Financial Performance and Guidance - Ligand reported 2019 revenues of $120 million[4] - 2019 revenue includes $41.8 million from royalties, $31.5 million from material sales, and $47.0 million from contract payments[6] - The company anticipates double-digit growth across all three revenue segments in 2020[7] - 2020 revenue guidance is $133 million, with a 91% gross margin and adjusted EPS of $3.62[8] - Ligand has $1 billion of cash available for M&A, share repurchase, and capital return[8] Technologies and Portfolio - Ligand's Captisol technology has generated over $350 million in revenue since its acquisition in 2011[9] - The company has over 200 fully-funded partnered programs with over 120 different partners[10] - Ligand anticipates more than 40 clinical and regulatory events and potential for more than 8 product approvals over the next 3 years[10] - Ligand acquired Icagen for $15 million cash at close, plus an earnout of 15% of milestones and royalties, capped at $25 million[14] OmniAb Technology - Ligand has received $114 million in payments related to OmniAb[9] - The number of antibodies in clinical development has more than quadrupled since 2008[31]

Part I [Business](index=9&type=section&id=Item%201.%20Business) The company develops and acquires technologies to aid pharmaceutical partners in drug discovery and development - Ligand's business model focuses on drug discovery, early-stage development, and partnering, leveraging over **120 collaborations** to fund more than **200 programs**, creating a diversified portfolio with a low corporate cost structure[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - In a major strategic shift, the company sold its royalty rights for Promacta to Royalty Pharma for **$827 million** in 2019; prior to the sale, Promacta accounted for nearly 50% of total revenue[31](index=31&type=chunk)[64](index=64&type=chunk) - The company expanded its technology platforms through the **$12 million acquisition of Ab Initio** and an agreement to acquire assets from Icagen for **$15 million**[31](index=31&type=chunk)[32](index=32&type=chunk) - Gilead Sciences is utilizing Ligand's Captisol technology in the formulation of remdesivir (GS-5734), an experimental drug being tested as a potential treatment for COVID-19[40](index=40&type=chunk) [Technologies](index=12&type=section&id=Technologies) The company's core technology platforms, including OmniAb and Captisol, form the basis of its partnered programs Key Technology Platforms and Partnerships | Technology Platform | Description | Partner/Program Count (as of Dec 31, 2019) | | :--- | :--- | :--- | | **OmniAb** | Genetically-engineered animals for discovering fully human antibodies | >40 collaboration partners, ~180 active programs | | **Captisol** | Patented cyclodextrin improving solubility, stability, and bioavailability | >40 partners with drugs in development; marketed in >70 countries | | **Vernalis Design Platform (VDP)** | Structure-guided drug discovery integrating protein structure, screening, and chemistry | 10 partners, 17 active research programs | | **HepDirect/LTP** | Liver-targeting prodrug technology | 6 partners with active programs | | **SUREtechnology Platform** | Economic rights to Selexis's technology for recombinant protein manufacturing | 14 partners, 23 programs | [Commercial and Development Portfolio](index=15&type=section&id=Commercial%20and%20Development%20Portfolio) The portfolio includes key commercial assets like Kyprolis and a diversified pipeline of over 200 partnered programs - Kyprolis, an Amgen product for multiple myeloma formulated with Captisol, is a key revenue driver with tiered royalties of **1.5% to 3.0%** on global net sales[65](index=65&type=chunk)[66](index=66&type=chunk) - The development pipeline includes several noteworthy late-stage assets, such as Retrophin's **Sparsentan** in a pivotal Phase 3 trial and Viking's **VK2809** for NASH[82](index=82&type=chunk)[84](index=84&type=chunk) - The company has a significant number of programs utilizing its **OmniAb platform** in clinical trials through partners like Janssen and WuXi[95](index=95&type=chunk)[96](index=96&type=chunk)[103](index=103&type=chunk) [Royalties and Contract Payments](index=23&type=section&id=Royalties%20and%20Contract%20Payments) The revenue model relies on tiered royalties from partnered products and a potential milestone payment pipeline exceeding $3.3 billion Selected Royalty Rate Agreements | Program | Licensee | Royalty Rate | | :--- | :--- | :--- | | **Kyprolis** | Amgen | 1.5% - 3.0% (Tiered) | | **Evomela** | Acrotech/CASI | 20% (Fixed) | | **Zulresso** | SAGE | 3% (Fixed) | | **Sparsentan** | Retrophin | 9% (Fixed) | | **TR