Ligand to Buy Xoma for $740 Million in Royalty Firm Tie-Up

(Bloomberg) -- Ligand Pharmaceuticals agreed to acquire Xoma for nearly $740 million, a move that unites two prominent investors in the biopharmaceutical royalty market and sent Xoma shares surging. The deal was announced on April 27, 2026.

"This combination creates a premier royalty aggregator with a diversified, high-growth portfolio of assets," said Todd Davis, CEO of Ligand Pharmaceuticals, in a statement. "The acquisition of Xoma's impressive portfolio of royalties and milestones provides scale and enhances our revenue growth."

The offer represents a significant premium to Xoma's recent trading levels, leading to a bullish reaction in its stock (XOMA). Both Ligand and Xoma operate as royalty aggregators, a specialized business model that involves investing in drugs during their development phase in exchange for a percentage of future sales if the drugs are successfully commercialized.

The acquisition is poised to consolidate Ligand's position in the niche market of royalty financing, giving it control over a larger and more diverse stream of potential revenue from dozens of drug candidates. For investors, the deal highlights the increasing financial activity in the healthcare sector, where M&A remains a key strategy for growth.

Strategic Consolidation

The tie-up between Ligand and Xoma is a strategic effort to build scale in the competitive royalty aggregation landscape. By pooling their assets, the combined entity can better manage the inherent risks of drug development, where many candidates fail to reach the market. A larger portfolio means a higher probability of backing a successful drug, leading to more stable and predictable royalty streams.

This move is part of a broader trend of consolidation and high-value deals within the pharmaceutical industry. For instance, Sun Pharma recently announced a major $11.75 billion deal to acquire the US firm Organon, underscoring the aggressive push for growth and pipeline expansion across the sector. While different in scale, both deals illustrate the strategic importance of acquisitions in building long-term value in the pharmaceutical space.

The transaction is subject to customary closing conditions, including approval by Xoma's stockholders and regulatory clearances. The companies expect to finalize the deal by the end of the year.

This article is for informational purposes only and does not constitute investment advice.