aibioLigand Pharmaceuticals completes $700.0 million 0.00% convertible senior notes offering
Tickers LGND
Ligand closed $700.0 million of 0.00% convertible senior notes due 2031 after the initial purchasers exercised their option in full. Net proceeds were approximately $678.2 million, with about $72.9 million going to note hedges and approximately $60 million to a share repurchase. The initial conversion price is approximately $334.27 per share.
Key facts
- Company
- Ligand Pharmaceuticals Incorporated (NASDAQ: LGND)
- News type
- Debt Financing
- Primary source
- LIGAND PHARMACEUTICALS INC Form 8-K filed June 25, 2026 (SEC EDGAR)
Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) said in its Form 8-K that on June 25, 2026 it completed its private offering of $700.0 million aggregate principal amount of 0.00% Convertible Senior Notes due 2031. The total includes the exercise in full of the initial purchasers' option to buy up to an additional $75.0 million. Net proceeds were approximately $678.2 million. The offering was priced on June 22, 2026 as $625.0 million of notes, according to the company's pricing release.
The filings do not name the initial purchasers. Neither the 8-K nor its exhibits names a financial advisor or a law firm for the offering. The only bank named is U.S. Bank Trust Company, National Association, which is trustee under the indenture.
Terms of the notes
The notes were issued under an indenture dated June 25, 2026. They are general senior, unsecured obligations and mature on September 15, 2031, unless earlier converted, redeemed or repurchased. They bear no regular interest, and the principal does not accrete.
The initial conversion rate is 2.9916 shares of common stock per $1,000 principal amount, an initial conversion price of approximately $334.27 per share. The 8-K says that price is a premium of approximately 27.5% over the last reported sale price on June 22, 2026. Before June 15, 2031, holders may convert only in specified circumstances, such as when the stock trades above 130% of the conversion price. From June 15, 2031 until the second scheduled trading day before maturity, they may convert at any time. On conversion, Ligand pays cash up to the principal and may pay the rest in cash, stock or a mix.
Ligand may not redeem the notes before September 21, 2029. After that date it may redeem them for cash if the stock has traded at or above 130% of the conversion price for at least 20 trading days in a 30 consecutive trading day period. If the company undergoes a fundamental change, holders may require repurchase at 100% of principal.
Where the money goes
The company used approximately $72.9 million of the net proceeds to pay for convertible note hedges, a cost partly offset by the proceeds of warrant sales. It also expects to use approximately $60 million of the proceeds, together with cash on hand, to repurchase 228,859 shares of its common stock at $262.17 per share, the last reported price on June 22, 2026.
The remaining proceeds are for general corporate purposes, including investments in complementary businesses, products and technologies. The company says it has no present commitments to do so beyond its previously announced agreement to acquire XOMA Royalty Corporation. The filings give no price or closing date for that acquisition.
Hedges and warrants
In connection with pricing, Ligand entered into convertible note hedge transactions with certain of the initial purchasers or their affiliates and other financial institutions. The company says the hedges are expected to reduce potential dilution from conversion of the notes and to offset cash payments above principal. Ligand also sold warrants to the same counterparties. The warrants have an initial strike price of $524.34 per share, a premium of 100% over the June 22 last reported sale price. The 8-K warns that the warrants could dilute holders if the stock price exceeds that strike.
The hedge confirmation form filed as Exhibit 10.1 is a blank template. It leaves the dealer name and address as placeholders, so it does not name the counterparties.
The company and its finances
In its press release Ligand calls itself a royalty aggregator, with economic interests in more than 100 development and commercial-stage assets, and says it licenses its Captisol and NITRICIL technologies.
The company's 10-K, filed on February 27, 2026, reports a net loss of $4.0 million for 2024, and net income of $124.5 million for 2025. Year-end 2024 cash and cash equivalents were $72.3 million.
The 2025 profit follows a loss in 2024. The notes add debt that matures on September 15, 2031.
What comes next
The next fixed dates are September 21, 2029, when Ligand may first call the notes, and June 15, 2031, when conversion becomes unrestricted. Both fall before the notes mature on September 15, 2031.