Bullish indicating open at $55-$60, IPO prices at $37
JUPITER, Fla. - Ligand Pharmaceuticals Incorporated (NASDAQ:LGND), a $2.88 billion market cap biopharmaceutical company with strong financial health indicators according to InvestingPro, has priced $400 million of 0.75% convertible senior notes due 2030 in a private placement to qualified institutional buyers, the company announced Monday.
The biopharmaceutical firm, which has demonstrated impressive revenue growth of 40.54% over the last twelve months, also granted initial purchasers a 13-day option to buy up to an additional $60 million in notes. The offering is expected to close on August 14, subject to customary conditions.
The notes will mature on October 1, 2030, with interest payable semiannually beginning April 1, 2026. Ligand estimates net proceeds of approximately $386.9 million from the offering, or $445.1 million if the purchasers’ option is fully exercised.
The company plans to use about $39.9 million of the proceeds to pay for convertible note hedge transactions, partially offset by proceeds from warrant sales. Additionally, approximately $15 million will be used to repurchase 102,034 shares of its common stock at $147.01 per share from certain note purchasers in private transactions. According to InvestingPro data, Ligand maintains a healthy balance sheet with more cash than debt and a strong current ratio of 5.45, suggesting ample liquidity for these transactions.
The initial conversion rate will be 5.1338 shares per $1,000 principal amount, equivalent to a conversion price of approximately $194.79 per share, representing a 32.5% premium over Ligand’s last reported stock price on August 11.
Ligand may redeem the notes on or after October 6, 2028, under certain conditions, including if its stock price reaches at least 130% of the conversion price for a specified period.
In connection with the offering, Ligand entered into convertible note hedge and warrant transactions with certain financial institutions. The warrant transactions have an initial strike price of $294.02 per share, a 100% premium over the company’s closing stock price on August 11.
The information is based on a press release statement from the company. For deeper insights into Ligand’s financial health, valuation metrics, and growth prospects, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, Ligand Pharmaceuticals reported impressive financial results for the second quarter of 2025, with revenue reaching $47.63 million, surpassing the expected $43.74 million. This revenue growth represented a 15% increase year-over-year, driven by strong performance in both the Royalty and Captisol segments. The company also delivered an adjusted earnings per share of $1.60, exceeding analysts’ forecasts of $1.43, marking an 11.89% surprise. In light of these strong results, RBC Capital raised its price target for Ligand Pharmaceuticals from $155 to $185, maintaining an Outperform rating. Similarly, Oppenheimer increased its price target to $167 from $162, also maintaining an Outperform rating, citing robust royalty growth. Additionally, Ligand Pharmaceuticals announced plans to offer $400 million in convertible senior notes due in 2030. The offering includes an option for initial purchasers to buy up to an additional $60 million in notes. These recent developments underscore Ligand’s financial momentum and strategic initiatives.
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