Ligand Pharmaceuticals (LGND) 10-Q/A 14 Nov 16 2016 Q1 Quarterly report (amended) Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May 01, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	LIGAND PHARMACEUTICALS INC
Entity Central Index Key	886,163
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		20,822,444

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 31,293	$ 97,428
Short-term investments	81,908	102,791
Accounts receivable	11,779	6,170
Note receivable from Viking Therapeutics	4,767	4,782
Inventory	1,750	1,633
Other current assets	1,562	1,908
Total current assets	133,059	214,712
Deferred income taxes	129,777	189,083
Investment in Viking Therapeutics	28,118	29,728
Intangible assets, net	212,823	48,347
Goodwill	72,997	12,238
Commercial license rights	8,546	8,554
Property and equipment, net	567	372
Other assets	70	27
Total assets	585,957	503,061
Current liabilities:
Accounts payable	2,688	4,083
Accrued liabilities	3,669	5,397
Current contingent liabilities	5,285	10,414
Current lease exit obligations	577	934
Other current liabilities	21	8
Total current liabilities	12,240	222,821
Long-term debt, net	204,653	201,985
Long-term contingent liabilities	4,022	3,033
Other long-term liabilities	446	297
Total liabilities	221,361	226,151
Commitments and Contingencies
Stockholders' equity:
Common stock, $0.001 par value; 33,333,333 shares authorized; 20,815,636 and 19,949,012 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively	21	20
Additional paid-in capital	783,890	661,850
Accumulated other comprehensive income	3,568	4,903
Accumulated deficit	(422,883)	(429,491)
Total stockholders' equity attributable to Ligand Pharmaceuticals	364,596	237,282
Total liabilities and stockholders' equity	$ 585,957	$ 503,061

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value (USD per share)	$ 0.001	$ 0.001
Common stock, shares authorized	33,333,333	33,333,333
Common stock, shares issued	20,815,636	19,949,012
Common stock, shares outstanding	20,815,636	19,949,012

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Revenues:
Royalties		$ 14,390	$ 10,287
Material sales		5,341	3,729
License fees, milestones and other revenues		9,917	586
Total revenues		29,648	14,602
Operating costs and expenses:
Cost of sales	[1]	955	1,074
Amortization of intangibles		2,524	594
Research and development		4,004	3,368
General and administrative		6,825	5,994
Lease exit and termination costs		244	223
Total operating costs and expenses		14,552	11,253
Income from operations		15,096	3,349
Other (expense) income:
Interest expense, net		(3,005)	(2,973)
Increase in contingent liabilities		(1,306)	(3)
Equity in net losses from Viking Therapeutics		(1,605)	0
Other, net		391	(447)
Total other (expense) income, net		(5,525)	(3,423)
Income (loss) before income taxes		9,571	(74)
Income tax expense		(3,694)	(15)
Income (loss) from operations		5,877	(89)
Gain on sale of Oncology Product Line before income taxes		1,139	0
Income tax expense on discontinued operations		(408)	0
Income from discontinued operations		731	0
Net income including noncontrolling interests:		6,608	(89)
Less: Net loss attributable to noncontrolling interests		0	(843)
Net income		$ 6,608	$ 754
Basic earnings per share data
Income from continuing operations (in usd per share)		$ 0.28	$ 0.04
Income from discontinued operations (in usd per share)		0.04	0
Net income (in usd per share)		0.32	0.04
Diluted earnings per share data
Income from continuing operations (in usd per share)		0.26	0.04
Income from discontinued operations (in usd per share)		0.03	0
Net income (in usd per share)		$ 0.30	$ 0.04
Shares used for computation (in thousands)
Basic (in shares)		20,708,000	19,612,000
Diluted (in shares)		22,283,979	20,630,788
[1]	Excludes amortization of intangibles.

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income:	$ 6,608	$ 754
Unrealized net (loss) gain on available-for-sale securities, net of tax	(1,098)	4,614
Less: Reclassification of net realized (gains) losses included in net income, net of tax	(236)	(234)
Comprehensive income (loss)	$ 5,274	$ 5,134

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net income including noncontrolling interests	$ 6,608	$ (89)
Less: gain from discontinued operations	731	0
Income (loss) from operations	5,877	(89)
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
Non-cash change in estimated fair value of contingent liabilities	1,306	3
Realized gain on sale of short-term investment	(406)	447
Depreciation and amortization	2,575	650
Amortization of discount on investments, net	320	0
Amortization of debt discount and issuance fees	2,668	2,509
Stock-based compensation	4,118	2,914
Deferred income taxes	4,101	6
Accretion of note payable	0	14
Change in fair value of the convertible debt receivable from Viking	15	0
Loss on equity investment in Viking Therapeutics, Inc.	1,605	0
Other		(1)
Changes in operating assets and liabilities:
Accounts receivable	(5,604)	5,211
Inventory	853	(150)
Other current assets	16	445
Other long-term assets	(41)	(291)
Accounts payable and accrued liabilities	(4,302)	(4,667)
Restricted investments	0	661
Deferred revenue	13	(83)
Net cash provided by operating activities	13,114	7,579
Investing activities
Payments to CVR holders and other contingency payments	(5,446)	(3,247)
Purchases of property and equipment	(238)	(10)
Cash paid for acquisition, net of cash acquired	(92,855)	0
Purchase of short-term investments	(49,892)	0
Proceeds from sale of property and equipment	0	1
Proceeds from sale of short-term investments	20,270	459
Proceeds from maturity of short-term investments	48,401	0
Net cash used in investing activities	(79,760)	(2,797)
Financing activities
Net proceeds from stock option exercises and ESPP	1,013	781
Purchase of common stock for RSU vesting	(502)	0
Net cash provided by financing activities	511	781
Net (decrease) increase in cash and cash equivalents	(66,135)	5,563
Cash and cash equivalents at beginning of period	97,428	160,203
Cash and cash equivalents at end of period	31,293	165,766
Supplemental disclosure of cash flow information
Interest paid	919	903
Taxes paid	1	11
Supplemental schedule of non-cash activity
Stock issued for acquisition	(77,615)	0
Accrued Inventory Purchases	600	2,402
Unrealized gain on AFS investments	$ (1,834)	$ 4,614

