UNITED STATES
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): June 23, 2010
LIGAND PHARMACEUTICALS INCORPORATED
(Exact name of registrant as specified in its charter)
| Delaware | 001-33093 | 77-0160744 | ||
| (State or other jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
11085 North Torrey Pines Road, Suite 300, La Jolla, California 92037
(Address of principal executive offices) (Zip Code)
(858) 550-7500
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 8.01. | Other Events. |
As previously announced, Ligand Pharmaceuticals Incorporated (“Ligand”), pursuant to an Agreement and Plan of Merger dated October 26, 2009 (as later amended, the “Merger Agreement”), acquired Metabasis Therapeutics, Inc., a Delaware corporation (“Metabasis”) on January 27, 2010 by a reverse triangular merger, with Metabasis surviving as a wholly-owned subsidiary of Ligand (the “Merger”).
One of Metabasis’ assets was and is a partnered drug development program with Hoffmann-La Roche Inc., Roche Palo Alto LLC and F. Hoffmann-La Roche Ltd. (together, “Roche”) in hepatitis C under that certain Collaboration and License Agreement, effective as of August 7, 2008, by and among Roche and Metabasis, as amended from time to time (the “Roche Agreement”).
In the Merger, the former Metabasis stockholders received an aggregate of $1,607,679 cash and an aggregate of 35,147,294 of each of four separate series of contingent value rights (“CVRs”) governed by the four respective Contingent Value Rights Agreements entered into on January 27, 2010 as contemplated by the Merger Agreement.
One such Contingent Value Rights Agreement, the “Roche CVR Agreement,” provided for the payment to the holders of the “Roche CVRs”, pro rata and after certain defined reductions, of 65% of any milestone payments or 68% of any royalties paid by Roche under the Roche Agreement, or 65% of the net proceeds of any sale of those program rights, less any costs and expenses reasonably incurred by Ligand in connection with such sale, in each case as received by Ligand or Metabasis after October 1, 2009.
As previously announced, as a result of Roche dosing the first patient in a Phase I clinical trial of RG7348, a Licensed Compound (as defined in the Roche Agreement), Metabasis earned, and on May 12, 2010 Roche paid to Metabasis, a $6,500,000 milestone payment.
Pursuant to the Roche CVR Agreement, an aggregate amount calculated as follows is distributable to the holders of the Roche CVRs in respect of such milestone payment: 65% of the gross milestone payment = $6,500,000 x 65% = $4,225,000; less 1% of such product to be contributed to the Stockholders’ Representative Fund established pursuant to the Merger Agreement = $4,225,000 - $42,250 = $4,182,750; and further less the full $1,500,000 for ARE-SD Region No. 24, LLC (the “Landlord”), as the former landlord of Metabasis’ headquarters building, pursuant to the terms of Section 10 of the Agreement for Termination of Lease and Voluntary Surrender of Premises dated July 21, 2009 (as later amended) between the Landlord and Metabasis = $4,182,750 - $1,500,000 = $2,682,750.
Pursuant to the Roche CVR Agreement, Ligand has delivered the $2,682,750 to Mellon Investor Services LLC, as Rights Agent under the Roche CVR Agreement (the “Rights Agent”). On July 1, 2010, the Rights Agent shall distribute the $2,682,750 pro rata (i.e., approximately $0.076 cash for each Roche CVR) to the holders as of June 28, 2010 (the third business day before July 1, 2010) of the Roche CVRs, all as previously announced.
Ligand cautions potential buyers and sellers of Roche CVRs that because the amount of the cash distribution is relatively large in proportion to the current market value of Roche CVRs, Ligand believes that a special securities-markets rule for establishing the ex-distribution date applies with respect to this cash distribution. Under the standard rule, the ex-distribution date would have been June 26, 2010. However, it is Ligand’s understanding that under the special rule, the actual ex-distribution date with respect to this distribution will in fact be July 2, 2010. Accordingly, persons who as of June 28, 2010 are holders of record of Roche CVRs but who sell the Roche CVRs in the market with a trade date of July 1, 2010 or earlier likely will be required to remit the cash distribution onward to the person who bought the Roche CVRs from them. As a result, Ligand believes that persons who acquire Roche CVRs on a trade date of July 2, 2010 or later will not be entitled to the economic benefit of this cash distribution, but persons who acquire Roche CVRs on a trade date of July 1, 2010 or earlier will be entitled to the economic benefit of this cash distribution.
Persons with further questions about the ex-distribution date and record date procedures are urged to consult with their own financial advisers.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LIGAND PHARMACEUTICALS INCORPORATED | ||||
| Date: June 23, 2010 | ||||
| By: | /S/ CHARLES S. BERKMAN | |||
| Name: | Charles S. Berkman | |||
| Title: | Vice President, General Counsel and Secretary | |||