Ligand Pharmaceuticals finalizes APEIRON buyout for $100 million

SAN DIEGO – Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) announced on Monday that it has completed the acquisition of APEIRON Biologics AG, inclusive of royalty rights for the neuroblastoma treatment QARZIBA® (dinutuximab beta). The deal, initially reported on July 8, 2024, was finalized on July 15 for a cash payment of $100 million.

APEIRON's shareholders are poised to receive additional payouts contingent on future commercial and regulatory milestones, potentially totaling up to $28 million. These additional payments are structured to occur if QARZIBA® royalties surpass set thresholds by specified dates in 2030 or 2034.

Ligand, a biopharmaceutical company based in San Diego, California, financed the acquisition using its available cash reserves. The transaction followed a 30-day period during which APEIRON shareholders could raise objections, alongside other standard closing conditions.

The acquisition is expected to enhance Ligand’s portfolio with QARZIBA®, a therapeutic agent for high-risk neuroblastoma, a rare cancer that predominantly affects children. The transaction's details will be further outlined in Ligand’s forthcoming Quarterly Report on Form 10-Q for the quarter ending June 30, 2024.

The completion of this acquisition marks a significant expansion for Ligand, which specializes in pharmaceutical preparations. This move is part of the company's broader strategy to grow its product offerings and secure additional revenue streams through strategic acquisitions.

In other recent news, Ligand Pharmaceuticals has expanded its credit facility from $75 million to $125 million, underscoring its strategic financial management. Additionally, Ligand has received approval from the U.S. Food and Drug Administration for Ohtuvayre, a novel treatment for chronic obstructive pulmonary disease, developed in partnership with Verona Pharma (NASDAQ:VRNA). This approval will result in a $5.8 million milestone payment and an additional $13.8 million upon the drug's commercial launch in 2024.

Analysts from Craig-Hallum and H.C. Wainwright have maintained a Buy rating on Ligand's stock, suggesting confidence in the company's growth potential. Ligand is projected to generate earnings of over $6.00 per share next year, an increase from this year's $5.01 per share.

Furthermore, Ligand reported a strong first quarter of 2024, with $311 million in cash and investments, and expects to generate an additional $60 million from operations throughout the year. The company also announced the creation of Pelthos Therapeutics and the FDA approval of ZELSUVMI, and entered into a partnership with Agenus (NASDAQ:AGEN), investing $75 million with an option for an additional $25 million. These recent developments reflect Ligand's strategic growth and robust pipeline of medicines.

InvestingPro Insights

Following the acquisition of APEIRON Biologics AG by Ligand Pharmaceuticals (NASDAQ:LGND), the financial health and market performance of Ligand are key considerations for investors. According to InvestingPro data, Ligand holds a market capitalization of $1.82 billion and has demonstrated a strong price performance with a 43.91% one-year total return, trading near its 52-week high at 99.17% of that value. The company's gross profit margin stands at a robust 71.67% for the last twelve months as of Q1 2024, despite a notable revenue decline of 41.92% during the same period.

Two InvestingPro Tips that stand out in the context of this acquisition are: Ligand's solid cash position, as it holds more cash than debt, and the company's liquid assets exceeding its short-term obligations. These factors suggest that Ligand is financially well-prepared for this strategic move and may have the liquidity to manage upcoming milestones and investments.

For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available that delve into aspects such as the stock's current overbought status and its high EBITDA valuation multiple. These insights could prove valuable in assessing Ligand's post-acquisition financial landscape and future profitability predictions. Interested readers can access these tips and more by using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, with a total of 11 additional tips listed on InvestingPro.

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