Why did LGND's Q3 earnings exceed forecasts?

Ligand Pharmaceuticals Inc. (LGND) reported robust Q3 2024 earnings, with revenues reaching $51.81 million, surpassing analysts' expectations of $40.65 million by 27.46%. This significant revenue outperformance can be attributed to several key factors:

1. **Royalty Revenues**: The company's revenue growth was primarily driven by a 28% increase in royalty revenues. This indicates that LGND's partnerships and license agreements with pharmaceutical companies are yielding substantial returns.
2. **Strategic Investments**: Ligand Pharmaceuticals has made strategic investments, such as the one in Castle Creek Biosciences, which are likely to support future growth and profitability. These investments likely contributed to the company's ability to increase its revenue streams.
3. **Business Model**: LGND's business model, focused on drug discovery, early-stage drug development, product reformulation, and partnerships, has proven to be effective in generating revenue. This model allows the company to leverage its expertise and technology platforms, such as Captisol®, to create a diversified portfolio of biotech and pharmaceutical product revenue streams.

In conclusion, Ligand Pharmaceuticals' Q3 earnings exceeded forecasts due to a combination of increased royalty revenues, strategic investments, and its effective business model. These factors collectively contributed to the company's robust revenue growth and outperformance in the quarter.

|code|Ticker|Name|Date|Net Income YoY|Net Income|market_code|
|---|---|---|---|---|---|---|
|LGND|LGND.O|Ligand|2024 Q1|105.34220124436817|8.6139E7|185|
|LGND|LGND.O|Ligand|2024 Q2|-2366.8558951965065|-5.1911E7|185|
|LGND|LGND.O|Ligand|2024 Q3|30.18592426749732|-7172000|185|