425

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): September 9, 2009

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.)

10275 Science Center Drive, San Diego, California 92121

(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:

x 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 7.01 Regulation FD Disclosure

On September 9, 2009, Ligand Pharmaceuticals Incorporated (“Ligand”) officers John Higgins and Syed Kazmi gave a presentation at the Thomas Weisel Partners Healthcare Conference in Boston, Massachusetts. A copy of the slides used in the presentation, and a transcript of the presentation, are attached to this report as Exhibit 99.1 and Exhibit 99.2 and are incorporated by reference herein.

Additional Information and Where to Find It

On August 23, 2009, Ligand entered into an Agreement and Plan of Merger (the “Merger Agreement”), with Neurogen Corporation, a Delaware corporation (“Neurogen”) and Neon Signal, LLC, a direct wholly-owned subsidiary of Ligand (“Merger Sub”). Under the Merger Agreement, Ligand will acquire Neurogen pursuant to a reverse triangular merger, whereby Merger Sub will merge with and into Neurogen, with Neurogen as the surviving corporation (the “Merger”).

Ligand intends to file with the SEC a Registration Statement on Form S-4, which will include a proxy statement of Neurogen and other materials relevant to the proposed Merger and related transactions. The Registration Statement and related Neurogen proxy statement (when they become available), and any other documents filed by Ligand or Neurogen with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Ligand by going to Ligand’s Investor Relations website page at www.ligand.com.

Item 8.01 Other Events

See Item 7.01 above.

Item 9.01 Financial Statements and Exhibits

The following exhibits are attached to this Current Report on Form 8-K:

(d) Exhibits.

Exhibit No.	Description
99.1	Slides used in Ligand’s September 9, 2009 presentation at the Thomas Weisel Partners Healthcare Conference in Boston, Massachusetts.
99.2	Transcript of Ligand’s September 9, 2009 presentation at the Thomas Weisel Partners Healthcare Conference in Boston, Massachusetts.

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: September 9, 2009
	By:	/s/ Charles S. Berkman
	Name:	Charles S. Berkman
	Title:	Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Slides used in Ligand’s September 9, 2009 presentation at the Thomas Weisel Partners Healthcare Conference in Boston, Massachusetts.
99.2	Transcript of Ligand’s September 9, 2009 presentation at the Thomas Weisel Partners Healthcare Conference in Boston, Massachusetts.

EX-99.1

1

John L. Higgins

President and Chief Executive Officer

Syed Kazmi, Ph.D.

Business Development and Strategic Planning

Exhibit 99.1

2

Safe Harbor Statement

•

The following presentation contains forward-looking statements regarding the proposed

acquisition of Neurogen by Ligand, including projections regarding expectations for

potential research and development payments, savings in operational costs, cash burn

rates, timing of achieving positive cash flow, and potential revenue and profits of a

combined company.

•

The forward looking statements made in the presentation are subject to several risk

factors, including, but not limited to the reliance on collaborative partners for milestone

and royalty payments, regulatory hurdles facing product candidates, uncertain product

development costs, disputes regarding ownership of intellectual property, the commercial

success of approved products, the failure of Neurogen’s stockholders to approve the

merger, Ligand’s or Neurogen’s inability to satisfy the conditions of the merger, or that

the merger is otherwise delayed or ultimately not consummated, and a failure of the

combined businesses to be integrated successfully.  Additional risks may apply to

forward looking statements made in this presentation.

•

The risk factors facing Ligand and Neurogen are explained in greater detail in the

Company’s and Neurogen’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.

3

Additional Information and Where to Find It

•

Ligand intends to file with the SEC a Registration Statement on Form S-4, which will include a proxy statement of

Neurogen and other relevant materials in connection with the proposed transaction. The proxy statement will be mailed

to the stockholders of Neurogen. Investors and security holders of Neurogen are urged to read the proxy statement and

the other relevant materials when they become available because they will contain important information about Ligand,

Neurogen and the proposed transaction. The proxy statement and other relevant materials (when they become

available), and any other documents filed by Ligand or Neurogen with the SEC, may be obtained free of charge at the

SEC's web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed

with the SEC by Ligand by going to Ligand’s Investor Relations page on its corporate website at www.ligand.com.

Investors and security holders may obtain free copies of the documents filed with the SEC by Neurogen by going to

Neurogen’s Investor Relations page on its corporate website at www.neurogen.com. Investors and security holders of

Neurogen are urged to read the proxy statement and the other relevant materials when they become available before

making any voting or investment decision with respect to the proposed transaction.

•

Ligand and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies

from the stockholders of Neurogen in favor of the proposed transaction. Information concerning Ligand’s directors and

executive officers is set forth in Ligand’s proxy statement for its 2008 annual meeting of shareholders, which was filed

with the SEC on April 29, 2008, and annual report on Form 10-K filed with the SEC on March 5, 2008.

