Ligand prices $625M convertible notes due 2031 at 0% interest

Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) priced $625.0 million in aggregate principal amount of 0.0% convertible senior notes due 2031 in a private placement to qualified institutional buyers, according to a company statement. The offering is expected to close on June 25, 2026, subject to customary closing conditions.

The initial purchasers were granted an option to buy up to an additional $75.0 million in notes during a 13-day period beginning on the first date the notes are issued. If exercised in full, net proceeds would reach approximately $678.2 million. Without the option, Ligand estimates net proceeds of approximately $605.3 million after fees and expenses.

The notes mature on September 15, 2031, carry no regular interest, and will not accrete in principal. The initial conversion price is approximately $334.27 per share, representing a 27.5% premium over Ligand's last reported closing price of $262.17 on the Nasdaq Global Market on June 22, 2026.

Ligand intends to use approximately $72.9 million of net proceeds to fund convertible note hedge transactions, net of proceeds from related warrant transactions. The warrants carry an initial strike price of $524.34 per share, a 100% premium to the June 22 closing price. An additional approximately $60.0 million will be used to repurchase 228,859 shares of common stock in privately negotiated transactions at $262.17 per share.

Remaining proceeds are designated for general corporate purposes, including potential investments in complementary businesses. Ligand noted it has no present commitments beyond its previously announced agreement to acquire Xoma Royalty Corporation.

Ligand may redeem the notes on or after September 21, 2029, if the stock price has been at least 130% of the conversion price for at least 20 trading days within a 30-consecutive trading day period. Upon a fundamental change, holders may require Ligand to repurchase the notes at 100% of principal.

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