investment in Ohtuvayre royalties, the incubation and spin-off of Pelthos and Palvella, and Qarziba’s approximately $20 million annualized royalty for around $100 million. According to InvestingPro data, Ligand maintains a strong financial position with more cash than debt and impressive revenue growth of 53.4% over the last twelve months.
Merck (NSE:PROR)’s acquisition of Verona is expected to support free cash flow generation for Ligand, with potential for greater sales acceleration and global reach, according to Oppenheimer’s research note.
The research firm also noted two key decisions expected around year-end for Filspari that could expand indications and broaden IgAN use, potentially boosting future royalty revenues.
Oppenheimer updated its Ohtuvayre estimates based on Merck’s acquisition, which contributed to the higher price target for Ligand shares. The company maintains a healthy liquidity position with a current ratio of 5.27, indicating strong ability to meet short-term obligations.
In other recent news, Ligand Pharmaceuticals has reported a successful start to 2025, surpassing earnings expectations with an adjusted EPS of $1.33, compared to the anticipated $1.22. The company also exceeded revenue forecasts, achieving $45 million against the expected $37.92 million. Additionally, Ligand has completed a merger involving its subsidiary LNHC, Inc. and Channel Therapeutics Corporation’s subsidiary, leading to the formation of Pelthos Therapeutics Inc. Pelthos has launched ZELSUVMI, the first FDA-approved at-home treatment for molluscum contagiosum. This launch resulted in a $5 million milestone payment for Ligand. Furthermore, Stifel has reiterated its Buy rating for Ligand, maintaining a price target of $143.00. The firm emphasized Ligand’s strong position in the royalty financing sector and its ability to sustain over 20% topline growth. These developments highlight Ligand’s continued progress and strategic positioning in its industry.
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