Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) and XOMA Royalty Corporation ("XOMA Royalty") (NASDAQ:XOMA), both biotechnology royalty aggregators, today announced that the companies have entered into a definitive agreement under which Ligand will acquire XOMA Royalty for $39.00 per share of common stock in cash, for a total equity value of approximately $739 million. XOMA Royalty stockholders are expected to separately receive one non-transferable Contingent Value Right ("CVR") per share entitling the holder to receive a portion of 75% of the net proceeds that may result from certain pending litigation at XOMA Royalty. The cash purchase price at close represents an approximately 14% premium to XOMA Royalty's 30 trading day volume weighted average price as of April 24, 2026, the last trading day prior to announcement of the transaction. 

"The acquisition of XOMA Royalty presents a compelling opportunity for us to strengthen and diversify our portfolio across all stages of clinical development and accelerate our long-term profitable growth. This acquisition will add seven marketed products and nearly double our portfolio of Phase 2 and 3 assets, which we believe will create significant value for our stockholders, all through a single transaction," said Todd Davis, CEO of Ligand. "The XOMA Royalty team has built a robust portfolio of complementary biopharmaceutical assets, and this acquisition will enable us to further grow and diversify in areas such as ophthalmology, oncology, CNS and rare diseases. With XOMA Royalty, we believe we will now be in an even stronger position to leverage our expertise and capital base to support broader patient access and advance late-stage clinical programs in a way that enhances patient outcomes and improves lives.

With this agreement, Ligand adds over 120 commercial, clinical, and preclinical stage assets to its broad and growing royalty portfolio highlighted by Roche's VABYSMO® (faricimab-svoa), Day One Pharmaceuticals' OJEMDA™ (tovorafenib), Zevra Therapeutics' MIPLYFFA™ (arimoclomol), and 14 programs in late-stage development, highlighted by Takeda's mezagitamab and certain assets from Takeda's externalized asset portfolio, including osavampator, volixibat and OHB-607. The addition of the XOMA Royalty portfolio is expected to increase Ligand's long-term growth profile.

"After evaluating a broad range of strategic and financing alternatives, we believe combining our diverse portfolio with a company that shares our commitment to helping the biopharmaceutical industry thrive represents the most compelling outcome for XOMA Royalty's stockholders," said Owen Hughes, CEO of XOMA Royalty. "The structure delivers to our stockholders both the intrinsic value of XOMA's portfolio today and the optionality associated with our ongoing litigation with Janssen Biotech (now Johnson & Johnson Innovative Medicine) via the CVR. Since 2023, we significantly scaled our portfolio with the addition of multiple assets and two platform technologies, enabling numerous upcoming regulatory and clinical catalysts beginning in 2026 and continuing over the next several years. We believe coupling Ligand's business development capabilities, portfolio management expertise plus the inherent financial synergies from this transaction position the combined company to maximize long-term value across the combined portfolio."

Transaction Terms

Under the terms of the merger agreement, Ligand will acquire all the outstanding shares of common stock of XOMA Royalty for $39.00 per share in cash. The cash consideration for the transaction is expected to be funded with Ligand's existing cash on hand and borrowings under Ligand's existing credit facility. XOMA Royalty's Series X Convertible Preferred Stock is expected to be converted into shares of common stock at its stated fixed price prior to closing, whereas the outstanding shares of Series A Preferred Stock and Series B Preferred Stock are expected to be redeemed. XOMA Royalty stockholders also will receive one CVR per share. The CVRs are intended to provide XOMA Royalty stockholders with the opportunity to receive certain net proceeds, if any are recovered, from certain ongoing litigation with regard to XOMA Royalty's dispute with Janssen Biotech regarding the commercialization of TREMFYA®.

Timing and Approvals

The transaction has been unanimously approved by the Ligand and XOMA Royalty Boards of Directors. Entities affiliated with BVF Partners, which own approximately 21% of the outstanding shares of XOMA Royalty common stock and approximately 44% assuming the conversion of their Series X Convertible Preferred Stock, have agreed to convert such shares into shares of XOMA Royalty common stock prior to closing and have entered into a voting agreement in support of the transaction. In addition, XOMA Royalty's directors and officers have also entered into voting agreements in support of the transaction. The transaction is expected to close in the third quarter of 2026, subject to customary closing conditions, approval by XOMA Royalty stockholders and the receipt of certain regulatory approvals.

Financial Guidance Update

The transaction is expected to close in the third quarter of 2026 and to be immediately accretive to Ligand earnings per share. Ligand is increasing its 2026 revenue guidance to be in the range of $270 million to $310 million (previously $245 million to $285 million) and is raising adjusted earnings per diluted share1 guidance to $8.50 to $9.50 (previously $8.00 to $9.00). Royalties are now expected to range from $225 million to $250 million (previously $200 million to $225 million). Guidance for sales of Captisol® ($35 million to $40 million) and contract revenue ($10 million to $20 million) are unchanged. In addition, Ligand expects the transaction to be accretive by $1.50 per share to adjusted EPS in 2027.2