Ligand Reports 2000 Results: Comparable Revenues Up 26%, Per Share Losses Down 33% and Product Sales Doubled From Prior Year.

Business Editors & Health/Medical Writers

BIOWIRE2K

SAN DIEGO--(BW HealthWire)--March 19, 2001

Fourth Quarter 2000 Product Sales Up 206% and Net Loss Per Share Down

54% From 1999

Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) today reported that revenues excluding contract manufacturing services increased to $48.1 million for the year ended December 31, 2000, or 26% over comparable revenues in 1999, and losses before the cumulative effect of changing our method of revenue recognition declined 21% (33% per share) to $59.3 million ($1.06 per share) in 2000 versus $74.7 million ($1.58 per share) in 1999. Including the $13.1 million cumulative effect of such change, net losses for the year ended December 31, 2000, were $72.4 million ($1.30 per share). Revenues for the fourth quarter ended December 31, 2000, increased 11% to $13.8 million compared to $12.4 million for the fourth quarter ended December 31, 1999, and net losses declined 44% (54% per share) to $12.7 million ($0.22 per share) versus $22.9 million ($0.48 per share) in the year-earlier period.

"In 2000, we achieved a healthy growth in revenues over 1999, including a doubling of product sales, and substantially reduced our operating loss and net loss for the year (before the cumulative effect of a change in accounting principle), with the fourth quarter accelerating that trend," said Paul V. Maier, Ligand Senior Vice President and Chief Financial Officer. "Ligand's 2000 financial results reflect a year in which we aligned our expense and capital structure to support the commercialization of our oncology and dermatology products and lowered our break-even point to better position ourselves for operating break-even on a quarterly basis in 2001.

"Sales for our four marketed products grew from $11.3 million in 1999 to $22.9 million in 2000 and are expected to double again in 2001. Total other operating expenses for the 2000 year declined by $6.3 million, or 7%, with increases in commercialization expenses more than offset by R&D and G&A decreases. Research and development expenses declined for the second year in a row, by $8.2 million, or 14%, in 2000 compared to 1999 due to reduced clinical and NDA expenses coupled with overall continuing tight expense controls.

"Our cash and capital structure improved in late 2000 and early 2001 through the issuance of $10.0 million (issue price) of the zero coupon convertible notes to Elan, and 2,000,000 shares of common stock to institutional investors, providing us with pro-forma cash and restricted cash as of December 31, 2000, of $57.5 million. We believe our cash resources will be sufficient to fund our operating needs through to break-even on a quarterly basis."

Highlights of accomplishments in 2000 and early 2001:

-- Doubled U.S. product sales: Launched Targretin(R) capsules in U.S. and
secured FDA approval of and launched Targretin(R) gel

-- Gained First European Product Approvals: Gained approval of Panretin(R) gel
in Europe and received CPMP recommendation to approve Targretin capsules in
Europe

-- Added Elan Pharma International to our group of exclusive distributors, to
market and distribute Ligand's five near-term oncology products in key
countries in Eastern and Western Europe

-- Reported positive Phase II clinical trial results showing Targretin capsules
extended survival in patients with non-small cell lung cancer (NSCLC)

-- Morphelan(TM) NDA filed with FDA by Elan for moderate to severe chronic
pain. Ligand has U.S. marketing rights to Morphelan(TM) for the treatment of
chronic pain in cancer and HIV patients.

-- Advanced androgen agonist LGD2226 to human development track for male
hypogonadism, female sexual dysfunction and osteoporosis

-- Pfizer moved lasofoxifene into Phase III trials for osteoporosis

-- AHP made a positive evaluation of TSE424 data in osteoporosis in preparation
for initiation of Phase III trials in first half 2001; advanced WAY248 to IND
track

-- Lilly advanced three clinical candidates for diabetes and cardiovascular
disease

-- Bristol-Myers Squibb entered into collaboration with Ligand to discover and
develop drugs to treat congestive heart failure, hypertension and other
cardiovascular diseases

-- Organon launched collaboration with Ligand to discover and develop drugs to
address hormone replacement therapy, contraception and reproductive disorders

According to David E. Robinson, Ligand Chairman, President and Chief Executive Officer, "Our two product pipelines continued to expand and mature in 2000 at an exciting pace. In our Ligand Specialty Pharmaceutical Products pipeline, we now have four products approved and marketed, a fifth product pending approval, advancement of our flagship product, Targretin capsules, toward Phase III trials in non-small cell lung cancer, and studies underway of our marketed products in other larger-market indications such as B-cell non-Hodgkin's lymphoma, psoriasis and eczema. The maturation of our existing commercial operations with the addition of a specialty dermatology sales force, providing increased focus and reach, and the launch of Morphelan(TM) (pending approval) in the U.S. and our EC-approved products in Europe through our exclusive distributors are all expected to contribute to further accelerate revenues during 2001.

