Ligand Pharmaceuticals and Glycomed Incorporated Announce Definitive Merger Agreement

Strategic Insights -

Ligand Pharmaceuticals Inc. and Glycomed Incorporated, two leaders in the biotechnology sector, have announced a definitive merger agreement in a stock-for-stock transaction. The combined company would have a significant financial strength of approximately $100 million in cash and investments, as well as proprietary technologies focused on discovering and developing small molecule therapeutics in various disease areas. The merger is expected to result in a stronger, financially and managerially robust company, capable of managing the challenges in the competitive global marketplace.

Key Takeaways:

  • The merger is a stock-for-stock transaction, with Glycomed shareholders receiving approximately 6.78 million shares of newly issued Ligand Common Stock at an exchange ratio of 0.5301 shares of Ligand Common Stock for each share of Glycomed Common Stock.
  • The combined company would have a significant financial strength of approximately $100 million in cash and investments, allowing for the development of promising drug candidates from either company's portfolio.
  • The merged companies would have strategic alliances with eight major pharmaceutical companies, including six of the world's top twenty, further strengthening their position in the competitive global marketplace.
  • Glycomed has cash and investments of $63.5 million as of December 31, 1994, and had $50 million outstanding in convertible debentures due in the year 2003, which would be convertible to 1.89 million Ligand shares at $26.52 per share.
  • The merger would result in the strengthening of the cancer and inflammation product pipeline, with Glycomed's proprietary technologies and Ligand's expertise in gene transcription technology and Signal Transducers and Activators of Transcription (STATs).
  • Ligand's pipeline includes six sex steroid compounds or compound series in preclinical development, and the company has licensed an approved product from Chiron Corporation, Proleukin (Aldesleukin), a genetically engineered protein for the treatment of metastatic renal cell carcinoma.
  • The merger would result in a significantly strengthened critical mass leader in the field, with clear advantages for both sets of shareholders.

Statistics:

  • The combined company would have approximately 25% of Ligand shares currently outstanding (on a fully diluted basis as of February 7, 1995).
  • The merger would have a cash and investment base of approximately $100 million.
  • Glycomed has cash and investments of $63.5 million as of December 31, 1994.
  • The company would have $50 million outstanding in convertible debentures due in the year 2003.
  • The convertible debentures would be convertible to 1.89 million Ligand shares at $26.52 per share.
  • Ligand has approximately two dozen products or compounds currently under preclinical or clinical development.
  • The company has licensed an approved product from Chiron Corporation, Proleukin (Aldesleukin).

Sources:

  • Ligand Pharmaceuticals Inc. and Glycomed Incorporated, "Ligand Pharmaceuticals Inc. and Glycomed Incorporated Announce Definitive Merger Agreement," February 7, 1995.
  • Business Wire, "Ligand Pharmaceuticals Inc. and Glycomed Incorporated Announce Definitive Merger Agreement," February 7, 1995.