Ligand Pharma to Buy XOMA Royalty for 739 Million
Ligand Pharmaceuticals announced a cash deal on Monday to acquire XOMA Royalty. The acquisition expands Ligands portfolio to over 200 drug development programs.
LIGAND PHARMACEUTICALS has reached a definitive agreement to acquire fellow biotechnology royalty aggregator XOMA ROYALTY CORPORATION in an all-cash transaction valued at approximately $739 million. The deal, announced Monday, significantly expands the purchasing company's footprint in the drug royalty space by adding more than 120 treatments to its existing lineup. This acquisition brings the total portfolio to over 200 drugs across various stages of development and commercialization.
Under the terms of the agreement, shareholders of the acquired firm will receive $39 per share in cash, representing a 3% premium to the stock's last closing price. Following the announcement, market reaction was positive, with shares of the target company climbing 6.2% in premarket trading while the buyer's stock rose 4.6%. The transaction is expected to close in the third quarter of 2026.
The strategic move nearly doubles the number of mid- and late-stage development assets in the combined pipeline. This includes candidates from TAKEDA PHARMACEUTICAL CO LTD targeting oncology, depression, and fatty liver disease. Additionally, the deal includes a non-transferable contingent right per share, entitling holders to 75% of net proceeds from ongoing litigation involving a subsidiary of JOHNSON & JOHNSON regarding the Crohn’s disease treatment Tremfya.
Financial outlooks for the acquiring entity have been revised upward following the merger news. The company now projects 2026 revenue to fall between $270 million and $310 million, up from the previous guidance of $245 million to $285 million. Annual adjusted profit forecasts were also raised to a range of $8.50 to $9.50 per share, with an anticipated further boost of $1.50 per share in 2027.
Biotech royalty aggregators play a critical role in the industry by providing immediate liquidity to drug developers. In exchange, these aggregators secure the rights to future royalty streams and milestone payments generated by the pharmaceutical candidates as they progress through clinical trials and enter the global market.