•

Neurogen

and

its

respective

directors

and

executive

officers

may

be

deemed

to

be

participants

in

the

solicitation

of

proxies from the stockholders of Neurogen in favor of the proposed transaction. Information about Neurogen’s executive

officers and directors and their ownership of Neurogen common stock is set forth Neurogen’s amended annual report on

Form

10-K,

which

was

filed

with

the

SEC

on

April

30,

2009.

Investors

and

security

holders

may

obtain

more

detailed

information regarding the direct and indirect interests of Neurogen and its respective executive officers and directors in

the acquisition by reading the proxy statement regarding the merger, which will be filed with the SEC.

4

Fundamentals of a Strong Biotech Company

•

Strong balance sheet

•

Spending discipline

•

Strong discovery capabilities and track record

•

Robust pipeline of partnerable

assets

•

Revenue diversity

Operating structure that has the potential to

generate substantial cash flows and profitability

5

Ligand Company Overview

•

Company with great assets

-

Two royalty streams, plus two more royalty-bearing products recently approved

-

Ten pharma

deals with over 21 development programs and over $600 million of

potential milestones

-

Prolific drug discovery engine has produced multitudes of drug candidates

•

Highly successful drug discovery capabilities

-

Focus on early-stage drug discovery and development

-

Partner pipeline assets at earliest value inflection point

•

Leadership focused on shareholders and market credibility

-

Cost-efficient R&D business with tight spending discipline

-

Clear communication and transparency with investors

-

Clarity on how to drive a business forward in this market environment

•

Commitment to driving shareholder value and to transparency on the business

with goal to drive strong cash flow and earnings

6

Ligand –

Recent events

•

Signed agreement to acquire Neurogen, public company with drug

screening assets, cash, pipeline and a drug partnership

•

PROMACTA

®

Phase I/II trial initiated with MDS

•

CONBRIZA™

approved in Europe for the treatment of osteoporosis

•

FABLYN®

Approved in Europe for the treatment of osteoporosis

•

Entered

license

agreement

with

ParinGenix

for

Phase

II

COPD

drug

•

Completed

lease

buyout,

substantially

reducing

contractual

lease

costs

going forward

•

Initiated Phase I SARM trial

•

Wyeth JAK 3 data presented at ACS

7

Pending Neurogen Acquisition

Stock-for-Stock Acquisition

Consideration

-

Net proceeds from sale of real  

estate

-

Net proceeds from sale of Aplindore

-

$3 million for Phase III trial initiation

for Merck VR1 program

-

$4 million if license H3 program

CVRs

$11 million in Ligand Common Stock,

plus potential for Four Contingent Value

Rights (CVR)

Transaction Value

4Q 2009

Anticipated Closing Date

Ligand to acquire Neurogen (NRGN)

Deal

Actual timing of the transaction will depend on a number of factors, some of which are beyond either company’s control.

8

Opportunity with Neurogen Acquisition

•

Acquire fully funded research partnership

Merck VR1 program

•

Access pipeline assets

Numerous opportunities including oral EPO and H3 antagonist

•

Leverage drug discovery capabilities of both companies

Accelerated Intelligent Drug Design platform

•

Gain estimated $7 million in net cash

•

Acquire substantial NOLs

before limitations

9

Partnership Highlights

10

Significant Value in Royalty Partnerships

•

Numerous deals with ten pharmaceutical companies

•

More than 21 different programs being pursued including the largest untapped

markets

Muscle wasting, COPD, thrombocytopenia, pain, asthma, Alzheimer’s

•

More than $600 million in potential R&D and milestone payments from existing

deals

Ligand has one of the strongest, most diverse royalty partnership rosters

in the small cap biotech universe 

11

Pharmaceutical Partnerships

12

Combined Product Pipeline

13

•

PROMACTA approved for treatment of

thrombocytopenia in patients with chronic

immune ITP in November 2008.

•

Two Phase III Hepatitis trials ongoing

•

Phase III trial in Chronic Liver Disease

ongoing

•

Phase I/II MDS trial initiated Spring 2009

•

Phase I Sarcoma trial ongoing

•

Submitted MAA for the long-term treatment

of ITP in December 2008.

•

LGD-4665 and other Ligand TPO molecules

licensed to GSK in December 2008

&

Collaboration Highlights

14

Thrombocytopenia -

Causes of Disease

•

Decreased production of platelets

Myelodysplastic

syndrome

Hepatitis C

Cancer in the bone marrow (leukemia)

Aplastic

anemia

•

Increased destruction of platelets

Autoimmune, such as ITP

Sequestration in the spleen

•

Drug-induced

Myelosuppression

by chemotherapy regimens

Anti-virals

in Hep

C therapies

Thrombocytopenia is a condition in which there is an abnormally low level of

platelets in the blood. 

