Ligand Pharmaceuticals Incorporated has entered into an exclusive, worldwide license agreement with GlaxoSmithKline (GSK) under which Ligand has licensed worldwide exclusive rights to Ligand's LGD-4665 product candidate and its other thrombopoietin (TPO)-related molecules to GSK. LGD-4665 currently is in phase-II for treatment of thrombocytopenia, a condition of low-platelet levels commonly associated with a diverse range of clinical disorders.

Under the terms of the agreement, GlaxoSmithKline will pay Ligand $5 million as an upfront license fee, up to $158 million in development and commercial milestones and a 16 per cent royalty on net sales. In the first year of sales, royalties will be one-half of the regular royalty rates. GSK has the exclusive right to develop, manufacture and commercialize LGD-4665, as well as other TPO related molecules discovered by Ligand.

"This agreement is another step in our strategy of partnering early-development assets to increase shareholder value while acutely focusing on resource-efficient, novel pipeline assets. The timing and structure of the deal is excellent for Ligand as it potentially provides a robust royalty rate and milestone stream for a product that has, thus far, demonstrated excellent and differentiated safety and efficacy," said John L Higgins, president and chief executive officer of Ligand Pharmaceuticals. "In addition, this license agreement is a validation of our programme by a world leading pharmaceutical company with clear development success in this field, and permits Ligand to prioritize its development expenses on other promising programmes going forward."

"We believe LGD-4665 will complement GSK's TPO receptor agonist programme that has resulted in the development of Promacta/Revolade (eltrombopag), which was recently approved by the FDA," said Ad Rawcliffe, senior vice president, Worldwide Business Development and R&D Finance, GSK. "We are pleased to extend our commitment to develop novel therapeutics to address patients' needs."

Under the terms of the agreement, GlaxoSmithKline will direct all product development and commercialization and will be responsible for all costs going forward for development, patent maintenance and prosecution, and commercialization. Ligand reported at the December 2008 American Society of Haematology annual meeting that LGD-4665 has the potential for weekly dosing, has differentiated clinical pharmacology from other products on the market and has promising potential efficacy in ITP, based on interim clinical study results.

Ligand discovers and develops new drugs that address critical unmet medical needs of patients with muscle wasting, frailty, hormone-related diseases, osteoporosis, inflammatory diseases and anaemia. Ligand's proprietary drug discovery and development programmes are based on its leadership position in gene transcription technology.