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Ligand Acquires Portfolio of Synthetic Royalty and Milestone Rights from CorMatrix® Cardiovascular for $17.5 Million

SAN DIEGO, May 04, 2016 (BUSINESS WIRE) -- Ligand Pharmaceuticals Incorporated LGND, +2.46% announces the acquisition of economic rights to multiple programs owned by CorMatrix [®] . Ligand will pay $17.5 million and in return will receive a portion of revenue (synthetic royalty) from CorMatrix’s existing marketed products and will have the right to receive future synthetic royalties from potential future products. CorMatrix’s products are medical devices that are designed to permit the development and regrowth of human tissue. This transaction will be immediately accretive to Ligand and represents Ligand’s entry into the field of medical devices.

Ligand will receive a share of revenue from the currently marketed CorMatrix portfolio of vascular, cardiac and pericardial tissue repair products. In addition, Ligand will receive a share of revenue and potential milestones from the currently marketed CorMatrix CanGaroo [®] ECM Envelope for cardiac implantable electronic devices. Ligand is owed a guaranteed minimum annual payment of $2.75 million. The currently marketed portfolio is expected to deliver approximately the annual minimum payments in the near term but has the potential to double over time based on the commercial success of the programs. Ligand will also potentially receive a mid-single digit royalty from CorMatrix’s development-stage Micronized ECM product and replacement valve products. CorMatrix’s existing and pipeline medical devices address market opportunities estimated to exceed $1 billion annually.

“This transaction further diversifies Ligand’s revenue and expands our portfolio to now include economic rights on unique and innovative medical devices that have already begun to prove their utility in the market today,” said John Higgins, Chief Executive Officer of Ligand. “The opportunity is an excellent fit for Ligand as it is financially accretive, does not require increased operating expenses and enables Ligand to begin to participate in the highly lucrative and growing medical device industry. We are very impressed with CorMatrix’s technology and operating team, and look forward to further development and expansion of their product line.”

The technology foundation for the underlying assets is Extracellular Matrix (ECM), an innovative implantable medical device that enables migration, vascularization...