BioCentury
ARTICLE | Company News

Ligand, Neurogen deal

August 31, 2009 7:00 AM UTC

Ligand will acquire Neurogen for about 4 million shares for a deal value of about $11 million based on Ligand's close of $2.76 on Aug. 21, the day before the deal was announced. Neurogen shareholders also are eligible for contingent payments that could total more than $7 million in cash, including net proceeds from any sale of Neurogen's real estate within six months of the deal closing; net proceeds from any sale of Neurogen's aplindore program within six months of the deal closing; $3 million upon Merck & Co. Inc. (NYSE:MRK, Whitehouse Station, N.J.) starting a Phase III trial for Neurogen's vanilloid receptor 1 ( VR1) antagonist program or 50% of the net proceeds if Ligand sells the program before Phase III studies are started; and $4 million if Ligand partners Neurogen's preclinical histamine H3 receptor (HRH3) antagonist program or 50% of the net proceeds from a sale of the HRH3 IP. Neurogen has been seeking strategic alternatives since May when it halted enrollment in two Phase IIb trials of aplindore, a dopamine D2 partial agonist, for Parkinson's disease and restless legs syndrome (RLS).

Ligand said the deal will give it a net gain of about $7 million in cash and fits its strategy of acquiring fully-funded, partnered programs. Merck is responsible for funding development of Neurogen's VR1 receptor antagonists for pain and CNS indications and has commercialization rights under a 2003 deal, including the lead antagonist, MK 2295, which is in Phase II testing. (see BioCentury, Dec. 8, 2003 & May 18, 2009). ...