Here's the PRNewswire version (its long):
Wednesday September 24 5:01 PM EDT
Company Press Release
Ligand and Allergan Announce Buyout of Allergan Ligand
Retinoid Therapeutics Inc.
SAN DIEGO and IRVINE, Calif.--(BW HealthWire)--Sept. 24, 1997--
Restructured Compound Development and Product Commercialization
Rights Allow Both Companies to Focus, Accelerate R&D
Ligand Pharmaceuticals Incorporated (Nasdaq:LGND) and Allergan, Inc. (NYSE:AGN) today
announced that they have exercised their respective options to purchase the Callable Common
Stock and assets of Allergan Ligand Retinoid Therapeutics, Inc. (ALRT) (Nasdaq:ALRI - news)
(the Options) at the original price provided by the agreements. The companies have also agreed to
restructure the terms and conditions relating to research, development, commercialization and
sublicense rights for the ALRT compounds in the period following closing of the Options exercise.
Ligand has notified the ALRT shareholders and Board of Directors, and Allergan that Ligand is
exercising its option (Stock Purchase Option) to purchase all of the Callable Common Stock of
ALRT per its rights under Article V of the Amended and Restated Certificate of Incorporation of
ALRT (Certificate). Ligand's option to purchase the Callable Common stock of ALRT is
exercisable for $71.4 million ($21.97 per share) from June 3, 1997, until June 3, 1998. The record
date for the purchase of the Callable Common Stock is October 14, 1997, and the closing date is
November 3, 1997, pending an effective securities registration statement with the U.S. Securities
and Exchange Commission. Ligand's notice states its intention to pay a combination of cash and
Ligand common stock for the ALRT Callable Common Stock as permitted by the Certificate.
Allergan has also notified all parties that Allergan will exercise its option (Asset Purchase Option),
per its rights under an Asset Purchase Option Agreement among Allergan, Ligand and ALRT, to
pay Ligand $8.9 million in cash to acquire an undivided one-half interest in the assets and
technologies of ALRT when Ligand exercises its Stock Purchase Option. Upon the closing, Allergan
will record a one-time charge, net of tax, related to the option payment. In addition, Allergan will
record a one-time decrease to its effective tax rate related to the tax benefit associated with their
original $50 million contribution to ALRT. Upon the closing, Ligand will record a one-time charge
related to the excess of the purchase option price over the fair value of assets acquired.
The existing agreements between Allergan and Ligand provide for a joint development and joint
commercialization arrangement following exercise of the buyout option. Allergan and Ligand have
amended and restated the existing agreements, effective as of the option closing date, so that among
other things, existing ALRT compounds and development programs will be divided up among
Allergan and Ligand, and each party will receive exclusive rights under the ALRT technology for use
with their respective compounds and programs.
Compounds allocated to Ligand include ALRT 268, ALRT 324, ALRT 1550, and Oral and
Topical Panretin(tm). Compounds allocated to Allergan include ALRT 4310, ALRT 326 and ALRT
4204. Each party will pay royalties to the other on net sales of its respective compounds, if any.
``The purchase of the ALRT Callable Common Stock by Ligand and exercise of the Asset
Purchase Option by Allergan as well as the restructured post buyout agreements between the
companies reflect the significant value created by the positive R&D results of this cooperative
venture,'' said Ligand Chairman, President and Chief Executive Officer David E. Robinson. ``The
amendments to the agreements governing the post buyout period provide for a clean, simple
separation on a compound by compound basis. This should allow Ligand and Allergan each to focus
and accelerate its own research, development and commercialization efforts on certain retinoid
compounds with exclusive worldwide rights while enjoying royalties on compounds exclusively
licensed to the other party.''
``We believe this simplification, clarification, separation and focus will maximize the value of assets
for Allergan, Ligand and their shareholders as well as future patients who may benefit from
medicines created in this venture,'' Mr. Robinson said.
``As a result of the restructured agreements, each company will gain exclusive worldwide rights to
various retinoid compounds and be better able to focus its R&D resources on those retinoid
compounds which it believes are most consistent with its strategic direction,'' said Allergan
Chairman, President and Chief Executive Officer William C. Shepherd. ``The decision around
Panretin(tm) is an excellent example of how the agreement allows each company to focus on the
areas most important to its future. With Ligand receiving worldwide exclusive rights to Panretin, we
are hopeful they will build a commercial presence that will maximize the value of this asset while
Allergan retains the opportunity to benefit by enjoying a significant revenue stream from the royalties
payable to us.''
Restructured Compound Development and Product Commercialization Rights
ORAL AND TOPICAL PANRETIN(tm) (ALRT 1057) - IN PHASE III PIVOTAL TRIALS
Ligand will receive exclusive, worldwide development, commercialization and sublicense rights to
Oral and Topical Panretin (ALRT 1057). In exchange for these rights, Ligand will pay to Allergan
royalties equal to 15 percent of net sales in North America (U.S., Canada and Mexico) and 10
percent of net sales outside North America for topical and oral application for all indications.
