By Brady Huggett

Ligand Pharmaceuticals Inc. completed a $24 million private placement of 2 million shares of its common stock with Elan Corp. plc and other investors.

Paul Maier, senior vice president and chief financial officer at Ligand, declined to discuss the transaction, saying that Ligand has not yet registered the shares with the SEC.

Ligand, of San Diego, said it would use the proceeds from the private placement for development and commercialization of existing and proposed products, expenses relating to clinical trials and registration activities, expansion of a sales and marketing infrastructure and new product launches, and for working capital and general corporate purposes.

Elan, of Dublin, Ireland, purchased 400,000 shares in the offering, giving Elan approximately 12.8 percent ownership of Ligand, or 18.6 percent on a fully diluted basis. Several investors participated in previous Ligand financings.

The shares were sold at $12 apiece. Ligand's stock (NASDAQ:LGND) dropped 56.25 cents Monday to close at $11.562.

Ligand had 56.6 million shares outstanding before the transaction and a cash position of $33 million at the end of the third quarter, although on Jan. 4 it drew down $10 million of zero-coupon convertible notes from Elan under the terms of their securities purchase agreement.

Ligand discovers, develops and markets drugs in the areas of cancer, skin diseases and men's and women's hormone-related diseases, as well as osteoporosis, metabolic disorders and cardiovascular and inflammatory diseases. Ligand has four drugs approved for marketing in the United States - Targretin capsules, Targretin gel, Ontak and Panretin gel - that are being marketed through its specialty oncology and dermatology sales force. Morphelan, a pain relief product licensed from Elan, is currently under FDA review.

Ontak is for the treatment of patients with persistent or recurrent cutaneous T-cell lymphoma, Panretin is for the topical treatment of cutaneous lesions associated with AIDS-related Kaposi's sarcoma, and Targretin is for the treatment of cutaneous manifestations of cutaneous T-cell lymphoma in patients who are refractory to at least one prior systemic therapy. Targretin gel is indicated for the topical treatment of cutaneous lesions in patients with cutaneous T-cell lymphoma.