aibioLigand plans $550 million of convertible notes due 2031
Tickers LGND
Ligand plans a private offering of $550.0 million of notes due 2031 to fund note hedges, a repurchase of up to $75 million of stock and general purposes, including a pending deal for Xoma Royalty Corporation.
Key facts
- Company
- Ligand Pharmaceuticals Incorporated (NASDAQ: LGND)
- News type
- Debt Financing
- Primary source
- SEC Form 8-K
The notes
Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) said on June 22, 2026 that it intends to offer $550.0 million of convertible senior notes due 2031 in a private placement to qualified institutional buyers, subject to market conditions. The initial purchasers would also get a 13-day option to purchase up to an additional $82.5 million of notes.
The notes would be general unsecured, senior obligations of the company. Interest would be paid semiannually on March 15 and September 15, starting March 15, 2027. The notes mature on September 15, 2031 unless they are converted, redeemed or repurchased earlier. The interest rate, initial conversion rate and redemption or repurchase terms will be set at pricing.
On conversion, Ligand will pay cash up to the principal of the notes converted. It can settle any remaining conversion value in cash, shares of common stock or a combination of the two, at its election.
Hedges, warrants and buybacks
Ligand expects to use part of the net proceeds to pay for convertible note hedge transactions with the initial purchasers, their affiliates or other financial institutions, which the release calls the option counterparties. The cost is partly offset by the proceeds of warrant transactions with the same counterparties.
The release is blunt about the downside. It says the warrant transactions "could separately have a dilutive effect" once the share price exceeds the warrants' strike price. It also says that up to $75 million of proceeds will go to repurchase stock from certain note purchasers at the last reported price on the pricing date, and that those repurchases "could result in a higher effective conversion price for the notes."
The release adds that hedging activity by the counterparties could move the stock and the notes, and could affect a holder's ability to convert.
The remaining proceeds would go to general corporate purposes, including investments in complementary businesses. Ligand says it has no present commitments beyond its previously announced agreement to acquire Xoma Royalty Corporation. The release gives no price or terms for the Xoma deal.
Neither the initial purchasers nor the option counterparties are named in the release, and it names no placement agent, advisor or legal counsel.
What the company does
Ligand describes itself as a royalty aggregator. It says it has 12 major commercial-stage royalty assets, which make up most of its royalty revenue, and more than 90 other commercial and development-stage programs. Its Captisol and NITRICIL technologies also earn royalties.
Its revenue comes mainly from royalties on products that partners sell, so the company depends on those partners' commercial results and does not control them. The company's annual report, filed February 27, 2026, says the business was refocused in 2022 after the spin-off of its OmniAb antibody discovery business in November 2022, the spin-off of its Pelican Expression Technology subsidiary in September 2023 and the carve-out of Pelthos Therapeutics in July 2025. The company argues that its model significantly mitigates the volatility of building a business around a few assets. That is its own view, and the annual report text offers no test of it.
Income, operating cash and the balance sheet
Research and development expense was $81.2 million in 2025, up from $21.4 million in 2024. The company reported net income of $124.5 million for 2025, after a net loss of $4.0 million in 2024.
Cash provided by operations, however, fell to $49.4 million in 2025 from $97.0 million in 2024. The release and the annual report passages cited here do not explain the gap between that figure and the reported profit.
At the end of 2024 the company held $72.3 million in cash and cash equivalents and $183.9 million in short-term investments. The release gives no amount for the general corporate purposes portion of the proceeds.