september 2012 rs preso [compatibility mode]

Ligand Corporate PresentationSeptember 5, 2012

Safe Harbor StatementThe following presentation contains forward‐looking statements regarding Ligand’s prospects, plans and strategies, drug development programs and collaborations. Forward‐looking statements include financial projections, expectations regarding research and development programs, and other statements including words such as “will,“ “should,” “could,” “plan,” etc. Actual events or results may differ from Ligand’s expectations. For example, expense reductions and drug development programs may not be realized. In addition there can be no assurance that Ligand will achieve its guidance in 2012 or thereafter.

The forward‐looking statements made in the presentation are subject to several risk factors, including, but not limited to, statements regarding intent, belief, or current expectations of the Ligand, its internal and partnered programs, including Promacta, Kyprolis (Carfilzomib), Melphalan, Ligand’s reliance on collaborative partners for milestone and royalty payments, regulatory hurdles facing Ligand's and partner's product candidates, uncertainty regarding Ligand's and partner's product development costs, the possibility that Ligand's and partner's drug candidates might not be proved to be safe and efficacious and commercial performance of Ligand's and/or its partner's products. Additional risks may apply to forward‐looking statements made in this presentation.

The risk factors facing Ligand are explained in greater detail in Ligand’s filings with the SEC, including the most recently filed annual reports on Form 10‐K and quarterly reports on Form 10‐Q, as well as other public filings.

While forward‐looking statements reflect our good faith beliefs (or those of the indicated third parties), they are not guarantees of future performance. We disclaim any obligation to update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.

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Overview of Ligand

• Founded in 1987 in La Jolla, CA

• Rich heritage of drug discovery, development and partnering

• Contributed to the development of over 40 novel clinical candidates and a dozen approved medicines

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Heritage

Overview of Ligand

• Leveraged history into a new business model centered around partnering and acquisitions

• Large portfolio of over 60 partnered programs

• 5 acquisitions in last 4 years have added significantly to our portfolio and increased depth of partnerships with many

• Most recent acquisition (CyDex Pharmaceuticals) added enabling technology to our portfolio

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Today

3 Focus Points for Investors

Unprecedented Asset Portfolio

Revenue Expansion Potential

Investment Leverage

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Ligand’s Portfolio ‐ Partnered ProgramsOver 25 Different Partners

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Big Biotech

Big Pharma

Specialty Pharma

Biotech

Over 60 fully funded partnered programs Nearly 50% in Phase 2 or Later

Ligand’s Portfolio ‐ Partnered Programs

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Phase 230%

Carbamazepine‐IV (Captisol‐enabled carbamazepine)CNSPhase 3Est. Primary Completion Date: Dec. 20121

Among others, includes::

Aprela (SERM+Premarin)Menopause relatedEst. NDA 2012

Dinaciclib (CDK Inhibitor)Oncology, multipleEst. Phase 3 Initiation 2012

Delafloxacin (fluoroquinolone)InfectionEst. Phase 3 Initiation 2H 2012

1 http://clinicaltrials.gov/ct2/show/NCT01128959?term=Captisol&rank=7

Ligand’s Currently Unpartnered Projects

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Internal R&D Assets Muscle Wasting

Diabetes

Blood Disorders

Seizure

SARMPhase 2 Ready

Melphalan IVPivotal Trial 2012

Glucagon ReceptorAntagonistEst. IND 2013

Topiramate IVPreclinical

EPO Receptor AgonistPreclinicalGCSFPreclinical

Infectious Disease

Oncology

HepDirect® TechnologyEst. IND 2013

Illustrative Revenue Growth Potential

2015

2012

"Shots on Goal" Vision

Turning into Reality

Promacta ®Kyprolis ®Avinza ®Conbriza®Nexterone®Captisol Material SalesLicense/Milestone Fees

PromactaKyprolisConbrizaNexteroneAvinzaAprelaDinaciclibCE‐ClopidogrelCE‐MelphalanCE‐CarbamazepineLilly CE ProgramHospira CE ProgramCaptisol Material SalesLicense/Milestone Fees$30 million$150 million

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~ 50%Royalty

2012 Revenue Composition2012 Financial Guidance

~ 25%Material Sales

~ 25%License FeesNOLs exceed $450 million

19.9 million shares outstanding

• $30M in total revenue• $25M in operating expenses

Includes $6M non‐cash expense

Projected Financial Highlights

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Promacta and Kyprolis

• Ligand has valuable partnerships with GSK and Onyx for two potential blockbuster drugs

• Estimated peak sales for Promacta and Kyprolis combined could achieve $4 billion annually

