Ligand Reports Fourth Quarter and Full Year 2012 Financial Results

  Ligand Reports Fourth Quarter and Full Year 2012 Financial Results

            Conference Call Begins at 4:30 p.m. Eastern time today

Business Wire

SAN DIEGO -- February 13, 2013

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

  *Ligand partner GlaxoSmithKline announced that the FDA approved Promacta
    for the treatment of thrombocytopenia (low blood platelet counts) in
    patients with chronic hepatitis C to allow them to initiate and maintain
    interferon-based therapy. Promacta is the first supportive care treatment
    available to patients who are ineligible or poor candidates for
    interferon-based therapy due to low blood platelet counts. Promacta in
    combination with interferon-based therapy has been shown to improve a
    patient’s ability to achieve sustained virologic response or viral cure.
  *GlaxoSmithKline received marketing approval for Promacta for the treatment
    of chronic idiopathic thrombocytopenia in Bangladesh. Promacta is now
    approved for sale in 92 countries worldwide.
  *Ligand initiated a pivotal trial of Captisol-enabled, propylene
    glycol-free (PG-free) high-dose melphalan as a conditioning treatment
    prior to autologous stem cell transplant for patients with multiple
    myeloma. This multi-center trial will evaluate safety and efficacy in 60
    patients, and is intended to confirm the results from an earlier Phase 2a
    study demonstrating that the PG-free melphalan intravenous formulation was
    safe and well-tolerated, and met the requirements for establishment of
    bioequivalence to the current commercial intravenous formulation of
    melphalan (sold by GlaxoSmithKline as Alkeran^® for Injection).
  *Ligand partner Pfizer announced that the FDA accepted for review a New
    Drug Application (NDA) for bazedoxifene/conjugated estrogens (BZA/CE), a
    potential new medicine for non-hysterectomized women for the treatment of
    moderate-to-severe vasomotor symptoms and vulvar and vaginal atrophy
    associated with menopause, as well as the prevention of postmenopausal
    osteoporosis. The FDA Prescription Drug User Fee Act (PDUFA) date is
    October 3, 2013.
  *Ligand presented preclinical data on LG-7501 at the 63^rd Annual Meeting
    of the American Association for the Study of Liver Diseases. LG-7501 is a
    small molecule inhibitor of NS5B polymerase for the treatment of hepatitis
    C virus infection, which uses Ligand’s HepDirect™ liver-targeting
    technology platform.
  *Ligand received a milestone payment of 620,000 shares of common stock in
    partner Retrophin, Inc., valued at approximately $1.4 million as of the
    transaction date and as of December 31, 2012, under the previously
    executed license agreement for the development and commercialization of
    Retrophin’s lead clinical candidate RE-021, formerly known as DARA (a Dual
    Acting Receptor Antagonist of Angiotensin and Endothelin receptors).
    Receipt of this milestone was triggered by the completion of Retrophin’s
    merger with Desert Gateway, Inc. and its transition to a publicly traded
    company.
  *Investigators reported additional data from Ligand’s successfully
    completed Phase 2a study of Captisol-enabled, PG-free melphalan, which
    will be presented this evening in a poster session at the 2013 BMT Tandem
    Meetings Conference in Salt Lake City.

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]

LIGAND PHARMACEUTICALS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)

                Three Months Ended December 31,  Twelve Months Ended December
                                                   31,
                  2012          2011           2012          2011       
                 (unaudited)                       (unaudited)
Revenues:
Royalties        $ 4,817          $ 2,616          $ 14,073         $ 9,213
Material sales     5,282            6,460            9,432            12,123
Collaborative
research and
development       3,536          3,861          7,883          8,701      
and other
revenues
Total revenues     13,635           12,937           31,388           30,037
                                                                    
Operating
costs and
expenses:
Cost of goods      2,328            2,059            3,601            4,909
sold
Research and       2,476            2,599            10,790           10,291
development
General and        4,283            3,709            16,108           14,977
administrative
Write-off of
in-process         -                -                -                2,282
research and
development
Lease exit and
termination       156            147            315            (22        )
costs
Total
operating          9,243            8,514            30,814           32,437
costs and
expenses
Amortization
of deferred       -              426           -             1,702      
gain on sale
leaseback
Gain (loss)
from               4,392            4,849            574              (698       )
operations
Other income       (601       )     (174       )     (2,789     )     (1,847     )
(expense), net
Decrease
(increase) in      (2,841     )     304              (1,650     )     (1,013     )
contingent
liabilities
Income tax
(expense)         1,636          (289       )    1,191          13,270     
benefit
Income (loss)
from              2,586          4,690          (2,674     )    9,712      
continuing
operations
Income (loss)
from
discontinued      (1,523     )    -              2,147          3          
operations,
net of taxes
Net income       $ 1,063         $ 4,690         $ (527       )   $ 9,715      
Basic and
diluted per
share amounts:
Income (loss)
from             $ 0.13           $ 0.24           $ (0.13      )   $ 0.49
continuing
operations
Discontinued      (0.08      )    -              0.11           -          
operations
Net income       $ 0.05          $ 0.24          $ (0.03      )   $ 0.49       
                                                                    
Weighted
average number     20,034,558       19,674,945       19,853,095       19,655,632
of common
shares-basic
Weighted
average number     20,124,331       19,738,228       19,853,095       19,713,320
of common
shares-diluted


LIGAND PHARMACEUTICALS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

                                        December 31, 2012  December 31, 2011
Assets                                   (unaudited)
Current assets:
Cash, cash equivalents and short-term    $     12,381        $     17,041
investments
Accounts receivable                            4,589               6,110
Inventory                                      1,697               1,301
Other current assets                           829                 1,581
Current portion of co-promote                 4,327              6,197
termination asset
Total current assets                           23,823              32,230
                                                             