Beta (VK2809/VK0214)** | Viking | 3.5% - 7.5% (Tiered) | | **SARM (VK5211)** | Viking | 7.25% - 9.25% (Tiered) | - Ligand has a potential milestone payment pipeline valued at over **$3.3 billion**, contingent on partners achieving specific development, regulatory, and commercial targets[118](index=118&type=chunk) [Patents and Proprietary Rights](index=29&type=section&id=Patents%20and%20Proprietary%20Rights) The company maintains a strong intellectual property portfolio protecting its core technologies like Captisol and OmniAb - Patents related to the Captisol component of Kyprolis are not expected to expire until **2033**[133](index=133&type=chunk) - The Captisol product itself is covered by patents with the latest expiration date not expected until **2033**, and other patent applications could extend terms to **2040**[136](index=136&type=chunk) - The OmniAb platform has patent protection in 30 countries with patents expected to expire between **2028 and 2034**[139](index=139&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from reliance on key partners, sole-source suppliers, and intellectual property challenges - A substantial portion of royalty revenue is dependent on sales of **Kyprolis** by Amgen and **Evomela** by Acrotech, creating vulnerability to product-specific setbacks[146](index=146&type=chunk) - The company relies on a **sole source supplier for Captisol**, and any supply interruption could significantly impact revenue and customer relationships[149](index=149&type=chunk) - The collaboration-dependent model means partners have significant discretion, and **program terminations could reduce future revenue**[153](index=153&type=chunk) - Third parties have challenged patents, and a settlement will permit a **generic version of Evomela in the U.S. on June 1, 2026**, or earlier under certain circumstances[164](index=164&type=chunk) [Unresolved Staff Comments](index=45&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[206](index=206&type=chunk) [Properties](index=45&type=section&id=Item%202.%20Properties) The company's principal leased facilities are located in California and the United Kingdom Principal Leased Facilities | Location | Size (Approx. Sq. Ft.) | Use | Lease Expiration | | :--- | :--- | :--- | :--- | | San Diego, CA | 7,000 | Corporate headquarters | June 2023 | | Emeryville, CA | 13,000 | Office and laboratory | August 2021 | | Cambridge, UK | 28,000 | Office and laboratory | September 2026 | [Legal Proceedings](index=46&type=section&id=Item%203.%20Legal%20Proceedings) This section refers to Note 10 in the Consolidated Financial Statements for details on legal proceedings - Information regarding legal proceedings is detailed in Note 10 of the financial statements[209](index=209&type=chunk) [Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[209](index=209&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on Nasdaq, and a new $500 million share repurchase program was initiated in 2019 - The company does not currently expect to pay cash dividends, planning to retain earnings for operations, debt repayment, and share repurchases[212](index=212&type=chunk) Q4 2019 Share Repurchases | Period | Total Shares Purchased | Average Price Paid Per Share | Maximum Value Remaining Under Program (in thousands) | | :--- | :--- | :--- | :--- | | Oct 2019 | — | $ — | $408,730 | | Nov 2019 | 625,409 | $107.74 | $341,351 | | Dec 2019 | 135,519 | $107.47 | $326,786 | | **Total Q4** | **760,928** | **$107.69** | **$326,786** | [Selected Consolidated Financial Data](index=49&type=section&id=Item%206.%20Selected%20Consolidated%20Financial%20Data) Five-year data shows revenue decline in 2019 due to the Promacta sale, which drove exceptionally high net income Selected Consolidated Financial Data (2017-2019) | (in thousands, except per share data) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Total revenues** | $120,282 | $251,453 | $141,102 | | **Gain from sale of Promacta license** | $812,797 | $— | $— | | **Income from operations** | $807,076 | $163,727 | $68,076 | | **Net income (loss)** | $629,302 | $143,321 | $12,556 | | **Diluted net income (loss) per share** | $31.85 | $5.96 | $0.53 | | **Total assets** | $1,494,915 | $1,260,803 | $671,021 | | **Total stockholders' equity** | $767,232 | $560,914 | $399,788 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue decreased 52% in 2019 due to the Promacta sale, while liquidity remains strong with over $1 billion in cash [Results of Operations](index=50&type=section&id=Results%20of%20Operations) Total revenue decreased 52% to $120.3 million in 2019, driven by a 63% drop in royalty revenue post-Promacta sale Revenue Comparison (2019 vs. 2018) | Revenue