Company: LGNZZ
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000886163-25-000063
Chunk: 71

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Item 1
Chunk 71
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 operations$117,273 $(7,172)$124,445 $79,669 $27,056 $52,613 Effective tax rate16.9 %(13.1)%22.0 %35.1 %

We compute our income tax provision by applying the estimated annual effective tax rate to income from operations and adding the effects of any discrete income tax items specific to the period. The effective tax rate for the three months ended September 30, 2025 and 2024 was 16.9% and (13.1)%, respectively. The effective tax rate for the nine months ended September 30, 2025 and 2024 was 22.0% and 35.1%, respectively. The variance from the U.S. federal statutory tax rate of 21% for the three and nine months ended September 30, 2025 was primarily due to Section162(m) limitation on deduction for officer compensation, and income from foreign operations, which were partially offset by the foreign derived intangible income 

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deduction. The variance from the U.S. federal statutory tax rate of 21% for the three and nine months ended September 30, 2024 was primarily due to tax benefits from the foreign-derived intangible income deduction as well as the research and development tax credits, which were partially offset by the Section 162(m) limitation during the period.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements.

 Liquidity and Capital Resources 

As of September 30, 2025, our cash, cash equivalents, and short-term investments totaled $664.5 million, which increased by $408.4 million from the end of last year mainly due to the issuance of the Notes in August 2025. Our primary source of liquidity, other than our holdings of cash, cash equivalents, and short-term investments, has been cash flows from operations. Our ability to generate cash from operations provides us with the financial flexibility we need to meet operating, investing, and financing needs.