Regardless of the underlying cause, thrombocytopenia leads to decreased platelet counts,

which puts patients at greater risk for bleeding and serious adverse events.

15

Medical Significance of Thrombocytopenia (US)

(Estimated markets)

Potential

Treatable

Patients

ITP

~60,000

Hepatitis C

~120,000

Chronic Liver Disease                                           

~400,000

Myelodysplastic

syndrome

~20,000

Leukemia / lymphoma

~50,000

Chemotherapy induced thrombocytopenia

~140,000

Intensive care unit –

acquired

~500,000

Bone marrow transplants

~50,000

Lupus

~100,000

Cirrhosis

~113,000

HIV/other

~600,000

~ 2 million platelet transfusions per year

16

ParinGenix

License

•

In June 2009, Ligand granted exclusive license rights to ParinGenix

for three issued U.S. patents relating to certain desulfated heparin

compounds

•

ParinGenix

lead compound, PGX-100, is an intravenous formulation

of

2-O,

3-O

desulfated

heparin

which

is

in

a

Phase

IIb

trial

for

the

treatment of acute COPD exacerbations (~700,000 patients require

hospitalization every year)

•

License terms

$350,000 upfront payment

3% royalty on net sales in the US

•

The transaction adds another potential lucrative royalty stream to

Ligand's already promising list of partnered, fully funded, royalty-

bearing programs

17

SERM Collaborations

•

Bazedoxifene

Monotherapy:   

CONBRIZA approved in Europe in April 2009

Viviant pending approval in the U.S.

•

Bazedoxifene

in Combination with Premarin

CE (APRELA):

Phase III data published in Fertility and Sterility

NDA planned for in 2010

•

Lasofoxifene

(FABLYN) for osteoporosis

treatment

•

Approved in Europe in March 2009 for the

treatment of osteoporosis

•

NDA pending approval in U.S.; FDA issued

Complete Response Letter in January 2009

18

Collaboration Highlights

&

•

Collaboration began in November 1997

•

Partnership resulted in lead and back-up

p38 kinase

inhibitor compounds

•

Anti-inflammatory therapeutics

Ongoing Clinical Trials:

•

Phase II in rheumatoid arthritis

•

Phase II in psoriasis

•

Phase II in atherosclerosis

The Opportunity:

•

Large, established target markets

•

If successfully developed, Ligand estimates

product could be on market in 2014  

p38 Kinase

Inhibitors

19

&

•

Collaboration began in October 1998

•

Collaboration produced multiple drug          

candidates

Completed Clinical Trials:

•

Phase II in COPD

•

Phase II in asthma

•

Phase II in psoriasis

The Opportunity:

•

Large, established target markets

•

If successfully developed, Ligand estimates

product could be on market in 2014

Chemokine

Receptor

CXCR2

Program

Collaboration Highlights

20

Collaboration Highlights

&

Other Research Program

Ongoing Clinical Trials:

•

Enzyme inhibitor in Phase II for oncology

•

Candidate for inflammatory diseases in Phase I

•

Candidate for respiratory diseases in Phase I

Recent Event:

•

BACE inhibitor for Alzheimer’s in development,

resulting in a milestone payment of $1 million

21

Collaboration Highlights

&

•

Collaboration began March 2006

•

Identify and advance molecules in chosen

therapeutic programs to development  

stage

Milestone and Royalty:

•

7 compounds identified to date

•

Success-based milestone payments and

up to double-digit royalties upon

commercialization

•

Seventh lead compound identified resulting in

a milestone payment of $500,000

Broad Discovery Program

22

Collaboration Highlights

&

•

Collaboration began in December 2006

$3 million per year in research funding

•

Alliance based on development of JAK3

kinase

inhibitors for systemic administration

for immunological and inflammatory

diseases

•

Success-based milestone payments and

up to double-digit royalties upon

commercialization

JAK-3 Kinase

23

SARM Program Overview

24

Selective Androgen Receptor Modulator Program

•

LGD-4033 is a selective androgen receptor modulator (SARM),

designed to provide the benefits of androgen receptor stimulation on

skeletal muscle and bone without the side effects of the currently

marketed androgens

•

LGD-4033 has demonstrated increased skeletal muscle mass and

bone mineral density while sparing the prostate in males and

masculinizing

effects in females in preclinical models

•

A Phase I study was initiated in summer 2009 to evaluate the safety,

tolerability and pharmacokinetic profile of LGD-4033 (expected

completion 1H2010)

•

Target

Indications:

Sarcopenia

&

frailty,

cachexia,

osteoporosis,

hypogonadism, sexual dysfunction

Market Need:

