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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: Andreas Helke who wrote (21360)	5/24/1998 5:02:00 PM
From: WTDEC	Respond to of 32384

Hi Andreas. Thanks for posting the LGND/SRGN/LLY news. I agree that LGND has acquired LLY's rights to ONTAK. However, the article states, ' LGND signed an agreement with LLY and SRGN..under which LLY will assign to LGND LLY's rights'', but does not describe this in detail. Later it says agreement calls for up to $10 million in cash or LGND stock be paid as milestone to LLY, if ONTAK is approved and LLY could get another $10 million in milestones under certain (unspecified) circumstances. Finally, with reference to the Oct. '97 collaborative agreement, the news says LGND and LLY agreed to "modifications in the LLY/SRGN and LLY/LGND agreements on ONTAK designed to facilitate the merger." There is no elaboration on that statement in the news. The next thing we see is Bernie's post re LLY filing which seems like LGND still has option to decide. (I have not seen filing myself but it is being e-mailed to me as I type ...I'm anxious to read it). My recollection of original deal was LGND got to chose between buying LLY's rights to ONTAK for $10 million plus milestones (and an royalty on sales????) OR having LLY buy $20 million og LGND stock at a 20% premium plus increasing by 1.5% the royalty LGND is entitled to get on one of the drugs in the LLT/LGND joint program. I think, but do not know for sure, that the confusion stems from the possibility ONTAK may not be approved. LGND probably has the option to do the stock deal if it is not approved. Hopefully we'll see when LGND files. Bernie says it requires a Philly lawyer to figure out the LLY filing. Regards, Walter

To: Andreas Helke who wrote (21360)	5/24/1998 9:58:00 PM
From: WTDEC	Read Replies (1) \| Respond to of 32384

Andreas, I read the LLY filing, but there was a key piece which was not included. The option which LGND had to sell $20 M of stock to LLY and increase the royalty on one of three specified drugs was clearly extended to the "earlier of 1/31/99 or the Effective Date". The Effective Date is in an agreement called the Subsequent Agreement between LGND and LLY dated 5/11/98. That document was not in the filing I got. My best guess is that if ONTAK gets final FDA approval before 1/1/99, LGND will have to buy LLY's rights to it. If it is not approved by then, LGND will have the option to do so or sell the stock for $20 M. We'll see for sure when more documents get filed... Have a good evening. Walter