Ligand, Chiva Pharmaceuticals enter strategic relationship to develop multiple Ligand assets, technology

Ligand Pharmaceuticals Incorporated announced today that it has entered into a strategic relationship with Chiva Pharmaceuticals, Inc. to develop multiple Ligand assets and technology in China and potentially worldwide. Chiva is being granted licenses to begin immediate development in China of Ligand's two clinical-stage HepDirect programs, Pradefovir for hepatitis B and MB01733 for hepatocellular carcinoma. Additionally, Ligand is granting Chiva a non-exclusive HepDirect technology license for the discovery, development and worldwide commercialization of new compounds in hepatitis B (HepB), hepatitis C (HepC) and hepatocellular carcinoma (HCC).

Chiva is developing these programs to address the high unmet medical need in China's fast growing pharmaceutical market. The Chinese government is offering financial support to pharmaceutical companies like Chiva who can develop innovative therapies in China for public health needs such as infectious disease and oncology.

Under the terms of the agreement, Ligand has the potential to earn over $100 million in milestones and royalties on potential sales. In addition, Ligand has the potential to receive a 10% equity position in Chiva and will also receive an undisclosed percentage of any sublicensing revenue generated from sublicensing of collaboration compounds to third parties in a major world market. Ligand is entitled to receive initial 2011 license payments that total $1 million.

"This strategic partnership with Chiva is a major event as it creates our first significant opportunity to introduce Ligand's products and drug discovery capability in China, which is the world's fastest-growing pharmaceuticals market. In addition, this is a substantive transaction where we have created new value and upside potential from recently acquired assets. Less than a year ago, we brought into Ligand a basket of assets through our acquisition of Metabasis, and now this deal validates our ability to leverage our acquisitions and business platform to generate new deals and upside," said John L. Higgins, President and Chief Executive Officer of Ligand Pharmaceuticals.

"The assets and technology that we have licensed to Chiva are especially well-suited to address unmet medical needs in China. After speaking with multiple Chinese companies about this type of alliance, we selected Chiva based on the quality of its U.S.-trained development team. Chiva's leadership also includes senior scientists who have extensive development experience with novel drugs. We look forward to a productive, long-term relationship with Chiva, and are excited about the potential to add development alliances throughout Asia," added Higgins.