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Significant Accounting Policies	Significant Accounting Principles Business Ligand is a biopharmaceutical company with a business model that is based upon the concept of developing or acquiring royalty revenue generating assets and coupling them with a lean corporate cost structure. We operate in one business segment: development and licensing biopharmaceutical assets. Principles of Consolidation The accompanying consolidated financial statements include Ligand and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation The Company’s accompanying unaudited condensed consolidated financial statements as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company and its subsidiaries, have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . These financial statements should be read in conjunction with the consolidated financial statements and notes therein included in the Company’s annual report on Form 10-K/A for the year ended December 31, 2015 filed on November 14, 2016. Restatement The Company has restated its financial statements for the year ended December 31, 2015 to correct errors relating to the Company's net operating loss (NOL) carryforward benefits in the United States which resulted in an overstatement of deferred tax assets (DTA) at December 31, 2015 and March 31, 2016. In connection with three acquisitions that were completed prior to February 2010, the Company recognized DTAs for a portion of the NOLs, which included capitalized research and development expenses, obtained from the acquired businesses. From the time of the acquisitions until September 2015, there was a valuation allowance against all of the Company’s NOLs, including those obtained from the entities acquired. In September 2015, the Company concluded that it was more likely than not that a substantial portion of it deferred tax assets would be realized through future taxable income. As a result, the Company released the majority of its DTA valuation allowance in full, including $27.5 million related to NOLs recognized as part of the businesses acquired prior to February of 2010. During the quarter ended September 30, 2016, the Company concluded that for accounting purposes the approximately $27.5 million of DTAs that were obtained upon acquiring the businesses prior to February of 2010 did not meet the more likely-than-not criterion for recognition in 2015 and that the related valuation allowance should not have been reversed. As a result, the Company's income tax benefit and net income for the year ended December 31, 2015 were overstated by $27.5 million each as were the Company's DTAs at March 31, 2016. Based on the materiality guidelines contained in SEC Staff Accounting Bulletin No. 99, Materiality, and SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements in Current Year Financial Statements, the Company believes that the income tax adjustment is material to its financial statements for periods subsequent to and including the year ended December 31, 2015. Accordingly, the Company determined that it would restate prior period financial statements and amend its previously filed affected filings, including its March 31, 2016 report on Form 10-Q and December 31, 2015 report on Form 10-K. The Company also recorded adjustments as part of this restatement related to the classification of our 2019 Convertible Senior Notes. As of December 31, 2015, the Company's last reported sale price exceeded the 130% threshold described in Note 6 - "Financing Arrangements" and accordingly the 2019 Convertible Senior Notes have been reclassified as a current liability as of December 31, 2015. As a result, the related unamortized discount of $39.6 million previously classified within stockholder's equity was reclassified as temporary equity component of currently redeemable convertible notes on our Condensed Consolidated Balance Sheet. The effects of these prior period corrections are as follows: As of December 31, 2015 As Reported Adjustments As Restated Deferred income taxes $ 216,564 $ (27,481 ) $ 189,083 Total assets (1) 530,542 (27,481 ) 503,061 2019 convertible senior notes, net - current — 201,985 201,985 Total current liabilities 20,836 201,985 222,821 2019 convertible senior notes, net - long term (1) 201,985 (201,985 ) — Equity component of currently redeemable convertible notes (Note 5) — 39,628 39,628 Additional paid-in capital 701,478 (39,628 ) 661,850 Accumulated deficit (402,010 ) (27,481 ) (429,491 ) Total stockholders' equity 304,391 (67,109 ) 237,282 Total liabilities and stockholders' equity (1) 530,542 (27,481 ) 503,061 (1) $3.4 million of unamortized issuance cost was reclassified to debt discount in the concurrently filed 2015 10-K/A form that it is filed after the Company's retrospective adoption of ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs in Q1 2016. As of March 31, 2016 As Reported Adjustments As Restated Deferred income taxes $ 157,258 (27,481 ) $ 129,777 Total assets 613,438 (27,481 ) 585,957 Accumulated deficit (395,402 ) (27,481 ) (422,883 ) Total stockholders' equity 392,077 (27,481 ) 364,596 Total liabilities and stockholders' equity 613,438 (27,481 ) 585,957 Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates. Reclassifications Certain reclassifications have been made to the previously issued balance sheet and statement of operations for the three months ended March 31, 2015 for comparability purposes. These reclassifications had no effect on the reported net income, stockholders' equity, and operating cash flows as previously reported. Income Per Share Basic income per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed by dividing net income by the weighted-average number of common shares and common stock equivalents of all dilutive securities calculated using the treasury stock method and the if-converted method. The total number of potentially dilutive securities including stock options and warrants excluded from the computation of diluted income per share because their inclusion would have been anti-dilutive was 3.5 million and 4.5 million , as of March 31, 2016 and 2015 , respectively. The following table presents the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share amounts): Three months ended March 31, 2016 2015 Net income from continuing operations $ 5,877 $ 754 Net income from discontinued operations 731 — Net income $ 6,608 $ 754 Shares used to compute basic income per share 20,707,926 19,611,881 Dilutive potential common shares: Restricted stock 66,736 61,538 Stock options 759,581 957,369 0.75% Convertible Senior Notes, Due 2019 749,736 — Shares used to compute diluted income per share 22,283,979 20,630,788 Basic per share amounts: Income from continuing operations $ 0.28 $ 0.04 Income from discontinued operations 0.04 — Basic net income per share $ 0.32 $ 0.04 Diluted per share amounts: Income from continuing operations $ 0.26 $ 0.04 Income from discontinued operations 0.03 — Diluted net income per share $ 0.30 $ 0.04 Cash Equivalents Cash equivalents consist of all investments with maturities of three months or less from the date of acquisition. Short-term Investments Short-term investments primarily consist of investments in debt securities that have effective maturities greater than three months and less than twelve months from the date of acquisition. The Company classifies its short-term investments as "available-for-sale". Such investments are carried at fair value, with unrealized gains and losses included in the statement of comprehensive income (loss). The Company determines the cost of investments based on the specific identification method. Restricted Investments Restricted investments consist of certificates of deposit held with a financial institution as collateral under a facility lease and third-party service provider arrangements. The following table summarizes the various investment categories at March 31, 2016 and December 31, 2015 (in thousands): Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value March 31, 2016 Short-term investments Bank deposits $ 42,376 $ 87 $ — $ 42,463 Corporate bonds 24,268 84 (2 ) 24,350 Commercial paper 8,401 2 — 8,403 Asset backed securities 2,067 1 (1 ) 2,067 Corporate equity securities 1,811 2,814 — 4,625 $ 78,923 $ 2,988 $ (3 ) $ 81,908 December 31, 2015 Short-term investments Bank deposits $ 43,043 $ — $ (4 ) $ 43,039 Corporate bonds 41,238 $ — (35 ) 41,203 Commercial paper 1,747 $ — — 1,747 Asset backed securities 10,020 $ — (5 ) 10,015 Corporate equity securities 1,843 $ 4,944 — 6,787 $ 97,891 $ 4,944 $ (44 ) $ 102,791 Inventory Inventory, which consists of finished goods, is stated at the lower of cost or market value. The Company determines cost using the first-in, first-out method. Inventory levels are analyzed periodically and written down to its net realizable value if it has become obsolete, has a cost basis in excess of its expected net realizable value or is in excess of expected requirements. There were no write downs related to obsolete inventory recorded for the three months ended March 31, 2016 and 2015 . Goodwill and Other Identifiable Intangible Assets Goodwill and other identifiable intangible assets consist of the following (in thousands): March 31, December 31, 2016 2015 Indefinite lived intangible assets Acquired IPR&D $ 12,556 $ 12,556 Goodwill 72,997 12,238 Definite lived intangible assets Complete technology 182,267 15,267 Less: Accumulated amortization (5,883 ) (3,762 ) Trade name 2,642 2,642 Less: Accumulated amortization (685 ) (652 ) Customer relationships 29,600 29,600 Less: Accumulated amortization (7,674 ) (7,304 ) Total goodwill and other identifiable intangible assets, net $ 285,820 $ 60,585 As Discussed in Note 2-Business Combination , on January 8, 2016, the Company completed its acquisition of OMT. As a result of the transaction, the Company recorded $167.0 million of intangibles with definite lives and goodwill of $60.8 million . Amortization of definite-lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of 20 years . Amortization expense of $2.5 million was recognized for the three months ended March 31, 2016 and amortization expense of $0.6 million was recognized for the three months ended March 31, 2015 . Estimated amortization expense for the year ending December 31, 2016 is $10.6 million and estimated amortization expense for the years ended December 31, 2017 through 2020 is $10.7 million per year. For each of the three months ended March 31, 2016 and 2015 , there was no impairment of IPR&D or goodwill. Commercial License Rights Commercial license rights represent a portfolio of future milestone and royalty payment rights acquired from Selexis in April 2013 and April 2015. Individual commercial license rights acquired under the agreement are carried at allocated cost and approximate fair value. The carrying value of the license rights will be reduced on a pro-rata basis as revenue is realized over the term of the agreement. Declines in the fair value of individual license rights below their carrying value that are deemed to be other than temporary are reflected in earnings in the period such determination is made. As of March 31, 2016 , management does not believe there have been any events or circumstances indicating that the carrying amount of its commercial license rights may not be recoverable. Property and Equipment Property and equipment is stated at cost and consists of the following (in thousands): March 31, December 31, 2016 2015 Lab and office equipment $ 2,482 $ 2,248 Leasehold improvements 273 273 Computer equipment and software 636 632 3,391 3,153 Less accumulated depreciation and amortization (2,824 ) (2,781 ) Total property and equipment, net $ 567 $ 372 Depreciation of equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives or the related lease term. Depreciation expense of $0.1 million was recognized for each of the three months ended March 31, 2016 and 2015 , respectively, which is included in operating expenses. Other Current Assets Other current assets consist of the following (in thousands): March 31, December 31, 2016 2015 Prepaid expenses $ 1,087 $ 1,177 Other receivables 475 731 Total other current assets $ 1,562 $ 1,908 Accrued Liabilities Accrued liabilities consist of the following (in thousands): March 31, December 31, 2016 2015 Compensation $ 854 $ 1,711 Professional fees 754 726 Amounts owed to former licensees 695 915 Royalties owed to third parties 937 823 Other 429 1,222 Total accrued liabilities $ 3,669 $ 5,397 Other Long-Term Liabilities Other long-term liabilities consist of the following (in thousands): March 31, December 31, 2016 2015 Deposits $ 298 $ 268 Deferred rent 107 — Other 41 29 Total other long-term liabilities $ 446 $ 297 Contingent Liabilities In connection with the Company’s acquisition of CyDex in January 2011, the Company recorded a contingent liability, for amounts potentially due to holders of the CyDex CVRs and former license holders. The liability is periodically assessed based on events and circumstances related to the underlying milestones, royalties and material sales. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly and actual amounts paid under the CVR agreements may be materially different than the carrying amount of the liability. The fair value of the liability at March 31, 2016 and December 31, 2015 was $6.9 million and $9.5 million , respectively. The Company recorded a fair-value adjustment to increase the liability by $0.2 million and $1.2 million for the three months ended March 31, 2016 and 2015 , respectively. There was a revenue-sharing payment of $2.8 million and $3.2 million to CyDex CVR holders during the three months ended March 31, 2016 and 2015 , respectively. In connection with the Company’s acquisition of Metabasis in January 2010 , the Company issued to Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs will entitle Metabasis stockholders to cash payments as frequently as every six months as cash is received by the Company from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The fair values of the CVRs are remeasured at each reporting date through the term of the related agreement. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. The fair value of the liability was estimated to be $2.4 million and $4.0 million as of March 31, 2016 and December 31, 2015 , respectively. The Company recorded an increase in the liability for Metabasis-related CVRs of $1.1 million and an decrease of $1.2 million for the three months ended March 31, 2016 and 2015 , respectively. The Company paid Metabasis CVR holders $2.6 million for the three months ended March 31, 2016 . No payments were made to Metabasis CVR holders for the three months ended March 31, 2015 . Revenue Recognition Royalties on sales of products commercialized by the Company’s partners are recognized in the quarter reported to Ligand by the respective partner. Generally, the Company receives royalty reports from its licensees approximately one quarter in arrears due to the fact that its agreements require partners to report product sales between 30 and 60 days after the end of the quarter. The Company recognizes royalty revenues when it can reliably estimate such amounts and collectability is reasonably assured. Under this accounting policy, the royalty revenues reported are not based upon estimates and such royalty revenues are typically reported to the Company by its partners in the same period in which payment is received. Revenue from material sales of Captisol is recognized upon transfer of title, which normally passes upon shipment to the customer, provided all other revenue recognition criteria have been met. All product returns are subject to the Company's credit and exchange policy, approval by the Company and a 20% restocking fee. To date, product returns by customers have not been material to net material sales in any related period. The Company records revenue net of product returns, if any, and sales tax collected and remitted to government authorities during the period. The Company analyzes its revenue arrangements and other agreements to determine whether there are multiple elements that should be separated and accounted for individually or as a single unit of accounting. For multiple element contracts, arrangement consideration is allocated at the inception of the arrangement to all deliverables on the basis of relative selling price, using a hierarchy to determine selling price. Management first considers VSOE, then TPE and if neither VSOE nor TPE exist, the Company uses its best estimate of selling price. Many of the Company's revenue arrangements for Captisol involve a license agreement with the supply of manufactured Captisol product. Licenses may be granted to pharmaceutical companies for the use of Captisol product in the development of pharmaceutical compounds. The supply of the Captisol product may be for all phases of clinical trials and through commercial availability of the host drug or may be limited to certain phases of the clinical trial process. Management believes that the Company's licenses have stand-alone value at the outset of an arrangement because the customer obtains the right to use Captisol in its formulations without any additional input by the Company. Other nonrefundable, upfront license fees are recognized as revenue upon delivery of the license, if the license is determined to have standalone value that is not dependent on any future performance by the Company under the applicable collaboration agreement. Nonrefundable contingent event-based payments are recognized as revenue when the contingent event is met, which is usually the earlier of when payments are received or collections are assured, provided that it does not require future performance by the Company. The Company occasionally has sub-license obligations related to arrangements for which it receives license fees, milestones and royalties. The Company evaluates the determination of gross versus net reporting based on each individual agreement. Sales-based contingent payments from partners are accounted for similarly to royalties, with revenue recognized upon achievement of the sales targets assuming all other revenue recognition criteria for milestones are met. Revenue from development and regulatory milestones is recognized when earned, as evidenced by written acknowledgement from the collaborator, provided that (1) the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, and the Company has no further performance obligations relating to that event, and (2) collectability is reasonably assured. If these criteria are not met, the milestone payment is recognized over the remaining period of the Company’s performance obligations under the arrangement. Revenue from research funding under our collaboration agreements is earned and recognized on a percentage-of completion basis as research hours are incurred in accordance with the provisions of each agreement. Stock-Based Compensation Stock-based compensation expense for awards to employees and non-employee directors is recognized on a straight-line basis over the vesting period until the last tranche vests. The following table summarizes stock-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 March 31, 2016 2015 Stock-based compensation expense as a component of: Research and development expenses $ 1,585 $ 920 General and administrative expenses 2,533 1,994 $ 4,118 $ 2,914 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 March 31, 2016 2015 Risk-free interest rate 1.5% 1.8% Dividend yield — — Expected volatility 50% 58% Expected term 6.6 6.6 Forfeiture rate 5.0% 8.5% Income Taxes Income taxes are accounted for under the liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the consolidated financial statements. The Company provides a valuation allowance for deferred tax assets if it is more likely than not that these items will expire before we are able to realize their benefit. The Company calculates the valuation allowance in accordance with the authoritative guidance relating to income taxes under ASC 740, Income Taxes, which requires an assessment of both positive and negative evidence that is available regarding the reliability of these deferred tax assets, when measuring the need for a valuation allowance. Developing the provision for income taxes requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. The Company's judgments and tax strategies are subject to audit by various taxing authorities. While management believes the Company has provided adequately for its income tax liabilities in its consolidated financial statements, adverse determinations by these taxing authorities could have a material adverse effect on the Company's consolidated financial condition and results of operations. Variable Interest Entities The Company identifies an entity as a VIE if either: (1) the entity does not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) the entity's equity investors lack the essential characteristics of a controlling financial interest. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in any VIE and therefore is the primary beneficiary. If the Company is the primary beneficiary of a VIE, it consolidates the VIE under applicable accounting guidance. If the Company is no longer the primary of a VIE or the entity is no longer considered as a VIE as facts and circumstances changed, it deconsolidates the entity under the applicable accounting guidance. Beginning May 2015, the Company deconsolidated Viking, a previously reported VIE, and elected to record its investment in Viking under the equity method of accounting as Viking is no longer considered a VIE and the Company does not have voting control or other elements of control that would require consolidation. The investment is subsequently adjusted for the Company’s share of Viking's operating results, and if applicable, cash contributions and distributions, which is reported on a separate line in our condensed consolidated statement of operations called “Equity in net losses of Viking Therapeutics”. On the condensed consolidated balance sheet, the Company reports its investment in Viking on a separate line in the non-current assets section called “Investment in Viking Therapeutics”. See Note 3, Investment in Viking Therapeutics, for additional details. Convertible Debt In August 2014, the Company completed a $245.0 million offering of 2019 Convertible Senior Notes, which bear interest at 0.75% . The Company accounts for the 2019 Convertible Senior Notes by separating the liability and equity components of the instrument in a manner that reflects the Company's nonconvertible debt borrowing rate. As a result, the Company assigned a value to the debt component of the 2019 Convertible Senior Notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in the Company recording the debt instrument at a discount. The Company is amortizing the debt discount over the life of the 2019 Convertible Senior Notes as additional non-cash interest expense utilizing the effective interest method. Recent Accounting Pronouncements In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, (5) recognize revenue when (or as) the entity satisfies a performance obligation. Management is currently evaluating the effect the adoption of this standard will have on the Company's financial statements. In April 2015, FASB issued ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. This update was issued to simplify the presentation for debt issuance costs. Upon adoption, such costs shall be presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability and not as a deferred charge presented in Other assets on our consolidated balance sheets. This amendment will be effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted. During the three-month period ended March 31, 2016, management adopted the change in the presentation on our consolidated balance sheets accordingly (see Note 6 for details). In January 2016, the FASB issued ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities that amends the accounting and disclosures of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in current earnings. The new standard is effective for interim and annual periods beginning on January 1, 2018. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation , which identifies areas for simplification involving several aspects of accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU No. 2016-09 is effective for reporting periods beginning after December 31, 2016. Early adoption is permitted. We are currently assessing the potential impact that the adoption of ASU No. 2016-09 will have in our condensed consolidated financial statements.

