Ligand Pharmaceuticals is a biopharmaceutical company located in San Diego, California. Founded in 1987 as Progenx Inc., the company went public in 1992. Initially focused on developing its own drugs, a period of turbulence in the early 2000s culminated in its CEO being ejected by the shareholders and provoked a change in focus to the acquisition of existing drugs and forming partnerships to develop them further. Since 2005, the company has twice restated its financial accounts, and it has been subject to class action lawsuits. Fortune ranked Ligand as among the top 100 fastest growing companies for 2014-2016, and in 2018 its CEO was listed among the top five highest paid CEOs in San Diego.
Business
Ligand Pharmaceutical develops or acquires royalty-generating assets comprising numerous technologies, therapies and drugs. The drugs for which it receives royalties include Kyprolis, Promacta, Melphalan and Baxdela. As of 2015, Ligand Pharmaceuticals was partnered with approximately 120 pharmaceutical companies, which include Captisol and its partnerships. Captisol, a Ligand indication, is a chemically modified clathrate compound of the cyclodextrin class designed to improve solubility, stability, bioavailability and dosing of active pharmaceutical ingredients.
History
Ligand Pharmaceuticals was founded, as Progenx Inc., in 1987 by Brook Byers and went public in late 1992. Its first CEO was Howard Birndorf, succeeded by David Robinson, both of whom focused on developing drugs based on orphannuclear receptors. In September 2005, Ligand was delisted from the NASDAQ after it missed several deadlines for filing its financial statements. The company was being investigated by the Securities and Exchange Commission for its financial reporting between 2002 and 2004, and it had to restate its accounts for this period. No action was ultimately taken against the company, but its auditor at the time, Deloitte, was later fined $1m by the Public Company Accounting Oversight Board for failing to conduct proper audits that would have revealed the channel stuffing that Ligand was undertaking. Ligand was relisted on NASDAQ in June 2006 and agreed to pay $12.2 million to resolve shareholder litigation. In addition to these accounting problems, by 2006 the company had reported no profits despite some of the drugs they developed having gained approval, and dissident shareholders, including Dan Loeb, forced Robinson out. He was replaced as CEO by Henry F. Blissenbach who sold all the company's commercial operations and cut the workforce. In January 2007 John Higgins, a former investment banker, was brought in as CEO. He changed the company's strategy to one of acquiring candidate drugs and forming partnerships to develop them further. During the Great Recession that began in the late 2000s, the company used its capital to acquire other companies including Neurogen, Pharmacopeia biotechnology, Metabasis Therapeutics and Cydex Pharmaceuticals. CEO Higgins stated that the result of the purchases was a portfolio of some 60 new drug candidates, partnerships with pharmaceutical companies and other assets. Fortune ranked Ligand as one of the top 100 fastest growing companies from 2014-2016 ranking as high as #6 in 2016.. In 2014, Emmanuel Lemelson published five reports that made negative claims about Ligand that is thought to have contributed to a drop of 34 percent in its share price. In September 2018, Lemelson was sued by the SEC for stock manipulation, allegedly making false statements about the company causing the share price to fall and profiting from a short sale. In November 2016, Ligand notified the SEC that it would be restating its recent financial reports due to ineffective accounting controls, overstated deferred tax assets, and miscategorization of unsecured debt. As a result several class action lawsuits were filed, alleging that the company had engaged in securities fraud. In 2018, Van Doorn of MarketWatch ranked Ligand #2 on a list of the fastest-growing companies in the health-care sector. The methodology looked at sales per share and gross margins. Ligand shares grew 99% from 2014-2019.
