Ligand Pharmaceuticals Incorporated has earned from Pfizer Inc a milestone payment of approximately $2.0 million, payable in 181,818 shares of Ligand stock held by Pfizer, as a result of Pfizer's confirmation of submission on August 19, 2004, of a New Drug Application (NDA) to the US Food and Drug Administration (FDA) for lasofoxifene for the prevention of osteoporosis in postmenopausal women.

Under the terms of the agreement between Ligand and Pfizer, Ligand is entitled to receive an additional milestone upon approval of lasofoxifene, if obtained, and, if thereafter marketed, royalty payments equal to 6 per cent of net sales of lasofoxifene worldwide for any indication, of which 1.3875 per cent of net sales have been purchased from Ligand by Royalty Pharma. Ligand will receive 181,818 shares of stock and will retire the shares from treasury stock, according to a company release.

"If approved, lasofoxifene could provide an important new therapeutic option to postmenopausal women who are at risk for osteoporosis," said Andres Negro-Vilar, Ligand's executive vice president of research and development and chief scientific officer. He added, "Clinical trials of next-generation SERMs such as lasofoxifene show an increase in bone mineral density and reduction of LDL cholesterol at least comparable to currently available first-generation SERMs."

Long-term phase II studies show that lasofoxifene has an improved profile in bone parameters, such as markers of bone resorption and one- and two-year lumbar spine bone mineral density with significant improvement over the current leading SERM, raloxifene (Evista). Similarly, LDL lowering was also more pronounced with lasofoxifene than with the standard dose of raloxifene. Phase III data submitted in the NDA is expected to be published during the course of the NDA review.

Under an existing agreement between Ligand and Royalty Pharma, Royalty Pharma has two remaining options to purchase royalties for a total of $26.5 million in two equal payments a total of 0.8 per cent of three SERM products' net sales. These options are exercisable as NDA acceptance and approval milestones are achieved during 2004 and 2005.

The first of these options for $13.25 million must be exercised within 30 days of NDA acceptance by the FDA on the first of either of the Pfizer or Wyeth SERMS. If both remaining options were exercised, Royalty Pharma would have rights to a total of 2.1875 per cent of net sales of three SERM products for a period of ten years, the release says.

Lasofoxifene is a selective estrogen receptor modulator (SERM). According to the National Osteoporosis Foundation, eight million American women have osteoporosis and almost 27 million women are estimated to have osteopenia (low bone mass), placing them at increased risk for osteoporosis.