Business Combination

Business Combination	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
Business Combination	Business Combination On January 8, 2016, the Company acquired substantially all of the assets and liabilities of OMT. OMT is a biotechnology company engaged in the genetic engineering of animals for the generation of human therapeutic antibodies through its OmniAb® technology, which currently offers three transgenic animal platforms for license, including OmniRat®, OmniMouse® and OmniFlic®. The transaction, which was accounted for as a business combination, added 16 partnered programs to the Company's portfolio and provides the Company with opportunities for further licensing and collaborations in the area. The aggregate acquisition consideration was $174.0 million , consisting of (in thousands): Cash consideration $ 96,359 Total share consideration: Actual number of shares issued 793 Multiplied by: Ligand closing share price on January 8, 2016 $ 97.92 Total share consideration 77,658 Total consideration $ 174,017 The acquisition consideration is subject to certain customary post-closing adjustments up to 15 months from January 8, 2016, in accordance with the terms and subject to the conditions contained in the Merger Agreement between the Company and OMT. Cash and cash equivalents $ 3,504 Accounts receivable 5 Income tax receivable 140 Prepaid expenses and other current assets 2 Deferred tax liabilities, net (56,114 ) Intangible asset with finite life - core technology 167,000 Liabilities assumed (1,279 ) Goodwill 60,759 Total consideration $ 174,017 The fair value of the core technology, or OMT's OmniAb technology, was based on the discounted cash flow method that estimated the present value of a hypothetical royalty stream derived from the licensing of the OmniAb technology. These projected cash flows were discounted to present value using a discount rate of 15.5% . The fair value of the core technology is being amortized on a straight-line bases over the estimated useful life of 20 years. The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed of $60.8 million was recorded as goodwill, which is not deductible for tax purposes and is primarily attributable to OMT’s revenue growth from combining the OMT and Ligand businesses and workforce, as well as the benefits of access to different markets and customers. The purchase price allocations were prepared on a preliminary basis and are subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. Any measurement period adjustments to the OMT purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition. The following table presents supplemental pro forma information for the three months ended March 31, 2016 and March 31, 2015 , as if the acquisition of OMT had occurred on January 1, 2015 (in thousands except for EPS): March 31, March 31, 2016 2015 Revenue $ 32,124 $ 17,152 Net income $ 8,877 $ (474 ) Basic earnings per share: $ 0.43 $ (0.02 ) Diluted earnings per share: $ 0.40 $ (0.02 ) The unaudited pro forma consolidated results include pro forma adjustments that assume the acquisition occurred on January 1, 2015. The primary adjustments include: (i) the $0.3 million share based compensation expenses related to the stock awards issued to the retained OMT employees after the acquisition, and (ii) additional intangible amortization expense of $0.2 million and $2.1 million was included in the quarter ended March 31, 2016 and 2015, respectively. The adjustments also include $2.5 million license revenue recognized by OMT from January 1, 2016 to the acquisition date. The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the acquisition on January 1, 2015. In addition, the unaudited pro forma consolidated results do not purport to project the future results of operations of the combined company nor do they reflect the expected realization of any cost savings associated with the acquisition.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. The Company establishes a three-level hierarchy to prioritize the inputs used in measuring fair value. The levels are described below with level 1 having the highest level input that is significant to the measurement and level 3 having the lowest: Level 1 - Quoted prices in active markets; Level 2 - Inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3 - Unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions. The following table provides a summary of the carrying value of assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 (in thousands). There were no transfers between Level 1 and Level 2 securities during the three months ended March 31, 2016 : Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents (1) $ 5,316 $ — $ 5,316 $ — Short-term investments (2) 81,908 4,625 77,283 — Note receivable Viking (3) 4,767 — — 4,767 Total assets $ 91,991 $ 4,625 $ 82,599 $ 4,767 Liabilities: Current contingent liabilities-CyDex (4) $ 5,285 $ — $ — $ 5,285 Long-term contingent liabilities-CyDex (4) 1,578 — — 1,578 Long-term contingent liabilities-Metabasis (5) 2,444 — 2,444 — Liability for amounts owed to former licensees (6) 534 534 — — Total liabilities $ 9,841 $ 534 $ 2,444 $ 6,863 The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs * Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents (1) $ 3,015 $ — $ 3,015 $ — Short-term investments (2) 92,775 6,786 85,989 — Viking note receivable (3) 4,782 — — 4,782 Total assets $ 100,572 $ 6,786 $ 89,004 $ 4,782 Liabilities: Current contingent liabilities-CyDex (4) $ 7,812 $ — $ — $ 7,812 Current contingent liabilities-Metabasis (5) $ 2,602 — 2,602 — Long-term contingent liabilities-Metabasis (5) 1,355 — 1,355 — Long-term contingent liabilities-CyDex (4) 1,678 — — 1,678 Liability for amounts owed to former licensees (6) 794 794 — — Total liabilities $ 14,241 $ 794 $ 3,957 $ 9,490 (1) Highly liquid investments with maturities less than 90 days from the purchase date are recorded as cash equivalents that are classified as Level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. (2) Investments in equity securities, which the Company received as a result of event-based and upfront payments from licensees, are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. Short-term investments in marketable securities with maturities greater than 90 days are classified as level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. (3) The fair value of the convertible note receivable from Viking was determined using a probability weighted option pricing model using a lattice methodology. The fair value is subjective and is affected by certain significant input to the valuation model such as the estimated volatility of the common stock, which was estimated to be 50% at March 31, 2016 . Changes in these assumptions may materially affect the fair value estimate. (4) The fair value of the liabilities for CyDex contingent liabilities were determined based on the income approach using a Monte Carlo analysis. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s assumptions regarding revenue volatility, probability of commercialization of products, estimates of timing and probability of achievement of certain revenue thresholds and developmental and regulatory milestones which may be achieved and affect amounts owed to former license holders and CVR holders. Changes in these assumptions can materially affect the fair value estimate. (5) The liability for CVRs for Metabasis are determined using quoted market prices in an inactive market for the underlying CVR. (6) The liability for amounts owed to former licensees are determined using quoted market prices in active markets for the underlying investment received from a partner, a portion of which is owed to former licensees. (7) The co-promote termination payments receivable represents a receivable for future payments to be made by Pfizer related to product sales and is recorded at its fair value. The receivable and liability will remain equal. The fair value is determined based on a valuation model using an income approach. The following table represents significant unobservable inputs used in determining the fair value of contingent liabilities assumed in the acquisition of CyDex: March 31, 2016 December 31, 2015 Range of annual revenue subject to revenue sharing (1) $23.5 million $22.5 million Revenue volatility 25% 25% Average probability of commercialization 78% 73% Sales beta 0.30 0.40 Credit rating BB BB Equity risk premium 6% 6% (1) Revenue subject to revenue sharing represent management’s estimate of the range of total annual revenue subject to revenue sharing (i.e. annual revenues in excess of $15 million ) through December 31, 2016 , which is the term of the CVR agreement. A reconciliation of the level 3 financial instruments as of March 31, 2016 is as follows (in thousands): Assets: Fair value of level 3 financial instrument assets as of December 31, 2015 $ 4,782 Viking note receivable fair market value adjustment (15 ) Fair value of level 3 financial instrument assets as of March 31, 2016 $ 4,767 Liabilities: Fair value of level 3 financial instrument liabilities as of December 31, 2015 $ 9,490 Payments to CVR and other former license holders (2,828 ) Fair value adjustments to contingent liabilities 201 Fair value of level 3 financial instrument liabilities as of March 31, 2016 $ 6,863 Other Fair Value Measurements 2019 Convertible Senior Notes In August 2014, the Company issued $245.0 million aggregate principal amount of its 2019 Convertible Senior Notes. The Company uses a quoted market rate in an inactive market, which is classified as a Level 2 input, to estimate the current fair value of its 2019 Convertible Senior Notes. The estimated fair value of the 2019 Senior Convertible Notes was $373.5 million as of March 31, 2016 . The carrying value of the notes does not reflect the market rate. See Note 7 Financing Arrangements for additional information. Viking Therapeutics The Company records its investment in Viking under the equity method of accounting. The investment is subsequently adjusted for the Company’s share of Viking's operating results, and if applicable, cash contributions and distributions. See Note 3 Investment in Viking Therapeutics for additional information. The market value of the Company's investment in Viking was $6.8 million as of March 31, 2016 . The carrying value of the investment in Viking does not reflect the market value.

Investment in Viking Therapeuti

Investment in Viking Therapeutics, Inc.	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Investment in Viking Therapeutics, Inc.	Investment in Viking Therapeutics In 2014, the Company entered into a MLA with Viking to license the rights to five of the Company's programs to Viking. Under the terms of the MLA, no consideration was exchanged upon execution, but rather Viking agreed to issue shares of Viking common stock with an aggregate value of approximately $29.2 million upon consummation of Viking's IPO. As part of this transaction, the Company also extended a $2.5 million convertible loan to Viking under a LSA. As a result of these transactions, the Company determined it held a variable interest in Viking. The Company considered certain criteria in the accounting guidance for VIEs, and determined that Viking was a VIE and Ligand was the primary beneficiary of Viking. As a result, the Company consolidated Viking on its financial statements from May 2014 through May 2015, the effective date of Viking's IPO. The Company recorded 100% of the losses incurred as net loss attributable to noncontrolling interest because it was the primary beneficiary with no equity interest in the VIE. In May 2015, Viking completed the Viking IPO and issued the Company approximately 3.7 million shares of Viking common stock with an aggregate value of $29.2 million based on the IPO price of $8.00 per share. In connection with the Viking IPO, the Company purchased 1.1 million shares of Viking common stock for an aggregate price of $9.0 million at the initial public offering price. Upon completion of Viking’s IPO, the Company determined that Viking was no longer a VIE and the Company did not have any other element of control that would require consolidation of Viking. In May 2015 , the Company deconsolidated Viking and began to account for its equity investment in Viking under the equity method. The Company owned an aggregate of 49.4% of the outstanding common stock of Viking at March 31, 2016 . In January 2016 , the Company entered into an amendment to the LSA with Viking to extend the maturity of the convertible loan to May 2017 , reduce the interest rate from 5.0% to 2.5% , and extend the lock up period by one year such that the Company may not sell, transfer, or dispose of any Viking securities prior to January 2017 . Additionally, upon the consummation of a subsequent capital financing transaction, Viking will be required to repay $1.5 million of the Viking Note obligation to the Company, with at least $0.3 million to be paid in cash and the remaining amount to be paid in the form and at the price of the Viking equity securities sold in the financing transaction. Upon maturity or further payments, the Company may elect to receive equity of Viking common stock or cash equal to 200% of the principal amount plus accrued and unpaid interest. The Company has opted to account for the Viking convertible note receivable at fair value. As of March 31, 2016 , the aggregate fair market value of the note receivable was $4.8 million . For the three months ended March 31, 2016 , the Company recorded a $15,000 decrease in the fair value of the Viking convertible note. See Note 2, Fair Value Measurements for additional details.

Lease Obligations

Lease Obligations	3 Months Ended
	Mar. 31, 2016
Leases [Abstract]
Lease Obligations	Lease Obligations The Company leases office and laboratory facilities in California, Kansas and New Jersey. These leases expire between 2016 and 2023 , some of which are subject to annual rent increases which range from 3.0% to 3.5% . The Company currently subleases office and laboratory space in California and New Jersey. The following table provides a summary of operating lease obligations and payments expected to be received from sublease agreements as of March 31, 2016 (in thousands): Operating lease obligations: Lease Termination Date Less than 1 year 1-2 years 3-4 years Thereafter Total Corporate headquarters- La Jolla, CA June 2019 $ 704 $ 1,465 $ 187 $ — $ 2,356 Corporate headquarters-San Diego, CA April 2023 52 261 277 306 896 Bioscience and Technology Business Center- Lawrence, KS December 2017 54 41 — — 95 Vacated office and research facility- Cranbury, NJ August 2016 1,089 — — — 1,089 Total operating lease obligations $ 1,899 $ 1,767 $ 464 $ 306 $ 4,436 Sublease payments expected to be received: Corporate headquarters- June 2019 $ 443 $ 920 $ 116 $ — $ 1,479 Office and research facility- Cranbury, NJ August 2016 88 — — — 88 Net operating lease obligations $ 1,368 $ 847 $ 348 $ 306 $ 2,869 As of March 31, 2016 and December 31, 2015 , the Company had lease exit obligations of $0.6 million and $0.9 million , respectively. For the three months ended March 31, 2016 and 2015 , the Company made cash payments, net of sublease payments received of $0.6 million and $0.9 million , respectively. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.2 million for the three months ended March 31, 2016 and 2015 .

