Company: LGNZZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000886163-25-000012
Chunk: 3

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1
Chunk 3
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 capital in the segment of the biopharmaceutical market in which we operate, creating significant investment opportunities for Ligand. Unlike open-market equity investing, many of our investments take place under Confidential Disclosure Agreements (CDAs), allowing us access to in-depth, advantageous diligence materials. Our flexible investment structures are designed to mitigate risks and help accommodate different transaction structures in line with our partners' goals. We believe our business model is highly scalable and has significant growth potential. We have assembled a talented, long-tenured team with deep industry relationships, investment experience and industry knowledge. 

From a more tactical perspective, we execute our strategy using four key approaches: royalty monetization, special situations, project finance, and IP technology platform investments. With royalty monetization, we purchase rights on existing royalty contracts that are owned by inventors, academic institutions or companies. There are advantages of royalty investing as a model since royalties 1) require minimal infrastructure, 2) are non-dilutable and 3) their cash flows are often protected in bankruptcy. In special situations investing, we can acquire or restructure companies with valuable assets or partnerships and realize the value of those assets by incubating and partnering the product assets, or holding preestablished royalty contracts/assets. Ligand has a track record of doing this successfully with investments such as:

•Pharmacopeia acquisition in 2008, which yielded Travere’s Filspari

•Metabasis acquisition in 2010, which contributed to the creation of Viking Therapeutics

•Vernalis acquisition in 2018, which yielded Verona’s Ohtuvayre

•Pfenex acquisition in 2020, which yielded five of our major commercial programs – Capvaxive, Vaxnuevance, Rylaze, Pneumosil, and Teriparatide, as well as our equity interest in Primrose Bio

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•Novan acquisition in 2023, which yielded ZELSUVMI

•Apeiron acquisition in 2024, which yielded Qarziba

Project finance involves the provision of development capital to fund late-stage clinical programs in return for royalty contracts that we negotiate, creating synthetic royalties on the future sales of those products. Finally, with IP technology platform acquisitions, we look for platforms that are infrastructure-light with existing royalties in place while providing the potential for new royalties through operating those platforms. Ideal technology IP platforms will be scalable and have broad applicability. Our Captisol and NITRICIL businesses are