Convenient, prostate-sparing androgen receptor modulator with

activity in bone, muscle and CNS

25

Research Engine

26

Ligand Research Platform

•

Technology

-

Gene reporter assays for nuclear receptors and JAK/STAT-coupled receptors

-

Ultra high-throughput screening platform combined with the world’s largest

proprietary

compound

collection

(5

+

million

compounds)

•

Highly flexible screening platform: cell-free and cell-based assays; functional and

binding assays

•

Consistently high rate of success across all classes of targets

•

Preclinical Development

-

Extensive track record both independently and with partners

-

Total of 48 clinical candidates discovered and 24 INDs

filed

•

Solid track record for publications

-

Quality journals: Science, Cell, Endocrinology, Journal of Medicinal Chemistry

-

First reports for many important discoveries:

•

Hematopoietic receptor-targeted small molecule drugs

•

Non-steroidal selective androgen receptor modulators

•

Non-steroidal selective progesterone receptor modulators

•

RXR-selective retinoid

27

Ligand Development & Partnerships

•

Clinical strategy to run Phase I-II programs through proof-of-concept

•

13 NDAs

and MAAs

submitted for Ligand discovered drugs

•

5 approved products from Ligand technology: Targretin, Panretin,

Promacta, Fablyn, Conbriza

•

Established track record for partnering with over 40 collaborations

with more than 30 different companies

•

Experience in multiple therapeutic areas

•

More than 21 different programs being pursued including the largest

untapped markets

Muscle wasting, COPD, thrombocytopenia, pain, asthma, osteoporosis,

Alzheimer’s

28

Pro Forma Financial Forecast

* Assumes Neurogen Acquisition closes in Q4 2009

•

Projected to have approximately $50 million in cash at year-end 2009

•

Given our current outlook on the combined businesses, 2010 pro forma operating

business projected to be approximately cash-flow neutral with expenses in line with

revenue

•

Potential for additional revenue and cash infusion from new license agreements

•

More than $500 million in potential Net Operating Loss carry-forwards before

limitations

Robustly capitalized company that

has sufficient cash

to make it to profitability without additional financings

29

Potential Near-Term Milestone and Events

•

Completion of Schering Plough CXCR2 Trial in COPD

•

Compound nomination from JAK-3 program by Wyeth for pre-clinical

development

•

Compound nomination by GSK from drug discovery collaboration

•

Nomination of Oral EPO drug candidate

•

VIVIANT FDA Action

•

Potential for over $10 million in milestone payments from existing

collaborations

Milestone or Event

•

SARM Phase I trial completion

•

PROMACTA EU NDA Action

•

PROMACTA data at ASH

EX-99.2

Exhibit 99.2

Ligand Pharmaceuticals, Inc.

Thomas Weisel Partners Healthcare Conference 2009

September 9, 2009

Moderator: Glad to have with us here today John Higgins from Ligand. He’s going to be giving a presentation, and if we have some time at the end, we will entertain some Q&A. And again, these are interactive sessions, so feel free to raise your hand and ask your question. And also, Dr. Syed Kazmi, as well, from Ligand.

John Higgins: Steve, thank you. It’s a pleasure to be here. Good morning, and welcome back from your Labor Day weekend. It’s back to school season. Ligand has had a productive past couple of months, and we’re poised for, I think, an exciting finish to 2009 and a very promising 2010.

I’m going to share the presentation with my colleague, Dr. Kazmi. Before I begin, I would like to just make some remarks about forward-looking statements. In this presentation, we will be making forward-looking statements about our business, our partnerships, our projections and outlooks. In addition, we recently announced our pending acquisition of Neurogen. There are some remarks in here about Neurogen and our expectations for the business, assuming that the deal closes. That deal has not closed, yet. For all these reasons, I direct you to our public company filings with the SEC, our 10-Ks and 10-Qs. Also, there will be an S-4, as well as a proxy statement filed for that merger shortly, and we direct you to those documents for further information about the merger process.

As we talk about Ligand, I’d like to just set the stage by describing our views of what the fundamentals are of a strong biotech company. There are a lot of great companies here, there are many, many more that aren’t here. But generally, when we look at small to mid cap biotech, our view is that, in this market environment, the strongest companies are those with a strong balance sheet, tight spending discipline, knowing when and where to spend money, strong discovery capabilities. That is really the backbone of a good biotech company, having a good core discovery asset, a robust pipeline of partnerable assets, where your investment in discovery is paying off, where you can partner or find other ways to value those assets, and finally, revenue diversity. All the great research in the world is meaningless to investors, unless there is a way to make money. That is the enterprise we are after. And in the blue box in the bottom of the slide, we believe that the operating structure should have a potential to generate substantial cash flows and profitability. This is our view of what makes a strong biotech company. We believe that Ligand fits this model very, very well.

