Quarterly report pursuant to Section 13 or 15(d)

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

v3.22.2.2
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 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 Nine months ended
September 30, September 30,
2022 2021 2022 2021
Royalties
Kyprolis $ 9,123  $ 8,821  $ 20,872  $ 18,548 
Evomela 3,123  2,665  8,218  7,191 
Teriparatide injection 4,071  2,567  12,484  2,831 
Rylaze 2,099  600  6,065  600 
Other 1,421  995  3,852  2,206 
$ 19,837  $ 15,648  $ 51,491  $ 31,376 
Captisol
     Captisol - Core $ 3,582  $ 5,374  $ 13,133  $ 16,310 
     Captisol - COVID(1)
32,367  29,719  64,483  112,565 
$ 35,949  $ 35,093  $ 77,616  $ 128,875 
Contract revenue
Service Revenue $ 4,975  $ 4,828  $ 15,574  $ 17,650 
License Fees 460  200  5,154  2,293 
Milestone 3,658  7,419  14,022  19,436 
Other 1,209  1,647  5,343  5,030 
$ 10,302  $ 14,094  $ 40,093  $ 44,409 
Total $ 66,088  $ 64,835  $ 169,200  $ 204,660 
(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 September 30, 2022 and December 31, 2021 (in thousands):
Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value
September 30, 2022
     Bank deposits $ 2,506  $ —  $ (53) $ 2,453 
     Corporate bonds 4,887  —  (107) 4,780 
     Corporate equity securities 5,807  312  (3,615) 2,504 
     Mutual fund 88,115  —  (1,203) 86,912 
US government securities 2,229  —  (84) 2,145 
     Warrants —  232  —  232 
$ 103,544  $ 544  $ (5,062) $ 99,026 
      Viking common stock 18,265 
Total short-term investments $ 117,291 
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 
     U.S. 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):
September 30, 2022
Amortized Cost Fair Value
Within one year $ 8,659  $ 8,458 
After one year through five years 982  939 
Total $ 9,641  $ 9,397 
Schedule of Goodwill and Other Identifiable Intangible Assets
Goodwill and other identifiable intangible assets consist of the following (in thousands):

September 30, December 31,
2022 2021
Indefinite-lived intangible assets
     Goodwill $ 181,206  $ 181,206 
Definite lived intangible assets
     Complete technology 282,057  280,617 
          Less: accumulated amortization (90,611) (78,991)
     Trade name 2,642  2,642 
          Less: accumulated amortization (1,544) (1,444)
     Customer relationships 40,700  40,700 
          Less: accumulated amortization (20,272) (18,267)
     Contractual relationships 362,000  362,000 
          Less: accumulated amortization (57,947) (36,217)
Total goodwill and other identifiable intangible assets, net $ 698,231  $ 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):
September 30, 2022 December 31, 2021
Gross
Adjustments(1)
Net Gross
Adjustments(2)
Net
Aziyo and CorMatrix $ 17,696  $ (9,455) $ 8,241  $ 17,696  $ (9,461) $ 8,235 
Selexis and Dianomi 10,602  (8,650) 1,952  10,602  (8,727) 1,875 
    Total $ 28,298  $ (18,105) $ 10,193  $ 28,298  $ (18,188) $ 10,110 
(1) Amounts represent accumulated amortization to principal of $11.6 million and credit loss adjustments of $6.5 million as of September 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):
September 30, December 31,
2022 2021
Compensation $ 6,229  $ 6,532 
Professional fees 2,848  2,046 
Amounts owed to former licensees 4,042  630 
Return reserve —  2,420 
Acquisition related liabilities —  1,000 
Subcontractor 1,756  1,759 
Other 4,463  3,192 
     Total accrued liabilities $ 19,338  $ 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 Nine months ended
September 30, September 30,
2022 2021 2022 2021
SBC - Research and development expenses $ 6,104  $ 4,480  $ 14,519  $ 12,975 
SBC - General and administrative expenses 6,493  5,274  16,621  15,400 
$ 12,597  $ 9,754  $ 31,140  $ 28,375 
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 Nine months ended
September 30, September 30,
2022 2021 2022 2021
Risk-free interest rate 2.8% 0.8% 2.9% 0.5%
Dividend yield — — — —
Expected volatility 50% 48% 50% 61%
Expected term (years) 4.9 4.9 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 Nine months ended
September 30, September 30,
2022 2021 2022 2021
Weighted average shares outstanding: 16,888  16,688  16,860  16,595 
Dilutive potential common shares:
     Restricted stock 65  75  —  85 
     Stock options 179  379  —  507 
Shares used to compute diluted income per share 17,132  17,142  16,860  17,187 
Potentially dilutive shares excluded from calculation due to anti-dilutive effect 6,706  5,574  6,503  4,984