Company: LGNZZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000886163-25-000012
Chunk: 161

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 8
Chunk 161
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. Net assets sold together with allocated goodwill and cash consideration paid were as follows (in thousands):

78

Property and equipment, net$8,250 Intangible assets19,895 Other assets717 Operating lease right-of-use assets8,693 Finance lease right-of-use assets20 Accrued liabilities(630)Deferred revenue(495)Long-term operating lease liabilities(8,445)Other liabilities(74)Net assets sold27,931 Allocated goodwill4,132 Cash consideration paid15,000 $47,063 Fair value of the consideration received includes the following (in thousands):Equity method investment$13,706 Equity securities32,278 Derivative assets3,200 $49,184 Goodwill allocated to the selling business based on the relative fair value of the Pelican business and Ligand that was written off was $4.1 million, resulting in a $2.1 million gain on sale of Pelican recorded to income (loss) from operations for the year ended December 31, 2023.Transaction costs of $1.2 million were allocated to the equity method investment and equity securities based on the relative fair value.As described above, we will receive 25% of sales revenue of PeliCRM197 above $3.0 million and 35% of all PeliCRM197 licensing revenue in perpetuity. The considerations were recognized as contingent consideration under the loss recovery model and they will be measured based on the gain contingency model under ASC 450, Contingencies, and thus, will be recognized as the underlying contingencies are resolved.In addition, we will receive 50% of potential development milestones and certain commercial milestones from two contracts previously entered into by Primordial Genetics. The considerations were recognized as derivative assets with a fair value of $3.2 million, at the disposition date, which was included in noncurrent derivative assets in our consolidated balance sheets. They are recognized as derivative assets under ASC 815, Derivatives and Hedging, as they have two underlyings (development and commercial milestones) and (i) the commercial milestones are dependent on the development milestones and (ii) the commercial milestone underlying is not determined to be predominate. The derivative assets are recorded at fair value as of September 18, 2023, and will be marketed to fair value at each reporting period going forward. During the year ended December 31, 2024, an adjustment of $(0.1)