LIGAND PHARMACEUTICALS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

2004

2003

Operating activities

Net loss

$

(13,139

)

$

(20,320

)

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of acquired technology and license rights

2,736

2,752

Depreciation and amortization of property and equipment

838

681

Amortization of debt discount and issuance costs

237

194

Write-off of X-Ceptor purchase right

—

5,000

Equity in loss of affiliate

—

302

Other

39

70

Changes in operating assets and liabilities:

Accounts receivable, net (Note 2)

4,866

(4,910

)

Inventories

(1,508

)

(554

)

Other current assets

46

760

Accounts payable and accrued liabilities

3,164

6,629

Other liabilities

(600

)

—

Deferred revenue

(295

)

(351

)

           Net cash used in operating activities

(3,616

)

(9,747

)

Investing activities

Purchases of short-term investments

(8,375

)

(331

)

Proceeds from sale of short-term investments

16,797

1,223

Purchases of property and equipment

(952

)

(238

)

Payment for AVINZA ^® royalty rights

—

(4,133

)

Payment for lasofoxifene royalty rights (Note 1)

(1,120

)

—

Other, net

47

85

           Net cash provided by (used in) investing activities

6,397

(3,394

)

Financing activities

Principal payments on equipment financing obligations

(641

)

(621

)

Proceeds from equipment financing arrangements

1,770

251

Increase in restricted investments

(43

)

(166

)

Repurchase of common stock

—

(15,867

)

Proceeds from issuance of common stock

2,733

136

Other

(72

)

(36

)

           Net cash provided by (used in) financing activities

3,747

(16,303

)

Net increase (decrease) in cash and cash equivalents

6,528

(29,444

)

Cash and cash equivalents at beginning of period

59,030

42,423

Cash and cash equivalents at end of period

$

65,558

$

12,979

Supplemental disclosure of cash flow information

Interest paid

$

300

$

132