EXHIBIT 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated statement of operations have been prepared to assist you in your analysis of the financial effects of the sale of the Purchased Assets, and have been presented in accordance with U.S. generally accepted accounting principles. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2018 combines the historical results for Ligand for the twelve months ended December 31, 2018 and the pro forma adjustments as if the sale of the Purchased Assets had occurred on January 1, 2018. The unaudited pro forma condensed consolidated balance sheet as of December 31, 2018 gives effect to the sale of the Purchased Assets as of such date. Our accounting for the pro forma adjustments is preliminary pending completion of several elements, including finalizing after-tax gain on the sale of the Purchased Assets. Accordingly, there may be material adjustments to the pro forma adjustments.

This pro forma financial information does not purport to represent what our actual results of operations or financial position would have been had the sale of the Purchased Assets occurred on the dates indicated nor is the information necessarily indicative of future operating results. The pro forma adjustments are based upon information and assumptions available at the time of the filing of this Form 8-K. You should read our pro forma condensed consolidated financial information in conjunction with our consolidated financial statements and the related notes, our “Selected Consolidated Financial and Operating Data,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which all appear in our Annual Report on Form 10-K for the year ended December 31, 2018.



[Tables Follow]





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LIGAND PHARMACEUTICALS INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2018
(Unaudited, in thousands, except per share amounts)
 
Historical
 
Pro Forma
 
 
Pro Forma
 
Ligand
 
Adjustments
 
 
Revenues:
 
 
 
 
 
 
Royalties
$
128,556

 
$
(99,300
)
(a)
 
$
29,256

Material sales
29,123

 
 
 
 
29,123

License fees, milestones and other revenues
93,774

 
 
 
 
93,774

Total revenues
251,453

 
(99,300
)
 
 
152,153

Operating costs and expenses:
 
 
 
 
 
 
Cost of material sales
6,337

 
 
 
 
6,337

Amortization of intangibles
15,792

 
 
 
 
15,792

Research and development
27,863

 
 
 
 
27,863

General and administrative
37,734

 
500

(b)
 
38,234

Total operating costs and expenses
87,726

 
500

 
 
88,226

Gain from sale of Promacta license

 
(827,000
)
(c)
 
(827,000
)
Income from operations
163,727

 
727,200

 
 
890,927

Other income (expenses):
 
 
 
 
 
 
Gain (loss) from Viking
50,187

 
 
 
 
50,187

Interest income
13,999

 
 
 
 
13,999

interest expense
(48,276
)
 
 
 
 
(48,276
)
Other income (expense), net
(6,307
)
 
 
 
 
(6,307
)
Total other income (expense), net
9,603

 

 
 
9,603

Income before income taxes
173,330

 
727,200

 
 
900,530

Income tax expense
(30,009
)
 
(152,267
)
(d)
 
(182,276
)
Net income:
$
143,321

 
$
574,933

 
 
$
718,254

 
 
 
 
 
 
 
Net income per common share:
 
 
 
 
 
 
Basic
$
6.77

 
 
 
 
$
33.94

Diluted
$
5.96

 
 
 
 
29.84

 
 
 
 
 
 
 
Weighted average per common share:
 
 
 
 
 
 
Basic
21,160

 
 
 
 
21,160

Diluted
24,067

 
 
 
 
24,067



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LIGAND PHARMACEUTICALS INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2018
(Unaudited, in thousands)
 
Historical
 
Pro Forma
 
 
 
 
Ligand
 
Adjustments
 
 
Pro Forma
ASSETS
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
$
117,164

 
$
827,000

(c)
 
$
944,164

Short-term investments
601,217

 
 
 
 
601,217

Investment in Viking
46,191

 
 
 
 
46,191

Accounts receivable, net
55,850

 
 
 
 
55,850

Inventory
7,124

 
 
 
 
7,124

Derivative assets
22,576

 
 
 
 
22,576

Other current assets
20,418

 
 
 
 
20,418

Total current assets
870,540

 
827,000

 
 
1,697,540

Deferred income taxes, net
46,521

 
(46,521
)
(e)
 

Intangible assets, net
219,793

 
 
 
 
219,793

Goodwill
86,646

 
 
 
 
86,646

Commercial license rights
31,460

 
 
 
 
31,460

Property and equipment, net
5,372

 
 
 
 
5,372

Other assets
471

 
 
 
 
471

Total assets
$
1,260,803

 
$
780,479

 
 
$
2,041,282

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
Accounts payable
$
4,183

 
$
500

(b)
 
$
4,683

Accrued liabilities
19,200

 
 
 
 
19,200

Income tax payable

 
100,558

(e)
 
100,558

Current contingent liabilities
5,717

 
 
 
 
5,717

Deferred revenue
3,286

 
 
 
 
3,286

Derivative liability
23,430

 
 
 
 
23,430

2019 convertible senior notes, net
26,433

 
 
 
 
26,433

Total current liabilities
82,249

 
101,058

 
 
183,307

2023 convertible senior notes, net
609,864

 
 
 
 
609,864

Deferred income taxes, net

 
10,693

(e)
 
10,693

Long-term contingent liabilities
6,825

 
 
 
 
6,825

Other long-term liabilities
951

 
7,222

(e)
 
8,173

Total liabilities
699,889

 
118,973

 
 
818,862

Total stockholders' equity
560,914

 
661,506

 
 
1,222,420

Total liabilities and stockholders' equity
$
1,260,803

 
$
780,479

 
 
$
2,041,282











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(a) To reflect the elimination of the Promacta license revenue during the period presented.

(b) To reflect the additional transaction costs in connection with the sale of the Purchased Assets during the period.

(c) To reflect the cash proceeds received upon the sale of the Purchased Assets.

(d) To reflect the related income tax expense in connection with the sale of the Purchased Assets.

(e) To reflect the estimated tax adjustments in connection with the sale of the Purchased Assets. The estimated after-tax gain on the sale of the Purchased Assets as if the transaction had closed on December 31, 2018 is approximately $643 million and is included in the stockholders' equity of the unaudited pro forma condensed consolidated balance sheet as of December 31, 2018. The actual gain will be determined as of March 6, 2019, the closing date, and could be materially different from this estimate.


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