Just a quick overview. Ligand, right now, we’re a company with great assets. We have two royalty streams, plus two more products that were recently approved. I’ll discuss those in more detail. We have 10 pharmaceutical deals, with over 21 development programs. The programs not only have a chance to generate substantial milestones, over $600 million in milestones, but also future royalties. Now, we also have a very successful drug discovery engine. The credentials are well laid out, as Syed will talk about a bit more.

Page 1

Ligand Pharmaceuticals, Inc.

Thomas Weisel Partners Healthcare Conference 2009

September 9, 2009

We have a leadership that’s focused on market credibility. We try to be transparent, be consistent, and give information that will help investors understand our business. We also really strive to work to run a cost efficient business, ultimately, with the goal to drive shareholder value. We are very shareholder focused.

I want to give just some highlights on recent events. Again, it’s been a very busy past several months. We signed an agreement just a few weeks ago to acquire Neurogen. They’re a public company based in Connecticut. They have drug screening assets, cash, pipeline, and a drug partnership. PROMACTA, a drug from a major partnership we have with GSK, the drug is approved. I’ll talk more about that, but recently, they have initiated another study for MDS, a cancer indication. Two products, CONBRIZA, a product that Wyeth has, and FABLYN, both estrogen receptor modulators for osteoporosis, those were approved in Europe. They have not launched yet. We are awaiting approval of one or both of those products. We entered a license agreement with ParinGenix for a Phase II program. We received a cash payment up front. We completed, just a few weeks ago, a lease buyout. This is important. We had substantially more space than we needed and it was a 13 year lease. So we were able to reduce our operating costs going forward, significantly. We initiated a Phase I SARM trial, and also a partner, Wyeth, had data just last week under JAK-3 program at the American Chemical Society.

Just a brief overview of the Neurogen acquisition. Again, this deal was just announced a few weeks ago. It’s a very nice fit for Ligand. It’s an acquisition for a small public company. It’s a stock for stock acquisition. The transaction value will issue be approximately 11 million dollars in Ligand stock, plus we’ll give their shareholders a contingent value right, a chance to earn more cash based on various activities. They’re in the process of selling the real estate, and also one of their research programs. If they are successful, their shareholders will receive the proceeds from those sales. There are some milestones based on programs. There’s a partnership with Merck. If Merck enters a Phase III trial, Ligand will receive a $10 million cash payment from Merck, and we’ll share three million dollars of that with Neurogen. And finally, we will inherit a Histamine type III program, if we license that program, or otherwise partner, we’ll share $4 million of cash with Neurogen. The anticipated closing date is next quarter.

This is an important acquisition for us. While it is a small deal, relative to the size of Ligand, it brings us diversity in partnership assets, pipeline, and discovery assets. We closed on a transaction about 10 months ago with Pharmacopeia. That was a very successful acquisition. It was an attractive valuation. The integration went smoothly, and we believe that we are a substantially stronger company for having brought Pharmacopeia on board.

Page 2

Ligand Pharmaceuticals, Inc.

Thomas Weisel Partners Healthcare Conference 2009

September 9, 2009

Neurogen, while it’s a different company with a different focus, it brings some of the same resources. Merck is a fully funded research project. They were in Phase II for their Vanilloid Receptor 1 program. It was an oral program, they are now looking at a non-oral route, and are in the pre-clinical phase, hoping to move to phase I shortly. We have several opportunities to bolt-on new pipeline assets, including an oral EPO program. We have our own oral erythropoietin program. We think their assets will compliment ours, particularly if we partner that program. They also have an H3 antagonist program, which is a promising area of research for several drug companies right now. They have a drug discovery platform. Just as Ligand does, we have a combinatorial screening, a high throughput screening platform, we have biological assays. They bring what they call the AIDD, Accelerated Intelligent Drug Design platform. They have, currently, a nice balance of cash, even after transaction expenses and repayment of debt. We expect to assume an estimated $7 million in net cash, and also, we’ll acquire some tax assets, as well. So it’s a diverse acquisition, and a very nice fit with Ligand.

Just a couple of highlights on our partnership. We have, really, a very exciting array of partnerships, numerous deals with 10 pharmaceutical companies, more than 21 different programs. As we think about Ligand, Ligand does its own drug research, our own drug discovery. We’ve had significant success in the past. When we at the point hit a partnering stage, we’ll try to partner the program at the earliest inflection point. That may yield cash up front, some milestones, and future royalties. What this creates for us is a roster of royalty assets, that while surely not everything will work out, we think, given the length of the list of partners and the diversity of targets, it’s a well balanced story. We’re targeting programs that are treating some of the largest untapped markets, including muscle wasting, COPD, thrombocytopenia, pain, Alzheimer’s, asthma, etc., and we get substantial revenue potential out of milestones and royalties.

