Ligand's Q2 2025: Unraveling Contradictions in Pelthos Launch, Deal Strategies, and Market Dynamics

Pelthos launch expectations, deal strategy and focus areas, share count and dilution impact on EPS, and Filspari full approval and market impact are the key contradictions discussed in Ligand's latest 2025Q2 earnings call.



Revenue Growth and Royalty Portfolio Expansion:
- Ligand Pharmaceuticals reported a 57% increase in royalty revenue and a 14% rise in adjusted EPS for Q2 2025.
- This growth was driven by the strong performance of Ligand’s expanding royalty portfolio, particularly from programs like O2vir and investments in cardiovascular therapies.

Investment and Strategic Mergers:
- The company completed a $40 million investment commitment with Medtronic and Orchestra BioMed, supporting the development of promising cardiovascular therapies.
- The merger of Pelthos with Channel Therapeutics was strategically aligned with Ligand's vision for growth and diversification.

Merck's Acquisition of Verona and Royalty Impact:
- Merck's planned $10 billion acquisition of Verona, where Ligand holds a 3% royalty, is expected to further accelerate the launch trajectory of O2vir.
- The acquisition reflects Merck's global scale and commercial capabilities, which could enhance O2vir's global commercialization.

Strong Financial Performance and Guidance Increase:
- Ligand's total revenue increased by 15% year-over-year to $47.6 million in Q2 2025.
- The company raised full-year 2025 revenue and adjusted EPS guidance, reflecting strong underlying growth and increased visibility into royalty streams, especially from O2vir and Filspari.