By Lisa Seachrist
Ligand Pharmaceuticals Inc. and Parke-Davis Pharmaceutical Research Division of Warner-Lambert Co. have entered into a research, development and license agreement that could net Ligand $13 million in research funding plus milestone payments and royalties.
The collaboration will focus on developing small-molecule drugs using Ligand's estrogen receptor technology. The companies haven't yet determined exactly which disease targets will be the focus of the collaboration; however, drugs acting on the estrogen receptor can be used to treat osteoporosis, cardiovascular disease, breast cancer and mood and cognitive disorders.
"The research priorities have yet to be set," said Paul Maier, chief financial officer and senior vice president for Ligand. "We have a nice leadership position in this field and we hope to capitalize on that with the Parke-Davis collaboration."
Under the terms of the agreement, Ligand and Parke-Davis will enter a 15-month exploratory phase after which Parke-Davis may extend the collaboration through September 2002. Should it be extended, Ligand would receive in total $13 million in research funding. Parke-Davis will pay undisclosed milestones and royalties to Ligand should any products develop from the collaboration.
In addition, Warner-Lambert purchased $2.5 million of Ligand common stock at the market average over 20 days.
The aim of the collaboration will be to create the third generation of selective estrogen receptor modulators (SERMs).
Ligand's first corporate collaboration, in May 1991, was predicated on its estrogen receptor technology. That deal with Pfizer Inc., of New York, has produced two SERMs currently in Phase II testing as treatments for osteoporosis. Pfizer is expected to determine shortly whether the first-generation SERM (droloxifene) or the second-generation SERM (CP336,156) will enter Phase III development.
Maier noted under the terms of the original deal, Ligand will receive up to $6 million in royalties from the development of either compound and 3 percent royalties from sales of droloxifene and 6 percent royalties from the sales of CP336,156. He also noted the companies are expecting approval and sales of either drug sometime in 2002 or 2003.
In 1994, Ligand signed a deal with American Home Products Corp., of Madison, N.J., to develop estrogen receptor modulators and that collaboration, too, has resulted in two products in clinical testing: TSE 424 for osteoporosis in Phase II, and ERA 923 in Phase I for the treatment of breast cancer. The AHP collaboration is bringing in up to $3 million in milestones for each compound and in "the mid- single digits" in royalties, Maier said.
"With four compounds in the clinic, we've had very productive relationships with Pfizer and AHP," Maier said. "A little further down these products should lead to a nice business and revenue stream. We believe this collaboration with Parke-Davis will further those opportunities and are optimistic that this is an excellent collaboration."
Ligand reported in August that the company expects to see profitability in 2000. Ligand's stock (NASDAQ:LGND) closed Thursday at $7.312, up 75 cents per share.