When we look at our picture of all the company logos, it’s a who’s who list. We have several pending mergers. A couple of these logos will go away with the Merck-Schering merger, the Wyeth-Pfizer merger, etc. But a very substantial list of high quality partners around the world.

This is a picture of our combined product pipeline. I’m not going to go through every line. This is, I think, a very substantial picture that quickly illustrates the value that Ligand has. At the top, there are two products that we’re earning royalties off of right now. One was just approved 8 months ago, and it still has about 11 to 12 year patent life. The next two products, VIVIANT and CONBRIZA, were approved in Europe over the last six months. Neither has launched yet, but we’re anticipating the launch of one or both of those products, perhaps within the next year. They both are pending U.S. approval, as well. As we go down the list there, there’s one drug in a couple of different

Page 3

Ligand Pharmaceuticals, Inc.

Thomas Weisel Partners Healthcare Conference 2009

September 9, 2009

Phase III trials. PROMACTA, we have a whole roster of Phase II assets, mostly driven by Schering-Plough, and Bristol-Meyers. These are fully funded research programs. We’re anticipating completion of those studies and presuming a positive data advancement to Phase III, and so on. We have some Phase I assets, and we haven’t even listed all of our preclinical assets.

On this chart, there are 29 lines, most of these programs are partnered already, a few of them are unpartnered, but it’s a very, very promising roster of partnered programs that, depending on the timing of launch and the various royalty rates, could generate substantial revenues and cash flows for Ligand.

I’m going to give just some remarks about one of our programs, and then Syed will give some remarks about other programs. Our lead program right now, lead partner program, is PROMACTA. This is a drug that was discovered in collaboration with GSK. We entered a partnership in the late ‘90s. The product was first developed and approved for ITP, Immune Thrombocytopenia Purpura. It was approved about nine months ago, and the products have launched. We’re now earning royalties off that product.

GSK is making a substantial investment in this program in a variety of other indications. Namely, they’re now conducting two Phase III studies for hepatitis, a Phase III trial for chronic liver disease, they initiated a Phase I and II trial for MDS, there’s a Phase I sarcoma trial ongoing. It’s a long list, but I think the takeaway is that there’s a very substantial investment by GSK. It is our belief that GSK views this as a promising drug with a big market potential. The MAA has been submitted in Europe for ITP, and to expand a franchise, GSK, less than a year ago, licensed a follow-on TPO receptor molecule from us at the end of 2008.

Thrombocytopenia is a condition where there’s an abnormally low level of platelets. When we think of hematology, there are three main elements of the blood. There’s red blood cells, white blood cells, and platelets. As we know, there are great drugs to boost red blood cells and white blood cells, but before this drug and another product that Amgen recently launched, there really were limited options to boost platelets. Thrombocytopenia happens when there’s decreased production of platelets that could be caused by a various disease, hepatitis, cancer, etc., increased destruction of platelets, you could have an autoimmune indication or drug induced, where, for instance, chemotherapy, destroys the platelets. So a variety of causes of low platelet count. If you have low platelets, you’ve got a high risk of bleeding, internal bleeding, bruising, petechia, risk of bleeding within the brain and getting a hemorrhagic stroke. So very significant market, and when we look at the treatable patient population, it is very large. The first market is a smaller market. ITP is a good proof of concept category, we believe very compelling data for both safety and efficacy, and now, as I’ve already talked about, GSK is conducting a battery of other studies. This is

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a large opportunity. We enjoy royalties that start at close to 5%, and quickly moves up to close to 10%. We disclose all the royalties, virtually all the royalties in our portfolio, when we’re permitted to by our partners. All that information is available in our 10Qs and 10Ks. But it’s a market that has a chance to generate significant revenues for us, longer term.

With that, I’ll turn it over to my colleague, Syed.

Syed Kazmi: So, continuing with an overview of our fully funded royalty bearing partnered programs. We have two collaborations, as John pointed out earlier, in the area of selective estrogen receptor modulators. The first collaboration is with Wyeth. Bazedoxifene is approved in Europe, and it’s pending approval in U.S. Bazedoxifene at Wyeth is also being developed in combination with Premarin for the treatment of menopausal symptoms and NDA for that is planned for 2010.

Another collaboration on SERM is at Pfizer, Lasofoxifene, again, approved in Europe earlier this year, and pending approval in U.S. So with these two SERMs, next year we anticipate generating royalty revenues after these products are launched in Europe.

Another collaboration is with BMS in the area of B38 MAP kinase inhibitors. The collaboration started about 12 years ago. It has generated various leads. Right now, BMS is running three Phase II studies in rheumatoid arthritis, psoriasis, and arthrosclerosis. The larger of the three, the rheumatoid arthritis trial, completed accrual in July this year, and the data are expected next month, according to clinicaltrials.gov. These are large established market opportunities, and if successfully developed, we anticipate the product could be on market in 2014.

