Quarterly report pursuant to Section 13 or 15(d)

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

v3.22.2
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Revenue by Source
The following table represents disaggregation of royalties, Captisol and contract revenue (in thousands):
Three months ended Six months ended
June 30, June 30,
2022 2021 2022 2021
Royalties
Kyprolis $ 7,127  $ 5,440  $ 11,749  $ 9,727 
Evomela 2,394  2,193  5,095  4,526 
Teriparatide injection 5,502  264  8,413  264 
Rylaze 2,317  —  3,966  — 
Other 619  719  2,431  1,211 
$ 17,959  $ 8,616  $ 31,654  $ 15,728 
Captisol
     Captisol - Core $ 3,325  $ 9,682  $ 9,551  $ 10,935 
     Captisol - COVID(1)
26,220  52,827  32,116  82,846 
$ 29,545  $ 62,509  $ 41,667  $ 93,781 
Contract revenue
Service Revenue $ 5,453  $ 7,360  $ 10,599  $ 12,822 
License Fees 1,608  1,050  4,694  2,093 
Milestone 1,275  3,600  10,364  12,017 
Other 1,579  1,540  4,134  3,384 
$ 9,915  $ 13,550  $ 29,791  $ 30,316 
Total $ 57,419  $ 84,675  $ 103,112  $ 139,825 
(1) Captisol - COVID represents revenue on Captisol supplied for use in formulation with remdesivir, an antiviral treatment for COVID-19.
Schedule of Short-Term Investments Our short-term investments consist of the following at June 30, 2022 and December 31, 2021 (in thousands):
Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value
June 30, 2022
     Bank deposits $ 2,504  $ —  $ (61) $ 2,443 
     Corporate bonds 4,904  —  (121) 4,783 
     Corporate equity securities 5,807  307  (3,703) 2,411 
     Mutual fund 112,535  —  (1,228) 111,307 
US government securities 2,246  —  (71) 2,175 
     Warrants —  129  —  129 
$ 127,996  $ 436  $ (5,184) $ 123,248 
      Viking common stock 19,407 
Total short-term investments $ 142,655 
December 31, 2021
     Bank deposits $ 63,389  $ 13  $ (21) $ 63,381 
     Corporate bonds 29,308  17  (38) 29,287 
     Commercial paper 36,008  2  (12) 35,998 
     Corporate equity securities 5,807  402  (2,027) 4,182 
     Mutual fund 152,136  —  (249) 151,887 
     US government securities 5,577  —  (23) 5,554 
     Warrants —  408  —  408 
$ 292,225  $ 842  $ (2,370) $ 290,697 
     Viking common stock 30,889 
Total short-term investments $ 321,586 
Schedule of Available-for-Sale Debt Securities
The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands):
June 30, 2022
Amortized Cost Fair Value
Within one year $ 6,423  $ 6,274 
After one year through five years 3,230  3,127 
Total $ 9,653  $ 9,401 
Schedule of Goodwill and Other Identifiable Intangible Assets
Goodwill and other identifiable intangible assets consist of the following (in thousands):

June 30, December 31,
2022 2021
Indefinite-lived intangible assets
     Goodwill $ 181,206  $ 181,206 
Definite lived intangible assets
     Complete technology 281,578  280,617 
          Less: accumulated amortization (86,740) (78,991)
     Trade name 2,642  2,642 
          Less: accumulated amortization (1,510) (1,444)
     Customer relationships 40,700  40,700 
          Less: accumulated amortization (19,602) (18,267)
     Contractual relationships 362,000  362,000 
          Less: accumulated amortization (50,704) (36,217)
Total goodwill and other identifiable intangible assets, net $ 709,570  $ 732,246 
Schedule Of Goodwill Balance by Segment On Relative Fair Value Basis The following table presents our allocation of goodwill balance by segment (in thousands):
Fair Value
Goodwill
Ligand core business $ 105,673 
OmniAb business 75,533 
$ 181,206 
Schedule of Commercial License Rights
Commercial license rights consist of the following (in thousands):
June 30, 2022 December 31, 2021
Gross
Adjustments(1)
Net Gross
Adjustments(2)
Net
Aziyo and CorMatrix $ 17,696  $ (9,425) $ 8,271  $ 17,696  $ (9,461) $ 8,235 
Selexis and Dianomi 10,602  (8,606) 1,996  10,602  (8,727) 1,875 
    Total $ 28,298  $ (18,031) $ 10,267  $ 28,298  $ (18,188) $ 10,110 
(1) Amounts represent accumulated amortization to principal of $11.5 million and credit loss adjustments of $6.5 million as of June 30, 2022.
(2) Amounts represent accumulated amortization to principal of $11.7 million and credit loss adjustments of $6.5 million as of December 31, 2021.
Schedule of Accrued Liabilities Accrued liabilities consist of the following (in thousands):
June 30, December 31,
2022 2021
Compensation $ 4,669  $ 6,532 
Professional fees 1,828  2,046 
Amounts owed to former licensees 2,674  630 
Royalties owed to third parties —  149 
Return reserve —  2,420 
Acquisition related liabilities —  1,000 
Subcontractor 1,756  1,759 
Supplier 1,995  848 
Accrued interest —  291 
Other 1,629  1,904 
     Total accrued liabilities $ 14,551  $ 17,579 
Schedule of Accounting for Share-Based Compensation The following table summarizes share-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands):
Three months ended Six months ended
June 30, June 30,
2022 2021 2022 2021
SBC - Research and development expenses $ 4,501  $ 4,556  $ 8,415  $ 8,495 
SBC - General and administrative expenses 4,998  5,660  10,128  10,126 
$ 9,499  $ 10,216  $ 18,543  $ 18,621 
Schedule of Fair-Value Options Awarded to Employees and Directors The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:
Three months ended Six months ended
June 30, June 30,
2022 2021 2022 2021
Risk-free interest rate 3.0% 0.9% 3.0% 0.5%
Dividend yield — — — —
Expected volatility 50% 54% 50% 62%
Expected term (years) 4.8 5.5 4.8 5.0
Schedule of Computation of Basic and Diluted Earnings per Share
The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands):

Three months ended Six months ended
June 30, June 30,
2022 2021 2022 2021
Weighted average shares outstanding: 16,868  16,659  16,846  16,548 
Dilutive potential common shares:
     Restricted stock —  69  —  90 
     Stock options —  444  —  572 
Shares used to compute diluted income per share 16,868  17,172  16,846  17,210 
Potentially dilutive shares excluded from calculation due to anti-dilutive effect 6,794  5,087  6,400  4,684