"In our Ligand Corporate Partner Products pipeline, the nine compounds already on human development track are moving through the development pipeline at an encouraging pace, with the first entering Phase III in 2000 and up to three additional compounds expected to move into Phase III in 2001 and 2002. In addition, we expect our research collaborations to add several new compounds for large-market indications to this pipeline during 2001. As these compounds progress through development, milestone and royalty revenues are expected to accelerate to become a significant component contributing to Ligand's operating results in 2001 and 2002."

Comparison of 2000 versus 1999

Total revenues for 2000 were $48.1 million, an increase of $7.2 million, or 18%, as compared to 1999 revenues of $40.9 million. Product sales doubled to $22.9 million in 2000, from $11.3 million in 1999, as a result of $6.7 million in first-year 2000 sales of Targretin(R) capsules, a 61% increase in sales of ONTAK(R), from $8.2 million in 1999 to $13.2 million in 2000, and $1.1 million in first-year 2000 sales of Targretin gel. ONTAK and Panretin gel were approved for marketing in the U.S. in February 1999, and Targretin capsules and Targretin gel were approved in December 1999 and June 2000, respectively.

ONTAK sales, which slowed somewhat in the second and third quarters of 2000 as a result of the launch of Targretin capsules, increased in the fourth quarter ended December 31, 2000, to $3.5 million from $2.9 million in the third quarter 2000. The fourth quarter growth in ONTAK sales resulted primarily from increased penetration of the private oncology practices. Targretin capsules achieved rapid first-year market penetration and is positioned for further solid growth in 2001. Targretin gel launch was initiated in September 2000 and is expected to accelerate in 2001 with the support of a new dermatology sales force. In order to further expand sales of these approved products, Ligand has put in place a specialty dermatology sales force to focus on the sales of Targretin capsules, Targretin gel and Panretin gel among dermatologists, while reserving its specialty oncology sales representatives for the marketing of ONTAK, Targretin capsules and, upon approval, Morphelan(TM) among private practice oncologists.

Research and development expenses decreased $8.2 million, or 14%, to $51.3 million for the year ended December 31, 2000, compared to $59.4 million for the year ended December 31, 1999. Decreased research and development expenses are primarily due to a reduction in clinical trial and NDA preparation activity related to Targretin capsules and Targretin gel.

Selling, general and administrative expenses were $34.1 million for the year ended December 31, 2000, compared to $27.3 million in the same period in 1999, an increase of $6.8 million. The increases reflect additions in marketing and sales personnel, increased expenses for the launch and commercialization of Targretin capsules and Targretin gel, and the continued promotion of ONTAK and Panretin gel, partially offset by lower G&A expenses.

During 2000, we implemented the SEC's Staff Accounting Bulletin number 101, a new accounting pronouncement that changed our method of revenue recognition for non-refundable up-front fees received in multiple-element contractual arrangements. SAB 101 provides that non-refundable up-front fees received under collaborative and distribution agreements be recognized over the period of continuing involvement rather than upon payment. The cumulative effect of this change to December 31, 1999, resulted in a non-cash charge to earnings of $13.1 million or $(0.24) per share for the year ended December 31, 2000. Following the adoption of SAB 101, the amortization of deferred up-front payments has been included in the caption "Collaborative Research and Development/Other" revenue and may be recognized in future quarters.

In March 2001, the Company issued 412,504 shares of its common stock to Lilly as payment for a $5 million milestone due upon cumulative net sales of ONTAK reaching $20 million, which was achieved in October 2000.

Web Cast Conference Call

Ligand Pharmaceuticals will host a live web cast, open to all interested parties, of a conference call during which David E. Robinson, Ligand Chairman, President and CEO, and Paul V. Maier, Senior Vice President and CFO, will discuss financial results for 2000. The web cast will be available at http://www.streetevents.com and at http://www.ligand.com (Investor/Public Relations page) on Tuesday, March 20, 2001, at 8:30 a.m. Eastern Standard Time.

