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Ligand Reports Fourth Quarter and Full Year 2012 Financial ResultsSAN DIEGO --(Business Wire)-- Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today announced financial results for the three and 12 months ended December 31, 2012 and reviewed business highlights for the fourth quarter of 2012 and early 2013. Ligand's 2012 Form 10-K is expected to be filed before March 12, 2013. Financial information related to contingent value rights contained in this news release is being finalized and is therefore subject to adjustment. "2012 was a transformational year for Ligand. Our operations reached profitability and positive cash-flow by year-end, and progress made in our late-stage partnered and unpartnered programs demonstrated the tremendous potential of our unique business model," commented John Higgins, President and Chief Executive Officer of Ligand. "We are very pleased with the continued revenue growth of Promacta®, partnered with GlaxoSmithKline, and believe the approval of Onyx's drug Kyprolis® in 2012 is a significant event for Ligand and our Captisol® business. Today, we have seven drugs generating royalties, with a potential for six more royalty-bearing products to be approved in the next three years. We expect to see continued advancement of our pipeline as well as revenue and net income growth in 2013 and beyond." Fourth Quarter Financial Results Total revenues from continuing operations for the fourth quarter of 2012 were $13.6 million, compared with $12.9 million for the fourth quarter of 2011. The $0.7 million increase is primarily due to higher royalty revenues from increased sales of Promacta, partially offset by lower Captisol sales and license and milestone revenues. Cost of goods sold was $2.3 million for the fourth quarter of 2012, an increase of $0.3 million compared with the fourth quarter of 2011. Other operating costs and expenses from continuing operations for the fourth quarter of 2012 were $6.9 million, compared with other operating costs and expenses of $6.5 million for the fourth quarter of 2011. Research and development expenses of $2.5 million were roughly flat compared with the fourth quarter of 2011. General and administrative expenses were $4.3 million, an increase of $0.6 million compared with the fourth quarter of 2011, primarily due to costs associated with tax consulting projects. Net income for the fourth quarter of 2012 was $1.1 million, or $0.05 per share, compared with net income for the fourth quarter of 2011 of $4.7 million, or $0.24 per share. Excluding an increase in liability for contingent value rights of $2.8 million, or $0.14 per share, for the fourth quarter of 2012 and a decrease in liability for contingent value rights of $0.3 million, or $0.02 per share, for the fourth quarter of 2011, net income for the fourth quarter of 2012 was $3.9 million, or $0.19 per share, compared with net income for the fourth quarter of 2011 of $4.4 million, or $0.22 per share. Income from continuing operations for the fourth quarter of 2012 was $2.6 million, or $0.13 per share, compared with income from continuing operations for the fourth quarter of 2011 of $4.7 million, or $0.24 per share. Excluding the increase in liability for contingent value rights of $2.8 million, or $0.14 per share, for the fourth quarter of 2012 and a decrease in liability for contingent value rights of $0.3 million, or $0.02 per share, for the fourth quarter of 2011, income from continuing operations for the fourth quarter of 2012 was $5.4 million, or $0.27 per share, compared with income from continuing operations for the fourth quarter of 2011 of $4.4 million, or $0.22 per share. As of December 31, 2012, Ligand had cash, cash equivalents, short-term investments and restricted investments of $15.1 million and accounts receivable of $4.6 million. Full-Year Financial Results Total revenues for 2012 were $31.4 million, compared with $30.0 million for 2011. Cost of goods sold was $3.6 million for 2012, compared to $4.9 million in 2011. Other operating costs and expenses for 2012 were $27.2 million, including $6.8 million in non-cash expense items, compared with other operating costs and expenses for 2011 of $27.5 million, including a $2.3 million write-off of in-process research and development for discontinued programs. The net loss for 2012 was $0.5 million, or $0.03 per share, compared with net income for 2011 of $9.7 million, or $0.49 per share. Net income for 2011 included a $13.3 million income tax benefit. Excluding the increase in liability for contingent value rights of $1.7 million, or $0.08 per share, for 2012 and $1.0 million, or $0.05 per share, for 2011, net income for 2012 was $1.1 million, or $0.06 per share, compared with net income for 2011 of $10.7 million, or $0.55 per share. The loss from continuing operations for 2012 was $2.7 million, or $0.13 per share, compared with income from continuing operations for 2011 of $9.7 million, or $0.49 per share. Excluding the increase in liability for contingent value rights of $1.7 million, or $0.08 per share, for 2012 and an increase in liability for contingent value rights of $1.0 million, or $0.05 per share, for 2011, the loss from continuing operations for 2012 was $1.0 million, or $0.05 per share, compared with income from continuing operations for 2011 of $10.7 million, or $0.55 per share. 2013 Operating Forecast For 2013 Ligand expects total revenues to be in the range of $41 million to $44 million and combined research and development and general and administrative expenses to be approximately $27 million, including approximately $7 million of non-cash expense items. Net income per share for 2013 is expected to be in the range of $0.35 to $0.39. Fourth Quarter and Recent Business Highlights
