Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) is a biopharmaceutical firm that specializes in discovering and developing innovative medicines. This company faces stiff competition from peers like Neurocrine Biosciences, Incyte Corporation, and Alkermes plc.

Analyzing Ligand’s financial metrics reveals worrying trends in their Return on Invested Capital (ROIC). Currently, Ligand is standing at a ROIC of -3.48%, which is alarmingly lower than their Weighted Average Cost of Capital (WACC) of 7.60%. This negative ROIC signifies that Ligand is struggling to provide sufficient returns to justify its capital costs, raising red flags for prospective investors.

In contrast, Neurocrine Biosciences boasts a ROIC of 9.78% and a WACC of 5.47%, leading to a favorable ROIC to WACC ratio of 1.79. This clearly indicates that Neurocrine is adeptly harnessing its capital to generate returns surpassing its cost of capital. Furthermore, peers like Incyte Corporation and United Therapeutics Corporation present robust ROIC to WACC ratios of 2.50 and 2.28, respectively.

Alkermes plc records the most impressive ROIC to WACC ratio at 2.93, showcasing excellent capital efficiency. This positions Alkermes as a more appealing option for investors. On the other hand, Myriad Genetics experiences a troubling situation with a negative ROIC of -71.95%, significantly below its WACC of 10.96%, leading to a ROIC to WACC ratio of -6.57. This starkly illustrates inefficiencies in utilizing its capital.