Company: LGNZZ
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000886163-25-000036
Chunk: 108

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Item 2
Chunk 108
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 in thousands)Q1 2025Q1 2024Change% ChangeGain (loss) from short-term investments$(12,367)$110,772 $(123,139)(111)%Interest income1,771 2,020 (249)(12)%Interest expense(867)(141)(726)515 %Other non-operating expense, net(2,501)(2,192)(309)14 %Total non-operating (expense) income, net$(13,964)$110,459 $(124,423)(113)%

The fluctuation in the gain (loss) from short-term investments is primarily driven by the changes in the fair value of our ownership in Viking common stock and other equity security investments. The net loss from short-term investments was $12.4 million in Q1 2025 as compared to the net gain from short-term investments of $110.8 million in Q1 2024. In Q1 2025, we recorded an unrealized loss on Viking shares of $16.1 million compared to an unrealized gain of $50.8 million in Q1 2024.  

Interest income consists primarily of interest earned on our short-term investments. The decrease over the prior year period was due to the decrease in average investment balances in Q1 2025 compared to Q1 2024.

Interest expense consists primarily of interest accrued related to a royalty and milestone payments purchase agreement, entered by Novan (Pelthos) in 2019, and assumed as part of the acquisition in September 2023.

Other non-operating expense, net, primarily consists of mark-to-market adjustments on derivatives (other than the partner program derivatives) and CVRs. Other non-operating expense, net, in Q1 2025 increased by $0.3 million as compared to Q1 2024, primarily due to the loss from change in fair value of CVR liabilities in Q1 2025. 

Income Tax Expense

(Dollars in thousands)Q1 2025Q1 2024Change(Loss) income before income taxes$(50,180)$113,447 $(163,627)Income tax benefit (expense)7,729 (27,308)35,037 (Loss) income from operations$(42,451)$86,139 $(128,590)Effective tax rate15.4 %24.1 %

We compute our income tax provision by applying the estimated annual effective tax rate to