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Ligand Pharmaceuticals Announces First Quarter Results

Business Wire, May 1, 2008

Conference call begins at 4:30 p.m. Eastern time today

SAN DIEGO -- Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) today announced financial results for the first quarter of 2008, and provided an operating forecast and program updates.

Financial Results

Total revenues from continuing operations for the three months ended March 31, 2008 were $4.9 million, compared with $0.2 million for the same period in 2007.

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Expenses from continuing operations in the first quarter of 2008 were $17.3 million, compared with $29.8 million in the first quarter of 2007. Included in general and administrative expenses for the first quarter of 2008 is $4.1 million of lease costs and $0.7 million of asset impairment charges associated with a building vacated and subleased in February 2008; and included in research and development expenses for the first quarter of 2008 is $0.6 million paid to the Salk Institute for a royalty buyout fee related to Pfizer's FABLYN[R] NDA submission. Included in operating expenses in the first quarter of 2007 are one-time items totaling $10.2 million related to the Company's restructuring announced in January 2007, and $1.0 million related to the write-off of certain assets either disposed of or no longer used by the Company in its ongoing operations.

Net loss in the first quarter of 2008 was $3.9 million, or $0.04 per share, compared with net income of $274.3 million, or $2.72 per share, in the comparable 2007 quarter. Loss from continuing operations in the first quarter of 2008 was $9.7 million, or $0.10 per share, compared with a loss from continuing operations of $16.9 million, or $0.17 per share, in the comparable 2007 quarter. Income from discontinued operations, net of taxes, in the first quarter of 2008 was $5.8 million, or $0.06 per share, compared with income from discontinued operations, net of taxes, of $291.2 million, or $2.89 per share, in the comparable 2007 quarter.

As of March 31, 2008, Ligand had cash, cash equivalents, short-term investments and restricted investments of $91.6 million. In addition, as of March 31, 2008, there was approximately $10 million of cash held in a trust account to support potential indemnifiable claims on behalf of certain current and former members of Ligand's Board of Directors. In the first quarter of 2008, the Company received $8.0 million, including interest, previously held in escrow to support potential claims by purchasers of Ligand's commercial products.

First Quarter 2008 and Subsequent Weeks Highlights

* April: Initiated a Phase II clinical trial with LGD-4665 in idiopathic thrombocytopenic purpura (ITP)

* March: Announced that the U.S. Food and Drug Administration (FDA) granted priority review for the new drug application (NDA) filed by Ligand partner GlaxoSmithKline (GSK) for PROMACTA([R]) for the treatment of chronic short-term ITP

* January: Announced that the Company was awarded a U.S. patent for LGD-4665, and ranked as one of the Top Industry Innovators by the Pharmaceuticals Patent Scorecard

"In the first quarter we remained diligent to our disciplined cost structure while increasing productivity throughout the company, particularly in our research programs focused on the development of novel, differentiated therapeutics addressing unmet and underserved medical needs. Our ability to innovate has led to a growing recognition of Ligand's science, with recent examples including being awarded a U.S. patent for LGD-4665, having LGD-4665 named one of the 100 Great Investigational Drugs by R&D Directions magazine and receiving recognition as one of the industry's top innovators in the Patent Board's Pharmaceuticals Patent Scorecard," said John L. Higgins, President and Chief Executive Officer.

"Beyond our proprietary work, it is notable that after years of scientific research and development between Ligand and several leading pharmaceutical company partners, three of those partners have NDAs under review at the FDA," he added. "We are fortunate to have a strong balance sheet and partnerships with advanced-stage deals, which are important attributes given the current landscape for small-cap biotech companies and regulatory environment."

2008 Operating Forecast

Affirming its previous 2008 revenue forecast, Ligand expects to receive approximately $20 million in royalty revenue for the full year from King Pharmaceuticals for sales of AVINZA[R] plus potential milestone payments from existing corporate partners. For the remaining three quarters of 2008, the Company anticipates total operating costs will be between $27 and $30 million including stock-based compensation and $1.5 million of amortization of deferred gain on sale leaseback. Excluding the $4.1 million lease costs associated with vacating and subleasing a building in February 2008, this estimate is a few million dollars higher than our original 2008 forecast mainly due to expenses to accelerate preclinical activities for our SARM program and higher legal expenses.

Business Services Industry

Ligand Pharmaceuticals Announces First Quarter Results

Business Wire, May 1, 2008

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