XML 29 R10.htm IDEA: XBRL DOCUMENT v3.22.4
Spin-off of OmniAb
 12 Months Ended
Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Spin-off of OmniAb Spin-off of OmniAb
On March 23, 2022, we entered into the Separation Agreement to separate our OmniAb Business and the Merger Agreement, pursuant to which Avista Public Acquisition Corp. II (“APAC”) would combine with OmniAb, and acquire Ligand's OmniAb Business, in a Reverse Morris Trust transaction (collectively, the “Transactions”). In connection with the execution of the Merger Agreement, we made organizational changes to better align our organizational structure with our strategy and operations, and management reorganized the reportable segments to better reflect how the business is evaluated by the chief operating decision maker. Beginning in the first quarter of 2022, we operated the following two reportable segments: (1) OmniAb business and (2) Ligand core business. The OmniAb business segment is focused on enabling the discovery of therapeutic candidates for our partners by pairing antibody repertoires generated from our proprietary transgenic animals with our OmniAb business platform screening tools. The Ligand core business segment is a biopharmaceutical business focused on developing or acquiring technologies that help pharmaceutical companies deliver and develop medicines. We performed a fair value analysis utilizing a combination of income approach and market approach to determine the fair value of each segment in order to appropriately allocate the goodwill between the segments as of the announcement date. We reassigned goodwill using a relative fair value allocation method, which resulted in goodwill of a $105.7 million and $75.5 million being allocated to Ligand core business and OminAb business, respectively.
After the closing date of the Transactions on November 1, 2022, the historical financial results of OmniAb have been reflected in our consolidated financial statements as discontinued operations under GAAP for all periods presented through the date of the Distribution. Pursuant to the Transaction Agreements, Ligand contributed to OmniAb cash and certain specific assets and liabilities constituting the OmniAb Business. Pursuant to the Distribution, Ligand distributed on a pro rata basis to its shareholders as of October 26, 2022 shares of the common stock of OmniAb representing 100% of Ligand’s interest in OmniAb. Immediately following the Distribution, Orwell Merger Sub Inc., a wholly-owned subsidiary of APAC, merged with and into OmniAb, with OmniAb continuing as the surviving company in the Merger and as a wholly owned subsidiary of New OmniAb. The entire transaction was completed on November 1, 2022, and following the Merger, New OmniAb is an independent, publicly traded company whose common stock trades on NASDAQ under the symbol “OABI.” After the Distribution, we do not beneficially own any shares of common stock in OmniAb and no longer consolidate OmniAb into our financial results for periods ending after November 1, 2022.
The transfer of assets and liabilities to OmniAb was effected through a contribution in accordance with the Merger Agreement, as summarized below (in thousands):
As of November 1, 2022
ASSETS
Current assets:
Cash and cash equivalents
$1,842 
Other current assets9,019 
Total current assets10,861 
Intangible assets, net165,422 
Goodwill75,533 
Property and equipment, net19,921 
Operating lease assets21,290 
Other assets1,449 
Total assets$294,476 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current contingent liabilities$1,569 
      Deferred revenue 8,582 
Current operating lease liabilities1,610 
Current finance lease liabilities1 
Total current liabilities11,762 
Long-term contingent liabilities4,175 
Deferred income taxes, net18,978 
Long-term operating lease liabilities24,823 
Other long-term liabilities5,006 
Total liabilities64,744 
Net assets transferred to OmniAb$229,732 

Discontinued operations
In connection with the Merger, the Company determined its antibody discovery business qualified for discontinued operations accounting treatment in accordance with ASC 205-20. The following table summarizes revenue and expenses of the discontinued operations for the years ended December 31, 2022, 2021 and 2020 (in thousands):
Year Ended December 31,
202220212020
Revenues:
Royalties$1,289 $— $— 
Contract revenue25,275 35,589 22,857 
Total revenues26,564 35,589 22,857 
Operating costs and expenses:
Amortization of intangibles10,847 12,945 11,800 
Research and development38,466 36,907 18,889 
General and administrative13,383 10,693 3,823 
Total operating costs and expenses62,696 60,545 34,512 
Loss from operations(36,132)(24,956)(11,655)
Other income (expense):
Gain from short-term investments— 1,266 1,900 
Interest expense— (7)(5)
Other income (expense), net554 (1,210)(2,070)
Total other expense, net554 49 (175)
Loss before income tax(35,578)(24,907)(11,830)
Income tax benefit7,436 5,692 2,247 
Net loss$(28,142)$(19,215)$(9,583)
There were no assets and liabilities related to discontinued operations as of December 31, 2022, as all balances were transferred to OmniAb upon Separation. The following table summarizes the assets and liabilities of the discontinued operations as of December 31, 2021 (in thousands):
December 31, 2021
ASSETS
Current assets:
Other current assets$1,100 
Total current assets of discontinued operations1,100 
Intangible assets, net174,349 
Goodwill75,533 
Property and equipment, net7,320 
Operating lease assets13,332 
Finance lease assets6 
Other assets243 
Total assets of discontinued operations$271,883 
LIABILITIES
Current liabilities:
Current contingent liabilities$2,538 
      Deferred revenue 10,342 
Current operating lease liabilities685 
Current finance lease liabilities1 
Total current liabilities of discontinued operations13,566 
Long-term contingent liabilities4,826 
Deferred income taxes, net28,239 
Long-term operating lease liabilities13,238 
Other long-term liabilities9,225 
Total liabilities of discontinued operations$69,094 

The following table summarizes the significant non-cash items, capital expenditures of the discontinued operations, and financing activities that are included in the consolidated statements of cash flows for the years ended December 31, 2022, 2021 and 2020 (in thousands):
Year Ended December 31,
202220212020
Operating activities:
Change in fair value of contingent consideration$(554)$1,210 $2,070 
Depreciation and amortization13,218 14,553 12,503 
Stock-based compensation expense9,404 9,457 5,602 
Investing activities:
Cash paid for acquisition, net of cash acquired
$— $— $(27,127)
Purchase of property, plant and equipment(5,572)(4,070)(1,753)
Payments to CVR Holders(960)(720)— 
Financing activities:
Payments to CVR Holders$(1,545)$(1,050)$(2,325)
Supplemental cash flow disclosures:
Purchases of property, plant and equipment included in accounts payable and accrued expenses$2,310 $1,231 $—