Ligand Reports First Quarter Financial Results

  Ligand Reports First Quarter Financial Results

                     Authorizes Share Repurchase Program

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

Business Wire

SAN DIEGO -- May 08, 2013

Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) today reported financial
results for the first quarter ended March 31, 2013, and provided an operating
forecast and program updates.

“We have had an excellent start to 2013 and are excited about how quickly the
company is evolving into a financial growth story,” said John Higgins, CEO and
President of Ligand. “Since the beginning of 2013, we signed an important
licensing agreement, acquired milestone and royalty rights that significantly
expanded our portfolio, and announced research data for pipeline programs.
Most notably, royalties from Promacta and Kyprolis continue to perform very
well, with Kyprolis exceeding our initial expectations. We are now generating
sustainable cash flow, which has allowed us to pay down debt earlier than
planned and to announce a share repurchase program today. These initiatives
speak to our confidence in the future of our business.”

Highlights for the first quarter include total revenues of $11.7 million,
non-GAAP net income of $3.3 million, or $0.16 per diluted share and GAAP net
income of $1.5 million, or $0.07 per diluted share. A description of the
non-GAAP calculations and reconciliation to comparable GAAP financial measures
is provided in the accompanying table titled “Non-GAAP Financial Measures.”

First Quarter Financial Results

Total revenues from continuing operations for the first quarter of 2013 were
$11.7 million, compared with $5.6 million for the same period in 2012. Royalty
revenues increased by 90% to $5.8 million as compared with $3.1 million for
the same period in 2012, primarily due to higher royalties from Promacta^® and
new royalties from Kyprolis^®. License fees and milestones increased $2.4
million compared with the first quarter of 2012, primarily due to the license
fee earned from Spectrum Pharmaceuticals for Captisol-Enabled™ Melphalan.

Cost of goods sold was $0.7 million for the first quarter of 2013, compared
with $0.2 million for the first quarter of 2012. The increase is primarily due
to higher material sales compared with the first quarter of 2012. Other
operating costs and expenses from continuing operations in the first quarter
of 2013 were $7.1 million, compared with $6.3 million in the first quarter of
2012. Research and development expenses decreased by $0.4 million compared
with the first quarter of 2012, primarily due to lower spending on internal
development programs. General and administrative expenses increased $1.1
million compared with the same quarter a year ago due primarily to higher
non-cash stock-based compensation expense.

Net income for the first quarter of 2013 was $1.5 million, or $0.07 per
diluted share, compared with $1.1 million, or $0.06 per diluted share, in the
first quarter of 2012. Excluding an increase in contingent liabilities for the
first quarter of 2013 of $1.8 million, or $0.09 per diluted share, and a
decrease in contingent liabilities for the first quarter of 2012 of $0.5
million, or ($0.03) per diluted share, net income for the first quarter of
2013 was $3.3 million, or $0.16 per diluted share, compared with net income
for the first quarter of 2012 of $0.6 million, or $0.03 per diluted share.

As of March 31, 2013, Ligand had cash, cash equivalents, short-term
investments and restricted investments of approximately $9.0 million. During
the first quarter of 2013, Ligand used $7.0 million of cash to prepay a
portion of its outstanding debt.

Corporate Share Repurchase

Ligand’s Board of Directors has authorized a share repurchase program of up to
$5.0 million to be used over the next 12 months. With this authorization, the
Company may repurchase stock from time to time in the open market. The Company
also expects to repay in full its remaining $18.0 million in debt by August
2014 per the existing repayment schedule. The Company believes it will be able
to pay down its debt and implement a share repurchase program based on its
operating outlook and expectations for rising cash flow from operations.

2013 Financial Forecast

Affirming its previous 2013 financial forecast, the Company expects total
revenues to be between $43 million and $46 million, and earnings per diluted
share to be between $0.47 and $0.51. For the second quarter of 2013, Ligand
estimates revenues to be between $9.0 million and $9.5 million, and earnings
per diluted share to be between $0.03 and $0.05. Earnings per share guidance
does not include the effects of any increase or decrease in contingent
liabilities.

