Allergan and Ligand form new research and development corporation to raise $100 million; File unit offering for $32.5 million.

SAN DIEGO & IRVINE, Calif.--(BUSINESS WIRE)--Dec. 20, 1994-- Ligand Pharmaceuticals Incorporated (Nasdaq/NMS:LGND) and Allergan, Inc. (NYSE:AGN) Tuesday announced that Ligand and Allergan Ligand Retinoid Therapeutics, Inc. (ALRT), a newly formed Delaware corporation, have filed a registration statement with the Securities and Exchange Commission relating to a public offering of $32,500,000 of Units through a rights offering to stockholders of Ligand and stockholders of Allergan.

Immediately prior to consummation of the subscription offering, the existing Joint Venture between Ligand and Allergan will be dissolved, and Ligand and Allergan will contribute the Joint Venture technology and assets, as well as $17.5 million from Ligand and $50 million from Allergan to ALRT.

Pursuant to the registration statement, Allergan Pharmaceuticals (Ireland) Ltd., a consolidated subsidiary of Allergan, Inc. will acquire an additional $6.0 million of Ligand Common Stock at a price equal to the average closing price for the 20 trading days ending the last trading day before expiration of the Rights. Ligand will use the proceeds of such sale to fund a portion of the Ligand cash contribution.

Each Unit will consist of one share of common stock of ALRT and two 5-year warrants each of which is to acquire one share of common stock of Ligand with an exercise price equal to 120 percent of the closing price of Ligand common stock during the 20 trading days ending one trading day before expiration of the Rights. The offering will consist of approximately 2.9 million transferable Rights, with ALRT receiving all of the net proceeds from the exercise thereof.

ALRT has been formed to accelerate the activities of the Joint Venture related to the discovery, development and commercialization of drugs based on retinoids. Retinoids have a broad range of biological actions, and evidence suggests that retinoids may be useful in the treatment of skin diseases, a variety of cancers, including kidney cancer, certain forms of leukemia and other cancers, as well as other possible indications. The net proceeds from the offering and the contributions of Allergan and Ligand will be used by ALRT to engage Ligand and Allergan to conduct research, development and commercialization relating to small molecule retinoid products.

ALRT represents an opportunity for Allergan and Ligand to continue to share complementary technology and financing. Allergan's and Ligand's initial cash contributions will be expensed as a one-time charge by each party upon consummation of the subscription offering. Expenses incurred by Allergan and Ligand in the performance of research and development on behalf of ALRT will be offset by revenue from ALRT.

The offering represents a continuation of Allergan's strategy to dedicate substantial financial and human resources to research and development projects. Allergan's financing commitment to ALRT is expected to be made at a rate essentially equivalent to Allergan's cost of capital.

ALRT represents an acceleration of Ligand's long-term commitment to develop products from its retinoid technology. Ligand believes the financing of the ALRT retinoid program is at a rate consistent with current market conditions and Ligand's cost of capital, and will provide for the accelerated development of retinoid products over the next four to five years.

Under the terms of the proposed rights offering, each holder of Ligand Common Stock would receive 0.061 rights for each share of Ligand Common Stock and each holder of Allergan Common Stock would receive 0.028 rights for each share of Allergan Common Stock, in each case owned as of the record date for distribution of the Rights. (The record date for receiving Rights is expected to be shortly before the registration statement relating to the Units is declared effective by the Securities and Exchange Commission.) One Right will be required to subscribe for one Unit (and the subscription price is expected to be $11.25 per Unit).

It is expected that the Rights will expire 30 days after the issuance thereof and that the Rights will be traded on the Nasdaq National Market during this period under the symbol "ALRIR." The ALRT Common Stock and the warrants for Ligand Common Stock comprising the Units will trade as Units, under the symbol "ALRIZ," for a 2-year period after closing of the subscription offering. Following such 2-year period, the ALRT Common Stock and the warrants for Ligand Common Stock will trade separately, and upon such separation the Ligand warrants will become exercisable. If an application for listing on the Nasdaq National Market is approved, the Warrants are expected to trade under the symbol "LGNDW." It is also expected that after the separation, the ALRT Common Stock would trade under a separate symbol, "ALRI."

The subscription offering may be withdrawn by ALRT, Ligand and Allergan if the aggregate gross proceeds are less than $32.5 million. If the subscription offering is withdrawn, all subscription payments will be refunded with interest.

Ligand or Allergan, if not exercised by Ligand, has the option to purchase all of the common stock of ALRT during a specified period in the future. If Ligand exercises the Stock Purchase Option, Allergan will have the right to acquire an undivided one-half interest in ALRT technology and 50 percent of all other ALRT assets. Additionally, after the earlier of a specified date or approval for commercial sale, Ligand and Allergan will have the option to acquire LGD1057, one of the compounds to be developed by ALRT prior to the exercise of the option to acquire ALRT common stock.

A registration statement relating to the Units has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time

the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there by any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Ligand Pharmaceuticals Incorporated, founded in 1987, is a leader in gene transcription technology, particularly intracellular receptor (IR) technology and Signal Transducers and Activators of Transcription (STATs). Ligand applies IR and STATs technology to the discovery and development of small molecule drugs to enhance therapeutic and safety profiles and to address major unmet patient needs in cancer, women's health and skin diseases, as well as osteoporosis, cardiovascular and inflammatory disease.

Allergan, Inc., a global health care company with headquarters in Irvine, Calif., develops, manufactures, and markets specialty therapeutic products for eye and skin care and neuromuscular disorders. A technology-driven company, Allergan is working to be the partner of choice for ever better health care.

Allergan Ligand Retinoid Therapeutics, Inc. is a newly formed company whose primary purpose is to discover, develop and commercialize drugs based on retinoids.

CONTACT: Allergan, Irvine

              Jeff D'Eliscu, 714/752-4636 (work); 714/675-9475 (home)
                 or
              Ligand, San Diego
              Susan Atkins, 619/550-7687 (work); 619/451-0772 (home)