With two retinoid-based compounds in late-stage clinicaldevelopment for cancer, Ligand Pharmaceuticals Inc. is heading backinto the capital markets for a follow-on offering, expecting to raiseabout $40 million.

San Diego-based Ligand, which is developing small-molecule drugsthat act on intracellular receptors to modulate gene expression,registered to sell 2.75 million shares. Based on the $14.125 closingprice Thursday of the company's stock (NASDAQ:LGND), Ligandwould raise $39 million. Ligand ended Friday unchanged at $14.125.

Following the offering, Ligand will have 30.86 million sharesoutstanding.

Underwriters Bear, Stearns & Co. Inc., Robertson, Stephens & Co.LLC and Hambrecht & Quist LLC, all of New York, have the optionof buying another 412,000 shares to cover overallotments.

As of June 30, 1996, Ligand had $56.7 million in cash and reported anet loss of $17 million for the first six months of the year.

Ligand Friday also said it was repaying $3.75 million of a $10million loan from corporate partner, American Home Products Corp.,of Madison, N.J., in Ligand stock. Conversion of that portion of thenote, which has a 7.75 percent interest rate, to 374,626 Ligand sharessaves the company $290,000 a year in interest payments.

Ligand's option of converting the loan to stock was part of a 1994agreement, worth $44 million, with American Home Products'subsidiary, Wyeth-Ayerst Laboratories, of Radnor, Pa. Thecollaboration was formed to develop drugs aimed at estrogen andprogesterone receptors for treatment of diseases affecting women.

Ligand's drug development targets two families of transcriptionfactors involved in controlling cellular activity _ the first areintracellular receptors and the second are signal transducers andactivators of transcription (STATs). The former are triggered byhormones and the latter respond to cytokines in regulating geneexpression.

The company said its small molecules are designed to either promoteor inhibit the activity of the intracellular receptors or STATs bymimicking the binding proteins or blocking them.

The most advanced compounds are retinoid-based drugs designed toactivate intracellular receptors. Retinoids are naturally occurringhormones chemically related to vitamin A and are known to control avariety of cellular activities.

Ligand this fall is launching three open-label Phase III studies ofTargretin, a retinoid-derived compound under development in oraland topical forms for cutaneous T-cell lymphoma.

Another retinoid-based drug, Panretin, is being evaluated in a topicalgel in Phase III trials for cutaneous Kaposi's sarcoma in AIDSpatients. Panretin is under development by Allergan Ligand RetinoidTherapeutics Inc., of San Diego, a joint venture between Ligand andAllergan Inc., of Irvine, Calif.

In addition to the Allergan joint venture and alliance with AmericanHome Products, Ligand has drug development collaborations withSmithKline Beecham plc and Glaxo Wellcome plc, both of London;Abbott Laboratories, of Abbott Park, Ill.; Sankyo Co. Ltd., of Tokyo;and Pfizer Inc., of New York.

Ligand's drug development focuses on cardiovascular andinflammatory diseases, as well as women's health problems andcancer. n

-- Charles Craig

(c) 1997 American Health Consultants. All rights reserved.

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