PROSPECTUS FILED PURSUANT TO RULE 424(B)(3)
LIGAND PHARMACEUTICALS INCORPORATED
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-131029
Prospectus Supplement No. 21
(to Prospectus dated April 12, 2006, as supplemented and amended by that
Prospectus Supplement No. 1 dated May 15, 2006, that Prospectus Supplement No. 2
dated June 12, 2006, that Prospectus Supplement No. 3 dated June 29, 2006, that
Prospectus Supplement No. 4 dated August 4, 2006, that Prospectus Supplement No.
5 dated August 9, 2006, that Prospectus Supplement No. 6 dated August 30, 2006,
that Prospectus Supplement No. 7 dated September 11, 2006, that Prospectus
Supplement No. 8 dated September 12, 2006, that Prospectus Supplement No. 9
dated October 2, 2006, that Prospectus Supplement No. 10 dated October 17, 2006,
that Prospectus Supplement No. 11 dated October 20, 2006, that Prospectus
Supplement No. 12 dated October 31, 2006, that Prospectus Supplement No. 13
dated November 14, 2006, that Prospectus Supplement No. 14 dated November 15,
2006, that Prospectus Supplement No. 15 dated December 14, 2006, that Prospectus
Supplement No. 16 dated January 5, 2007, that Prospectus Supplement No. 17 dated
January 16, 2007, that Prospectus Supplement No. 18 dated February 5, 2007, that
Prospectus Supplement No. 19 dated February 28, 2007, and that Prospectus
Supplement No. 20 dated March 5, 2007)
This Prospectus Supplement No. 21 supplements and amends the prospectus
dated April 12, 2006 (as supplemented and amended by that Prospectus Supplement
No. 1 dated May 15, 2006, that Prospectus Supplement No. 2 dated June 12, 2006,
that Prospectus Supplement No. 3 dated June 29, 2006, that Prospectus Supplement
No. 4 dated August 4, 2006, that Prospectus Supplement No. 5 dated August 9,
2006, that Prospectus Supplement No. 6 dated August 30, 2006, that Prospectus
Supplement No. 7 dated September 11, 2006, that Prospectus Supplement No. 8
dated September 12, 2006, that Prospectus Supplement No. 9 dated October 2,
2006, that Prospectus Supplement No. 10 dated October 17, 2006, that Prospectus
Supplement No. 11 dated October 20, 2006, that Prospectus Supplement No. 12
dated October 31, 2006, that Prospectus Supplement No. 13 dated November 14,
2006, that Prospectus Supplement No. 14 dated November 15, 2006, that Prospectus
Supplement No. 15 dated December 14, 2006, that Prospectus Supplement No. 16
dated January 5, 2007, that Prospectus Supplement No. 17 dated January 16, 2007,
that Prospectus Supplement No. 18 dated February 5, 2007, that Prospectus
Supplement No. 19 dated February 28, 2007, and that Prospectus Supplement No. 20
dated March 5, 2007), or the Prospectus, relating to the offer and sale of up to
7,790,974 shares of our common stock to be issued pursuant to awards granted or
to be granted under our 2002 Stock Incentive Plan, or our 2002 Plan, up to
147,510 shares of our common stock to be issued pursuant to our 2002 Employee
Stock Purchase Plan, or our 2002 ESPP, and up to 50,309 shares of our common
stock which may be offered from time to time by the selling stockholders
identified on page 110 of the Prospectus for their own accounts. Each of the
selling stockholders named in the Prospectus acquired the shares of common stock
upon exercise of options previously granted to them as an employee, director or
consultant of Ligand or as restricted stock granted to them as a director of
Ligand, in each case under the terms of our 2002 Plan.
We will not receive any of the proceeds from the sale of the shares of our
common stock by the selling stockholders under the Prospectus. We will receive
proceeds in connection with option exercises under the 2002 Plan and shares
issued under the 2002 ESPP which will be based upon each granted option exercise
price or purchase price, as applicable.
This Prospectus Supplement No. 21 includes the attached Current Report
on Form 8-K of Ligand Pharmaceuticals Incorporated dated March 15, 2007, as
filed by us with the Securities and Exchange Commission.
This Prospectus Supplement No. 21 should be read in conjunction with,
and delivered with, the Prospectus and is qualified by reference to the
Prospectus, except to the extent that the information in this Prospectus
Supplement No. 21 updates or supersedes the information contained in the
Prospectus.