Type | 2019 (in thousands) | 2018 (in thousands) | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Royalty Revenue | $46,976 | $128,556 | $(81,580) | (63)% | | Material Sales | $31,489 | $29,123 | $2,366 | 8% | | License fees, milestones, etc. | $41,817 | $93,774 | $(51,957) | (55)% | | **Total revenue** | **$120,282** | **$251,453** | **$(131,171)** | **(52)%** | - The decrease in royalty revenue was primarily driven by the sale of the Promacta license; Promacta royalties were **$14.2 million** in 2019 compared to **$99.3 million** in 2018[230](index=230&type=chunk)[231](index=231&type=chunk) Operating Costs and Expenses (2019 vs. 2018) | Expense Type | 2019 (in thousands) | 2018 (in thousands) | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Cost of material sales | $11,347 | $6,337 | $5,010 | 79% | | Amortization of intangibles | $16,864 | $15,792 | $1,072 | 7% | | Research and development | $55,908 | $27,863 | $28,045 | 101% | | General and administrative | $41,884 | $37,734 | $4,150 | 11% | | **Total operating costs** | **$126,003** | **$87,726** | **$38,277** | **44%** | [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position with $1.01 billion in cash, bolstered by the Promacta sale - Cash, cash equivalents, and short-term investments stood at approximately **$1.01 billion** at year-end, significantly boosted by proceeds from the Promacta license sale[239](index=239&type=chunk) - The company fully paid off the remaining **$26.3 million** principal of its 2019 Convertible Notes upon maturity in August 2019[241](index=241&type=chunk) - A new **$500 million** stock repurchase program was approved in September 2019, with **$326.8 million** remaining available as of December 31, 2019[243](index=243&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates, equity prices, and foreign currency - The investment portfolio, totaling over **$998 million**, is subject to market and credit risks, including potential declines in value based on market conditions[269](index=269&type=chunk) - The **2023 Convertible Notes** and outstanding warrants expose the company to equity price risk, as their value is tied to Ligand's common stock price[270](index=270&type=chunk)[271](index=271&type=chunk) - Foreign currency risk exists due to international business operations and royalty payments, but the company does not currently hedge these exposures[271](index=271&type=chunk) [Consolidated Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements and accompanying notes for the past three fiscal years [Note 2. Sale of Promacta License](index=83&type=section&id=Note%202.%20Sale%20of%20Promacta%20License) The company sold its Promacta rights to Royalty Pharma for $827.0 million, resulting in an $812.8 million gain - The company sold its Promacta-related intellectual property and royalty stream for **$827.0 million** in cash to Royalty Pharma[374](index=374&type=chunk) - The transaction resulted in a pre-tax gain of **$812.8 million**, recorded in income from operations, with an additional **$14.2 million** recognized as royalty revenue[374](index=374&type=chunk) [Note 4. Business Combinations](index=83&type=section&id=Note%204.%20Business%20Combinations) The company completed several acquisitions, including Ab Initio for $12.0 million and Vernalis for $43.0 million - Acquired Ab Initio on July 23, 2019, for **$12.0 million** in cash, adding a patented antigen technology that resulted in **$7.4 million** of intangible assets and **$6.3 million** of goodwill[379](index=379&type=chunk)[381](index=381&type=chunk) - Acquired Vernalis in October 2018 for **$43.0 million**, adding a structure-based drug discovery platform and portfolio of programs[383](index=383&type=chunk) [Note 7. Convertible Senior Notes](index=91&type=section&id=Note%207.%20Convertible%20Senior%20Notes) The 2019 Convertible Notes were fully paid off, while the $750.0 million 2023 Convertible Notes remain outstanding - On August 15, 2019, the 2019 Notes matured, and the company paid the remaining **$26.3 million** principal amount and **$11.9 million** bond premium in cash, fully extinguishing this debt[408](index=408&type=chunk) - The 2023 Notes with a principal amount of **$750.0 million** remain outstanding, with a carrying value of **$639.0 million** and a fair value of **$647.3 million** as of December 31, 2019[414](index=414&type=chunk)[425](index=425&type=chunk) [Note 10. Commitment and Contingencies: Legal Proceedings](index=101&type=section&id=Note%2010.