Financing Arrangements

Financing Arrangements	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Financing Arrangements	Financing Arrangements 0.75% Convertible Senior Notes Due 2019 In August 2014, the Company issued $245.0 million aggregate principal amount of its 2019 Convertible Senior Notes, resulting in net proceeds of $239.3 million . The 2019 Convertible Senior Notes are convertible into common stock at an initial conversion rate of 13.3251 shares per $1,000 principal amount of convertible notes, subject to adjustment upon certain events, which is equivalent to an initial conversion price of approximately $75.05 per share of common stock. The notes bear cash interest at a rate of 0.75% per year, payable semi-annually. Holders of the 2019 Convertible Senior Notes may convert the notes at any time prior to the close of business on the business day immediately preceding May 15, 2019, under any of the following circumstances: (1) during any fiscal quarter (and only during such fiscal quarter) commencing after December 31, 2014, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding fiscal quarter, the last reported sale price of the Company's common stock on such trading day is greater than 130% of the conversion price on such trading day; (2) during the five business day period immediately following any ten consecutive trading day period, in which the trading price per $1,000 principal amount of notes was less than 98% of the product of the last reported sale price of the Company's common stock on such trading day and the conversion rate on each such trading day; or (3) upon the occurrence of certain specified corporate events as specified in the indenture governing the notes. On or after May 15, 2019 until the close of business on the second scheduled trading day immediately preceding August 15, 2019, holders of the notes may convert all or a portion of their notes at any time, regardless of the foregoing circumstances. Upon conversion, Ligand must deliver cash to settle the principal and may deliver cash or shares of common stock, at the option of the Company, to settle any premium due upon conversion. In accordance with accounting guidance for debt related to conversion and other options, the Company separately accounted for the debt and equity components of the 2019 Convertible Senior Notes by allocating the $245.0 million total proceeds between the debt component and the embedded conversion option, or equity component, due to Ligand's ability to settle the 2019 Convertible Senior Notes in cash for the principal portion and to settle any premium in cash or common stock, at the Company's election. The debt allocation was performed in a manner that reflected the Company's non-convertible borrowing rate for similar debt of 5.83% derived from independent valuation analysis. The initial debt value of $192.5 million accretes at 5.83% to reach $245.0 million at the maturity date. The equity component of the 2019 Convertible Senior Notes was recognized as a debt discount and represents the difference between the $245.0 million proceeds at issuance of the 2019 Convertible Senior Notes and the fair value of the debt allocation on their respective issuance dates. The debt discount is amortized to interest expense using the effective interest method over the expected life of a similar liability without an equity component. The notes will have a dilutive effect to the extent the average market price per share of common stock for a given reporting period exceeds the conversion price of $75.05 . As of March 31, 2016 , the “if-converted value” exceeded the principal amount of the 2019 Convertible Senior Notes by $104.6 million . In connection with the issuance of the 2019 Convertible Senior Notes, the Company incurred $5.7 million of issuance costs, which primarily consisted of underwriting, legal and other professional fees. The portions of these costs allocated to the equity components totaling $1.2 million were recorded as a reduction to additional paid-in capital. The portions of these costs allocated to the liability components totaling $4.5 million are recorded net of the liability component on the balance sheet beginning in 2016 in accordance with ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs . The portions allocated to the liability components are amortized to interest expense using the effective interest method over the expected life of the 2019 Convertible Senior Notes. The Company determined the expected life of the debt discount for the 2019 Convertible Senior Notes to be equal to the original five -year term of the notes. The carrying value of the equity component related to the 2019 Convertible Senior Notes as of March 31, 2016 and December 31, 2015 , net of issuance costs, was $51.3 million . Convertible Bond Hedge and Warrant Transactions In August 2014, in connection with the issuance of the 2019 Convertible Senior Notes, to minimize the impact of potential dilution to the Company's common stock upon conversion of such notes, the Company entered into convertible bond hedges and sold warrants covering approximately 3,264,643 shares of its common stock. The convertible bond hedges have an exercise price of $75.05 per share and are exercisable when and if the 2019 Convertible Senior Notes are converted. If upon conversion of the 2019 Convertible Senior Notes, the price of the Company's common stock is above the exercise price of the convertible bond hedges, the counterparties will deliver shares of common stock and/or cash with an aggregate value approximately equal to the difference between the price of common stock at the conversion date and the exercise price, multiplied by the number of shares of common stock related to the convertible bond hedge transaction being exercised. The convertible bond hedges and warrants described below are separate transactions entered into by the Company and are not part of the terms of the 2019 Convertible Senior Notes. Holders of the 2019 Convertible Senior Notes and warrants will not have any rights with respect to the convertible bond hedges. The Company paid $48.1 million for these convertible bond hedges and recorded the amount as a reduction to additional paid-in capital. Concurrently with the convertible bond hedge transactions, the Company entered into warrant transactions whereby it sold warrants to acquire, approximately 3,264,643 shares of common stock with an exercise price of approximately $125.08 per share, subject to certain adjustments. The warrants have various expiration dates ranging from November 13, 2019 to April 22, 2020. The warrants will have a dilutive effect to the extent the market price per share of common stock exceeds the applicable exercise price of the warrants, as measured under the terms of the warrant transactions. The Company received $11.6 million for these warrants and recorded this amount to additional paid-in capital. The common stock issuable upon exercise of the warrants will be in unregistered shares, and the Company does not have the obligation and does not intend to file any registration statement with the SEC registering the issuance of the shares under the warrants. The carrying values and the fixed contractual coupon rates of the Company's financing arrangements as of March 31, 2016 and December 31, 2015 were as follows (in thousands): March 31, 2016 December 31, 2015 2019 Convertible Senior Notes Principal amount outstanding $ 245,000 $ 245,000 Unamortized discount (37,169 ) (39,628 ) Net carrying amount 207,831 205,372 Less: Unamortized deferred financing costs 3,178 3,387 Total notes payable $ 204,653 $ 201,985

Income Tax

Income Tax	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Income Tax	Income Tax The Company's income tax provision from continuing operations for the three months ended March 31, 2016 was $3.7 million . The Company's income tax provision from discontinued operations for the three months ended March 31, 2016 was $0.4 million . The Company's income tax provision from continuing operations for the three months ended March 31, 2015 was $15,000 . The Company estimates its annual effective income tax rate for continuing operations to be approximately 39.4% for 2016, compared to the 1.9% effective income tax rate for 2015. The estimated effective tax rate for 2016 is different from the federal statutory rate primarily as a result of significant permanent book-to-tax differences and state taxes. The permanent differences include non-taxable contingent consideration income (expense) recorded related to the change in market value of contingent liabilities. Any significant contingent consideration expense or income will result in a significantly higher or lower effective tax rate because contingent consideration expense is largely not deductible for tax purposes and contingent consideration income is not taxable. Other permanent differences between financial statement income and taxable income relate to items such as stock compensation, meals and entertainment charges, and compensation of officers. The primary difference in the estimated effective tax rate in 2016 compared to 2015 relates to the release of the Company’s valuation allowance in 2015. Our estimated annual effective tax rate for the three months ended March 31, 2015 is primarily attributable to an increase in our deferred tax liability associated with the tax amortization of acquired indefinite lived IPR&D intangible assets. The Company maintains a valuation allowance in the amount of $8.9 million against certain U.S. state NOLs, federal NOLs arising from Pre-ASC 718 excess stock compensation benefits and federal research and development tax credits. Each reporting period, the Company evaluates the need for a valuation allowance on our deferred tax assets by jurisdiction and adjusts our estimates as more information becomes available. The Company will reassess the ability to realize the deferred tax assets on a quarterly basis. If it is more likely than not that it will not realize the recognized deferred tax assets, then all or a portion of the valuation allowance may need to be re-established, which would result in a charge to tax expense. Conversely if new events indicate that it is more likely than not that we will realize additional deferred tax assets, then all or a portion of the remaining valuation allowance may be released, which would result in a tax benefit. As of March 31, 2016 , the Company had unrecognized tax benefits of approximately $33.6 million related to uncertain tax positions that, if recognized, would result in adjustments to the related deferred tax assets and reduce our annual effective tax rate, subject to the remaining valuation allowance. The Company files income tax returns in the U.S. and in various state jurisdictions with varying statutes of limitations. The Company is no longer subject to income tax examination by tax authorities for years prior to 2011; however, its net operating loss and research credit carry-forwards arising prior to that year are subject to adjustment. It is the Company's policy to recognize interest expense and penalties related to income tax matters as a component of income tax expense. As of March 31, 2016 , there was no material accrued interest related to uncertain tax positions.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Stockholders' Equity	Stockholders’ Equity The Company grants options and awards to employees and non-employee directors pursuant to a stockholder approved stock incentive plan, which is described in further detail in Note 8, Stockholders' Equity, of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The following is a summary of the Company’s stock option and restricted stock activity and related information: Stock Options Restricted Stock Award Shares Weighted- Average Exercise Price Shares Weighted- Average Grant Date Fair Value Balance as of December 31, 2015 1,683,341 $ 34.23 130,749 $ 60.36 Granted 241,015 88.84 229,847 94.76 Exercised (44,029 ) 23.00 (34,649 ) 52.18 Balance as of March 31, 2016 1,880,327 41.50 325,947 72.88 Net cash received from options exercised during the three months ended March 31, 2016 and 2015 was approximately $1.0 million and $0.8 million , respectively. Tax deductions for stock options and restricted stock which have exceeded stock based compensation expense in previous years have not been recognized by the Company. The Company will monitor the utilization of the net operating losses and recognize the excess tax deduction when that deduction reduces taxes payable. As of March 31, 2016 , 42,000 shares were available for future option grants or direct issuance under the Company's 2002 Stock Incentive Plan, as amended. Employee Stock Purchase Plan The Company's Amended ESPP allows participating employees to purchase up to 1,250 shares of Ligand common stock during each offering period, but in no event may a participant purchase more than 1,250 shares of common stock during any calendar year. The length of each offering period is six months, and employees are eligible to participate in the first offering period beginning after their hire date. This plan is described in further detail in Note 8, Stockholders' Equity, of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. There were no shares of common stock issued under the amended ESPP during the three months ended March 31, 2016 and 2015 , respectively. As of March 31, 2016 , 72,367 shares were available for future purchases under the Amended ESPP. Issuance of common stock In conjunction with the acquisition of OMT, the Company issued 793,070 shares of its common stock based on a 20-day volume-weighted average price of $107.66 of its common stock calculated three days prior to closing.

Litigation

Litigation	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Litigation	Litigation The Company records an estimate of a loss when the loss is considered probable and estimable. Where a liability is probable and there is a range of estimated loss and no amount in the range is more likely than any other number in the range, The Company records the minimum estimated liability related to the claim in accordance with FASB ASC Topic 450 Contingencies. As additional information becomes available, the Company assesses the potential liability related to its pending litigation and revises its estimates. Revisions in the Company's estimates of potential liability could materially impact its results of operations. Securities Litigation In 2012, a federal securities class action and shareholder derivative lawsuit was filed in Pennsylvania alleging that the Company and its CEO assisted various breaches of fiduciary duties based on the Company’s purchase of a licensing interest in a development-stage pharmaceutical program from the Genaera Liquidating Trust in 2010 and the Company’s subsequent sale of half of its interest in the transaction to Biotechnology Value Fund, Inc. Plaintiff filed a second amended complaint in February 2015, which the Company moved to dismiss in March 2015. The district court granted the motion to dismiss on November 11, 2015. The plaintiff has appealed that ruling to the Third Circuit. The Company intends to continue to vigorously defend against the claims against the Company and its CEO. The outcome of the matter is not presently determinable. Paragraph IV Certification by Par Pharmaceuticals On January 7, 2016, the Company received a paragraph IV certification from Par Sterile Products, LLC, a subsidiary of Par Pharmaceuticals, Inc., or Par, advising us that it had filed an ANDA with the FDA seeking approval to market a generic version of Merck’s NOXAFIL-IV product. The paragraph IV certification states it is Par’s position that Merck’s U.S. Patent No. 9,023,790 related to NOXAFIL-IV and our U.S. Patent No. 8,410,077 related to Captisol are invalid and/or will not be infringed by Par’s manufacture, use or sale of the product for which the ANDA was submitted. On February 19, 2016, Merck filed an action against Par in the United States District Court for the District of New Jersey, asserting that Par’s manufacture, use or sale of the product for which the ANDA was submitted would infringe Merck’s U.S. Patent No. 9,023,790. The case against Par is captioned Merck Sharpe & Dohme Corp. v. Par Sterile Products, LLC, Par Pharmaceuticals, Inc., Par Pharmaceutical Companies, Inc., and Par Pharmaceutical Holdings, Inc., No.16-cv-00948.

Subsequent Event

Subsequent Event	3 Months Ended
	Mar. 31, 2016
Subsequent Events [Abstract]
Subsequent event	Subsequent events Viking On April 13, 2016 , Viking closed its underwritten public offering of 7.5 million shares of common stock and warrants to purchase up to 7.5 million shares of its common stock at a price of $1.25 per share of its common stock and related warrants. The warrant has an exercise price of $1.50 per share, immediately exercisable and will expire on April 13, 2021 . As part of this public offering, the Company purchased 560,000 shares of common stock and warrants to purchase 560,000 shares of Viking's common stock for a total purchase price of $0.7 million . The purchased shares of common stock and warrants are subject to the same terms as the shares issued in this offering. In addition, on April 13, 2016 , pursuant to the terms of the amendment to the LSA that was entered in January 2016 between Ligand and Viking (see details in Note 4), Viking repaid $0.3 million of the convertible notes in cash, and issued the Company 960,000 shares of its common stock and warrants to purchase 960,000 shares of its common stock as repayment of $1.2 million of the convertible notes. The shares received as part of the repayment are subject to a lock-up period that ends on January 23, 2017 in accordance with the amended LSA. Our equity ownership of Viking decreased to approximately 38% after this public offering and the repayment of the convertible notes. Sublease In April 2016, the Company executed a sublease agreement for our current corporate headquarters facility in La Jolla, California. The sublease term will commence in May 2016 and expire in June 2019 . The sublesee is obligated to pay a base rent of approximately $51,000 per month for the first twelve months and is subject to 3% annual increases through the sublease term. CorMatrix On May 3, 2016, the Company entered into an agreement to acquire certain economic rights of CorMatrix ® . Pursuant to the Purchase Agreement, the Company paid $17.5 million in cash to acquire a portion of revenues (“synthetic royalties”) from CorMatrix’s existing marketed products and will have the right to receive potential future synthetic royalties from future marketed products, if any. Ligand is entitled to a minimum of $2.75 million of synthetic royalty annually. The synthetic royalty rate on the pipeline assets is a mid-single digit royalty. The agreement will terminate with respect to each of CorMatrix’s products upon the later of (i) May 3, 2026 and (ii) 10 years from the date of the first commercial sale of such product. Relationships between the Parties As previously disclosed in Ligand’s filings, Jason Aryeh is a director of both Ligand and CorMatrix. Mr. Aryeh beneficially owns equity of CorMatrix representing approximately .56% of CorMatrix’s outstanding equity. Mr. Aryeh recused himself from all of the board’s consideration of the Purchase Agreement, including any financial analysis, the terms of the Purchase Agreement and the vote to approve the Purchase Agreement and the related transactions. In addition, prior to the board’s consideration of the Purchase Agreement, Mr. David Knott, a member of Ligand’s board, disclosed to the board that he beneficially owns equity of CorMatrix representing approximately .47% of CorMatrix’s outstanding equity. All of the disinterested directors of Ligand approved the Purchase Agreement and related transactions with CorMatrix.

