Company: LGNZZ
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000886163-25-000063
Chunk: 98

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Item 8
Chunk 98
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, although Ligand does not control Pelthos and is not the primary beneficiary under ASC 810.Concurrent with the Pelthos Transaction, Ligand invested $18.0 million into Pelthos, out of which $12.7 million were invested by Ligand prior to July 1, 2025 in a form of intercompany loan. On July 1, 2025, this intercompany loan was cancelled, and Ligand contributed the remaining balance of $5.3 million to Pelthos.Ligand received Pelthos Series A Convertible preferred shares and Pelthos common shares in connection with the Pelthos Transaction. We assessed Ligand’s consolidation requirements for these investments under ASC 810, Consolidation, and concluded that Ligand is not required to consolidate Pelthos.As further discussed in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, we recorded Pelthos Series A Convertible preferred shares and Pelthos common shares in other investments and equity method investments, respectively, within our condensed consolidated balance sheet, and elected to subsequently measure them using the fair value option, with the change in fair value for these investments being recorded to gain (loss) from change in fair value of equity-method investments and other investments in our condensed consolidated statements of operations.Pelthos Series A preferred sharesPelthos common sharesTotalFair value on July 1, 2025$43,192 $18,900 $62,092 Change in fair value for the three months ended September 30, 202552,786 23,100 75,886 Fair value on September 30, 2025$95,978 $42,000 $137,978 As a result of the Pelthos Transaction, on July 1, 2025, Ligand recognized income in the amount of $53.1 million which was recorded to contract revenue and other income in our condensed consolidated statements of operations for the three and nine months ended September 30, 2025. The amount of income from Pelthos Transaction represents the excess of the fair value of 1) our investment in Pelthos Series A Convertible preferred shares and Pelthos common shares ($62.1 million in total); 2) the carrying amount of LNHC, Inc. assets and liabilities as of July 1, 2025, the date of sale; and 3) $5.3 million cash consideration paid to Pel