Ligand Pharmaceuticals announced a $739 million cash purchase of XOMA Royalty Corporation, valuing the deal at $39.00 per share. The transaction, expected to close in the third quarter of 2026, will add seven marketed products and nearly double Ligand’s portfolio of Phase 2 and 3 assets, bringing the combined company’s total to more than 200 assets. The deal is immediately accretive to Ligand’s adjusted earnings per share, with management projecting a $1.50 increase in adjusted EPS for 2027.
The acquisition lifts Ligand’s 2026 revenue outlook to $270 million–$310 million and adjusted EPS guidance to $8.50–$9.50, up from the prior guidance of $245 million–$285 million and $8.00–$9.00, respectively. The upgrade follows a 2025 full‑year revenue of $268 million and adjusted EPS of $8.13, and a Q4 2025 revenue of $59.7 million, underscoring the company’s confidence that the added assets will generate additional cash flow and earnings growth.
Management highlighted the strategic fit of the transaction, stating, "This is an exciting acquisition of a highly complementary business that meaningfully expands Ligand's royalty portfolio and accelerates near‑term and long‑term growth." The company also noted that it can absorb the XOMA portfolio with almost 100% synergies, and that the deal will add seven marketed products and nearly double its Phase 2 and 3 assets, creating significant value for shareholders through a single transaction.
The market reacted positively to the announcement. Analysts at Stifel, BofA Securities, and Oppenheimer raised their guidance for Ligand, reflecting confidence in the immediate earnings accretion and the broadened royalty base. XOMA shares were trading above the cash offer, reflecting the premium and the value of the contingent value right tied to potential litigation proceeds.
The acquisition positions Ligand as a leading biopharma royalty aggregator, diversifying its revenue streams and extending the duration of its royalty rights beyond 2040. While integration and litigation outcomes present potential headwinds, the strategic expansion and expected synergies provide a strong tailwind, supporting a robust long‑term growth trajectory for the combined entity.
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