Ligand Pharma (NASDAQ: LGND) reported Q3 EPS of $0.56, $0.14 better than the analyst estimate of $0.42. Revenue for the quarter came in at $17.7 million versus the consensus estimate of $17.8 million.

Release of Valuation Allowance

Ligand has accumulated a usable portfolio of net operating loss carryforwards (NOLs) and other tax assets of more than $700 million, through a combination of operations and acquisitions. Through the interim financial statements dated June 30, 2015, Ligand has maintained a valuation allowance offsetting the entire balance of the NOLs due to the uncertainty of future use prior to expiration. After an analysis of our recent history of cumulative earnings and forecasted future taxable income, we have determined it is more likely than not that we will utilize substantially all of the NOL balance prior to expiration and therefore are releasing substantially all of the valuation allowance effective September 30, 2015. The net income tax benefit from valuation allowance release increased our GAAP net income by $217.3 million or $10.12 per diluted share for the third quarter of 2015 and $10.29 per diluted share for the first nine months of 2015. $217.3 million is the estimated tax benefit Ligand will have by utilizing its more than $700 million of NOLs.

For earnings history and earnings-related data on Ligand Pharma (LGND) click here.