LIGAND PHARMACEUTICALS INC 8-K

What Happened

• On July 14, 2026, Ligand Pharmaceuticals, Inc. completed its previously announced merger with XOMA Royalty Corporation (the Merger), with XOMA Royalty Holdings Corporation surviving as a wholly owned subsidiary of Ligand.
• Concurrently, Ligand entered into an Amended and Restated Credit Agreement dated July 14, 2026, replacing its prior credit agreement and establishing a $125.0 million revolving credit facility that matures on September 12, 2028. The facility is secured by certain company collateral and guaranteed by Ligand’s material U.S. subsidiaries.

Key Details

• Closing date: July 14, 2026. Revolving credit facility size: $125.0 million; maturity: September 12, 2028.
• Financial covenants include a consolidated senior secured net leverage ratio ≤ 2.50:1 (company may elect up to 3.00:1 for limited periods following a permitted acquisition) and minimum trailing four-quarter consolidated EBITDA of $100M through Mar 31, 2027 and $150M thereafter.
• Pricing: borrowings at Term SOFR + margin (1.75%–2.50%) or base rate + margin (0.75%–1.50%); unused commitment fee 0.300%–0.450% depending on leverage.
• The agreement contains customary restrictive covenants and events of default (including payment defaults, covenant breaches, cross-defaults and change of control) that could allow lenders to stop borrowings or accelerate repayment.

Why It Matters

• The Merger expands Ligand’s business by bringing XOMA Royalty Holdings into a wholly owned subsidiary, and the new $125M revolver provides near-term liquidity and financial flexibility to support operations and integration.
• However, the facility imposes performance requirements (leverage and EBITDA thresholds) and restrictions (on indebtedness, dividends, disposals, related-party transactions, etc.) that management must meet; failure could trigger defaults, acceleration of debt or limits on corporate actions.
• Investors should monitor Ligand’s upcoming Form 10-Q (the company expects to file the credit agreement as an exhibit) and future quarterly results for how the combined business affects EBITDA, leverage and covenant compliance.