Ligand Pharmaceuticals Inc. announced Wednesday a five-yearcollaboration with Glaxo Inc. to develop drugs to treat andprevent atherosclerosis.
Glaxo, the U.S. unit of London-based Glaxo Holdings plc, ispicking up much of the research costs and also agreed to makea $10 million equity investment in the San Diego-baseddeveloper of receptor-based drugs.
Glaxo has purchased $7.5 million of Ligand's preferred stock,which could be converted into 6 percent equity interest. It hascommitted an additional $2.5 million to buy stock in Ligand'splanned initial public stock offering. Ligand said it is revisingan IPO filing it made last April with the Securities andExchange Commission and is optimistic about breaking into thenow-cold IPO market this fall.
Glaxo is to fund all its own research, an undisclosed portion ofLigand's research and make milestone payments to Ligand.Glaxo is responsible for clinical development of any resultingproducts for which it will have exclusive worldwide marketingrights. Ligand is to receive royalties on those product sales.
The collaboration aims to combine Ligand's research intohormone-activated receptors technology with Glaxo's researchand development capabilities and marketing muscle.
Ligand has discovered novel biological mechanisms that areinvolved in the control of plasma lipid and cholesterol levels,according to David E. Robinson, its president and chiefexecutive officer. It has identified several hormones and afamily of intracellular receptors that are believed to play majorroles in regulating lipid and cholesterol production anddistribution.
The collaboration will comb Glaxo's library of compounds forpotential drugs that act as agonists or antagonists on fourreceptors identified by Ligand, Robinson said.
"We will be seeking small molecules which operate throughthese novel mechanisms to correct the disturbances whichaccelerate atherosclerosis," said Robert B. Stein, Ligand's vicepresident of research.
Ligand has signed two other corporate collaborators, which alsomade equity investments in Ligand.
In July, Ligand formed a joint venture with Allergan Inc. todevelop dermatology and ophthalmology drugs based onretinoid technology. Allergan is funding the venture for $15million and made a $20 million equity investment in Ligand, inwhich it now holds a 13 percent interest. The project isdeveloping Ligand's leading contenders to enter clinical trials,probably in 1993, Robinson said.
Pfizer Inc. was signed to a five-year collaboration in May 1991to develop drugs to treat osteoporosis. Pfizer also invested inLigand and holds a roughly 13 percent interest. The jointventure has produced several lead compound candidates,which are now in preclinical animal testing, Robinson said.
"Less than one-quarter of our technology is partnered withanybody," he said. Ligand retains rights to several cancerapplications and potential treatments for hypertension, obesityand inflammation. At least one more collaboration is expectedto be announced this month.
The collaborations should help Ligand make its case in supportof an IPO, Robinson said. "While the market has not been afriend, the success of Ligand has been a help."
Its first run at an IPO last April -- before the market stalled --would have given the company a market value of about $100million.
Robinson declined to speculate about how much value Ligandcould fetch in today's IPO market, saying only, "I certainlybelieve there been increased value since April."
-- Ray Potter Senior Editor
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