%20Commitment%20and%20Contingencies%3A%20Legal%20Proceedings) The company is involved in patent litigation concerning EVOMELA®, including a settlement with Teva for a 2026 generic entry - The company settled patent litigation with Teva, allowing for a generic version of EVOMELA® to be marketed in the U.S. starting **June 1, 2026**[451](index=451&type=chunk) - Ligand has filed patent infringement complaints against Alembic and Lupin in response to their ANDA filings for generic versions of EVOMELA®[452](index=452&type=chunk)[454](index=454&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=109&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[473](index=473&type=chunk) [Controls and Procedures](index=109&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[474](index=474&type=chunk) - Based on the 2013 COSO framework, management concluded that internal controls over financial reporting were effective as of December 31, 2019[477](index=477&type=chunk) [Other Information](index=112&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[489](index=489&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=112&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information is incorporated by reference from the company's upcoming Definitive Proxy Statement - This section is incorporated by reference from the company's upcoming Proxy Statement[492](index=492&type=chunk) [Executive Compensation](index=112&type=section&id=Item%2011.%20Executive%20Compensation) Information is incorporated by reference from the company's upcoming Definitive Proxy Statement - This section is incorporated by reference from the company's upcoming Proxy Statement[493](index=493&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=112&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information is incorporated by reference from the company's upcoming Definitive Proxy Statement - This section is incorporated by reference from the company's upcoming Proxy Statement[494](index=494&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=112&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information is incorporated by reference from the company's upcoming Definitive Proxy Statement - This section is incorporated by reference from the company's upcoming Proxy Statement[495](index=495&type=chunk) [Principal Accountant Fees and Services](index=112&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information is incorporated by reference from the company's upcoming Definitive Proxy Statement - This section is incorporated by reference from the company's upcoming Proxy Statement[496](index=496&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=113&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K - This section contains an index of all financial statements and exhibits filed with the annual report[499](index=499&type=chunk) [Form 10-K - Summary](index=121&type=section&id=Item%2016.%20Form%2010-K%20-%20Summary) The company reports no summary for Form 10-K - None[508](index=508&type=chunk)

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) The company's financial position improved significantly in 2019, driven by the Promacta license sale, leading to increased assets and net income despite a quarterly loss [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=5&type=section&id=ITEM%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements reflect a strengthened financial position, significant net income from the Promacta sale, and strategic cash flow management [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2019, total assets were $1.55 billion, an increase from $1.26 billion at December 31, 2018, mainly due to an increase in cash and short-term investments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $225,302 | $117,164 | | Short-term investments | $874,383 | $601,217 | | **Total Assets** | **$1,547,476** | **$1,260,803** | | **Total Liabilities** | **$696,895** | **$699,889** | | **Total Stockholders' Equity** | **$850,581** | **$560,914** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q3 2019, the company reported a net loss of $15.3 million on revenues of $24.8 million, a significant shift from a net income of $67.4 million in Q3 2018 Statement of Operations Summary (in thousands, except per share amounts) | Metric | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $24,808 | $45,663 | $93,279 | $191,863 | | Income (loss) from operations | $(5,158) | $23,362 | $817,255 | $130,578 | | Gain from sale of Promacta license | — | — | $812,797 | — | | Net Income (Loss) | $(15,251) | $67,362 | $636,667 | $185,803 | | Diluted Net Income (Loss) per Share | $(0.81) | $2.80 | $31.29 | $7.61 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2019, net cash used in operating activities was $22.0 million, a decrease from $161.5 million provided in the prior year, mainly due to the non-cash gain on the Promacta sale