Ligand Pharmaceuticals Inc. (LGND) reported fourth quarter 2013 (ending Dec 2013) adjusted earnings of 28 cents per share, beating the Zacks Consensus Estimate of 20 cents. Earnings were also above the year-ago figure of 19 cents per share.

Total revenues for the quarter were $14.7 million, up 8% from the year-ago quarter. Revenues were just above the Zacks Consensus Estimate of $14 million. Revenues were mainly driven by higher royalties.

Total revenues for the full year were $49 million, up 56% from the year-ago quarter beating the Zacks Consensus Estimate of $48 million. Adjusted earnings were 75 cents per share, beating the Zacks Consensus Estimate of 58 cents.

Quarter in Details

Royalty revenues were $7.1 million in the reported quarter, up 47.8% from the year-ago quarter. Particularly, higher royalties were earned on Promacta and Kyprolis.

Material sales were $6.8 million in the reported quarter, up 28.9%.

In the fourth quarter of 2013, research and development (R&D) expenses remained flat at $2.4 million.

General and administrative (G&A) expenses were $4.4 million, up 4.8% from the year-ago comparable period.

Pipeline Update

Ligand has started a phase I study on LGD-6972 (a glucagon receptor antagonist) for the treatment of patients with type II diabetes. Results are expected in mid-2014. A phase III study on MK-8931 (an investigational BACE inhibitor) has also commenced for the treatment of mild-to-moderate Alzheimer’s disease.

2014 Outlook Maintained

Ligand reaffirmed its guidance for 2014. The company expects total revenues in the range of $62 million–$64 million in 2014. The Zacks Consensus Estimate currently stands at $63 million. Adjusted earnings per share are expected in the range of $1.40 and $1.45 per share. The Zacks Consensus Estimate currently stands at $1.21 per share.

In the first quarter of 2014, the company expects total revenue in the range of $13 million–$14 million. The Zacks Consensus Estimate currently stands at $14 million. Adjusted earnings per share are expected in the range of $0.22 and $0.25 per share. The Zacks Consensus Estimate currently stands at $0.22 per share.

Ligand carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the healthcare sector include Actelion Ltd. (ALIOF), Alexion Pharmaceuticals, Inc. (ALXN) and Alnylam Pharmaceuticals, Inc. (ALNY). While Actelion and Alexion hold a Zacks Rank #1 (Strong Buy), Alnylam carries a Zacks Rank #2 (Buy).

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