Our common stock is traded on The Nasdaq Global Market under the symbol
"LGND." On March 14, 2007, the last reported sale price of our common stock on
The Nasdaq Global Market was $10.72 per share.
Investing in our common stock involves risk. See "Risk Factors"
beginning on page 7 of the Prospectus and beginning on page 62 of Prospectus
Supplement No. 13.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if the
Prospectus or this Prospectus Supplement No. 21 is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this Prospectus Supplement No. 21 is March 15, 2007.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 15, 2007
LIGAND PHARMACEUTICALS INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-20720
(Commission File Number)
10275 SCIENCE CENTER DRIVE,
SAN DIEGO, CALIFORNIA
(Address of principal executive offices)
(858) 550-7500 (Registrant's telephone number, including area code)
77-0160744
(I.R.S. Employer Identification No.)
92121-1117
(Zip Code)
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On March 15, 2007, Ligand Pharmaceuticals Incorporated (the "Company")
issued a press release announcing its consolidated financial results for the
quarter and year ended December 31, 2006. A copy of this press release is
furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
In accordance with General Instruction B.2. of Form 8-K, the
information in this Current Report on Form 8-K, including Exhibit 99.1, shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability
of that section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except as
expressly set forth by specific reference in such a filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
EXHIBIT NO. DESCRIPTION
99.1 Press release of the Company dated March 15, 2007.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned.
LIGAND PHARMACEUTICALS INCORPORATED
Date: March 15, 2007 By: /s/ Tod. G. Mertes
Name: Tod G. Mertes
Title: Interim CFO
EXHIBIT 99.1
CONTACTS:
Ligand Pharmaceuticals Incorporated Lippert/Heilshorn & Associates
John L. Higgins, President and CEO or Don Markley
Erika Luib-De la Cruz, Investor Relations DMARKLEY@LHAI.COM
(858) 550-7896 (310) 691-7100
LIGAND PHARMACEUTICALS ANNOUNCES FOURTH QUARTER RESULTS
CONFERENCE CALL BEGINS AT 4:30 P.M. EASTERN TIME TODAY
SAN DIEGO (MARCH 15, 2007) - LIGAND PHARMACEUTICALS INCORPORATED (NASDAQ: LGND)
today announced financial results for the three and 12 months ended December 31,
2006, and reviewed business highlights of the fourth quarter of 2006 and early
2007.
FINANCIAL RESULTS
The Company sold its commercial oncology products in October 2006. The
results of operations related to the oncology products have been reflected as
discontinued operations for all reporting periods discussed below.
For the fourth quarter of 2006, total revenues were $34.1 million,
compared with total revenues of $35.7 million in the fourth quarter of 2005. Net
product sales in the quarter were also $34.1 million, compared with net product
sales of $33.4 million in the prior-year fourth quarter. Total revenues in 2006
were $141.0 million, compared with total revenue of $123.0 million in 2005. Net
product sales were $137.0 million in 2006, compared with net product sales of
$112.8 million in 2005.
As a result of the sale of the Company's commercial oncology products
in the fourth quarter of 2006, and the sale of AVINZA(R) in February 2007,
Ligand expects that revenue in 2007 will be driven primarily by royalty payments
related to sales of AVINZA.
Operating expenses in the fourth quarter of 2006 were $32.4 million,
compared with operating expenses of $37.5 million in the fourth quarter of 2005.
Operating expenses in 2006 were $181.8 million (excluding a co-promotion
termination charge of $131.1 million), compared with operating expenses of
$144.9 million in 2005.
In accordance with the corporate restructuring announced in January
2007, the Company's full-time workforce will be reduced by approximately 76% and
the majority of commercial operations have been eliminated.
Net income in the fourth quarter of 2006 was $141.4 million, or $1.61
per diluted share, compared with a net loss of $2.8 million, or $0.04 per share,
in the comparable 2005 quarter. Income from continuing operations in the fourth
quarter of 2006 was $40.6 million, or $0.42 per diluted share, compared with a
loss from continuing operations of $3.7 million, or $0.05 per share, in the
comparable 2005 quarter. Income from discontinued operations in the fourth
quarter of 2006 was $100.7 million, or $1.00 per diluted share, compared with
income from discontinued operations of $1.0 million, or $0.01 per share, in the
comparable 2005 quarter.
