Company: LGNZZ
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000886163-25-000063
Chunk: 110

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Item 8
Chunk 110
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 As such, the Elutia asset was switched from the non-accrual method to the effective interest method during the first quarter of 2024. We further considered the current and expected future economic and market conditions, current company performance and recent payments received from Elutia. In May 2025, we executed a second amendment to our agreement with Elutia where we received $2.3 million of Elutia common stock in lieu of cash payment, which was recorded to short-term investments in our condensed consolidated balance sheet. During the three months ended September 30, 2025 and 2024, we recorded a reduction of $0.2 million and $0.3 million, respectively, to Elutia allowance of expected credit loss. During the nine months ended September 30, 2025 and 2024, we recorded a reduction of $1.0 million and $4.9 million, respectively, to Elutia allowance of expected credit loss. Arecor ProgramsAs discussed in Note 3, Investment Transactions, we acquired certain financial royalty assets within the Arecor Transaction, including AT220  (Tyenne) and AT292 programs, recorded at $4.8 million and $1.9 million, respectively, as of the Arecor Transaction closing date. As AT220 is a commercial phase program, we are able to reasonably estimate future cash 

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flows for this financial royalty asset and, as such, we recognized income from the AT220 financial royalty assets starting from the Arecor Transaction closing date. We account for the AT292 financial royalty asset using the non-accrual method until we are able to reliably estimate future cash flows.Primrose mRNAOn September 18, 2023, we entered into a merger agreement, pursuant to which our subsidiary, Pelican Technology Holdings, Inc. (“Pelican”) became a wholly owned subsidiary of Primrose Bio. Simultaneous with the merger, we entered into a purchase and sale agreement with Primrose Bio and contributed $15 million in exchange for 50% of potential development milestones and certain commercial milestones from two contracts previously entered into by Primordial Genetics. A portion of the consideration was initially recognized as derivative assets and adjusted to fair value each reporting period. Upon the adoption of ASU 2025-07, we reclassified the fair value of this asset to financial royalty asset as of January 1, 2025. The asset is currently put under the non-accrual method as