Significant Accounting Polici17

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include Ligand and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
Basis of Presentation	Basis of Presentation The Company’s accompanying unaudited condensed consolidated financial statements as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company and its subsidiaries, have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . These financial statements should be read in conjunction with the consolidated financial statements and notes therein included in the Company’s annual report on Form 10-K/A for the year ended December 31, 2015 filed on November 14, 2016.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates.
Reclassifications	Reclassifications Certain reclassifications have been made to the previously issued balance sheet and statement of operations for the three months ended March 31, 2015 for comparability purposes. These reclassifications had no effect on the reported net income, stockholders' equity, and operating cash flows as previously reported.
Income Per Share	Income Per Share Basic income per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed by dividing net income by the weighted-average number of common shares and common stock equivalents of all dilutive securities calculated using the treasury stock method and the if-converted method.
Cash Equivalents and Short-term Investments	Cash Equivalents Cash equivalents consist of all investments with maturities of three months or less from the date of acquisition. Short-term Investments Short-term investments primarily consist of investments in debt securities that have effective maturities greater than three months and less than twelve months from the date of acquisition. The Company classifies its short-term investments as "available-for-sale". Such investments are carried at fair value, with unrealized gains and losses included in the statement of comprehensive income (loss). The Company determines the cost of investments based on the specific identification method.
Restricted Investments	Restricted Investments Restricted investments consist of certificates of deposit held with a financial institution as collateral under a facility lease and third-party service provider arrangements.
Inventory	Inventory Inventory, which consists of finished goods, is stated at the lower of cost or market value. The Company determines cost using the first-in, first-out method. Inventory levels are analyzed periodically and written down to its net realizable value if it has become obsolete, has a cost basis in excess of its expected net realizable value or is in excess of expected requirements.
Goodwill and Other Identifiable Intangible Assets	Amortization of definite-lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of 20 years .
Commercial license rights	Commercial License Rights Commercial license rights represent a portfolio of future milestone and royalty payment rights acquired from Selexis in April 2013 and April 2015. Individual commercial license rights acquired under the agreement are carried at allocated cost and approximate fair value. The carrying value of the license rights will be reduced on a pro-rata basis as revenue is realized over the term of the agreement. Declines in the fair value of individual license rights below their carrying value that are deemed to be other than temporary are reflected in earnings in the period such determination is made. As of March 31, 2016 , management does not believe there have been any events or circumstances indicating that the carrying amount of its commercial license rights may not be recoverable.
Property and Equipment	Depreciation of equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives or the related lease term.
Contingent Liabilities	Contingent Liabilities In connection with the Company’s acquisition of CyDex in January 2011, the Company recorded a contingent liability, for amounts potentially due to holders of the CyDex CVRs and former license holders. The liability is periodically assessed based on events and circumstances related to the underlying milestones, royalties and material sales. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly and actual amounts paid under the CVR agreements may be materially different than the carrying amount of the liability. The fair value of the liability at March 31, 2016 and December 31, 2015 was $6.9 million and $9.5 million , respectively. The Company recorded a fair-value adjustment to increase the liability by $0.2 million and $1.2 million for the three months ended March 31, 2016 and 2015 , respectively. There was a revenue-sharing payment of $2.8 million and $3.2 million to CyDex CVR holders during the three months ended March 31, 2016 and 2015 , respectively. In connection with the Company’s acquisition of Metabasis in January 2010 , the Company issued to Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs will entitle Metabasis stockholders to cash payments as frequently as every six months as cash is received by the Company from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The fair values of the CVRs are remeasured at each reporting date through the term of the related agreement. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability.
Revenue Recognition	Revenue Recognition Royalties on sales of products commercialized by the Company’s partners are recognized in the quarter reported to Ligand by the respective partner. Generally, the Company receives royalty reports from its licensees approximately one quarter in arrears due to the fact that its agreements require partners to report product sales between 30 and 60 days after the end of the quarter. The Company recognizes royalty revenues when it can reliably estimate such amounts and collectability is reasonably assured. Under this accounting policy, the royalty revenues reported are not based upon estimates and such royalty revenues are typically reported to the Company by its partners in the same period in which payment is received. Revenue from material sales of Captisol is recognized upon transfer of title, which normally passes upon shipment to the customer, provided all other revenue recognition criteria have been met. All product returns are subject to the Company's credit and exchange policy, approval by the Company and a 20% restocking fee. To date, product returns by customers have not been material to net material sales in any related period. The Company records revenue net of product returns, if any, and sales tax collected and remitted to government authorities during the period. The Company analyzes its revenue arrangements and other agreements to determine whether there are multiple elements that should be separated and accounted for individually or as a single unit of accounting. For multiple element contracts, arrangement consideration is allocated at the inception of the arrangement to all deliverables on the basis of relative selling price, using a hierarchy to determine selling price. Management first considers VSOE, then TPE and if neither VSOE nor TPE exist, the Company uses its best estimate of selling price. Many of the Company's revenue arrangements for Captisol involve a license agreement with the supply of manufactured Captisol product. Licenses may be granted to pharmaceutical companies for the use of Captisol product in the development of pharmaceutical compounds. The supply of the Captisol product may be for all phases of clinical trials and through commercial availability of the host drug or may be limited to certain phases of the clinical trial process. Management believes that the Company's licenses have stand-alone value at the outset of an arrangement because the customer obtains the right to use Captisol in its formulations without any additional input by the Company. Other nonrefundable, upfront license fees are recognized as revenue upon delivery of the license, if the license is determined to have standalone value that is not dependent on any future performance by the Company under the applicable collaboration agreement. Nonrefundable contingent event-based payments are recognized as revenue when the contingent event is met, which is usually the earlier of when payments are received or collections are assured, provided that it does not require future performance by the Company. The Company occasionally has sub-license obligations related to arrangements for which it receives license fees, milestones and royalties. The Company evaluates the determination of gross versus net reporting based on each individual agreement. Sales-based contingent payments from partners are accounted for similarly to royalties, with revenue recognized upon achievement of the sales targets assuming all other revenue recognition criteria for milestones are met. Revenue from development and regulatory milestones is recognized when earned, as evidenced by written acknowledgement from the collaborator, provided that (1) the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, and the Company has no further performance obligations relating to that event, and (2) collectability is reasonably assured. If these criteria are not met, the milestone payment is recognized over the remaining period of the Company’s performance obligations under the arrangement. Revenue from research funding under our collaboration agreements is earned and recognized on a percentage-of completion basis as research hours are incurred in accordance with the provisions of each agreement.
Stock-Based Compensation	Stock-Based Compensation Stock-based compensation expense for awards to employees and non-employee directors is recognized on a straight-line basis over the vesting period until the last tranche vests.
Income Taxes	Income Taxes Income taxes are accounted for under the liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the consolidated financial statements. The Company provides a valuation allowance for deferred tax assets if it is more likely than not that these items will expire before we are able to realize their benefit. The Company calculates the valuation allowance in accordance with the authoritative guidance relating to income taxes under ASC 740, Income Taxes, which requires an assessment of both positive and negative evidence that is available regarding the reliability of these deferred tax assets, when measuring the need for a valuation allowance. Developing the provision for income taxes requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. The Company's judgments and tax strategies are subject to audit by various taxing authorities. While management believes the Company has provided adequately for its income tax liabilities in its consolidated financial statements, adverse determinations by these taxing authorities could have a material adverse effect on the Company's consolidated financial condition and results of operations.
Variable Interest Entities	Variable Interest Entities The Company identifies an entity as a VIE if either: (1) the entity does not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) the entity's equity investors lack the essential characteristics of a controlling financial interest. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in any VIE and therefore is the primary beneficiary. If the Company is the primary beneficiary of a VIE, it consolidates the VIE under applicable accounting guidance. If the Company is no longer the primary of a VIE or the entity is no longer considered as a VIE as facts and circumstances changed, it deconsolidates the entity under the applicable accounting guidance. Beginning May 2015, the Company deconsolidated Viking, a previously reported VIE, and elected to record its investment in Viking under the equity method of accounting as Viking is no longer considered a VIE and the Company does not have voting control or other elements of control that would require consolidation. The investment is subsequently adjusted for the Company’s share of Viking's operating results, and if applicable, cash contributions and distributions, which is reported on a separate line in our condensed consolidated statement of operations called “Equity in net losses of Viking Therapeutics”. On the condensed consolidated balance sheet, the Company reports its investment in Viking on a separate line in the non-current assets section called “Investment in Viking Therapeutics”.
Convertible Debt	Convertible Debt In August 2014, the Company completed a $245.0 million offering of 2019 Convertible Senior Notes, which bear interest at 0.75% . The Company accounts for the 2019 Convertible Senior Notes by separating the liability and equity components of the instrument in a manner that reflects the Company's nonconvertible debt borrowing rate. As a result, the Company assigned a value to the debt component of the 2019 Convertible Senior Notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in the Company recording the debt instrument at a discount. The Company is amortizing the debt discount over the life of the 2019 Convertible Senior Notes as additional non-cash interest expense utilizing the effective interest method.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, (5) recognize revenue when (or as) the entity satisfies a performance obligation. Management is currently evaluating the effect the adoption of this standard will have on the Company's financial statements. In April 2015, FASB issued ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. This update was issued to simplify the presentation for debt issuance costs. Upon adoption, such costs shall be presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability and not as a deferred charge presented in Other assets on our consolidated balance sheets. This amendment will be effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted. During the three-month period ended March 31, 2016, management adopted the change in the presentation on our consolidated balance sheets accordingly (see Note 6 for details). In January 2016, the FASB issued ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities that amends the accounting and disclosures of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in current earnings. The new standard is effective for interim and annual periods beginning on January 1, 2018. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation , which identifies areas for simplification involving several aspects of accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU No. 2016-09 is effective for reporting periods beginning after December 31, 2016. Early adoption is permitted. We are currently assessing the potential impact that the adoption of ASU No. 2016-09 will have in our condensed consolidated financial statements.

