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GLAXO AND LIGAND WILL COLLABORATE ON ATHEROSCLEROSIS DRUG R&D

Executive Summary

GLAXO AND LIGAND WILL COLLABORATE ON ATHEROSCLEROSIS DRUG R&D for cardiovascular disease treatment and prevention products under a five-year research program announced Sept. 9. San Diego-based Ligand Pharmaceuticals will contribute its expertise in hormone- activated intracellular receptor technology, and Glaxo will provide its research, development and marketing capabilities. The research will be conducted mostly at Ligand facilities and at Glaxo Group Research Labs in the U.K. Commenting on the technology behind the deal, Ligand VP- Research Robert Stein, MD/PhD, said: "Several hormones and the family of intracellular receptors, which form the core of Ligand's expertise, play major roles in regulation of lipid and cholesterol production and distribution." The collaborative program will seek "small molecules which operate through these novel mechanisms to correct the disturbances which accelerate atherosclerosis," he explained. Glaxo has agreed to pay the costs of its own research and will share the cost of Ligand's research. Glaxo also will make payments to Ligand for five separate development milestones, and in turn, will have exclusive worldwide marketing rights to any products. Ligand will receive royalties from product sales. As part of the agreement, Glaxo is acquiring a 6% interest in Ligand. The equity investment includes $7.5 mil. in preferred stock, or between 600,000 to 700,000 shares. Glaxo also plans to buy $2.5 mil. of common stock when Ligand makes its initial public offering. Ligand anticipates that the IPO will proceed this autumn. The company filed an IPO prospectus with the Securities and Exchange Commission on April 16, seeking to gross nearly $45 mil. at its then-proposed maximum price of $13 a share ("The Pink Sheet" May 18, T&G-7). Ligand is currently amending the standing IPO prospectus. Ligand entered into a similar five-year R&D collaboration with Pfizer that focuses on developing treatments for osteoporosis ("The Pink Sheet" May 13, 1991, T&G-13). The agreement with Pfizer, which commits up to $15 mil., was Ligand's first corporate partnership. Recently, Ligand established a joint venture with Allergan for R&D of retinoid drugs ("The Pink Sheet" July 6, T&G-12). Allergan is supporting the venture with up to $35 mil. Research is being conducted by the labs of both companies. The arrangement involves 50/50 profit sharing for codeveloped products and royalties for products developed by one of the partners.
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