Financial royalty assets consist of the following (in thousands):


	June 30, 2026						December 31, 2025
	Gross carrying value(1)		Allowance		Net carrying value (1)		Gross carrying value(1)		Allowance		Net carrying value(1)
Qarziba	$	101,303	$	(468)	$	100,835	$	118,593	$	(498)	$	118,095
Agenus Bot/Bal	40,815		(408)		40,407		40,815		(408)		40,407
Tolerance Therapeutics (Tzield®)	25,470		(99)		25,371		25,257		(98)		25,159
Ohtuvayre inventors	19,957		(179)		19,778		16,921		(151)		16,770
Elutia (CorMatrix)	6,062		(837)		5,225		6,607		(1,107)		5,500
AT220	4,442		(109)		4,333		5,132		(132)		5,000
Primrose mRNA	3,281		(98)		3,183		3,281		(98)		3,183
Zerion	2,640		(79)		2,561		—		—		—
Others	5,729		(212)		5,517		5,769		(214)		5,555
Total financial royalty assets, net	$	209,699	$	(2,489)	$	207,210	$	222,375	$	(2,706)	$	219,669

(1) The amounts include the short-term portion of financial royalty assets, which represents our estimate of current-quarter royalty receipts expected to be collected in the subsequent quarter. The short-term portion of financial royalty assets totaled $13.0 million and $22.8 million and was presented as a separate line item in our condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively.

Financial royalty assets represent future economic rights acquired by Ligand in various transactions. Upon the early adoption of ASU 2025-07 on January 1, 2025, certain economic rights in partner programs that were previously accounted for as derivative assets (including the Agenus partner programs, Primrose mRNA, and Castle Creek Milestone) are now accounted for as financial royalty assets.

In July 2024, we acquired certain financial royalty assets as part of the Apeiron Acquisition, including Qarziba and certain InvIOs programs, which were recorded at $104.9 million and $1.3 million, respectively, as of the acquisition date. As

Qarziba is a commercial-stage program, we are able to reasonably estimate future cash flows and, accordingly, we recognized income from the Qarziba financial royalty assets starting from the Apeiron Acquisition effective date. We account for the InvIOs financial royalty asset using the non-accrual method until we are able to reliably estimate future cash flows.

In May 2024, we acquired a synthetic royalty on future global net sales of Agenus’ novel immuno-oncology botensilimab in combination with balstilimab (“Bot/Bal”), which is accounted for as a financial royalty asset. We apply the non-accrual method to the Bot/Bal financial royalty asset until such time as future cash flows can be reliably estimated.

In addition to Bot/Bal, we acquired economic rights in certain partner programs (including UGN-301 with Urogen). These economic rights were initially accounted for as derivative assets but were reclassified to financial royalty assets on January 1, 2025, upon adoption of ASU 2025-07. As of December 31, 2025, we recorded a full impairment of all Agenus partner programs, including UGN-301, which was returned to Agenus by Urogen in the fourth quarter of 2025.

In November 2023, we acquired Tolerance Therapeutics for $20.0 million in cash. Tolerance Therapeutics was a holding company, owned by the inventors of Tzield (teplizumab), and is owed a royalty of less than 1% on worldwide net sales of Tzield. Tzield is marketed by Sanofi, starting in 2023. For tax purposes, this transaction was treated as a stock acquisition; accordingly, no step-up in tax basis or other tax attributes was recorded. As a result, a deferred tax liability of $5.5 million was recognized in 2024 for the difference between the book and tax basis, with a corresponding increase to the carrying value of the Tolerance Therapeutics’ financial royalty asset. Given the early stages of Tzield’s commercialization, management has applied the non-accrual method to this financial royalty asset until such time as future cash flows can be reliably estimated.

In March 2024, August 2024 and January 2025, we acquired future milestone and royalty rights related to Ohtuvayre from certain Ohtuvayre inventors for a total of $3.8 million, $13.6 million and $1.8 million, respectively. On June 26, 2024, Verona Pharma plc received FDA approval for Ohtuvayre for the maintenance treatment of patients with chronic obstructive pulmonary disease (“COPD”). Verona initiated U.S. commercial sales of Ohtuvayre in the third quarter of 2024 and was subsequently acquired by Merck on October 7, 2025. We began recognizing income from the Ohtuvayre inventor-related financial royalty assets on October 1, 2025, as, at that point in the product’s commercialization, management determined that future cash flows could be reliably estimated.