Significant Accounting Polici18

Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of computation of basic and diluted net income (loss) per share	The following table presents the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share amounts): Three months ended March 31, 2016 2015 Net income from continuing operations $ 5,877 $ 754 Net income from discontinued operations 731 — Net income $ 6,608 $ 754 Shares used to compute basic income per share 20,707,926 19,611,881 Dilutive potential common shares: Restricted stock 66,736 61,538 Stock options 759,581 957,369 0.75% Convertible Senior Notes, Due 2019 749,736 — Shares used to compute diluted income per share 22,283,979 20,630,788 Basic per share amounts: Income from continuing operations $ 0.28 $ 0.04 Income from discontinued operations 0.04 — Basic net income per share $ 0.32 $ 0.04 Diluted per share amounts: Income from continuing operations $ 0.26 $ 0.04 Income from discontinued operations 0.03 — Diluted net income per share $ 0.30 $ 0.04
Summary of investment categories	The following table summarizes the various investment categories at March 31, 2016 and December 31, 2015 (in thousands): Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value March 31, 2016 Short-term investments Bank deposits $ 42,376 $ 87 $ — $ 42,463 Corporate bonds 24,268 84 (2 ) 24,350 Commercial paper 8,401 2 — 8,403 Asset backed securities 2,067 1 (1 ) 2,067 Corporate equity securities 1,811 2,814 — 4,625 $ 78,923 $ 2,988 $ (3 ) $ 81,908 December 31, 2015 Short-term investments Bank deposits $ 43,043 $ — $ (4 ) $ 43,039 Corporate bonds 41,238 $ — (35 ) 41,203 Commercial paper 1,747 $ — — 1,747 Asset backed securities 10,020 $ — (5 ) 10,015 Corporate equity securities 1,843 $ 4,944 — 6,787 $ 97,891 $ 4,944 $ (44 ) $ 102,791
Summary of goodwill and other identifiable intangible assets	Goodwill and other identifiable intangible assets consist of the following (in thousands): March 31, December 31, 2016 2015 Indefinite lived intangible assets Acquired IPR&D $ 12,556 $ 12,556 Goodwill 72,997 12,238 Definite lived intangible assets Complete technology 182,267 15,267 Less: Accumulated amortization (5,883 ) (3,762 ) Trade name 2,642 2,642 Less: Accumulated amortization (685 ) (652 ) Customer relationships 29,600 29,600 Less: Accumulated amortization (7,674 ) (7,304 ) Total goodwill and other identifiable intangible assets, net $ 285,820 $ 60,585
Summary of property and equipment	Property and equipment is stated at cost and consists of the following (in thousands): March 31, December 31, 2016 2015 Lab and office equipment $ 2,482 $ 2,248 Leasehold improvements 273 273 Computer equipment and software 636 632 3,391 3,153 Less accumulated depreciation and amortization (2,824 ) (2,781 ) Total property and equipment, net $ 567 $ 372
Summary of other current assets	Other current assets consist of the following (in thousands): March 31, December 31, 2016 2015 Prepaid expenses $ 1,087 $ 1,177 Other receivables 475 731 Total other current assets $ 1,562 $ 1,908
Summary of accrued liabilities	Accrued liabilities consist of the following (in thousands): March 31, December 31, 2016 2015 Compensation $ 854 $ 1,711 Professional fees 754 726 Amounts owed to former licensees 695 915 Royalties owed to third parties 937 823 Other 429 1,222 Total accrued liabilities $ 3,669 $ 5,397
Summary of other long-term liabilities	Other long-term liabilities consist of the following (in thousands): March 31, December 31, 2016 2015 Deposits $ 298 $ 268 Deferred rent 107 — Other 41 29 Total other long-term liabilities $ 446 $ 297
Schedule for accounting for share-based compensation	The following table summarizes stock-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 March 31, 2016 2015 Stock-based compensation expense as a component of: Research and development expenses $ 1,585 $ 920 General and administrative expenses 2,533 1,994 $ 4,118 $ 2,914
Summary 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 March 31, 2016 2015 Risk-free interest rate 1.5% 1.8% Dividend yield — — Expected volatility 50% 58% Expected term 6.6 6.6 Forfeiture rate 5.0% 8.5%

Business Combination (Tables)

Business Combination (Tables)	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
Schedule of Business Acquisitions by Acquisition, Consideration Transferred	The aggregate acquisition consideration was $174.0 million , consisting of (in thousands): Cash consideration $ 96,359 Total share consideration: Actual number of shares issued 793 Multiplied by: Ligand closing share price on January 8, 2016 $ 97.92 Total share consideration 77,658 Total consideration $ 174,017
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed	he acquisition consideration was preliminarily allocated to the acquisition date fair values of acquired assets and assumed liabilities as follows (in thousands): Cash and cash equivalents $ 3,504 Accounts receivable 5 Income tax receivable 140 Prepaid expenses and other current assets 2 Deferred tax liabilities, net (56,114 ) Intangible asset with finite life - core technology 167,000 Liabilities assumed (1,279 ) Goodwill 60,759 Total consideration $ 174,017
Schedule of Pro Forma Information	The following table presents supplemental pro forma information for the three months ended March 31, 2016 and March 31, 2015 , as if the acquisition of OMT had occurred on January 1, 2015 (in thousands except for EPS): March 31, March 31, 2016 2015 Revenue $ 32,124 $ 17,152 Net income $ 8,877 $ (474 ) Basic earnings per share: $ 0.43 $ (0.02 ) Diluted earnings per share: $ 0.40 $ (0.02 )

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Summary of the assets and liabilities measured at fair value on recurring basis	The following table provides a summary of the carrying value of assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 (in thousands). There were no transfers between Level 1 and Level 2 securities during the three months ended March 31, 2016 : Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents (1) $ 5,316 $ — $ 5,316 $ — Short-term investments (2) 81,908 4,625 77,283 — Note receivable Viking (3) 4,767 — — 4,767 Total assets $ 91,991 $ 4,625 $ 82,599 $ 4,767 Liabilities: Current contingent liabilities-CyDex (4) $ 5,285 $ — $ — $ 5,285 Long-term contingent liabilities-CyDex (4) 1,578 — — 1,578 Long-term contingent liabilities-Metabasis (5) 2,444 — 2,444 — Liability for amounts owed to former licensees (6) 534 534 — — Total liabilities $ 9,841 $ 534 $ 2,444 $ 6,863 The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs * Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents (1) $ 3,015 $ — $ 3,015 $ — Short-term investments (2) 92,775 6,786 85,989 — Viking note receivable (3) 4,782 — — 4,782 Total assets $ 100,572 $ 6,786 $ 89,004 $ 4,782 Liabilities: Current contingent liabilities-CyDex (4) $ 7,812 $ — $ — $ 7,812 Current contingent liabilities-Metabasis (5) $ 2,602 — 2,602 — Long-term contingent liabilities-Metabasis (5) 1,355 — 1,355 — Long-term contingent liabilities-CyDex (4) 1,678 — — 1,678 Liability for amounts owed to former licensees (6) 794 794 — — Total liabilities $ 14,241 $ 794 $ 3,957 $ 9,490 (1) Highly liquid investments with maturities less than 90 days from the purchase date are recorded as cash equivalents that are classified as Level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. (2) Investments in equity securities, which the Company received as a result of event-based and upfront payments from licensees, are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. Short-term investments in marketable securities with maturities greater than 90 days are classified as level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. (3) The fair value of the convertible note receivable from Viking was determined using a probability weighted option pricing model using a lattice methodology. The fair value is subjective and is affected by certain significant input to the valuation model such as the estimated volatility of the common stock, which was estimated to be 50% at March 31, 2016 . Changes in these assumptions may materially affect the fair value estimate. (4) The fair value of the liabilities for CyDex contingent liabilities were determined based on the income approach using a Monte Carlo analysis. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s assumptions regarding revenue volatility, probability of commercialization of products, estimates of timing and probability of achievement of certain revenue thresholds and developmental and regulatory milestones which may be achieved and affect amounts owed to former license holders and CVR holders. Changes in these assumptions can materially affect the fair value estimate. (5) The liability for CVRs for Metabasis are determined using quoted market prices in an inactive market for the underlying CVR. (6) The liability for amounts owed to former licensees are determined using quoted market prices in active markets for the underlying investment received from a partner, a portion of which is owed to former licensees. (7) The co-promote termination payments receivable represents a receivable for future payments to be made by Pfizer related to product sales and is recorded at its fair value. The receivable and liability will remain equal. The fair value is determined based on a valuation model using an income approach.
CyDex Acquisition	The following table represents significant unobservable inputs used in determining the fair value of contingent liabilities assumed in the acquisition of CyDex: March 31, 2016 December 31, 2015 Range of annual revenue subject to revenue sharing (1) $23.5 million $22.5 million Revenue volatility 25% 25% Average probability of commercialization 78% 73% Sales beta 0.30 0.40 Credit rating BB BB Equity risk premium 6% 6% (1) Revenue subject to revenue sharing represent management’s estimate of the range of total annual revenue subject to revenue sharing (i.e. annual revenues in excess of $15 million ) through December 31, 2016 , which is the term of the CVR agreement.
Reconciliation of level 3 financial instruments	A reconciliation of the level 3 financial instruments as of March 31, 2016 is as follows (in thousands): Assets: Fair value of level 3 financial instrument assets as of December 31, 2015 $ 4,782 Viking note receivable fair market value adjustment (15 ) Fair value of level 3 financial instrument assets as of March 31, 2016 $ 4,767 Liabilities: Fair value of level 3 financial instrument liabilities as of December 31, 2015 $ 9,490 Payments to CVR and other former license holders (2,828 ) Fair value adjustments to contingent liabilities 201 Fair value of level 3 financial instrument liabilities as of March 31, 2016 $ 6,863

Lease Obligations (Tables)

Lease Obligations (Tables)	3 Months Ended
	Mar. 31, 2016
Leases [Abstract]
Payments expected to received from sublease agreements	The following table provides a summary of operating lease obligations and payments expected to be received from sublease agreements as of March 31, 2016 (in thousands): Operating lease obligations: Lease Termination Date Less than 1 year 1-2 years 3-4 years Thereafter Total Corporate headquarters- La Jolla, CA June 2019 $ 704 $ 1,465 $ 187 $ — $ 2,356 Corporate headquarters-San Diego, CA April 2023 52 261 277 306 896 Bioscience and Technology Business Center- Lawrence, KS December 2017 54 41 — — 95 Vacated office and research facility- Cranbury, NJ August 2016 1,089 — — — 1,089 Total operating lease obligations $ 1,899 $ 1,767 $ 464 $ 306 $ 4,436 Sublease payments expected to be received: Corporate headquarters- June 2019 $ 443 $ 920 $ 116 $ — $ 1,479 Office and research facility- Cranbury, NJ August 2016 88 — — — 88 Net operating lease obligations $ 1,368 $ 847 $ 348 $ 306 $ 2,869

Financing Arrangements (Tables)

Financing Arrangements (Tables)	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Summary of carrying values and coupon rates on financing arrangements	The carrying values and the fixed contractual coupon rates of the Company's financing arrangements as of March 31, 2016 and December 31, 2015 were as follows (in thousands): March 31, 2016 December 31, 2015 2019 Convertible Senior Notes Principal amount outstanding $ 245,000 $ 245,000 Unamortized discount (37,169 ) (39,628 ) Net carrying amount 207,831 205,372 Less: Unamortized deferred financing costs 3,178 3,387 Total notes payable $ 204,653 $ 201,985

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Stock option plan activity	The following is a summary of the Company’s stock option and restricted stock activity and related information: Stock Options Restricted Stock Award Shares Weighted- Average Exercise Price Shares Weighted- Average Grant Date Fair Value Balance as of December 31, 2015 1,683,341 $ 34.23 130,749 $ 60.36 Granted 241,015 88.84 229,847 94.76 Exercised (44,029 ) 23.00 (34,649 ) 52.18 Balance as of March 31, 2016 1,880,327 41.50 325,947 72.88
Restricted stock activity	The following is a summary of the Company’s stock option and restricted stock activity and related information: Stock Options Restricted Stock Award Shares Weighted- Average Exercise Price Shares Weighted- Average Grant Date Fair Value Balance as of December 31, 2015 1,683,341 $ 34.23 130,749 $ 60.36 Granted 241,015 88.84 229,847 94.76 Exercised (44,029 ) 23.00 (34,649 ) 52.18 Balance as of March 31, 2016 1,880,327 41.50 325,947 72.88

Significant Accounting Polici24

Significant Accounting Policies (Narrative) (Details) shares in Millions	Jan. 08, 2016USD ($)	Jan. 31, 2010right	Mar. 31, 2016USD ($)shares	Mar. 31, 2015USD ($)shares	Dec. 31, 2015USD ($)	Aug. 31, 2014USD ($)
Earnings (Loss) Per Share
Common shares excluded from computation | shares			3.5	4.5
Cash, Cash Equivalents and Short-term Investments
Maturity period of cash and cash equivalents, maximum			3 months
Maturity period of short term investments, minimum			3 months
Inventory, Net [Abstract]
Inventory write downs			$ 0	$ 0
Goodwill and Other Identifiable Intangible Assets
Finite-lived intangible asset, useful life			20 years
Amortization expense			$ 2,500,000	600,000
Impairment of goodwill			0	0
Amortization Expense
Amortization expense 2016			10,600,000
Amortization expense 2017			10,700,000
Amortization expense 2018			10,700,000
Amortization expense 2019			10,700,000
Amortization expense 2020			10,700,000
Property and Equipment
Depreciation			100,000	100,000
Contingent Liabilities
Purchase of commercial license rights			$ 92,855,000	0
Revenue Recognition
Restocking fee (percent)			20.00%
Minimum
Revenue Recognition
Period when partner sales reports are received after end of quarter			30 days
Maximum
Revenue Recognition
Period when partner sales reports are received after end of quarter			60 days
Equipment | Minimum
Property and Equipment
Estimated useful life of assets			3 years
Equipment | Maximum
Property and Equipment
Estimated useful life of assets			10 years
OMT, Inc.
Property, Plant and Equipment [Line Items]
Goodwill acquired	$ 60,800,000
Finite-lived intangible assets	$ 167,000,000
Cydex Pharmaceuticals, Inc
Contingent Liabilities
Fair value of liability			$ 6,900,000		$ 9,500,000
Contingent liability change in amount			200,000	1,200,000
Cydex Pharmaceuticals, Inc | Revenue Sharing
Contingent Liabilities
Purchase of commercial license rights			2,800,000	3,200,000
Metabasis Therapeutics
Contingent Liabilities
Fair value of liability			2,400,000		4,000,000
Contingent liability change in amount			(1,100,000)	1,200,000
Number of contingent value rights | right		4
Number of contingent value rights per series of contingent value rights | right		1
Number of contingent value rights issued for each share | right		4
Contingent value rights, frequency of cash payment		6 months
Contingent liability, cash payment			2,600,000	0
Omthera Pharmaceuticals
Milestone Payments
Milestone payment received					0
2019 convertible senior notes
Convertible Debt
Principal amount outstanding			245,000,000		$ 245,000,000
2019 convertible senior notes | Senior Notes
Convertible Debt
Principal amount outstanding						$ 245,000,000
Interest rate						0.75%
Acquired in-process research and development
Goodwill and Other Identifiable Intangible Assets
Impairment of IPR&D			$ 0	$ 0