Moving on to another collaboration, this is for inflammation and immunological diseases. This collaboration is with Schering-Plough. The collaboration started back in 1998. We have information based on clinicaltrials.gov and other sources that Schering has completed all three Phase II trials in COPD, asthma and psoriasis, and now this is moving on to next stage in the development pathway. Again, these are large opportunities, and if successfully developed, we anticipate that this product could be on market in 2014.

In addition to the collaboration with the CXCR2 in COPD that I just talked about, there are other leads that are being pursued in this collaboration with Schering-Plough. We have a Phase II program in oncology, two Phase I programs in inflammation and respiratory diseases, and then there is a BACE inhibitor program for Alzheimer’s disease in preclinical development. So this collaboration with Schering-Plough has been extremely productive and moving on really well.

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The next research collaboration is with GSK for several different targets in multiple therapeutic indications. So far, in less than three years, we have been able to nominate seven different compounds, resulting in a total milestone payment of $3.5 million, then, of course, they are success based milestone payments and up to double-digit royalties upon commercialization on a product by product basis.

Another research collaboration with Wyeth has been going on really well. This collaboration started in December 2006, and it is still ongoing, with $3 million a year in research funding. The collaboration is based on developing oral JAK-3 kinase inhibitors for immunological and inflammatory diseases. This program, like others, also has success based milestone payments, and up to double-digit royalties on a product by product basis.

Moving on to our internal R&D program, I will highlight one, and rest you’ve seen in our pipeline chart that John pointed out earlier. The one program we have internally is on selective antigen receptor modulators. The lead compound was designed to provide the benefits of antigen receptor mediated effects on skeletal muscle and bone, without the undesirable side effects of currently marketed antigens. The compound has shown increased muscle mass and bone mineral density, while sparing the prostate in males, and undesirable virilization effects in females in several preclinical models. This is part of our second generation, next generation SARMs with very good selectivity when it comes to target tissues, such as muscle and bone versus undesirable targets, like prostate. A Phase I study was initiated in summer 2009 to evaluate the safety, tolerability, and PK of this molecule. We expect completion of Phase I studies in first half of next year. The target indications are all huge where there’s large, unmet medical need. We’re talking sarcopenia and frailty, muscle wasting or Chachexia associated with a variety of severe diseases, such as cancer, AIDS, end-stage renal disease, osteoporosis, hypogonadism, and sexual dysfunction.

In terms of our core technology, our research engine, Ligand has been known for its core technology platform, which was the basis for several collaborations, past or current. The technology involves Ligand dependent gene expression assays for nuclear receptors for JAK-STAT coupled receptors, which really resulted in some first-in-class molecules, including a small molecule mimetic for a large growth factor, the PROMACTA that John talked about. We also have ultra high throughput screening platform. This platform is very versatile, it’s very flexible. It has the world’s largest and very diverse compound collection library of 5 million plus compounds. You can do all kinds of ultra high throughput assays in the system with very high, consistently high rate of success across all types of targets, be it enzymes, receptors, iron channels, and so on. Coupled with this, as John pointed out, once the deal with Neurogen is closed, we can now bring in yet another novel technology to add to our technology platform, which is the AIDD.

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We have a great preclinical development track, total of 48 clinical candidates with 24 IND filed. And as I pointed out earlier, the science is solid, we are looking at first-in-class molecules, publications in top journals, and just to wrap up, an overview of development of partnerships, our clinical strategy is to bring the program to the proof of concept to do what we do best, work on novel targets, bring novel compounds through clinical development to clinical proof of concept and partner at the right value inflection point across the spectrum.

Our Ligand discovered drugs have been through 13 NDAs and MAAs, five products have been approved, using Ligand technology. Targretin and Panretin were the two retinoid products that Ligand had a few years ago, and now we have PROMACTA, FABLYN, and CONBRIZA approved in U.S. and Europe. As John pointed out, 40 collaborations with more than 30 different companies, experience in multiple therapeutic areas, and again, 21 different programs are currently being pursued, including the large established markets, such as muscle wasting, COPD, pain, asthma, osteoporosis, and Alzheimer’s. And with that, I’ll invite John to continue.

