Here's the press release:
SmithKline Beecham and Ligand Add Leptin-Obesity Research to
Existing Collaboration
SAN DIEGO and PHILADELPHIA, March 18 /PRNewswire/ -- Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) and SmithKline Beecham plc. (NYSE: SBH) have agreed, subject to regulatory approval, to initiate a new collaboration to develop small molecule drugs that modulate the signaling pathway controlled by leptin as a means of discovering orally available drugs for treatment or prevention of obesity. This follows an expansion last year of the existing hematopoietic growth factor alliance with its U.S. affiliate of SmithKline Beecham Corporation (SB).
As part of the leptin-obesity collaboration, SB will, after regulatory approval of the transaction, purchase 274,423 shares of Ligand Common Stock for $5.0 million ($18.22 per share, a 20 percent premium over a 15-day trading average of the stock prior to execution of the agreement) and will also purchase for $1 million a warrant to purchase 150,000 shares of Ligand Common Stock at $20 per share. The warrant expires in five years, and Ligand may require SB to exercise the warrant under certain circumstances after three years. SB will also purchase additional Ligand Common Stock at a 20 percent premium if a research milestone is achieved. The agreement also provides for cash payments if subsequent milestones are met.
Under the new agreement, SB will obtain exclusive worldwide rights to products resulting from the obesity collaboration and has agreed to make milestone payments to Ligand as compounds progress through preclinical and clinical development, and royalty payments on sales, if products result from the research.
"We are very pleased to initiate this new collaboration in controlling obesity by affecting the leptin signaling pathway and the expansion of our existing collaboration to include a third hematopoietic drug discovery target," said Andres Negro-Vilar, M.D., Ph.D., Ligand Chief Scientific Officer and Senior Vice President, Research. "We're excited about the opportunities this research will provide to develop small-molecule, orally deliverable pharmaceutical products from these programs which are intended to meet the needs of patients in two important therapeutic areas."
"This agreement is a true collaboration and builds on a productive existing relationship. Ligand provides their STATs technology and expertise in cytokines, and SB provides not only expertise in obesity and diabetes but also the important discovery that leptin is a cytokine," said Dr. David U'Prichard, Chairman, Research and Development, SB Pharmaceuticals. "Together, we can accelerate the discovery and development of important new medicines in these critical areas."
The obesity agreement follows the expansion and extension last year of Ligand's collaboration with SB to discover and characterize small molecule drugs to control hematopoesis. Under the 1995 hematopoesis agreement, SB acquired exclusive rights to products resulting from the collaboration in certain targeted areas in exchange for research and development funding and an initial equity investment. In February 1997, SB exercised its option to expand the scope of the collaboration to include a third drug discovery target, and purchased an additional $2.5 million of Ligand Common Stock. In August 1997, SB extended the term of the collaboration, purchasing a $2.5 million convertible note.
STATs Technology: A Powerful New Drug Discovery Tool
Certain protein hormones, known as cytokines, control many key biological processes within the human body, including immune and inflammatory responses, blood cell formations, and the growth and differentiation of many cell types. Cytokines cannot enter cells and therefore act by binding to a cell surface receptor and, through a process known as signal transduction, initiate a cascade of biochemical events that leads to changes in the transcription and expression of a variety of genes that alter cell function.
Several cytokines, including EPO and the IFNs, are highly successful drugs, generating in excess of $5 billion in annual worldwide sales. However, these drugs must be administered by injection. Most cytokines of therapeutic interest exert their effect through activation of a signal transduction pathway known as the JAK/STAT pathway. Leptin is known to work through such a pathway.
Ligand is working to develop small molecules that mimic, or in some cases, inhibit the proteins which bind to cell surface receptors and activate the JAK/STAT pathway. These small molecules may be able to be delivered orally rather than by injection, providing a significant advance over currently available therapies.
SmithKline Beecham -- one of the world's leading healthcare companies -- discovers, develops, manufactures, and markets pharmaceuticals, vaccines, over-the-counter medicines, and health-related consumer products, and provides healthcare services including clinical laboratory testing, disease management, and pharmaceutical benefit management. For company information, visit SmithKline Beecham on the World Wide Web at sb.com.
Since 1989, Ligand Pharmaceuticals Incorporated has established a leadership position in gene transcription technology, particularly intracellular receptor (IR) technology and STATs technology. 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 major unmet patient needs in cancer, women's and men's health, skin diseases, osteoporosis, cardiovascular and inflammatory disease.
This press release may contain certain forward looking statements by Ligand and SmithKline Beecham and actual results could differ materially from those described as a result of numerous factors including, but not limited to, the following. There can be no assurance: (a) the collaborative arrangement will be successful or continued; (b) that any products under development by Ligand or SmithKline Beecham will receive approval from the U.S. Food and Drug Administration or other authorities to market any of these products; (c) human clinical trials will result from the compound discovery activities of collaborative efforts discussed herein; (d) that, if successfully developed and thereafter approved, there will be a market for the drugs; (e) that preclinical results will be predictive of any clinical results. Ligand and SmithKline Beecham undertake no obligations to update the matters discussed herein to reflect events after the date of this press release.
/CONTACT: Cheryl Monblatt - Investor Relations, 619-550-7777, or Mary Kenny - Media, 619-550-7536, both of Ligand Pharmaceuticals; or Rick Koenig - Media, 215-751-3415 or Richard Williams - Investors, 215-751-7002, both of SmithKline Beecham/ |