Significant Accounting Polici25

Significant Accounting Policies (Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Summary of computation of basic and diluted net income (loss) per share
Net income from continuing operations	$ 5,877	$ (89)
Net income from discontinued operations	731	0
Net income:	$ 6,608	$ 754
Shares used to compute basic income per share	20,707,926	19,611,881
Dilutive potential common shares:
Restricted stock	66,736	61,538
Stock options	759,581	957,369
0.75% Convertible Senior Notes, Due 2019	749,736	0
Shares used to compute diluted income per share	22,283,979	20,630,788
Basic per share amounts:
Income from continuing operations (in usd per share)	$ 0.28	$ 0.04
Income from discontinued operations (in usd per share)	0.04	0
Net income (in usd per share)	0.32	0.04
Diluted per share amounts:
Income from continuing operations (in usd per share)	0.26	0.04
Income from discontinued operations (in usd per share)	0.03	0
Net income (in usd per share)	$ 0.30	$ 0.04

Significant Accounting Polici26

Significant Accounting Policies (Investment Categories) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Summary of investment categories
Amortized cost	$ 78,923	$ 97,891
Gross unrealized gains	2,988	4,944
Gross unrealized losses	(3)	(44)
Estimated fair value	81,908	102,791
Bank deposits
Summary of investment categories
Amortized cost	42,376	43,043
Gross unrealized gains	87	0
Gross unrealized losses	0	(4)
Estimated fair value	42,463	43,039
Corporate bonds
Summary of investment categories
Amortized cost	24,268	41,238
Gross unrealized gains	84	0
Gross unrealized losses	(2)	(35)
Estimated fair value	24,350	41,203
Commercial paper
Summary of investment categories
Amortized cost	8,401	1,747
Gross unrealized gains	2	0
Gross unrealized losses	0	0
Estimated fair value	8,403	1,747
Asset backed securities
Summary of investment categories
Amortized cost	2,067	10,020
Gross unrealized gains	1	0
Gross unrealized losses	(1)	(5)
Estimated fair value	2,067	10,015
Corporate equity securities
Summary of investment categories
Amortized cost	1,811	1,843
Gross unrealized gains	2,814	4,944
Gross unrealized losses	0	0
Estimated fair value	$ 4,625	$ 6,787

Significant Accounting Polici27

Significant Accounting Policies (Goodwill and Other Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Summary of Goodwill and Other Identifiable Intangible Assets
Goodwill	$ 72,997	$ 12,238
Total goodwill and other identifiable intangible assets, net	285,820	60,585
Complete technology
Summary of Goodwill and Other Identifiable Intangible Assets
Definite lived intangible assets	182,267	15,267
Less: Accumulated amortization	(5,883)	(3,762)
Trade name
Summary of Goodwill and Other Identifiable Intangible Assets
Definite lived intangible assets	2,642	2,642
Less: Accumulated amortization	(685)	(652)
Customer relationships
Summary of Goodwill and Other Identifiable Intangible Assets
Definite lived intangible assets	29,600	29,600
Less: Accumulated amortization	(7,674)	(7,304)
Acquired in-process research and development
Summary of Goodwill and Other Identifiable Intangible Assets
Acquired in-process research and development	$ 12,556	$ 12,556

Significant Accounting Polici28

Significant Accounting Policies (Property and Equipment) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Summary of Property and equipment
Property and equipment , gross	$ 3,391	$ 3,153
Less accumulated depreciation and amortization	(2,824)	(2,781)
Total property and equipment, net	567	372
Lab and office equipment
Summary of Property and equipment
Property and equipment , gross	2,482	2,248
Leasehold improvements
Summary of Property and equipment
Property and equipment , gross	273	273
Computer equipment and software
Summary of Property and equipment
Property and equipment , gross	$ 636	$ 632

Significant Accounting Polici29

Significant Accounting Policies (Other Current Assets) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Summary of other current assets
Prepaid expenses	$ 1,087	$ 1,177
Other receivables	475	731
Total current assets	$ 1,562	$ 1,908

Significant Accounting Polici30

Significant Accounting Policies (Accrued Liabilities and Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accrued Liabilities
Compensation	$ 854	$ 1,711
Professional fees	754	726
Amounts owed to former licensees	695	915
Royalties owed to third parties	937	823
Other	429	1,222
Total accrued liabilities	3,669	5,397
Other Long-Term Liabilities
Deposits	298	268
Deferred rent	107	0
Other	41	29
Total other long-term liabilities	$ 446	$ 297

Significant Accounting Polici31

Significant Accounting Policies (Accounting for Share-Based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Basis of Presentation [Line Items]
Share-based compensation expense total	$ 4,118	$ 2,914
Research and development expenses
Basis of Presentation [Line Items]
Share-based compensation expense total	1,585	920
General and administrative expenses
Basis of Presentation [Line Items]
Share-based compensation expense total	$ 2,533	$ 1,994

Significant Accounting Polici32

Significant Accounting Policies (Fair Value Valuation Assumptions) (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Summary of fair-value options awarded to employees and directors
Risk-free interest rate	1.50%	1.80%
Dividend yield	0.00%	0.00%
Expected volatility	50.00%	58.00%
Expected term	6 years 7 months 6 days	6 years 6 months 22 days
Forfeiture rate	5.00%	8.50%

Business Combination (Details)

Business Combination (Details) $ in Thousands	Jan. 08, 2016USD ($)programplatform	Mar. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Business Acquisition [Line Items]
Finite-lived intangible asset, useful life		20 years
Goodwill		$ 72,997	$ 12,238
OMT, Inc.
Business Acquisition [Line Items]
Number of transgenic animal platforms | platform	3
Number of partnered programs added | program	16
Consideration transferred	$ 174,000
Period for certain post-closing adjustments	15 months
Goodwill	$ 60,759
Core Technology | OMT, Inc.
Business Acquisition [Line Items]
Projected cash flow discount rate (percent)	15.50%
Finite-lived intangible asset, useful life	20 years

Business Combination - Consider

Business Combination - Consideration Transferred (Details) - OMT, Inc. $ / shares in Units, $ in Thousands	Jan. 08, 2016USD ($)$ / sharesshares
Business Acquisition [Line Items]
Cash consideration	$ 96,359
Total share consideration:
Actual number of shares issued (shares) | shares	793,070
Multiplied by: Ligand closing share price on January 8, 2016 | $ / shares	$ 97.92
Total share consideration	$ 77,658
Total consideration	$ 174,017

Business Combination - Assets A

Business Combination - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Jan. 08, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill	$ 72,997		$ 12,238
OMT, Inc.
Business Acquisition [Line Items]
Cash and cash equivalents		$ 3,504
Accounts receivable		5
Income tax receivable		140
Prepaid expenses and other current assets		2
Deferred tax liabilities, net		(56,114)
Intangible asset with finite life - core technology		167,000
Liabilities assumed		(1,279)
Goodwill		60,759
Total consideration		$ 174,017

Business Combination - Pro Form

Business Combination - Pro Forma Information (Details) - OMT, Inc. - USD ($) $ / shares in Units, $ in Thousands	Jan. 07, 2016	Mar. 31, 2016	Mar. 31, 2015
Business Acquisition [Line Items]
Revenue		$ 32,124	$ 17,152
Net income		$ 8,877	$ (474)
Basic earnings per share (in USD per share):		$ 0.43	$ (0.02)
Diluted earnings per share (in USD per share):		$ 0.40	$ (0.02)
Pro forma adjustment for share-based compensation expense of OMT			$ 300
Pro forma adjustment for additional intangible amortization expense		$ 200	$ 2,100
Pro forma adjustment for license revenue recognized by OMT in the current period prior to the acquisition	$ 2,500

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Aug. 31, 2014
2019 convertible senior notes
Liabilities:
Principal amount outstanding	$ 245,000,000	$ 245,000,000
2019 convertible senior notes | Senior Notes
Liabilities:
Estimated fair value of debt	373,500,000
Principal amount outstanding			$ 245,000,000
Recurring
Assets:
Assets, fair value	91,991,000	100,572,000
Liabilities:
Liabilities, fair value	9,841,000	14,241,000
Recurring | Current contingent liabilities-CyDex
Liabilities:
Liabilities, fair value	5,285,000	7,812,000
Recurring | Current contingent liabilities-Metabasis
Liabilities:
Liabilities, fair value		2,602,000
Recurring | Long-term contingent liabilities-Metabasis
Liabilities:
Liabilities, fair value	2,444,000	1,355,000
Recurring | Long-term contingent liabilities-CyDex
Liabilities:
Liabilities, fair value	1,578,000	1,678,000
Recurring | Liability for amounts owed to former licensees
Liabilities:
Liabilities, fair value	534,000	794,000
Recurring | Cash Equivalents
Assets:
Assets, fair value	5,316,000	3,015,000
Recurring | Short-term investments
Assets:
Assets, fair value	$ 81,908,000	92,775,000
Recurring | Note receivable Viking Therapeutics, Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated volatility of common stock	50.00%
Assets:
Assets, fair value	$ 4,767,000	4,782,000
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Assets, fair value	4,625,000	6,786,000
Liabilities:
Liabilities, fair value	534,000	794,000
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Current contingent liabilities-CyDex
Liabilities:
Liabilities, fair value	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Current contingent liabilities-Metabasis
Liabilities:
Liabilities, fair value		0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Long-term contingent liabilities-Metabasis
Liabilities:
Liabilities, fair value	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Long-term contingent liabilities-CyDex
Liabilities:
Liabilities, fair value	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Liability for amounts owed to former licensees
Liabilities:
Liabilities, fair value	534,000	794,000
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash Equivalents
Assets:
Assets, fair value	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Short-term investments
Assets:
Assets, fair value	4,625,000	6,786,000
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Note receivable Viking Therapeutics, Inc.
Assets:
Assets, fair value	0	0
Recurring | Significant Other Observable Inputs (Level 2)
Assets:
Assets, fair value	82,599,000	89,004,000
Liabilities:
Liabilities, fair value	2,444,000	3,957,000
Recurring | Significant Other Observable Inputs (Level 2) | Current contingent liabilities-CyDex
Liabilities:
Liabilities, fair value	0	0
Recurring | Significant Other Observable Inputs (Level 2) | Current contingent liabilities-Metabasis
Liabilities:
Liabilities, fair value		2,602,000
Recurring | Significant Other Observable Inputs (Level 2) | Long-term contingent liabilities-Metabasis
Liabilities:
Liabilities, fair value	2,444,000	1,355,000
Recurring | Significant Other Observable Inputs (Level 2) | Long-term contingent liabilities-CyDex
Liabilities:
Liabilities, fair value	0	0
Recurring | Significant Other Observable Inputs (Level 2) | Liability for amounts owed to former licensees
Liabilities:
Liabilities, fair value	0	0
Recurring | Significant Other Observable Inputs (Level 2) | Cash Equivalents
Assets:
Assets, fair value	5,316,000	3,015,000
Recurring | Significant Other Observable Inputs (Level 2) | Short-term investments
Assets:
Assets, fair value	77,283,000	85,989,000
Recurring | Significant Other Observable Inputs (Level 2) | Note receivable Viking Therapeutics, Inc.
Assets:
Assets, fair value	0	0
Recurring | Significant Unobservable Inputs (Level 3)
Assets:
Assets, fair value	4,767,000	4,782,000
Liabilities:
Liabilities, fair value	6,863,000	9,490,000
Recurring | Significant Unobservable Inputs (Level 3) | Current contingent liabilities-CyDex
Liabilities:
Liabilities, fair value	5,285,000	7,812,000
Recurring | Significant Unobservable Inputs (Level 3) | Current contingent liabilities-Metabasis
Liabilities:
Liabilities, fair value		0
Recurring | Significant Unobservable Inputs (Level 3) | Long-term contingent liabilities-Metabasis
Liabilities:
Liabilities, fair value	0	0
Recurring | Significant Unobservable Inputs (Level 3) | Long-term contingent liabilities-CyDex
Liabilities:
Liabilities, fair value	1,578,000	1,678,000
Recurring | Significant Unobservable Inputs (Level 3) | Liability for amounts owed to former licensees
Liabilities:
Liabilities, fair value	0	0
Recurring | Significant Unobservable Inputs (Level 3) | Cash Equivalents
Assets:
Assets, fair value	0	0
Recurring | Significant Unobservable Inputs (Level 3) | Short-term investments
Assets:
Assets, fair value	0	0
Recurring | Significant Unobservable Inputs (Level 3) | Note receivable Viking Therapeutics, Inc.
Assets:
Assets, fair value	4,767,000	$ 4,782,000
Viking Therapeutics, Inc.
Liabilities:
Market value of investment in Viking	$ 6,800,000

