Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) has announced the pricing of $400.0 million aggregate principal amount of 0.75% convertible senior notes due 2030 in a private placement. The sale of the notes is expected to close on August 14, 2025, subject to customary closing conditions.
The net proceeds from the offering are estimated to be approximately $386.9 million, with an additional $60.0 million if the initial purchasers exercise their option to purchase additional notes in full. Ligand intends to use approximately $39.9 million of the net proceeds to pay the cost of the convertible note hedge transactions and approximately $15.0 million to repurchase 102,034 shares of its common stock from certain purchasers of the notes in privately negotiated transactions.
The initial conversion price of the notes represents a premium of approximately 32.5% over the last reported sale price of Ligand’s common stock on the NASDAQ Global Market on August 11, 2025. The conversion rate will initially be 5.1338 shares of Ligand’s common stock per $1,000 principal amount of notes.
In connection with the pricing of the notes, Ligand entered into convertible note hedge transactions with certain initial purchasers and warrant transactions with option counterparties. The strike price of the warrants will initially be $294.02 per share, representing a premium of 100% over the last reported sale price of Ligand’s common stock on the NASDAQ Global Market on August 11, 2025.
Ligand expects to use approximately $15.0 million of the net proceeds from the offering to repurchase 102,034 shares of its common stock from certain purchasers of the notes in privately negotiated transactions. The agreed-to price per share of Ligand’s common stock repurchased in such transactions is equal to the last reported price per share of Ligand’s common stock of $147.01 per share on the NASDAQ Global Market on August 11, 2025.
The press release also states that Ligand cannot predict the magnitude of market activity or the overall effect it will have on the market price of the notes and/or the market price of Ligand’s common stock. As a result of these announcements, the company's shares have moved -0.98% on the market, and are now trading at a price of $154.48. For the full picture, make sure to review LIGAND PHARMACEUTICALS INC's 8-K report.