• Annual royalty revenue for these two products could approach $200 million combined

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Primetime

Promacta

Promacta

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• Marketed by GSK for ITP

• Significant royalty interest

• Major upcoming 2012 catalysts

• Long patent protection through 2027

• Potential for major label expansion

• Strong partner significantly investing, 25+ active clinical trials

A Potential Blockbuster Driver for Ligand Growth

Oral Medicine that Boosts Platelets to Treat Thrombocytopenia

The Blood Business has Three Main Markets

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Disease Main Products 2011 ~Revenues

Red Blood Cells Anemia Epogen® Aranesp®Procrit®

$9 Billion

White Blood Cells Neutropenia Neupogen®Neulasta®

$5.8 Billion

Platelets Thrombocytopenia Promacta® Nplate®

$0.4 Billion

Blood Market Overview

• Anemia and Neutropenia markets have been well served by blockbuster drugs for about 20 years. These are large, will established markets

• Thrombocytopenia is a very young high‐growth market with the introduction of two medicines approximately 3 years ago

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$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

Anemia Neutropenia Thrombocytopenia

$9 Billion

$5.8 Billion

$0.4 Billion

$ Billion

s

Markets have been around ~20 years

Infant market, huge growth potential

2011 ~Revenues

Thrombocytopenia contains a number of “sub‐markets” of rarethrombocytopenia‐inducing diseases, similar to anemia, neutropenia markets

Medical Need is Real, Life Threatening, and Unmet

Thrombocytopenia: Major Need & Opportunity

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120

0

200

400

600

800

1000

1200

1400

1600

1800

Patie

nt #s (000s)

Patients needed to potentiallyreach $1B

in sales

1505

35120 20

140 20 15

250120

60

340

400

Sources: Aplastic Anemia (<1000 patients): (N Engl J Med 2012; 367:11‐19)

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Promacta Market Opportunity

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ITP

HCV

HORT and other

Marketed

sNDA Submitted

Phase 2

Estimated Peak Annual Revenue Potential

$500 Million

$1.5 Billion

$2.0 Billion

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• Currently approved in 89 countries

• 39 new countries on‐line in last 18 months

• Continuing review in ~ 12 others

• GSK investing significant global resource

Promacta/RevoladeGlobal brand with significant momentum

Promacta/Revolade

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Global brand with significant momentum

Approvals as of June 2012

Promacta

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Annual ITP Sales ($M)

$‐

$20

$40

$60

$80

$100

$120

$140

2009 2010 2011

USEUOther

• Dramatic Revenue Acceleration252% growth in 2011

• Promacta is Gaining ITP Market Share vs. Nplate19% in 4Q1033% in 4Q11

• Ligand is entitled to a net 8.3% royaltyon $1 billion in annual sales

$ millions

A Potential Blockbuster Driver for Ligand Growth

2009 2010 2011 2012

Current Niche Indication: ITP

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• Product in infancy – patents and royalties through 2027

• With higher sales, Ligand earns higherroyalty rates

• Multiple major indications still indevelopment

Strong Quarterly Revenue Growth for Ligand

Ligand

Promacta Reven

ue ($

millions)

$2.5

$2.0

$1.5

$1.0

$0.5

$0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Promacta

• Next big potential indication for Promacta is thrombocytopenia in Hep C patients

• GSK submitted sNDA for US and Europe in May on basis of positive Phase 3 trials

• Granted 6‐month accelerated review period (PDUFA date November 2012)

• Potential blockbuster market opportunity for Hep C indication alone

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Hepatitis C‐related Thrombocytopenia

HCV: Significant Promacta Opportunity Before AND After "All‐Oral” Regimens Arrive

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• Alpha interferon and Ribavirin are still mainstay of HCV treatment. "All Oral" has not become a commercial reality yet.

• If “All Oral" regimens are approved, timing outlook by third parties is between two to four years

• "All Oral" regimens treat HCV, but they do not boost platelets or treat thrombocytopenia. The sickest HCV patients with cirrhosis may still require platelet intervention during treatment

• Developing countries have a higher rate of HCV genotypes other than genotype 1. Due to lower cost and the disease strain, interferon‐based regimens may still be a treatment standard in the large markets in the developing countries

Oncology‐related ThrombocytopeniaSignificant unmet medical need

Worldwide patient population of ~100,000 annually

MyelodysplasticSyndrome (MDS)

