Company: LGNZZ
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000886163-25-000036
Chunk: 65

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Item 8
Chunk 65
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 three months ended March 31, 2025 or 2024.

16

Other Assets and Other Current AssetsOther assets include economic rights related to the 2023 expansion of our strategic partnership with Palvella to accelerate Phase 3 development of Qtorin™ rapamycin for the treatment of Microcystic Lymphatic Malformations (“Microcystic LMs”). According to the terms of the second amendment to our development funding and royalties agreement with Palvella (the “Palvella Second Amendment”), Palvella received an upfront payment of $5 million from Ligand. In return for the upfront payment, among other contractual changes, the tiered royalty payable by Palvella to Ligand was increased to between 8.0% and 9.8% based on annual aggregate worldwide net sales of Qtorin rapamycin. We are not obligated to provide additional funding to Palvella for development or commercialization of Qtorin.We determined the economic rights related to Palvella should be characterized as a funded research and development arrangement, because the contract designated the funds usage for research and development activities, and thus we account for them in accordance with ASC 730-20, Research and Development Arrangement. We reduce our asset as the funds are expended by Palvella. As of March 31, 2025, of the $5 million upfront funding related to the Palvella Second Amendment, $2.0 million of the funding to Palvella was expended. Our CEO and director, Todd Davis, is a director of Palvella. Mr. Davis recused himself from both boards’ consideration of the agreement between us and Palvella, including any financial analysis, the terms of the Palvella Second Amendment and the vote to approve the Palvella Second Amendment and the related transactions.Other current assets primarily include $10.1 million current portion of financial royalty assets (disclosed in Note 5, Financial Royalty Assets, net).Accrued LiabilitiesAccrued liabilities consist of the following (in thousands):March 31,December 31,20252024Royalties owed to third parties$7,633 $6,500 Professional fees5,428 4,858 UK value-added tax5,587 5,159 Compensation1,890 5,522 Subcontractor1,756 1,756 Customer deposit621 621 Other622 3,490      Total accrued liabilities$23,