Ligand Acquires XOMA Royalty

Ligand Pharmaceuticals (LGND) agreed on April 27, 2026, to acquire XOMA Royalty in a deal the company said will broaden its royalty holdings and accelerate profit growth.

Deal Terms and Approvals

Ligand executed a definitive merger agreement to acquire all outstanding XOMA common shares for $39.00 a share in cash, valuing the business at about $739 million. The agreement includes a non-transferable contingent-value right (CVR) per share, entitling XOMA shareholders to 75.0% of net proceeds from pending litigation. The price implies roughly a 14.0% premium to XOMA’s 30-day volume-weighted average price as of April 24, 2026. The CVR structure passes a defined portion of litigation upside to XOMA holders while Ligand provides the upfront cash consideration.

The boards of both companies unanimously approved the transaction. BVF Partners agreed to convert its Series X preferred shares to common and vote in favor, representing about 21.0% of common equity and roughly 44.0% on an assumed conversion basis. Ligand disclosed the agreement in a Form 8-K and said it will fund the purchase with cash on hand and borrowings under its existing credit facility. The merger is subject to customary closing conditions, including regulatory approvals, and is expected to close in the third quarter of 2026.

Portfolio Expansion and Financial Impact

The acquisition adds more than 120 assets to Ligand’s holdings, including seven marketed products and nearly doubles its Phase 2 and 3 pipeline. The combined royalty portfolio will exceed 200 assets across partners, modalities, and therapeutic areas. Notable royalty programs include Roche’s VABYSMO, Day One’s OJEMDA, Zevra’s MIPLYFFA, and several Takeda programs such as mezagitamab, osavampator, volixibat, and OHB-607. The company said the deal strengthens its position as a biopharma royalty aggregator.

Ligand said the transaction will be immediately accretive to adjusted earnings per share (EPS) upon closing. It raised its 2026 guidance to revenue of $270 million to $310 million, royalties of $225 million to $250 million, Captisol sales of $35 million to $40 million, contract revenue of $10 million to $20 million, and adjusted EPS of $8.50 to $9.50. Management projected the deal would add $1.50 a share to adjusted EPS in 2027. Executives described the acquisition as a step that lifts near-term earnings and expands recurring royalty cash flows from partnered commercial products and late-stage programs.

“This acquisition will add seven marketed products and nearly double our portfolio of Phase 2 and 3 assets,” said Todd Davis, Ligand’s chief executive officer.