Bone MarrowSuppression

1 Expert Opinion: Thrombocytopenia & Myelodysplastic Syndrome http://www.medscape.org/viewarticle/565023

Patients develop severe cytopenia, require frequent transfusions

Excess bleeding results in major complications or

death for nearly 25% of patients1

Damage to platelet forming cells in bone

marrow

Can limit treatment

Leads to transfusions and transplants

PromactaDevelopment in Oncology‐related Thrombocytopenia

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Chemotherapy‐induced (CIT)

Acute MyeloidLeukemia (AML)

Fast‐growing cancer

Abnormal red blood cells and platelets can quickly crowd out normal cells

Cancers of the Blood

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Jefferies Published Revenue Outlook for Promacta/Revolade

Jefferies Equity Research Report for GSK dated May 3, 2012 BUY rating, sales figures converted from GBP to US Dollars

$ millions

• If Promacta revenue reaches $667 million in 2016, Ligand will earn approximately $50 million in royalties

The Need for an Enabling Solubility Technology

27Sources: Chemical & Engineering News, 2010, American Pharmaceutical Review ‐ Solubility Roundtable, 2011

4 out of 5 Drug candidateshave poor solubility



4 out of 5

2 out of 5

Drug candidateshave poor solubility

Marketed drugshave poor solubility



4 out of 5

2 out of 5

Drug candidateshave poor solubility

Marketed drugshave poor solubility

Kyprolis™

Primetime HighlightKyprolis™ for Multiple Myeloma

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• Kyprolis (carfilzomib) is formulated with Ligand’s Captisol

• Improved solubility with Captisol enabled significantly reduced drug load

• Kyprolis™ has shown compelling efficacy data

• 20%‐range response rates across patients resistant/not responsive to 5 classes of currently approved multiple myeloma drugs

• Strong potential for improvements over Velcade® forms

• Despite important strides in the last decade, multiple myeloma remains uniformly fatal

Primetime HighlightKyprolis™ ‐ How did we get here?

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2005

+ CarfilzomibCollaboration


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Kyprolis™

Primetime HighlightKyprolis™ for Multiple Myeloma – Detailed History

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2005

2008

2009

2011

2012

Proteolix signs Collaboration Agreement for Captisol‐enabled® IV formulation of Carfilzomib

Carfilzomib Phase 2 study initiation

Onyx acquires Proteolix ‐ $851 million total potential payments

Ligand acquires Captisol® through CyDex acquisition

Kyprolis NDA approved

Primetime HighlightKyprolis™ for Multiple Myeloma ‐ Opportunity

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• Multiple myeloma market expected to exceed $8 billion by 2016

• Clear view of Kyprolis’ potential contribution and significance to multiple myeloma treatment

• Analyst projects Kyprolis generating: $1b ‐ 2016$2b ‐ 2020

Sources: EvaluatePharma and Decision Resources, Sanford Bernstein

• Ligand entitled to receive milestones, royalties and Captisol materials sales

CDK Inhibitor

• Merck has studied dinaciclib in multiple Phase 2 studies for cancer

• Dinaciclib is cyclin dependent kinase (CDK) inhibitor‐ inhibiting CDK blocks cell‐cycle progression and promotes apoptosis

• Merck is making a significant commitment to increase its oncology presence

• Ligand is entitled to receive milestones and royalties from the dinaciclib program

12 in 2012 Highlight

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Dinaciclib for Oncology

• What is CDK and why is it important?• Family of kinases that are critical regulators of cell

cycle Progression• Cell cycle dysregulation is hallmark of cancer

inhibiting CDK should block cell‐cycle progression and promote apoptosis

• Dinaciclib inhibits CDK‐1, ‐2, ‐5 and ‐9

• In what diseases has Dinaciclib been studied?• Phase II studies have been completed in ALL/AML,

CLL/CML, lymphoma, advanced breast/lung cancer and mantle cell lymphoma/B‐cell CLL

• NCI conducting studies in Stage IV melanoma and multiple myeloma

• Why is Dinaciclib interesting?• Novel kinase inhibitors are the next wave of

therapeutics in the oncology space• Novel NME with strong patent protection

Dinaciclib (CDK Inhibitor)

CDK Control of the Cell Cycle(sandwalk.blogspot.com‐2009)

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Carbamazapine

Partnership HighlightIV Carbamazepine for Epilepsy

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• I.V. carbamazepine is formulated with Ligand’s Captisol

• Carbamazepine used in:• Management of complex partial seizures• Treatment of generalized tonic‐clonic seizures (the

most common type of generalized seizure) • Adjunct in patients with secondary or partial epilepsy

• Captisol enabled the IV form of widely used oral sodium channel blocker

• IV improvement in onset of action• Ideal for hospital/emergency settings

• Currently in Phase 3 development by Lundbeck• Estimated primary completion date December 2012