Company: LGNZZ
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000886163-25-000036
Chunk: 74

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Item 8
Chunk 74
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 Apeiron development phase financial royalty assets on a non-accrual basis as there is a higher level of uncertainty over the related expected cash flows.For tax purposes this transaction is treated as a stock purchase. As a result, we will not obtain a tax stepped-up basis in Apeiron’s underlying assets and will assume the carryover tax basis. As part of the tax purchase price accounting, deferred tax liabilities of $18.1 million have been recorded to reflect the difference between the book and tax basis of the acquired assets.We account for the earnout liabilities in the Apeiron Acquisition in accordance with ASC450, Contingencies, and will recognize respective liability when the contingency is resolved, and the liability becomes payable. No earnout liability is recognized as of as of March 31, 2025, or as of December 31, 2024.In conjunction with the Apeiron Acquisition, we have also invested $4.2 million (including $0.2 million transaction costs) in common shares of InvIOs Holding AG (“InvIOs”), a privately held spin-off of Apeiron. This investment was part of an €8 million (approximately $8.8 million) round with other investors which would help finance the research and development of three innovative early-stage immuno-oncology assets. Apeiron has previously outlicensed these assets to InvIOs and is entitled to future royalties and milestone payments.As the result of this investment, we did not obtain control or significant influence in InvIOs. We determined that common stock of InvIOs did not have a readily determinable fair value and therefore elected the measurement alternative in ASC 321 to subsequently record the investment at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. When fair value becomes determinable, from observable price changes in orderly transactions, our investment will be marked to fair value.

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5. Financial Royalty Assets, net

Financial royalty assets consist of the following (in thousands):March 31, 2025December 31, 2024Gross carrying value(2)Allowance (1)Net carrying value (2)Gross carrying value(2)Allowance (1)Net carrying valueQarziba$106,161 $(497)$105,664 $105,329 $(484)$104,845 Agenus (Bot/Bal)40,815 (408)