Restricted cash and investments                2,767               1,341
Property and equipment, net                    788                 455
Goodwill and other identifiable                68,150              70,564
intangible assets
Long-term portion of co-promote                8,207               15,255
termination asset
Other assets                                  525                738
Total Assets                             $     104,260       $     120,583
                                                             
Liabilities and Stockholders' Equity
Accounts payable and accrued             $     16,277        $     27,446
liabilities
Current portion of co-promote                  4,327               6,197
termination liability
Current portion of note payable                14,835              -
Bank line of credit                           -                  10,000
Total current liabilities                      35,439              43,643
Long-term portion of co-promote                8,207               15,255
termination liability
Long-term portion of deferred revenue          2,369               3,466
Long-term debt                                 13,443              20,286
Other long-term liabilities                   18,317             21,404
Total liabilities                              77,775             104,054
Common stock subject to conditional            -                   8,344
redemption
Stockholders' equity                          26,485             8,185
Total liabilities and stockholders'      $     104,260       $     120,583
deficit


LIGAND PHARMACEUTICALS INCORPORATED
NON-GAAP FINANCIAL MEASURES
(in thousands, except share data)

                             Three Months Ended December 31, 2012
                              GAAP            CVR Adjustment  NON-GAAP
                              (unaudited)
Gain (loss) from operations     4,392            -                4,392
Other income (expense), net     (601       )     -                (601       )
Decrease (increase) in          (2,841     )     2,841            -
contingent liabilities
Income tax (expense)           1,636          -              1,636      
benefit
Income (loss) from             2,586          2,841          5,427      
continuing operations
Income (loss) from
discontinued operations,       (1,523     )    -              (1,523     )
net of taxes
Net income                    $ 1,063         $ 2,841         $ 3,904      
Basic and diluted per share
amounts:
Income (loss) from            $ 0.13           $ 0.14           $ 0.27
continuing operations
Discontinued operations        (0.08      )    -              (0.08      )
Net income                    $ 0.05          $ 0.14          $ 0.19       
                                                                
Weighted average number of      20,034,558       20,034,558       20,034,558
common shares-basic
Weighted average number of      20,124,331       20,124,331       20,124,331
common shares-diluted
                                                                
                              Three Months Ended December 31, 2011
                              GAAP             CVR Adjustment   NON-GAAP
                                                                
Gain (loss) from operations     4,849            -                4,849
Other income (expense), net     (174       )     -                (174       )
Decrease (increase) in          304              (304       )     -
contingent liabilities
Income tax (expense)           (289       )    -              (289       )
benefit
Income (loss) from             4,690          (304       )    4,386      
continuing operations
Income (loss) from
discontinued operations,       -              -              -          
net of taxes
Net income                    $ 4,690         $ (304       )   $ 4,386      
Basic and diluted per share
amounts:
Income (loss) from            $ 0.24           $ (0.02      )   $ 0.22
continuing operations
Discontinued operations        -              -              -          
Net income                    $ 0.24          $ (0.02      )   $ 0.22       
                                                                
Weighted average number of      19,674,945       19,674,945       19,674,945
common shares-basic
Weighted average number of      19,738,228       19,738,228       19,738,228
common shares-diluted


LIGAND PHARMACEUTICALS INCORPORATED
NON-GAAP FINANCIAL MEASURES
(in thousands, except share data)

                             Twelve Months Ended December 31, 2012
                              GAAP            CVR Adjustment  NON-GAAP
                              (unaudited)
Gain (loss) from operations     574               -               574
Other income (expense), net     (2,789     )      -               (2,789     )
Decrease (increase) in          (1,650     )      1,650           -
contingent liabilities
Income tax (expense)           1,191           -              1,191      
benefit
Income (loss) from             (2,674     )     1,650          (1,024     )
continuing operations
Income (loss) from
discontinued operations,       2,147           -              2,147      
net of taxes
Net income                    $ (527       )   $  1,650         $ 1,123      
Basic and diluted per share
amounts:
Income (loss) from            $ (0.13      )   $  0.08          $ (0.05      )
continuing operations
Discontinued operations        0.11            -              0.11       
Net income                    $ (0.03      )   $  0.08          $ 0.06       
                                                                
Weighted average number of      19,853,095        19,853,095      19,853,095
common shares-basic
Weighted average number of      19,935,718        19,935,718      19,935,718
common shares-diluted
                                                                
                                                                
                              Twelve Months Ended December 31, 2011
                              GAAP             CVR Adjustment   NON-GAAP
                                                                
Gain (loss) from operations     (698       )      -               (698       )
Other income (expense), net     (1,847     )      -               (1,847     )
Decrease (increase) in          (1,013     )      1,013           -
contingent liabilities
Income tax (expense)           13,270          -              13,270     
benefit
Income (loss) from             9,712           1,013          10,725     
continuing operations
Income (loss) from
discontinued operations,       3               -              3          
net of taxes
Net income                    $ 9,715         $  1,013         $ 10,728     
Basic and diluted per share
amounts:
Income (loss) from            $ 0.49           $  0.05          $ 0.55
continuing operations
Discontinued operations        -               -              -          
Net income                    $ 0.49          $  0.05          $ 0.55       
                                                                
Weighted average number of      19,655,632        19,655,632      19,655,632
common shares-basic
Weighted average number of      19,713,320        19,713,320      19,713,320
common shares-diluted

Contact:

Ligand Pharmaceuticals Incorporated
John L. Higgins, President and CEO
Jennifer Capuzelo, Investor Relations
jcapuzelo@ligand.com
(858) 550-7584
or
LHA
Don Markley
dmarkley@lhai.com
(310) 691-7100