Ligand Pharma to acquire fellow biotech royalty rights buyer XOMA for $739 million

By Puyaan Singh

April 27 (Reuters) – Ligand Pharmaceuticals will buy fellow biotechnology royalty aggregator XOMA Royalty for about $739 million in cash, the companies said on Monday.

The deal adds more ​than 120 treatments, including seven marketed products, boosting Ligand’s ‌portfolio to more than 200 drugs that are in development or already on the market. Shares of XOMA surged 9.7%, while Ligand’s were up 1.6%.

Biotech royalty aggregators provide immediate cash to drug developers in exchange for economic ‌rights ​to future royalty and milestone payments from ⁠the candidates the companies ⁠develop.

Here are further details on the deal:

• Ligand will pay $39 per XOMA share in cash, around 3% premium to the stock’s last close, for a total equity value of about $739 ​million.

• The seven marketed drugs Ligand gains include Roche’s Vabysmo, Servier’s Ojemda and Zevra’s Miplyffa. At peak, the company expects ⁠to earn royalties worth $37.5 million annually ⁠from eye drug Vabysmo, said Lauren Hay, Ligand’s portfolio ​strategy vice president.

• There will be one non-transferable contingent right per ​share entitled to 75% of net proceeds from certain ‌pending litigation tied to XOMA’s dispute with Johnson & Johnson subsidiary Janssen around Crohn’s disease drug Tremfya.

• Ligand said the acquisition will be immediately accretive and raised its 2026 revenue outlook to a ⁠range of $270 million to $310 million, from $245 million to $285 million earlier.

• It also raised its annual adjusted profit forecast to $8.50 to $9.50 per share, up ⁠from $8 to $9 apiece, ‌and expects a further $1.50-per-share boost in 2027.

• ⁠Ligand expects to retain capacity to continue executing ​on its ‌strategy of investing $150 million to $250 million annually ​in high-value ⁠royalty assets, said finance chief Tavo Espinoza.

• CEO Todd Davis added, “we are … typically looking at deals in the $25 million to $60 million range. As our portfolio grows in value, the deal size could go up proportionately.”

(Reporting by Puyaan Singh in Bengaluru; Editing by Leroy Leo ​and Vijay Kishore)