April 21, 2010 (FinancialWire) — Ligand Pharmaceuticals Inc. (NASDAQ: LGND) said that it earned a $6.5 million payment from Roche (OTC: RHHBY) as a result of Roche progressing RG7348 into a Phase I clinical trial for the treatment of hepatitis C viral infection.

According to Ligand, the milestone payment arises from a 2008 collaboration and license agreement between Roche and Metabasis Therapeutics, Inc. Ligand acquired Metabasis in January 2010.

Ligand said its net proceeds from the milestone payment will be around $2.3 million after paying $4.2 million to others including holders of the Ligand-issued “Roche” CVR.

Under a 2008 collaboration and license agreement, Metabasis contributed HepDirect liver-targeting technology to help develop prodrugs of Roche’s proprietary lead nucleosides against HCV infection.

Ligand said it is eligible to receive additional payments from Roche upon the achievement of certain further development and regulatory milestones as well as royalties on potential sales of the drug, subject to obligations to share such payments with holders of the Ligand-issued Roche CVR.

Ligand issued a Roche contingent value right to each former holder of a Metabasis common share as part of Ligand’s acquisition of Metabasis. Each Roche CVR entitles holders to certain payments if and when Ligand receives certain payments in connection with the Roche-Metabasis collaboration and license agreement.

Of the $6.5 million milestone payment, 65% is earmarked for the Roche CVR holders. After reduction for pre-existing contractual payment obligations, the Roche CVR holders will receive approximately $2.7 million in respect of this milestone payment.

California-based Ligand discovers and develops new drugs addressing diseases including hepatitis, muscle wasting, Alzheimer's, inflammatory diseases, anemia, COPD, asthma, rheumatoid arthritis and osteoporosis.

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