Ligand Pharmaceuticals: Unaudited Pro Forma Condensed Consolidated Financial Statements

The following excerpt is from the company's SEC filing.

The following unaudited pro forma condensed consolidated statement of operations have been prepared to assist you in your analysis of the financial effects of the sale of the Purchased Assets, and have been presented in accordance with U.S. generally accepted accounting principles. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2018 combines the historical results for Ligand for the twelve months ended December 31, 2018 and the pro forma adjustments as if the sale of the Purchased Assets had occurred on January 1, 2018. The unaudited pro forma condensed consol idated balance sheet as of December 31, 2018 gives effect to the sale of the Purchased Assets as of such date. Our accounting for the pro forma adjustments is preliminary pending completion of several elements, including finalizing after-tax gain on the sale of the Purchased Assets. Accordingly, there may be material adjustments to the pro forma adjustments.

This pro forma financial information does not purport to represent what our actual results of operations or financial position would have been had the sale of the Purchased Assets occurred on the dates indicated nor is the information necessarily indicative of future operating results. The pro forma adjustments are based upon information and assumptions available at the time of the filing of this Form 8-K. You should read our pro forma condensed consolidated financial information in conjunction with our consolidated financial statements and the related notes, our “Selected Consolidated Financial and Operating Data,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which all appear in our Annual Report on Form 10-K for the year ended December 31, 2018.

[Tables Follow]

LIGAND PHARMACEUTICALS INCORPORATED

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2018

(Unaudited, in thousands, except per share amounts)

Historical

Pro Forma

Adjustments

Revenues:

Royalties

128,556

(99,300

29,256

Material sales

29,123

License fees, milestones and other revenues

93,774

Total revenues

251,453

152,153

Operating costs and expenses:

Cost of material sales

Amortization of intangibles

15,792

Research and development

27,863

General and administrative

37,734

38,234

Total operating costs and expenses

87,726

88,226

Gain from sale of Promacta license

(827,000

Income from operations

163,727

727,200

890,927

Other income (expenses):

Gain (loss) from Viking

50,187

Interest income

13,999

interest expense

(48,276

Other income (expense), net

(6,307

Total other income (expense), net

Income before income taxes

173,330

900,530

Income tax expense

(30,009

(152,267

(182,276

Net income:

143,321

574,933

718,254

Net income per common share:

Diluted

Weighted average per common share:

21,160

24,067

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2018

(Unaudited, in thousands)

ASSETS

Current assets:

Cash and cash equivalents

117,164

944,164

Short-term investments

601,217

Investment in Viking

46,191

Accounts receivable, net

55,850

Inventory

Derivative assets

22,576

Other current assets

20,418

Total current assets

870,540

1,697,540

Deferred income taxes, net

46,521

(46,521

Intangible assets, net

219,793

Goodwill

86,646

Commercial license rights

31,460

Property and equipment, net

Other assets

Total assets

1,260,803

780,479

2,041,282

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

Accrued liabilities

19,200

Income tax payable

100,558

Current contingent liabilities

Deferred revenue

Derivative liability

23,430

2019 convertible senior notes, net

26,433

Total current liabilities

82,249

101,058

183,307

2023 convertible senior notes, net

609,864

10,693

Long-term contingent liabilities

Other long-term liabilities

Total liabilities

699,889

118,973

818,862

Total stockholders' equity

560,914

661,506

1,222,420

Total liabilities and stockholders' equity

(a) To reflect the elimination of the Promacta license revenue during the period presented.

(b) To reflect the additional transaction costs in connection with the sale of the Purchased Assets during the period.

(c) To reflect the cash proceeds received upon the sale of the Purchased Assets.

(d) To reflect the related income tax expense in connection with the sale of the Purchased Assets.

(e) To reflect the estimated tax adjustments in connection with the sale of the Purchased Assets. The estimated after-tax gain on the sale of the Purchased Assets as if the transaction had closed on December 31, 2018 is approximately $643 million and is included in the stockholders' equity of the unaudited pro forma condensed consolidated balance sheet as of December 31, 2018. The actual gain will be determined as of March 6, 2019, the closing date, and could be materially different from this estimate.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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