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Ligand and Organon Mutually Terminate Collaboration and License Agreement

Ligand and Organon Mutually Terminate Collaboration and License Agreement

Ligand and Organon Mutually Terminate Collaboration and License Agreement

Ligand and Organon Mutually Terminate Collaboration and License Agreement

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Ligand Pharmaceuticals Incorporated has announced the mutual termination of its collaboration and license agreement with N.V. Organon, which Ligand assumed in connection with its acquisition of Pharmacopeia in December 2008.

Pharmacopeia and Organon entered into the collaboration and license agreement in February 2007 for the purpose of working collaboratively to discover, develop and commercialize therapeutic products across a broad range of indications, including neuroscience and immunology. Under the terms of the collaboration and license agreement, Pharmacopeia received an up-front payment of $15 million and additional payments in research funding over the five-year term of the research portion of the agreement.

According to Ligand, the collaboration with Organon has been highly productive towards the goal of generating candidate compounds addressing targets of mutual interest, and several novel drug candidates discovered through the collaboration are in various stages of lead identification and optimization process.

In November 2007, Organon was acquired by, and is now a part of, Schering-Plough Corporation. Ligand has entered into other collaboration agreements with Schering-Plough which have generated multiple drug candidates in Phase I and Phase II studies and these agreements remain not affected by the mutual termination of this agreement.

As part of the termination, Organon will continue to fund research through a wind-down period ending December 31, 2009 and Ligand may receive up to several million dollars in milestones upon expiration of such wind-down period.

In addition, Ligand is entitled to receive future royalties and milestones as a result of Organon’s successful advancement through clinical development of therapeutic candidates discovered as a result of the collaboration which result in commercial sales. Organon is solely responsible for the further development and commercialization of all collaboration products after programs are handed over by Ligand, and for all development and commercialization costs.

“We are pleased with the progress made under the Organon collaboration. Moreover, the potential to receive milestone payments and one-time fees for transferred programs earlier than expected is consistent with our strategy to increase shareholder value,” said John L. Higgins, President and Chief Executive Officer of Ligand Pharmaceuticals. “More importantly, we continue to maintain a positive and productive relationship with Schering-Plough in multiple promising programs in our current partnered pipeline.”