Ligand Announces Pricing of $400 Million Convertible Senior Notes Offering
JUPITER, Fla., Aug. 11, 2025 (GLOBE NEWSWIRE) -- Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) ("Ligand") announced today the pricing of $400.0 million aggregate principal amount of 0.75% convertible senior notes due 2030 (the "notes") in a private placement (the "offering") to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Ligand also granted the initial purchasers of the notes (the "initial purchasers") an option to purchase, during a 13-day period beginning on, and including, the first date on which the notes are issued, up to an additional $60.0 million aggregate principal amount of notes. The sale of the notes is expected to close on August 14, 2025, subject to customary closing conditions.
The notes will be general unsecured, senior obligations of Ligand and will accrue interest payable semiannually in arrears on April 1 and October 1 of each year, beginning on April 1, 2026 at a rate of 0.75% per annum. The notes will mature on October 1, 2030, unless earlier converted, redeemed or repurchased.
Ligand estimates that the net proceeds from the offering will be approximately $386.9 million (or approximately $445.1 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting fees and estimated expenses. Ligand intends to use approximately $39.9 million of the net proceeds from the offering to pay the cost of the convertible note hedge transactions described below (after such cost is partially offset by the proceeds to Ligand from the sale of the warrants in the warrant transactions described below). In addition, Ligand expects to use approximately $15.0 million of the net proceeds from this offering to repurchase 102,034 shares of its common stock from certain purchasers of the notes in privately negotiated transactions, as described below. Ligand expects to use the remaining net proceeds from the offering, together with cash on hand, for general corporate purposes including investing in complementary businesses, companies, products and technologies, although Ligand has no present commitments or agreements to do so. If the initial purchasers exercise their option to purchase additional notes, Ligand expects to sell additional warrants to the option counterparties and use a portion of the net proceeds from the sale of the additional notes, together with the proceeds from the sale of the additional warrants, to enter into additional convertible note hedge transactions and the remaining net proceeds for general corporate purposes.
Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding July 1, 2030 only upon the occurrence of certain circumstances. On or after July 1, 2030 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time.
Upon conversion, Ligand will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of Ligand's common stock or a combination of cash and shares of Ligand's common stock, at Ligand's election, in respect of the remainder, if any, of Ligand's conversion obligation in excess of the aggregate principal amount of the notes being converted. The conversion rate will initially be 5.1338 shares of Ligand's common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $194.79 per share of Ligand's common stock). The initial conversion price of the notes represents a premium of approximately 32.5% over the last reported sale price of Ligand's common stock on the Nasdaq Global Market on August 11, 2025. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if Ligand delivers a notice of redemption, Ligand will, in certain circumstances, increase ...
