Ligand Announces Lilly, Seragen & Marathon Deals

Ligand Pharmaceuticals has announced a series of agreements involvingthe merger of one of its wholly-owned subsidiaries with Seragen, the transfer of product rights from Eli Lilly and the acquisition of Marathon Biopharmaceuticals, which currently has a service agreement with Seragen.

Under the terms of the Seragen deal, Ligand will make an upfront payment of $30 million, comprising $4 million in cash and the rest in common stock. In addition, the deal provides for a further payment of $37 million in cash and/or stock six months after US Food and Drug Adminstration approval of Ontak (denileukin diftitox), a treatment for cutaneous T cell lymphoma. This final payment will not be made, however, if the product is not cleared by the FDA within two years of the initial closing.

Ligand will receive Seragen's intellectual property and worldwide rights to six fusion proteins, including Ontak, which was recently accepted for filing by the FDA, which gave it priority review status (Marketletter February 9), and will be reviewed by the agency's Oncologic Drug Advisory Committee on June 2. The drug has been developed as a cancer therapy through a strategic alliance between Seragen and Eli Lilly, which started in 1994, hence the latest transfer of product rights agreement between Lilly and Ligand.