John Higgins: Syed, thank you. Just a couple of slides, and then we’ll wrap it up and take some questions. Just an overview, now having looked at some of the partnerships in our research platform, I’d like to focus you on our pro forma financial forecast. Now, this does assume a Neurogen acquisition, that the acquisition closes in the fourth quarter. If we pick up approximately $7 million in cash, we believe that we’ll finish the year with nearly $50 million in cash at the end of 2009, and given our current outlook on the combined businesses, for 2010 pro forma operating business is projected to be approximately cash flow neutral, with expenses in line with revenue. And this is significant. The last couple of years, we’ve actually sustained a very significant operating burn. That’s a typical biotech model. You do good drug research, but you spend a lot of money along the way. Ligand is now at a point, and just with our second quarter financial report in early August, our outlook is such that revenues, we’re looking at royalty revenues, contract payments, milestone payments, revenues will be in line with expenses next year. We’re estimating in the low to mid $30 million range. And accordingly, the business would be cash flow neutral. That’s significant, as we see several opportunities to earn, potentially, new license payments, milestones from other partnerships, as well as potentially increased royalties, with the expansion of existing markets for PROMACTA or approvals of new products.

We, again, also have more than $500 million in potential net operating loss carry forward. This is significant. It’s a very large base. They will be limited, for a variety of tax code reasons. However, presuming we do turn profitable, we’ll actually be able to use those tax assets.

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And finally, I just want to leave you with a slide that outlines what we view as our potential near-term milestone in events. This is out, roughly, the next six months or so. PROMACTA, again, an exciting and lead drug partnership for us. We expect data at ASH in New Orleans in December. GSK is working on more studies, but also, building their long term safety database. We also know that PROMACTA, an NDA was filed in Europe at the end of last year. So we anticipate EU action on that. Our SARM trial, our androgen receptor program, single dose study will be finished this fall, and the multi-dose next spring, a chance for publications and presentations for that data. We have a potential for earning over $10 million in milestone payments from existing collaborations. This is within the next six months. There are few collaborations where there are some milestones enumerated. We can’t disclose them for confidentiality reasons, but presuming the research is successful, we have a chance to earn fairly substantial cash milestone payments. We’re looking forward to the completion of Schering-Plough’s CXCR2 trial in COPD. We’re anticipating action on VIVIANT, US FDA action on Wyeth’s osteoporosis drug. Internally, we believe that we’ll be able to nominate the lead candidate for our oral erythropoietin program. We’re looking to Wyeth to nominate a candidate for JAK-3, this is a hot target. A lot of research is going on in this area, but we think that Wyeth may be able to nominate a compound for JAK-3. And finally, to date, we’ve seen GSK nominate seven compounds out of our discovery platform, they may be able to nominate another one. This is a, we think, a long list of substantial news events. There are some revenue events, there are regulator events, there are clinical events, research events. This belies, we think, the strength of our story. It shows the diversity of Ligand and the potential. And again, this is our outlook for just the next six months or so.

With that, I appreciate your time and attention. We have a few minutes for questions, if there are any.

Male: Yes, in the back.

Q: [Number of outstanding shares after closing the deal with Neurogen]

John Higgins: We’ll have approximately 117 million.

Q: I was just wondering if you could maybe comment a little bit more on your strategy. You said you like to partner these programs out at certain inflection points. How do you balance that timing, with respect to wanting to kind of keep the cost structure lean, but also, at the same time, knowing that you’re sacrificing some downstream economics. And as you look past 2010, becoming cash flow neutral, is the next step for the company maybe keeping some of these programs in-house a little bit further, maybe retaining some kind of cost and profit sharing options, down the road?

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John Higgins: Steve, thank you. As far as deal making outlook, our view is while there’s a presumption that you can hold an asset longer, run it through Phase II, maybe get into Phase III, and then get better terms, we actually don’t necessarily agree with that. Partly, the last five to eight years, big pharma is paying much more to license quality assets. They’re doing deals earlier, they want more control over the clinical and regulatory path, and they are providing, we believe, much higher economic terms now than they were, let’s say, in the mid ‘90s. So when you offset how much more marginal value you might get against the excess, the extra cost and risk that the company would take on, we actually think the trade off favors earlier licensing. Now, if you only have one program to license and you license that early, then you could wait a long time before the magic happens, so to speak, before you really have something to talk about. And in the case of Ligand, we did a series of deals in the mid ‘90s that are now paying dividends for us. We have royalties, we’re getting some late stage clinical events, so we have a number of programs that are punctuating our story from a news flow perspective, and in a rich pipeline of early stage assets. So we think, partly, the economic and the risk exchange warrants an earlier licensing, but also, the composition, the diversity, the depth of the Ligand story also gives us an opportunity to license earlier, and really focus on what we’re good at. Historically, we’ve been a very, very good drug discovery company. So that’s our outlook, short term. It may evolve, based on future performance, but for right now, we’ll focus, again, on licensing at earlier stages.

Q: Do you believe you can turn profitable?

John Higgins: Presuming the revenues sustain or grow, yes, absolutely. We believe that we can invest in a substantial research business without meaningfully growing expenses.

Moderator: We’re out of time. Thank you, John and thank you, Dr. Kazmi.

END

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