Ligand completes $739M XOMA deal as royalty revenue jumps 51%
What's the deal? Ligand Pharmaceuticals has completed its roughly $739 million acquisition of XOMADealroom has a profile for this one. Try Dealroom → Royalty, adding seven commercial products and a pipeline of more than 100 assets. The deal, finalised in July, expands Ligand's royalty portfolio to over 200 biopharmaceutical assets.
What each company does: Ligand runs a royalty-aggregation model, taking a cut of partners' drug sales without funding their development, manufacturing, or marketing. XOMA brought a portfolio of commercial royalty streams that now feed directly into that model.
The numbers: Third-quarter royalty revenue rose 51% year over year to $70.3 million, with XOMA assets contributing $12.3 million. Total revenues and income fell 32% to $78.7 million — but that reflects $53.1 million in one-off PelthosDealroom has a profile for this one. Try Dealroom → divestiture income booked a year earlier; excluding it, revenue rose 26%.
Why now? Filspari, developed by Travere Therapeutics, won US approval in April for focal segmental glomerulosclerosis, a second rare kidney disease beyond IgA nephropathy. The expansion widens the drug's eligible patients without added marketing cost to Ligand.
What's the endgame? Filspari generated an estimated $16.8 million in Q3 royalties — up about 85% year over year — making it Ligand's largest royalty asset. Ligand collects a 9% royalty on sales, which reached $187 million across the US and EU in the quarter.
Management raised full-year adjusted diluted earnings-per-share guidance to between $9.50 and $9.75, from $9.00 to $9.50, and reaffirmed its revenue outlook. "Ligand delivered another strong quarter, with royalty revenue growing 51% year-over-year," said chief executive officer Todd Davis.
What could go wrong? The XOMA deal carries execution risk and added cost, including higher expenses and convertible debt. Filspari's rising share of royalties also concentrates earnings in a single asset.
The signal: Ligand is doubling down on royalty aggregation, pairing a fast-growing drug with a larger, more diversified portfolio. The combination gives it multiple revenue streams and clinical catalysts, but it ties near-term growth to how well the XOMA assets and Filspari perform.
Read more: seekingalpha.com
Image credit: XOMA
