Ligand Pharmaceuticals Incorporated announced has entered into an agreement with Cardinal Health PTS, LLC, a subsidiary of Cardinal Health Inc., for the manufacturing and packaging of Avinza (morphine sulfate extended-release capsules). Under a long-term contract, Avinza will be manufactured at the Cardinal Health facility located in Winchester, Kentucky. Ligand and Cardinal Health have an existing relationship for the fill/finish of Targretin capsules.

Under the terms of the new agreement, upon the successful completion of technology transfer and regulatory approval, manufacturing will commence for a five-year term. Ligand has an option to extend for an additional two-year period. During the interim, Ligand and Cardinal Health will work closely together in the qualification and validation of the facility. Ligand and Cardinal Health intend to file for regulatory approval in 2005. Financial terms of the contract were not disclosed.

"This new manufacturing and packaging agreement with Cardinal Health represents an important step toward realizing the full potential of Avinza by providing for a near doubling of current production capacity as well as a second source of supply to meet the accelerating demand and sales of Avinza," said Gian Aliprandi, senior vice president, technical supply and international operations. "We believe the addition of Cardinal Health as a second source, together with activities to expand current capacity, are necessary to fully support the long-term success of our co-promotion of Avinza with Organon and its market potential. Cardinal Health has been a good manufacturing partner of Ligand, and we are pleased to expand our relationship to include Avinza."

In March 2002, the US Food and Drug Administration granted marketing approval for Avinza for once-daily treatment of moderate to severe pain in patients who require continuous, around-the-clock opioid therapy for an extended period of time. Avinza was developed by Elan, which licensed the US and Canadian rights to Ligand in 1998. Under its license and supply agreement with Elan, amended in 2002, Ligand retained the right to qualify and purchase Avinza from a second manufacturing source.