SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 2007
LIGAND PHARMACEUTICALS INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-20720
(Commission File Number)
10275 SCIENCE CENTER DRIVE,
SAN DIEGO, CALIFORNIA
(Address of principal executive offices)
(858) 550-7500
(Registrant's telephone number, including area code)
77-0160744
(I.R.S. Employer Identification No.)
92121-1117
(Zip Code)
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On March 1, 2007 Ligand Pharmaceuticals Incorporated
(the "Company") entered into an Indemnity Fund Agreement (the "Agreement") with
Dorsey & Whitney LLP ("Dorsey"), counsel to Company's independent directors and
to the Audit Committee of the Board of Directors ("Board"). Under the Agreement,
the Company has established in a Dorsey trust account a $10 million indemnity
fund (the "Fund") to support the Company's existing indemnification obligations
to continuing and departing directors in connection with the ongoing SEC
investigation and related matters (the "Legacy Liabilities"). The agreement
provides that the Fund may be disbursed by Dorsey on behalf of the directors to
pay indemnified claims against the Legacy Liabilities, provided that the Company
shall approve any such disbursements for Legacy Liabilities other than the SEC
Investigation.
Interest accruing to the Fund will be returned to the Company quarterly.
Any amounts remaining in the fund will be returned to the Company on the
earliest of (i) the satisfaction of all Legacy Liabilities and the resolution of
all matters or potential matters involving any of these directors relating to
the Legacy Liabilities (ii) the date which is twenty-four (24) months after
receipt of any written or oral communication initiated by the SEC regarding the
SEC Investigation (iii) written communication from the SEC that the SEC
Investigation has been discontinued without any remaining Legacy Liability or
(iv) mutual agreement of the parties.
The Indemnity Fund Agreement is filed as Exhibit 10.1 hereto and
incorporated by reference herein.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
On March 1, 2007, the Company announced the resignation of directors John
Groom, Irving S. Johnson, Ph.D., Daniel Loeb, Carl C. Peck, M.D., and Brigette
Roberts, M.D. effective immediately. These resignations followed the conclusion
of the Company's strategic review process and the consummation of the sale of
AVINZA(R) (morphine sulfate extended-release capsules) to King Pharmaceuticals.
The Company also announced the appointment of four new directors, who were
nominated for election by the Board's Nominating and Governance Committee:
John L. Higgins, age 36, is President and Chief Executive Officer of the
Company. Prior to joining the Company, Mr. Higgins was Chief Financial Officer,
Executive Vice President, Finance, Administration and Corporate Development of
Connetics Corporation, a public specialty pharmaceutical company, until its
acquisition by Stiefel Laboratories, Inc. in December 2006. In those capacities,
in which he had served since January 2002, he was responsible for corporate
development, finance, investor relations, strategic planning and general
administration. He served as Executive Vice President, Finance and
Administration, from January 2000 to December 2001, and as Vice President,
Finance and Administration from September 1997 through December 1999. Mr.
Higgins earned an A.B. in Economics from Colgate University and is a Director of
BioCryst Pharmaceuticals, Inc., a public biotech company, where he serves as
Chairman of the Audit Committee.
Todd C. Davis, 46, is a Managing Director of Cowen & Company and a
principal and founder of Cowen Healthcare Royalty Partners. Previously, Mr.
Davis was a partner at Paul Capital Partners and Apax Partners. Mr. Davis has
served on the boards of several public and private companies, including most
recently Verus Pharmaceuticals, Prism Pharmaceuticals, Prometheus Laboratories
and SkinMedica. He holds a B.S. in mathematics from the U.S. Naval Academy and
an M.B.A. from Harvard Business School.
Elizabeth M. Greetham, 57, is Chief Executive Officer and President of ACCL
Financial Consultants. Prior to ACCL, Ms. Greetham served as both CEO and CFO of
DrugAbuse Sciences and was a portfolio manager at Weiss, Peck & Greer. Ms.
Greetham also serves as a member of the board of directors of publicly traded
King Pharmaceuticals, Inc. Ms. Greetham earned an M.A. with Honors from the
University of Edinburgh in Scotland.
As previously disclosed, on February 26, 2007 the Company consummated the
sale of its rights in and to AVINZA(R) (morphine sulfate extended-release
capsules), in the United States, its territories and Canada to King
Pharmaceuticals and its wholly-owned subsidiary King Pharmaceuticals Research
and Development, Inc. Pursuant to the asset purchase agreement King paid the
Company approximately $295 million in cash and will continue to pay Ligand
specified royalty payments based on King Pharmaceuticals' annual net sales of
AVINZA(R) through AVINZA(R)'s patent expiration in November 2017. The Company
has also agreed to indemnify King Pharmaceuticals and its affiliates and their
respective representatives from losses arising out of specified events described
in the asset purchase agreement. The Company notes that Ms. Greetham's interest
in this transaction arises solely from her position as a director of King
Pharmaceuticals and that there is no arrangement or understanding between the
Company and King Pharmaceuticals with respect to her election as a director of
the Company.
David M. Knott, 62, is Chief Investment Manager of Knott Partners
Management and Dorset Management, two related hedge fund entities. He was
previously with Mandrakos Associates. Prior to that, Mr. Knott was a broker at
Donaldson Lufkin & Jenrette (DLJ). He received a B.A. in Political Science from
the University of Pennsylvania and an M.B.A. in Finance from the Wharton School
of the University of Pennsylvania.
In addition, John W. Kozarich, Ph.D., a current director, was named
Chairman of the Board assuming the position previously held by Henry F.
Blissenbach, who will remain on the Board.
None of the new directors was selected pursuant to any arrangement or
understanding between him/her and any other person. There are no family
relationships between the incoming directors and any of the Company's other
directors or executive officers. There have been no related party transactions
between the Company and any of the new directors reportable under Item 404(a) of
Regulation S-K.
A copy of the Company's press release announcing these resignations and
appointments is attached hereto as Exhibit 99.1 and is incorporated herein by
this reference.
(d) Exhibits.
EXHIBIT NO. DESCRIPTION
10.1 Indemnity Fund Agreement.
99.1 Press release of the Company dated March 1, 2007.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned.
LIGAND PHARMACEUTICALS INCORPORATED
Date: March 05, 2007 By: /s/ TOD G. MERTES
Name: Tod G. Mertes
Title: Interim CFO