First Quarter and Recent Business Highlights

  *Ligand acquired financial rights to potential future milestones and
    royalties for more than 15 biologic development programs from Selexis SA.
    Each acquired program is fully funded by a development partner. Selexis is
    a privately held global life science company based in Switzerland focused
    on drug discovery for lead identification and cell line development for
    scale-up and manufacturing of therapeutic protein drugs.
  *Ligand entered into an international license agreement and a supply
    agreement with Spectrum Pharmaceuticals for the development and
    commercialization of Ligand’s Captisol-enabled, propylene glycol-free
    melphalan. Under the terms of the license agreement, Ligand received a $3
    million license fee and is eligible to receive milestone payments and
    royalties on future net sales of Captisol-enabled melphalan.
  *Ligand received a $1.4 million milestone payment from Retrophin, Inc.
    related to a license agreement signed in February 2012 for the development
    of RE-021 for the treatment of focal segmental glomerulosclerosis (FSGS).
    Ligand is entitled to receive milestone payments and royalties on
    successful future development and commercialization of RE-021 under this
    agreement. Retrophin is preparing to initiate a Phase 2 trial for RE-021
    in FSGS in 2013.
  *Ligand presented positive preclinical data on its HepDirect™
    liver-targeting technology platform at the 2013 International Liver
    Congress (EASL) Annual Meeting in Amsterdam.
  *Ligand paid $7.0 million of principal earlier than planned on its
    outstanding debt under its Loan and Security Agreement with Oxford Finance
    Corporation. Ligand’s new principal debt balance is $18.0 million, which
    is expected to be fully paid by August 2014.
  *Investigators reported clinical data on Captisol-enabled IV-Topiramate
    that was featured in the May 2013 issue of the journal Epilepsia.

Non-GAAP Financial Measures

The adjusted non-GAAP (U.S. Generally Accepted Accounting Principles)
financial measures discussed above for the quarters ended March 31, 2013 and
2012 exclude expenses related to the increase or decrease in liability for
contingent liabilities.

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 ended March
31, 2013 and 2012. 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 June 7, 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 412205. Individual investors can access the Webcast
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, Onyx Pharmaceuticals,
Merck, Pfizer, Baxter International, Bristol-Myers Squibb, Celgene, Lundbeck
Inc., Eli Lilly & Co., Spectrum Pharmaceuticals and The Medicines Company.
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 and research and
development milestone payments may not be received. 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 the second quarter of 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. Further, Ligand may not
generate its expected revenues under its existing license agreements and may
experience significant costs as the result of potential delays under its
supply agreements. 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.

                                             
LIGAND PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except share data)
                                               
                                               Three Months Ended March 31,
                                                2013          2012       
                                                                
Revenues:
Royalties                                      $ 5,826          $ 3,060
Material sales                                   1,539            667
Collaborative research and development and      4,286          1,909      
other revenues
Total revenues                                   11,651           5,636
                                                                
Operating costs and expenses:
Cost of goods sold                               663              155
Research and development                         2,465            2,817
General and administrative                       4,502            3,416
Lease exit and termination costs                89             87         
Total operating costs and expenses              7,719          6,475      
Gain (loss) from operations                      3,932            (839       )
Other expense, net                               (721       )     (447       )
(Increase) decrease in contingent                (1,841     )     513
liabilities
Income tax (expense) benefit                    (66        )    35         
Income (loss) from continuing operations        1,304          (738       )
Income from discontinued operations, net of     191            1,871      
taxes
Net income                                     $ 1,495         $ 1,133      
Basic and diluted per share amounts:
Income (loss) from continuing operations       $ 0.06           $ (0.04      )
Discontinued operations                         0.01           0.10       
Net income                                     $ 0.07          $ 0.06       
                                                                
