Company: LGNZZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000886163-25-000012
Chunk: 130

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 8
Chunk 130
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0 million. To determine the fair value of the derivative assets, the Company applied a discounted cash flow model using observable and unobservable market data for inputs, including the probability of technical and regulatory success of underlying clinical programs. Auditing management’s estimate of the fair value of the derivative assets involved complex auditor judgment because the fair value calculations were sensitive to changes in assumptions described above, and certain inputs used in the determination of the fair value were based on unobservable data, including the probability of technical and regulatory success of underlying clinical programs.How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls related to the valuation of derivative assets. This included testing controls over management’s review of the significant assumptions and other inputs used in the valuation models.  Our audit procedures included, among others, evaluating the methodology used in the valuation models and the significant assumptions described above. We compared the significant assumptions to published data for clinical trials. We involved our valuation specialists to assist in the evaluation including assessing whether the methodology used in developing the estimate was consistent with valuation practice given the characteristics of the derivative and to develop an independent value of the assets. 

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2016.

San Diego, California

February 28, 2025

59

LIGAND PHARMACEUTICALS INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

 December 31,20242023ASSETSCurrent assets:Cash and cash equivalents $72,307 $22,954 Short-term investments183,858 147,355 Accounts receivable, net38,376 32,917 Inventory14,114 23,969 Income taxes receivable4,073 6,395 Prepaid expenses1,934 1,182 Other current assets16,897 2,657 Total current assets331,559 237,429 Intangible assets, net266,648 299,606 Goodwill105,250 103,370 Long-term portion of financial royalty assets, net185,024 62,291 Noncurrent derivative assets10,583 3,531 Property and equipment, net15,133 15,607 Operating lease right-of-use assets6,907 6,062 Finance lease right-of-use assets2,766 3,393 Equity method investment in Primrose Bio—