Analyst Sees Big Upside In Ligand's Capital-Efficient Biotech Strategy

Stifel initiated coverage on Ligand Pharmaceuticals, Inc. LGND on Wednesday, noting that Ligand has uniquely positioned itself as a strategic partner.

The company’s business model involves funding programs in mid-to late-stage drug development in return for economic rights, purchasing royalty rights in the development stage or commercial biopharmaceutical products, and licensing technology.

Stifel analyst Annabel Samimy writes, “In an inconsistent financing environment, LGND stands as an important source of differentiated capital through royalty-financing deals to mid– to late-stage biopharma companies looking for non-dilutive funding.”

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The analyst says, “LGND has emerged as an aggregator of highly differentiated biopharmaceutical royalty assets with the unique ability to identify, acquire, and develop under-valued assets through its operational expertise.”

Stifel initiated with a Buy rating and a price target of $43.

Analyst Samimy says Ligand mainly works with early-stage biotech companies that constantly need funding and often use it inefficiently. On the technology side, Ligand focuses on proven, scalable platforms. Its key asset is the Captisol platform, which over 100 biotech and pharma companies have licensed.

Ligand Pharmaceuticals reported fourth-quarter adjusted EPS of $1.27, beating the consensus of $1.19, and sales of $42.81 million, beating the consensus of $39.02 million.

Ligand reaffirmed its fiscal 2025 outlook of adjusted EPS of $6.00-$6.25 vs. $6.15 consensus and sales of $180 million-$200 million versus consensus of $187.75 million.

This strategy puts Ligand in a market with constant demand for capital, while building a fast-growing portfolio that avoids the high risk usually seen in early-stage biotech.

Since restructuring in 2022–2023, Ligand has achieved over 20% revenue growth and more than 35% earnings-per-share growth. It aims to continue this trend with a lean cost structure.

Price Action: LGND stock was down 2.46% at $101.29 on Thursday.

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