being excluded Net Cash Flow Summary (in thousands) | Activity | Nine months ended Sep 30, 2019 | Nine months ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(21,997) | $161,487 | | Net cash provided by (used in) investing activities | $530,097 | $(698,571) | | Net cash provided by (used in) financing activities | $(401,479) | $675,670 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies, the Promacta royalty sale, the Ab Initio acquisition, debt repayment, share repurchases, and ongoing legal proceedings - On March 5, 2019, the company sold its rights to Promacta royalties to Royalty Pharma for **$827.0 million in cash**, recognizing a gain of **$812.8 million**[71](index=71&type=chunk) - On July 23, 2019, the company acquired Ab Initio Biotherapeutics, an antigen-discovery company, for an initial purchase price of **$12.0 million**[77](index=77&type=chunk)[78](index=78&type=chunk) - The 2019 Convertible Senior Notes matured on August 15, 2019, and the company paid the remaining **$26.3 million** principal amount in cash[89](index=89&type=chunk) - The company repurchased **$366.5 million** of its common stock in the first nine months of 2019. A new **$500 million** repurchase program was approved in September 2019, with **$408.7 million** remaining available at quarter-end[107](index=107&type=chunk)[109](index=109&type=chunk) - The company settled patent litigation with Teva, permitting Teva to market a generic version of EVOMELA® in the U.S. on June 1, 2026, or earlier under certain circumstances[113](index=113&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue decline due to the Promacta sale, increased operating expenses, key portfolio updates, and strong liquidity supporting share repurchases and strategic investments [Overview](index=32&type=section&id=Overview) Ligand operates as a biopharmaceutical company focused on developing and acquiring technologies to aid pharmaceutical partners in drug discovery and development - Ligand's business model focuses on drug discovery, early-stage development, and partnering to create a diversified portfolio of over **200 programs** with more than **110 partners**[125](index=125&type=chunk)[127](index=127&type=chunk) - Revenue is generated from three primary sources: royalties, Captisol material sales, and license fees/milestones[128](index=128&type=chunk) [Portfolio Program Updates](index=33&type=section&id=Portfolio%20Program%20Updates) Significant portfolio progress includes the Ab Initio acquisition, new license agreements, strong Kyprolis sales, Zulresso® launch, and positive CE-Iohexol clinical trial results - Acquired Ab Initio for **$12 million** to add a patented antigen technology synergistic with the OmniAb® platform[131](index=131&type=chunk) - Kyprolis® third-quarter sales totaled **$280 million**. Amgen announced a collaboration with BeiGene to commercialize Kyprolis in China[131](index=131&type=chunk) - Sage Therapeutics launched Zulresso®, the **11th FDA-approved drug** utilizing Ligand's Captisol technology[131](index=131&type=chunk) - Announced positive topline results from a Phase 1 clinical trial of its internal CE Iohexol program, demonstrating bioequivalence to OMNIPAQUE[133](index=133&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Total revenue for Q3 2019 decreased 46% to $24.8 million compared to Q3 2018, primarily due to the sale of Promacta royalties Revenue Comparison (in thousands) | Revenue Source | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Royalties | $9,767 | $36,127 | $35,931 | $88,343 | | Material sales | $6,849 | $7,027 | $24,357 | $19,030 | | License fees, milestones and other | $8,192 | $2,509 | $32,991 | $84,490 | | **Total revenue** | **$24,808** | **$45,663** | **$93,279** | **$191,863** | - The decrease in royalty revenue is primarily due to the sale of the Promacta license on March 6, 2019; no Promacta royalties were recognized after this date[134](index=134&type=chunk) Operating Costs and Expenses Comparison (in thousands) | Expense Category | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Costs of material sales | $3,147 | $1,460 | $9,410 | $3,382 | | Research and development | $13,742 | $5,483 | $37,244 | $19,023 | | General and administrative | $9,525 | $9,633 | $31,607 | $26,571 | | **Total operating costs and expenses** | **$29,966** | **$22,301** | **$88,821** | **$61,285** | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains strong, with cash, cash equivalents, and marketable securities totaling $1.1 billion as of September 30, 2019 - As of September 30, 2019, cash, cash equivalents, and marketable securities totaled **$1.1 billion**[146](index=146&type=chunk) - The 2019 Notes were fully