Panretin Topical Gel and Panretin Oral Capsules were in Phase I/II human clinical trials when ALRT
was formed. Today, Topical Panretin is in Phase III pivotal trials in Kaposi's sarcoma (KS) in the
U.S., and positive results from an international Phase III pivotal trial in KS reported August 25,
1997, could be used in a New Drug Application (NDA) filing in the U.S. later this year or early next
year.
Panretin Oral Capsules are in Phase III pivotal trials in acute promyelocytic leukemia and the drug is
being studied in an extensive Phase II clinical trial program from which additional NDA target
indications are expected to be announced this year and next.
ALRT1550 - IN PHASE I/II TRIALS
Ligand will receive exclusive, worldwide development, commercialization and sublicense rights to
ALRT 1550 currently in development for oncology applications. In exchange for these rights, Ligand
will pay to Allergan royalties equal to 6 percent of worldwide net sales on all indications. ARLT
1550 entered Phase I/IIa human clinical trials in the first quarter of 1997 and is expected to enter
Phase IIb late this year or early next.
RXR SELECTIVE AGONISTS
Ligand will receive exclusive, worldwide development, commercialization and sublicense rights to
ALRT 268 and ALRT 324, two advanced preclinical RXR selective compounds being developed
for non-insulin dependent diabetes treatment or prevention. Ligand will make a cash payment to
Allergan of $4.5 million at the closing of the ALRT options exercises; Ligand will make milestone
payments to Allergan equal to 33 1/3 percent of all milestone payments made to Ligand with respect
to ALRT 268 and ALRT 324 from future corporate partners (certain transactions exempted from
up front payments). Ligand will also pay royalties to Allergan of either 6 percent of net sales on all
indications for these products or 50 percent of all royalties payable to Ligand with respect to net
sales of these products, whichever is greater.
Allergan will receive exclusive worldwide development, commercialization and sublicense rights to
two promising second generation RXR selective compounds with potential application for metabolic
diseases, ALRT 326 and ALRT 4204, subject to a 6 percent royalty payment to Ligand.
``Ligand reconfirms its goal to enter into a major strategic alliance in metabolic diseases. This
collaboration may include Targretin(tm) (LGD 1069) which was not in the ALRT venture and which
is currently in Phase II trials in type II diabetes. Allergan has been a partner in the development of
second generation RXR selective compounds (ALRT 268 and ALRT 324) targeted for metabolic
diseases; and both companies consider it appropriate that, as part of the amended agreement,
Allergan participate in the financial opportunity in metabolic diseases of these RXR selective
compounds including Targretin,'' stated Mr. Robinson. Accordingly, Allergan will receive 33 1/3
percent of royalties payable to Ligand with respect to net sales of Targretin for uses other than
oncology and dermatology indications.
RAR ANTAGONISTS
Allergan will receive exclusive, worldwide development, commercialization and sublicense rights to
ALRT4310, an RAR antagonist being developed by the ALRT venture for topical application
against mucocutaneous toxicity associated with currently marketed retinoids as well as for psoriasis.
Allergan will pay to Ligand royalties equal to 6 percent of worldwide net sales on all indications.
``The restructured agreement is an important step in our strategy to grow as a global specialty
pharmaceutical company,'' said Lester J. Kaplan, Ph.D., Allergan Corporate Vice President of
Science and Technology. ``Initially, we will focus our retinoid development resources on the two
retinoids which we are most excited about, ALRT 4310 which has shown promise for various skin
conditions in animal models, and new formulations (topical and oral) and indications for
Tazorac(r)/Zorac(r), our new topical retinoid currently marketed for psoriasis and acne. We are
extremely optimistic about the potential for RXR compounds in type II diabetes and will be moving
ALRT 326 and ALRT 4204 aggressively towards IND filing while we pursue corporate partnering
opportunities for the compounds in the metabolic disease area. Our initial research efforts will
continue to be targeted at the rapid identification of highly receptor selective retinoids for skin,
cancer and other indications.''
``LOTTERY'' FOR OTHER RETINOID COMPOUNDS
Allergan and Ligand will participate in a lottery for each of the approximately 2,000 retinoid
compounds existing in the ALRT compound library (lottery compounds) as of the closing date other
than Compounds ALRT 268, ALRT 324, ALRT 4310, ALRT 1550, ALRT 326, ALRT 4204 and
Oral and Topical Panretin(tm). Each party will pay to the other royalties equal to 6 percent of
worldwide net sales on all lottery compounds selected, on all indications. Each party will be granted
appropriate exclusive, worldwide licenses, with sublicense rights under the ALRT technology, to
make, use and sell the lottery compounds consistent with certain restrictions.
The lottery process will allow Ligand to select the next RXR compound. Then selection will alternate
between Allergan and Ligand in this category. Allergan will select both the first RAR alpha selective
compound and the first RAR antagonist compound while Ligand will select the next two compounds
in each of these classes. Further selection of RAR compounds in these two categories will then
alternate between Allergan and Ligand.
