Ligand will continue to obtain research funding until the end of the year and is entitled to milestones at that time.

Ligand Pharmaceuticals is ending its collaboration with Organon to discover, develop, and commercialize therapeutics for a range of indications including neurological and immunological diseases. As part of the termination, Organon will continue to fund research until December 31. Additionally, Ligand reports that it may receive up to several million dollars in milestones upon expiration of this wind-down period.

Organon, which is now a part of Schering-Plough, will also pay Ligand future royalties and milestones as candidates discovered under the original deal advance in development and commercialization. Ligand’s agreements with Schering-Plough, soon to be taken over by Merck & Co., remain in place.

Ligand assumed the partnership with Organon with its purchase of Pharmacopeia in December 2008. Organon tapped Pharmacopeia in February 2007 with $15 million up front and the promise to fund research over five years.

The collaboration with Organon reportedly generated compounds addressing targets of mutual interest. Additionally, candidates discovered through the alliance are in various stages of lead identification and optimization, Ligand notes.

“The potential to receive milestone payments and one-time fees for transferred programs earlier than expected is consistent with our strategy to increase shareholder value,” remarks John L. Higgins, president and CEO of Ligand. “More importantly, we continue to maintain a positive and productive relationship with Schering-Plough in multiple promising programs in our current partnered pipeline.”

Ligand’s arrangement with Schering-Plough began in October 1998. Schering-Plough completed a Phase II study in patients with moderate-to-severe COPD in the fourth quarter of 2008 as part of the CXCR2 program. Two separate Phase II trials in asthma ended in the first quarter. Additionally, the agreement has resulted in an enzyme inhibitor that entered Phase II  in November 2008 for oncology, a candidate for inflammatory diseases that entered Phase I trials in March 2007, a candidate for respiratory diseases that entered Phase I in September 2007, and a BACE inhibitor for Alzheimer’s disease, Ligand reports.

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