Company: LGNZZ
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000886163-25-000063
Chunk: 89

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Item 8
Chunk 89
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ized product occurs. Fixed or milestone payments receivable based on the achievement of contractual criteria for products arising out of our R&D arrangements are recognized as contract revenue and other income in the period that the milestone threshold is met. Derivative AssetsAs of September 30, 2025, all our derivative assets are warrants which are not used for risk management purposes. See Note 3, Investment Transactions.As a result of our early adoption of ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606), certain assets previously accounted as derivatives have qualified for a new derivative scope exception introduced by ASU 2025-07, and are now accounted for as financial royalty assets with January 1, 2025, being the effective date of ASU 2025-07 adoption. Such assets include (1) our rights in future milestone and royalty payments from Agenus Partnered Programs (see Note 3, Investment Transactions), (2) rights to receive from Primrose Bio 50% of milestone payments on two contracts previously entered into by Primordial Genetics (“Primrose mRNA”), and (3) Castle Creek Milestone (as defined in Note 3, Investment Transactions). All derivatives are measured at fair value on the condensed consolidated balance sheets. Derivative assets consist of the following (in thousands):September 30, 2025December 31, 2024Agenus Partner Programs$— $6,326 Primrose mRNA— 3,451 Agenus Warrant1,282 806 Castle Creek Warrant5,242 — Orchestra Warrant2,112 — Arecor Warrant715 —      Total noncurrent derivative assets$9,351 $10,583  A change in the fair value of warrants that amounted to $(0.7) million and $(0.1) million, respectively, for the three and nine months ended September 30, 2025, was included in other non-operating expense, net in the condensed consolidated statements of operations. Due to the adoption of ASU 2025-07, a change in the fair value of Agenus Partner Programs, Primrose mRNA and Castle Creek Milestone derivatives that amounted to $(0.5) million, $(0.6) million and $0.3 million, respectively, which was previously included in fair value adjustments to partner program derivatives in the condensed consolidated statement of operations for the