Weighted average number of common                20,189,378       19,709,078
shares-basic
Weighted average number of common                20,280,030       19,738,801
shares-diluted
                                                                             
                                                                             

LIGAND PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                          
                                            March 31, 2013   December 31, 2012
Assets                                      (unaudited)
Current assets:
Cash, cash equivalents and short-term       $    5,037       $     12,381
investments
Accounts receivable                              4,622             4,589
Inventory                                        2,838             1,697
Other current assets                             986               829
Current portion of co-promote termination       4,257            4,327
asset
Total current assets                             17,740            23,823
                                                             
Restricted cash and investments                  3,933             2,767
Property and equipment, net                      758               788
Goodwill and other identifiable                  67,557            68,150
intangible assets
Long-term portion of co-promote                  7,916             8,207
termination asset
Other assets                                    459              525
Total Assets                                $    98,363      $     104,260
                                                             
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities    $    15,548      $     16,277
Current portion of co-promote termination        4,257             4,327
liability
Current portion of note payable                 13,212           14,835
Total current liabilities                        33,017            35,439
Long-term portion of co-promote                  7,916             8,207
termination liability
Long-term portion of deferred revenue            2,125             2,369
Long-term debt                                   5,494             13,443
Other long-term liabilities                     19,215           18,317
Total liabilities                                67,767            77,775
Stockholders' equity                            30,596           26,485
Total liabilities and stockholders'         $    98,363      $     104,260
deficit
                                                                   
                                                                   

LIGAND PHARMACEUTICALS INCORPORATED
NON-GAAP FINANCIAL MEASURES
(in thousands, except share data)
                                                            
                              Three Months Ended March 31, 2013
                                               Contingent
                              GAAP             Liabilities      NON-GAAP
                                               Adjustment
                              (unaudited)
Gain from operations          $ 3,932          $ -              $ 3,932
Other expense, net              (721       )     -                (721       )
Increase in contingent          (1,841     )     1,841            -
liabilities
Income tax expense             (66        )    -              (66        )
Income from continuing         1,304          1,841          3,145      
operations
Income from discontinued       191            -              191        
operations, net of taxes
Net income                    $ 1,495         $ 1,841         $ 3,336      
Basic per share amounts:
Income from continuing        $ 0.06           $ 0.10           $ 0.16
operations
Discontinued operations        0.01           -              0.01       
Net income                    $ 0.07          $ 0.10          $ 0.17       
                                                                
Diluted per share amounts:
Income from continuing        $ 0.06           $ 0.09           $ 0.15
operations
Discontinued operations        0.01           -              0.01       
Net income                    $ 0.07          $ 0.09          $ 0.16       
                                                                
Weighted average number of      20,189,378       20,189,378       20,189,378
common shares-basic
Weighted average number of      20,280,030       20,280,030       20,280,030
common shares-diluted
                                                                
                              Three Months Ended March 31, 2012
                                               Contingent
                              GAAP             Liabilities      NON-GAAP
                                               Adjustment
                                                                
Loss from operations          $ (839       )   $ -              $ (839       )
Other expense, net              (447       )     -                (447       )
Decrease in contingent          513              (513       )     -
liabilities
Income tax benefit             35             -              35         
Income (loss) from             (738       )    (513       )    (1,251     )
continuing operations
Income (loss) from
discontinued operations,       1,871          -              1,871      
net of taxes
Net income                    $ 1,133         $ (513       )   $ 620        
Basic and diluted per share
amounts:
Loss from continuing          $ (0.04      )   $ (0.03      )   $ (0.07      )
operations
Discontinued operations        0.10           -              0.10       
Net income                    $ 0.06          $ (0.03      )   $ 0.03       
                                                                
Weighted average number of      19,709,078       19,709,078       19,709,078
common shares-basic
Weighted average number of      19,738,801       19,738,801       19,738,801
common shares-diluted

Contact:

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