Fair Value Measurements (Acquis

Fair Value Measurements (Acquisition of CyDex) (Details) - Cydex Pharmaceuticals, Inc - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Credit Derivatives [Line Items]
Amount Of Revenue For Contingent Consideration	$ 15
Contingent Consideration Classified as Equity
Credit Derivatives [Line Items]
Range of annual revenue subject to revenue sharing	$ 23.5	$ 22.5
Revenue volatility	25.00%	25.00%
Average of probability of commercialization	78.00%	73.00%
Sales beta	0.30	0.40
Credit rating	BB	BB
Equity risk premium	6.00%	6.00%

Fair Value Measurements (Level

Fair Value Measurements (Level 3 Reconciliation) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Assets:
Fair value of level 3 financial instrument assets as of December 31, 2015	$ 4,782
Viking note receivable fair market value adjustment	(15)
Fair value of level 3 financial instrument assets as of March 31, 2016	4,767
Liabilities:
Fair value of level 3 financial instrument liabilities as of December 31, 2015	9,490
Payments to CVR and other former license holders	(2,828)
Fair value adjustments to contingent liabilities	201
Fair value of level 3 financial instrument liabilities as of March 31, 2016	$ 6,863

Investment in Viking Therapeu40

Investment in Viking Therapeutics, Inc. (Details) $ / shares in Units, $ in Thousands, shares in Millions	1 Months Ended			3 Months Ended		13 Months Ended
	Jan. 31, 2016USD ($)	May 31, 2015USD ($)$ / sharesshares	May 31, 2014USD ($)program	Mar. 31, 2016USD ($)	Mar. 31, 2015USD ($)	May 31, 2015$ / shares	Dec. 31, 2015USD ($)
Schedule of Equity Method Investments [Line Items]
Note receivable from Viking Therapeutics				$ 4,767			$ 4,782
Change in fair value of the convertible debt receivable from Viking				$ 15	$ 0
Viking
Schedule of Equity Method Investments [Line Items]
Number of programs licensed | program			5
Loss percentage recorded						100.00%
Debt | Viking
Schedule of Equity Method Investments [Line Items]
Convertible loan facility			$ 2,500
Viking Therapeutics, Inc.
Schedule of Equity Method Investments [Line Items]
Equity interest in outstanding common stock of Viking (percent)				49.40%
Note receivable, stated interest rate (percent)	2.50%						5.00%
LSA, lock-up period extension	1 year
Note receivable, amount due upon consummation of capital financing transaction	$ 1,500
Note receivable, cash due upon consummation of capital financing transaction	$ 300
Note receivable, repayment in equity (percent)	200.00%
Common Stock
Schedule of Equity Method Investments [Line Items]
Aggregate value of shares received under licensing agreement		$ 29,200
IPO shares purchased by the Company (shares) | shares		1.1
Payments to acquire IPO shares		$ 9,000
Common Stock | Viking Therapeutics, Inc. | IPO
Schedule of Equity Method Investments [Line Items]
Shares issued in IPO (shares) | shares		3.7
IPO aggregate offering price		$ 29,200
IPO share price (USD per share) | $ / shares		$ 8				$ 8

Lease Obligations (Narrative) (

Lease Obligations (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Operating Leased Assets [Line Items]
Lease expiration year, minimum	2,016
Lease expiration year, maximum	2,023
Percentage of increase in annual base rent, minimum	3.00%
Percentage of increase in annual base rent, maximum	3.50%
Lease exit costs	$ 244	$ 223
Rent expense, net sublease income	600	900
Adjustment for accretion and changes in lease assumptions	200	$ 200
Contract Termination
Operating Leased Assets [Line Items]
Lease exit costs	$ 600		$ 900

Lease Obligations (Lease Obliga

Lease Obligations (Lease Obligations) (Details) $ in Thousands	Mar. 31, 2016USD ($)
Operating Leased Assets [Line Items]
Operating lease obligations, Less than 1 year	$ 1,899
Operating lease obligations, Future Minimum Payments, 1-2 years	1,767
Operating lease obligations, 3-4 years	464
Operating lease obligations, Thereafter	306
Operating lease obligations, Total	4,436
Payments expected to received from sublease agreements
Sublease payments expected to be received, Less than 1 year	1,368
Sublease payments expected to be received, 1-2 years	847
Sublease payments expected to be received, 3-4 years	348
Sublease payments expected to be received, Thereafter	306
Sublease payments expected to be received, Total	2,869
CALIFORNIA | Corporate Headquarters - La Jolla
Operating Leased Assets [Line Items]
Operating lease obligations, Less than 1 year	704
Operating lease obligations, Future Minimum Payments, 1-2 years	1,465
Operating lease obligations, 3-4 years	187
Operating lease obligations, Total	2,356
Payments expected to received from sublease agreements
Sublease payments expected to be received, Less than 1 year	443
Sublease payments expected to be received, 1-2 years	920
Sublease payments expected to be received, 3-4 years	116
Sublease payments expected to be received, Total	1,479
CALIFORNIA | Corporate Headquarters - San Diego, CA
Operating Leased Assets [Line Items]
Operating lease obligations, Less than 1 year	52
Operating lease obligations, Future Minimum Payments, 1-2 years	261
Operating lease obligations, 3-4 years	277
Operating lease obligations, Thereafter	306
Operating lease obligations, Total	896
KANSAS | Bioscience and Technology Business Center - Lawrence, KS
Operating Leased Assets [Line Items]
Operating lease obligations, Less than 1 year	54
Operating lease obligations, Future Minimum Payments, 1-2 years	41
Operating lease obligations, Total	95
NEW JERSEY | Vacated Office Office and Research Facility - Cranbury, NJ
Operating Leased Assets [Line Items]
Operating lease obligations, Less than 1 year	1,089
Operating lease obligations, Total	1,089
NEW JERSEY | Office and Research Facility Cranbury
Payments expected to received from sublease agreements
Sublease payments expected to be received, Less than 1 year	88
Sublease payments expected to be received, Total	$ 88

Financing Arrangements (Narrati

Financing Arrangements (Narrative) (Details)	1 Months Ended	3 Months Ended
	Aug. 31, 2014USD ($)d$ / sharesshares	Mar. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Debt Instrument [Line Items]
Initial debt value		$ 204,653,000	$ 201,985,000
Common stock, shares available to be issued | shares	3,264,643
Exercise price of convertible bond hedge | $ / shares	$ 75.05
Exercise price | $ / shares	$ 125.08
Proceeds from issuance of warrants	$ 11,600,000
2019 convertible senior notes
Debt Instrument [Line Items]
Aggregate principal amount outstanding		245,000,000	245,000,000
Initial debt value		207,831,000	205,372,000
Senior Notes
Debt Instrument [Line Items]
Payment for convertible bond hedges	$ 48,100,000
Senior Notes | 2019 convertible senior notes
Debt Instrument [Line Items]
Interest rate	0.75%
Aggregate principal amount outstanding	$ 245,000,000
Net proceeds from note after debt issuance costs	$ 239,300,000
Initial conversion rate	0.0133251
Initial conversion price | $ / shares	$ 75.05
Proceeds from issuance of debt	$ 245,000,000
Debt discount rate	5.83%
Initial debt value	$ 192,500,000
If-converted value in excess of principal		104,600,000
Debt issuance costs	5,700,000
Equity component of convertible debt recorded as a reduction to additional paid-in capital	1,200,000
Long-term debt issuance costs	$ 4,500,000
Term of notes	5 years
Carrying value of the equity component of debt, net of issuance costs		$ 51,300,000	$ 51,300,000
Senior Notes | 2019 convertible senior notes | Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Threshold trading days | d	20
Consecutive trading days	30 days
Percentage of stock price trigger	130.00%
Senior Notes | 2019 convertible senior notes | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Threshold trading days | d	5
Consecutive trading days	10 days
Maximum threshold percentage of debt trading price trigger	98.00%

Financing Arrangements (Notes P

Financing Arrangements (Notes Payable) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Notes Payable, Current and Noncurrent [Abstract]
Net carrying amount	$ 204,653	$ 201,985
2019 convertible senior notes
Notes Payable, Current and Noncurrent [Abstract]
Principal amount outstanding	245,000	245,000
Unamortized discount	(37,169)	(39,628)
Net carrying amount	207,831	205,372
Less: Unamortized deferred financing costs	3,178	3,387
Total notes payable	$ 204,653	$ 201,985

Income Tax (Details)

Income Tax (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income tax provision	$ 3,694	$ 15
Income tax provision, per diluted share (in USD per share)	$ 0.17	$ 0
Income tax provision from discontinued operation	$ 400
Income tax provision, discontinued operation, per diluted share (in USD per share)	$ 0.02
Effective income tax rate, continuing operations (percent)	39.40%	1.90%
Valuation allowance	$ 8,900
Unrecognized tax benefits	$ 33,600

Stockholders' Equity (Stock Opt

Stockholders' Equity (Stock Option Plan and Restricted Stock Activity) (Details)	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Stock Options:
Balance as of December 31, 2015 | shares	1,683,341
Granted | shares	241,015
Exercised | shares	(44,029)
Balance as of March 31, 2016 | shares	1,880,327
Weighted Average Exercise Price (in USD per share)
Balance as of December 31, 2015 | $ / shares	$ 34.23
Granted | $ / shares	88.84
Exercised | $ / shares	23
Balance as of March 31, 2016 | $ / shares	$ 41.50
Restricted Stock [Member]
Restricted Shares:
Nonvested at December 31, 2015 | shares	130,749
Granted | shares	229,847
Exercised | shares	(34,649)
Nonvested at March 31, 2016 | shares	325,947
Weighted- Average Grant Date Fair Value (in USD per share)
Nonvested at December 31, 2015 | $ / shares	$ 60.36
Granted | $ / shares	94.76
Exercised | $ / shares	52.18
Nonvested at March 31, 2016 | $ / shares	$ 72.88

Stockholders' Equity (Narrative

Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	Jan. 08, 2016	Mar. 31, 2016	Mar. 31, 2015
2002 Stock Incentive Plan | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future option grants		42,000
Employee Stock Purchase Plan
Employee Stock Purchase Plan
Shares allowed to purchase in employee stock purchase plan		1,250
Shares issued in period		0	0
Shares available for future purchases		72,367
Employee Stock Purchase Plan | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net proceeds from employee stock purchase plan		$ 1	$ 0.8
OMT, Inc.
Employee Stock Purchase Plan
Common stock issued in acquisition (shares)	793,070
20-day volume-weighted average price of common stock issued in acquisition (usd per share)	$ 107.66

Subsequent Event (Details)

Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Thousands	May 03, 2016	Apr. 13, 2016	Apr. 30, 2016	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2016	Aug. 31, 2014
Subsequent Event [Line Items]
Warrants issued is public offering (shares)							3,264,643
Warrant exercise price (USD per share)							$ 125.08
Annual royalty revenue				$ 14,390	$ 10,287
Corporate Headquarters - La Jolla | Subsequent Event
Subsequent Event [Line Items]
Rent expense			$ 51
Annual increase in rent expense (percent)			3.00%
Viking Therapeutics, Inc. | Subsequent Event
Subsequent Event [Line Items]
Shares issued in public offering (shares)		7,500,000
Warrants issued is public offering (shares)		7,500,000
Public offering share price (USD per share)		$ 1.25
Warrant exercise price (USD per share)		$ 1.50
Public offering shares purchased by the Company (shares)		560,000
Public offering warrants purchased by the Company (USD per share)		560,000
Payments to acquire public offering shares and warrants		$ 700
Proceeds from collection of note receivable		$ 300
Shares received for repayment of note receivable (shares)		960,000
Warrants received for repayment of note receivable (shares)		960,000
Value of shares and warrants received for repayment of note receivable		$ 1,200
Ownership percentage in Viking after public offering and repayment of convertible notes		38.00%
Synthetic Royalties | Subsequent Event
Subsequent Event [Line Items]
Payments to Acquire Intangible Assets	$ 17,500
Royalty Agreement, Expiration Period	10 years
Minimum | Scenario, Forecast | Synthetic Royalties
Subsequent Event [Line Items]
Annual royalty revenue						$ 2,750
Mr. Aryeh, Director | CorMatrix | Subsequent Event
Subsequent Event [Line Items]
Equity of CorMatrix beneficially owned by Ligand director			0.56%
Mr. Knott, Director | CorMatrix | Subsequent Event
Subsequent Event [Line Items]
Equity of CorMatrix beneficially owned by Ligand director			0.47%