Ligand Pharmaceuticals’ share price took a knocking on Friday after the firm revealed that it would be restating its 2002 and 2003 financial results as well figures for the first three quarters of 2004 because of accounting errors. The company’s share price fell 10% on the news.

The company said that an internal audit found that it had improperly recognised revenue on product shipments to distributors – it had used a process known as “sell-through accounting”, which does not recognise revenue until after the product has been subsequently shipped from the wholesalers.

Although the firm said that the audit had not uncovered any improper or fraudulent actions by any members of its management, Ligand said that because of the delay in its regulatory filings, it could face the prospect of being delisted from the Nasdaq Stock Exchange.