The net loss in 2006 was $31.7 million, or $0.39 per share, compared
with a net loss of $36.4 million, or $0.49 per share, in 2005. Loss from
continuing operations in 2006 was $135.9 million, or $1.69 per share, compared
with a loss from continuing operations of $31.5 million, or $0.43 per share, in
2005. Income from discontinued operations in 2006 was $104.1 million, or $1.30
per share, compared with a loss from discontinued operations of $4.9 million, or
$0.06 per share, in 2005.
As of December 31, 2006, Ligand had cash, cash equivalents, short-term
investments and restricted cash of $212.5 million. As of February 28, 2007,
Ligand had approximately $415 million of unrestricted cash and investments.
Additionally, there is $35.0 million of cash held in escrow accounts following
the sales of AVINZA and our oncology product line to support potential
indemnification claims by the purchasers of those assets. To the extent not
utilized, the escrowed funds will become available at varying dates starting in
April 2007 through February 2008. The increase in cash since the end of 2006 is
due to the closing of the sale of AVINZA to King Pharmaceuticals on date
February 26, 2007.
"During the fourth quarter of 2006 and into early 2007, we took several
critical steps to restructure Ligand into a highly focused R&D and
royalty-driven biotech company," said John L. Higgins, President and Chief
Executive Officer. "The extent of the Company's transformation is truly
revolutionary, and our new business model and highly disciplined operating plan
are designed to deliver value to shareholders. Through the sale of AVINZA and of
our oncology product line, we now have significant financial resources to
continue the development of our proprietary programs and to consider returning
cash to our shareholders through a combination of a dividend and share
repurchase."
FOURTH QUARTER AND EARLY 2007 HIGHLIGHTS
Business highlights of the fourth quarter of 2006 and early 2007 include
the following:
o In March 2007, the Company announced changes to the board of
directors including naming John L.
Higgins, Todd C. Davis, Elizabeth M. Greetham and David M. Knott as
directors; and the resignation of directors John Groom, Irving S.
Johnson, Ph.D., Daniel Loeb, Carl C. Peck, M.D. and Brigette
Roberts, M.D. Additionally, director John W. Kozarich was named
chairman of the board, replacing Henry F. Blissenbach, who remains
a director.
o In February 2007, Ligand completed the sale of AVINZA (morphine
sulfate extended release capsules) and associated assets to King
Pharmaceuticals, Inc. in exchange for cash and royalties. Ligand
received $280.4 million in cash, which represents the purchase
price of $246.3 million, net of certain inventory adjustments of
$18.7 million and less $15.0 million placed into escrow, plus $49.1
million in reimbursement of payments previously made to Organon and
others.
o In January 2007, Ligand announced a restructuring including the
elimination of approximately 204 positions across all functional
areas. Associated with the restructuring, several executive
officers agreed to step down including the Company's Chief
Financial Officer, Chief Scientific Officer and General Counsel.
o In January 2007, John L. Higgins joined the Company as Chief
Executive Officer, President and in March 2007 was named a member
of its board of directors.
o In November 2006, Ligand announced initiation of clinical trials
for LGD-4665, an oral, small-molecule drug that mimics the activity
of thrombopoietin (TPO), a growth factor that promotes growth and
production of blood platelets.
o In November 2006, noteholders of Ligand's outstanding 6%
convertible subordinated notes, in the aggregate principal amount
of $128.2 million, converted all of the notes into 20.8 million
shares of common stock. Accrued interest and unamortized debt issue
costs related to the converted notes of $0.2 million and $1.0
million, respectively, were recorded as additional paid-in capital.
Ligand currently has approximately 101.0 million shares
outstanding.
o In October 2006, Ligand completed the sale of its oncology product
line to Eisai Co., Ltd. (placeCityTokyo) and Eisai Inc.
(placeStateNew Jersey) for $205.0 million. Of this, $185.0 million
was received in cash and $20.0 million was placed into escrow. The
sale included Ligand's four marketed oncology drugs ONTAK(R)
(denileukin diftitox), Targretin(R)
(bexarotene) capsules, Targretin(R) (bexarotene) gel 1% and
Panretin(R) (alitretinoin) gel 0.1%.