paid off at maturity on August 15, 2019. The **$750.0 million** 2023 Notes remain outstanding[148](index=148&type=chunk)[149](index=149&type=chunk) - A new **$500 million** stock repurchase program was approved on September 11, 2019, after a prior **$350 million** program was fully utilized[150](index=150&type=chunk)[151](index=151&type=chunk) Cash Flow Summary (in thousands) | Activity | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | | Net cash provided by (used in) Operating activities | $(21,997) | $161,487 | | Net cash provided by (used in) Investing activities | $530,097 | $(698,571) | | Net cash provided by (used in) Financing activities | $(401,479) | $675,670 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company states that there were no substantial changes to its market risks during the third quarter of 2019 compared to the disclosures in its 2018 Annual Report on Form 10-K - There were no substantial changes to market risks in the three and nine months ended September 30, 2019, compared to the disclosures in the 2018 Annual Report[157](index=157&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2019 - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[158](index=158&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[160](index=160&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides updates on legal proceedings, risk factors, equity security sales, and other required disclosures [Item 1. Legal Proceedings](index=39&type=section&id=ITEM%201.%20Legal%20Proceedings) Legal proceedings include an appeal in the AG Oncon case, a settlement with Teva, new EVOMELA® patent lawsuits, and civil complaints related to opioid litigation - For updates on legal proceedings, the report refers to Note 8 in Part I, Item 1[161](index=161&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=ITEM%201A.%20Risk%20Factors) Updated risk factors include market and credit risks, potential revenue shortfalls from key products, reliance on collaborations, and specific risks for the OmniAb platform - The company's investments are subject to market and credit risks, which could be heightened during periods of market volatility and adversely impact financial results[163](index=163&type=chunk) - Future revenue from key products like Kyprolis and Evomela may be lower than expected due to various commercial and competitive risks[166](index=166&type=chunk) - The OmniAb antibody platform faces risks as no drug using its antibodies has been approved, and failure in a partner's clinical trial could negatively impact the platform's perception and future revenue[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the third quarter of 2019, the company repurchased a total of 1,833,896 shares of its common stock Issuer Purchases of Equity Securities (Q3 2019) | Program | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Prior Program | 937,567 | $95.91 | | Current Program | 896,329 | $101.83 | - The prior **$350.0 million** stock repurchase program was fully utilized and terminated in September 2019 upon the approval of a new program[174](index=174&type=chunk) [Item 3. Defaults Upon Senior Securities](index=42&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) None - None[177](index=177&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[178](index=178&type=chunk) [Item 5. Other Information](index=42&type=section&id=ITEM%205.%20Other%20Information) None - None[179](index=179&type=chunk) [Item 6. Exhibits](index=43&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications (Exhibits 31.1, 31.2, 32.1) and financial data in iXBRL format (Exhibits 101, 104)

Washington, D.C. 20549 ________________________________________________________________________________________ FORM 10-Q ________________________________________________________________________________________ ☒ Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the quarterly period ended June 30, 2019 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Per ...

For the Transition Period From ______ to ______ . Commission File Number: 001-33093 LIGAND PHARMACEUTICALS INCORPORATED (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________________________________________ FORM 10-Q ________________________________________________________________________________________ x Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchang ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________________________________________________________ FORM 10-K _____________________________________________________________________________________________ x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2018 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transitio ...