Non-GAAP Financial Measures The adjusted non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures discussed above for the quarters and years ended December 31, 2012 and 2011 exclude expenses related to the increase in liability for contingent value rights. Management has presented net income, net income per share, income from continuing operations and income from continuing operations per share in accordance with GAAP and on an "adjusted" basis for the quarters and years ended December 31, 2012 and 2011. Ligand believes that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. Ligand uses these non-GAAP financial measures in connection with its own budgeting and financial planning. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP. Conference Call Ligand management will host a conference call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss this announcement and answer questions. To participate via telephone, please dial (877) 407-4019 from the U.S. or (201) 689-8337 from outside the U.S., using the passcode "Ligand." A replay of the call will be available until March 12, 2013 at 5:30 p.m. Eastern time by dialing (877) 660-6853 from the U.S. or (201) 612-7415 from outside the U.S., using passcode is 407649. Individual investors can access the Webcast through Ligand's web site at www.ligand.com. About Ligand Pharmaceuticals Ligand is a biopharmaceutical company that develops and acquires assets it believes will generate royalty revenues and, under its lean corporate cost structure, produce sustainable profitability. Ligand has a diverse asset portfolio addressing the unmet medical needs of patients for a broad spectrum of diseases including thrombocytopenia, multiple myeloma, diabetes, hepatitis, muscle wasting, dyslipidemia, anemia and osteoporosis. Ligand's Captisol platform technology is a patent-protected, chemically modified cyclodextrin with a structure designed to optimize the solubility and stability of drugs. Ligand has established multiple alliances with the world's leading pharmaceutical companies including GlaxoSmithKline, Merck, Pfizer, Eli Lilly & Company, Baxter International, Bristol-Myers Squibb, Celgene, Onyx Pharmaceuticals, Lundbeck Inc. and The Medicines Company, among others. Please visit www.captisol.com for more information on Captisol or www.ligand.com for more information on Ligand. Follow Ligand on Twitter @Ligand_LGND. Forward-Looking Statements This news release contains certain forward-looking statements by Ligand that involve risks and uncertainties and reflect Ligand's judgment as of the date of this release. Actual events or results may differ from Ligand's expectations. For example, we may not receive expected revenue from material sales of Captisol, expected royalties on partnered products or from research and development milestones may not be received, and we and our partners may not be able to timely or successfully advance any product(s) in Ligand's internal or partnered pipeline. In addition, there can be no assurance that Ligand will achieve its guidance for 2013 or beyond, that Ligand will deliver strong cash flow over the long-term, that Ligand's 2013 revenues will be at the levels or be broken down as currently anticipated or that Captisol sales will be sufficiently strong, that Ligand will be able to create future revenues and cash flows by developing innovative therapeutics, that results of any clinical study will be timely, favorable or confirmed by later studies, that products under development by Ligand or its partners will receive regulatory approval, or that there will be a market for the product(s) if successfully developed and approved. Also, Ligand and its partners may experience delays in the commencement, enrollment, completion or analysis of clinical testing for its product candidates, or significant issues regarding the adequacy of its clinical trial designs or the execution of its clinical trials, which could result in increased costs and delays, or limit Ligand's ability to obtain regulatory approval. Further, unexpected adverse side effects or inadequate therapeutic efficacy of Ligand's product(s) could delay or prevent regulatory approval or commercialization. Ligand may also have indemnification obligations to King Pharmaceuticals or Eisai in connection with the sales of the Avinza and oncology product lines. In addition, Ligand may not be able to successfully implement its strategic growth plan and continue the development of its proprietary programs. The failure to meet expectations with respect to any of the foregoing matters may reduce Ligand's stock price. Additional information concerning these and other risk factors affecting Ligand's business can be found in prior press releases available via www.ligand.com as well as in Ligand's public periodic filings with the Securities and Exchange Commission at www.sec.gov. Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. [Tables to follow]
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