``This selection process will fairly divide the extensive compound library synthesized by Ligand and
Allergan scientists,'' said Dr. Kaplan. ``Each company will emerge with a full range of representative
compounds from each of the unique classes of selective retinoids. Allergan will continue to invest in
receptor and function selective retinoids targeted for eye, skin, cancer and metabolic diseases. We
are exploring financing alternatives to better focus our R&D resources on those aspects of the
retinoid programs which we believe will create the greatest value for Allergan shareholders.''
``The pool of retinoids from the ALRT compound library includes many novel and functionally
selective molecules that offer a unique opportunity for each company to continue a vigorous R&D
program to fully exploit the therapeutic potential of the different retinoid classes in several major
therapeutic areas, such as cancer, metabolic diseases including diabetes and obesity, and skin
disorders,'' said Andres Negro-Vilar, M.D., Ph.D., Ligand Senior Vice President for Research and
Chief Scientific Officer.
LIGAND REGISTRATION FILING
Ligand will file a registration statement with the Securities and Exchange Commission (SEC) to
register a number of shares sufficient to exercise the Stock Purchase Option with a combination of at
least $25.0 million cash and up to $46.4 million in shares of Ligand common stock at a price based
upon the average of the closing price for the 20 trading days immediately preceding the day before
the closing date of the Stock Purchase Option.
``Ligand has the right to increase the amount of cash we use to exercise the Stock Purchase Option
at the closing of the transaction, but we are not permitted to increase the amount of Ligand stock
used in the transaction after we give notice of our intention to exercise. Therefore, it is prudent for us
to file the registration statement with the maximum of Ligand stock to be registered, while keeping
open our option to use significantly more cash before the transaction closes,'' according to Paul V.
Maier, Ligand Senior Vice President and Chief Financial Officer.
``ALRT has publicly reported that it had cash and equivalents of $31.7 million at the end of the
second quarter,'' according to Mr. Maier. ``Whatever net cash is left in ALRT at the closing date
would be divided between the sponsors and each company's portion could be used to reduce the
effective buyout cost to Ligand and Allergan.''
ALRT BACKGROUND
ALRT was formed in 1994 by Ligand and Allergan to accelerate development of retinoid products
previously being pursued in the Ligand Allergan joint venture. On June 3, 1995, ALRT completed a
public offering of 3.25 million Units at $10.00 each, which included one share of Callable Common
Stock of ALRT and two warrants for Ligand Common Stock at an exercise price of $7.12 expiring
on June 3, 2000. The offering raised gross proceeds of $32.5 million. Ligand and Allergan
contributed certain technology and other assets to ALRT, including $17.5 million in cash from
Ligand and $50.0 million in cash from Allergan.
Allergan, Inc., headquartered in Irvine, California, is a technology-driven, global health care
company focused on specialty pharmaceutical products for specific disease areas that deliver value
to customers, satisfy unmet medical needs and improve patients' lives.
Since 1989, Ligand Pharmaceuticals Incorporated has established a leadership position in gene
transcription technology, particularly intracellular receptor (IR) technology and Signal Transducers
and Activators of Transcription (STATs). Ligand has applied IR and STATs technology to the
discovery and development of small molecule drugs to enhance therapeutic and safety profiles and
to address unmet patient needs in cancer, women's and men's health and skin diseases, as well as
osteoporosis, metabolic, cardiovascular and inflammatory disease.
Copies of Allergan's press releases and additional information about the company are available on
the Allergan Web Site at www.allergan.com, or you can contact the Allergan Investor Relations
Department by calling 714/246-4636.
Copies of Ligand's press releases are available by fax, please call 800/758-5804 No. 509313; or
you can contact the Ligand Investor Relations Department by calling 619/550-7852.
This press release may contain certain forward looking statements by ALRT, Allergan and/or
Ligand, and actual results could differ materially from those described as a result of factors including,
but not limited to the following. There can be no assurance that Targretin(tm), Panretin(tm) or any
other ALRT compound or product in the Company's pipeline, will be successfully developed, that
regulatory approvals will be granted, that patient or physician acceptance of these products will be
achieved, that final results of human clinical trials will be consistent with any interim results, that the
final results will be supportive of regulatory approvals required to market products or that the parties
will be successful in entering into additional strategic alliances to further develop certain assets .
Additional information concerning these factors can be found in press releases as well as in the
Allergan, Ligand and ALRT public periodic filings with the Securities and Exchange Commission.
Allergan, Ligand and ALRT disclaims any intent or obligation to update these forward-looking
statements.
A registration statement relating to the shares of Ligand Common Stock to be issued on the Stock
Purchase Closing Date will be filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers be accepted prior to the time the
registration statement becomes effective. This press release shall not constitute an offer to sell nor
the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which
such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such state.
Panretin and Targretin are trademarks of Ligand Pharmaceuticals, Inc. Tazorac and Zorac are
registered trademarks of Allergan, Inc.
Contact:
Ligand Pharmaceuticals Inc., San Diego
Susan Atkins, 619/550-7687
or
Allergan Inc., Irvine
Jeff D'Eliscu, 714/246-4636 (office)
714/675-9475 (home) |