PROGRAM UPDATE
The Company also provided the following update on the status and
outlook of its key proprietary and partnered development programs.
Proprietary Program Highlights:
o LGD-4665, oral thrombopoietin (TPO) mimetic; as noted above, a
Phase I clinical trial began in November 2006; the trial is
expected to be completed in the fourth quarter of 2007.
o SARMs (selective androgen receptor modulators); as part of the
alliance with TAP, the company has exercised options for
development of certain compounds, and is engaged in preclinical
research at this time. Ligand anticipates advancing its lead drug
candidate, LGD-3303, into clinical studies in 2008.
o SGRMs (selective glucocorticoid receptor modulators): Although the
overall program will continue to advance, the Company has
determined not to pursue further development of LGD-5552, as Good
Laboratory Practice studies failed to demonstrate desired
preclinical safety characteristics. The Company expects to optimize
other potential drug candidates to advance to clinical studies.
Partnered Program Highlights:
o TPO Mimetics: Ligand's partner GlaxoSmithKline has completed a
Phase II/III trial and initiated another Phase III trial with
eltrombopag (Promacta)for idiopathic thrombocytopenic purpura.
GlaxoSmithKline plans to initiate a Phase III trial in 2007 for
hepatitis C.
o SERMs (selective estrogen receptor modulators): Ligand's partner
Wyeth, in the fourth quarter, reported positive Phase III trial
data for bazedoxifene (Viviant) for osteoporosis, and bazedoxifene
CE (Aprela) for menopause. Bazedoxifene (Viviant)
currently has a PDUFA date in April 2007, and an NDA filing for
bazedoxifene CE (Aprela)is expected in late 2007.
o SARMs (selective androgen receptor modulators): Ligand's partner
TAP is continuing its Phase I trial with the LGD-2941 program for
osteoporosis and frailty.
CONFERENCE CALL
Ligand management will host a conference call today to discuss this
announcement and answer questions; the call will begin at 4:30 p.m. Eastern time
(1:30 p.m. Pacific time). To participate via telephone, please dial
(800)323-0845 from the U.S. or (760)634-8407 from outside the U.S. A replay of
the call will be available until March 17, 2007 at 5:30 p.m. Eastern by dialing
(800) 642-1687 from the U.S. or (760)645-9291 from outside the U.S., and
entering passcode 2147471. Individual investors can access the Webcast through
CCBN's Individual Investor Center at www.earnings.com or by visiting any of the
investor sites in CCBN's Individual Investor Network. Institutional investors
can access the Webcast via CCBN's password-protected event management site,
StreetEvents (WWW.STREETEVENTS.COM).
ABOUT LIGAND PHARMACEUTICALS
Ligand discovers and develops new drugs that address critical unmet
medical needs of patients in the areas of thrombocytopenia, cancer, hepatitis C,
hormone-related diseases, osteoporosis and inflammatory diseases. Ligand's
proprietary drug discovery and development programs are based on its leadership
position in gene transcription technology, primarily related to intracellular
receptors.
FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements by Ligand
that involve risks and uncertainties and reflect Ligand's judgment as of the
date of this release. Actual events or results may differ from Ligand's
expectations. For example, we may not receive expected royalties on AVINZA(R)
from King Pharmaceuticals or any other partnered products or from research and
development milestones, and we may not be able to timely or successfully
transform the Company or advance any product(s) in our pipeline. In addition, we
may have indemnification obligations to King Pharmaceuticals or Eisai in
connection with the sales of the AVINZA and oncology product lines. Further, we
may not be able to complete our reductions in workforce on any particular or
expected timeframe, we may not realize significant operating savings due to our
restructuring, we may not be able to successfully or timely complete a
transformation of the company, our early stage programs or any specific business
or research initiative(s). In addition, we may not be able to successfully
implement our strategy, and continue the development of our proprietary
programs. Also, the Company's Board of Directors has not completed the analyses
necessary to determine the amount and timing of return of cash to stockholders.
The failure to meet expectations with respect to any of the foregoing matters
may reduce our stock price. Additional information concerning these and other
risk factors affecting Ligand's business can be found in prior press releases
available via WWW.NASDAQ.COM as well as in Ligand's public periodic filings with
the Securities and Exchange Commission at WWW.SEC.GOV Ligand disclaims any
intent or obligation to update these forward-looking statements beyond the date
of this release. This caution is made under the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.
[Tables to follow]
LIGAND PHARMACEUTICALS INCORPORATE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------------- --------------------------------------
2006 2005 2006 2005
----------------- ------------------ --------------------------------------
REVENUES: (unaudited)
Product sales $ 34,130 $ 33,426 $ 136,983 $ 112,793
Collaborative research and development and
other revenues, net -- 2,273 3,977 10,217
----------------- ------------------ ----------------- -------------------
Total revenues 34,130 35,699 140,960 123,010
----------------- ------------------ ----------------- -------------------
----------------- ------------------ ----------------- -------------------
OPERATING COSTS AND EXPENSES:
Cost of products sold 5,874 5,103 22,642 23,090
Research and development 12,913 9,309 41,926 33,096
Selling, general and administrative 21,671 13,035 79,748 56,168
Co-promotion 3,799 10,029 37,455 32,501
Co-promote termination charges (11,902) -- 131,078 --
----------------- ------------------ ----------------- -------------------
Total operating costs and expenses 32,355 37,476 312,849 144,855
----------------- ------------------ ----------------- -------------------
Gain on sale leaseback 3,119 -- 3,119 --
----------------- ------------------ ----------------- -------------------
Income (loss) from operations 4,894 (1,777) (168,770) (21,845)
----------------- ------------------ ----------------- -------------------
Other expense, net (388) (1,876) (5,503) (9,625)
Income tax benefit 36,124 -- 38,414 --
----------------- ------------------ ----------------- -------------------
Income (loss) from continuing operations 40,630 (3,653) (135,859) (31,470)
Discontinued operations 100,734 931 104,116 (4,929)
----------------- ------------------- --------------- -------------------
Net income (loss) $ 141,364 $ (2,722) $ (31,743) $ (36,399)
BASIC PER SHARE AMOUNTS:
Income (loss) from continuing operations $ 0.46 $ (0.05) $ (1.69) $ (0.43)
Discontinued operations 1.15 0.01 1.30 (0.06)
------------------ ------------------ --------------- -----------------
Net income (loss) 1.61 (0.04) (0.39) $ (0.49)
------------------ ------------------ --------------- -----------------
Weighted average number of common shares 87,677,662 74,057,555 80,618,528 74,019,501
DILUTED PER SHARE AMOUNTS:
Income (loss) from continuing operations $ 0.42 $ (0.05) $ (1.69) $ (0.43)
Discontinued operations 1.00 0.01 1.30 (0.06)
------------------- ------------------ ---------------- -----------------
Net income (loss) $ 1.42 $ (0.04) (0.39) $ (0.49)
------------------- ------------------ ---------------- -----------------
Weighted average number of common shares 100,460,489 74,057,555 80,618,528 74,019,501
LIGAND PHARMACEUTICALS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
DECEMBER 31, 2006 DECEMBER 31, 2005
ASSETS ------------------- -------------------
Current assets:
Cash, cash equivalents, short-term investments, and restricted
cash $ 210,662 $ 86,930
Other current assets 24,895 46,037
----------------------- ------------------------
Total current assets 235,557 132,967
Restricted investments 1,826 1,826
Property and equipment, net 5,551 22,483
Acquired technology, product rights and royalty buy-down, 83,083
net 146,770
Other assets 36 10,573
----------------------- -----------------------
Total assets $ 326,053 $ 314,619
======================= ========================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities, excluding deferred revenue, deferred gain,
co-promote termination liability, and debt $ 60,936 $ 77,348
Current portion of deferred revenue, net 57,981 157,519
Current portion of deferred gain 1,964 --
Current portion of co-promote termination liability 12,179 --
Current portion of debt 37,750 344
----------------------- -----------------------
----------------------- -----------------------
Total current liabilities 170,810 235,211
Long-term debt -- 166,745
Long-term portion of co-promote termination liability 81,149 --
Long-term portion of deferred gain 27,220 --
Other long-term liabilities 7,177 10,737
Common stock subject to conditional redemption 12,345 12,345
Stockholders' equity (deficit) 27,352 (110,419)
----------------------- -----------------------
Total liabilities and stockholders' equity (deficit) $ 326,053 $ 314,619
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