Ligand Pharmaceuticals Incorporated

Ligand Pharmaceuticals Incorporated discovers, develops and markets new drugs that address critical unmet medical needs of patients in the areas of cancer, skin diseases, and men's and women's hormone-related diseases, as well as osteoporosis, metabolic disorders and cardiovascular and inflammatory diseases. Ligand's proprietary drug discovery and development programs are based on its leadership position in gene transcription technology, primarily related to Intracellular Receptors (IRs) and Signal Transducers and Activators of Transcription (STATs).

This news release may contain certain forward-looking statements by Ligand which involve risks and uncertainties and reflect Ligand's judgement as of the date of this release. Actual events or results may differ from Ligand's expectations. There can be no assurance that Ligand will achieve quarterly break-even in 2001 or at all; collaborative arrangements will be successful or continued; Ligand will receive any milestone payments for the discovery and/or development of any compounds; any products under development by Ligand or any of its collaborative partners will receive approval from the FDA or other authorities to market any of these products; if successfully developed and thereafter approved, there will be a market for the drugs. Additional information concerning these and other risk factors affecting Ligand's business can be found in prior press releases as well as in Ligand's public periodic filings with the Securities and Exchange Commission, available via Ligand's website at http://www.ligand.com. Ligand disclaims any intent or obligation to update these forward-looking statements beyond the date of this release.

Note: Targretin(R)and Panretin(R)are registered trademarks of Ligand Pharmaceuticals Incorporated, and ONTAK(R)is a registered trademark of Seragen, Inc., a wholly owned subsidiary of Ligand. Morphelan(TM)is a trademark of Elan. Full prescribing information for Ligand's products may be obtained in the U.S. from Ligand Professional Services by calling toll free 800-964-5836 or on Ligand's web site at http://www.ligand.com.

Ligand Pharmaceuticals' releases are available on the World Wide Web at www.businesswire.com/cnn/lgnd.htm.

                  LIGAND PHARMACEUTICALS INCORPORATED
           CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION
              (in thousands, except loss per share data)

                       Three Months Ended
                           December 31,             Years Ended
                           (Unaudited)              December 31,
                          2000      1999          2000      1999
Revenues:
 Product sales          $  6,676    $  2,180   $   22,910    $11,307
 Collaborative
  research and
  development/other        7,157       9,522       25,200     26,978
 Contract
  manufacturing               --         726           --      2,610
   Total revenues         13,833      12,428       48,110     40,895

Operating costs and
 expenses:
 Cost of products
  sold                     2,263         566        8,591      3,563
 Contract
  manufacturing               --       1,745           --      6,926
   Total product
    and manufacturing
    costs
                           2,263       2,311        8,591      10,489
  Research and
   development            12,794      14,644       51,287      59,442
  Selling, general
   and administrative      8,190       7,200       34,114      27,257
  Write-off of
   acquired
   technology                 --       5,000           --       5,000
   Total other
    operating
    expenses              20,984      26,844       85,401      91,699
   Total operating
    costs and
    expenses              23,247      29,155       93,992     102,188

Loss from operations      (9,414)    (16,727)     (45,882)    (61,293)
Other expense, net        (3,290)     (6,134)     (13,395)    (13,426)
Loss before cumulative
 effect of a change in
 accounting principle    (12,704)    (22,861)     (59,277)    (74,719)
Cumulative effect on
 prior years
 (to December 31,
 1999) of changing
 method of revenue
 recognition                  --         --       (13,099)         --
Net loss                $(12,704)   $(22,861)  $  (72,376)   $(74,719)

Basic and diluted
 per share amounts:
   Loss before
    cumulative effect
    of a change in
    accounting
    principle           $  (0.22)   $  (0.48)  $    (1.06)   $  (1.58)
   Cumulative effect
    on prior years
    (to December 31,
    1999)of changing
    method of revenue
    recognition               --          --        (0.24)         --
   Net loss             $  (0.22)   $  (0.48) $     (1.30)   $  (1.58)
   Weighted average
    number of
    common shares     56,642,265  47,938,845   55,664,921  47,146,312

Proforma amounts
 assuming the new
 revenue recognition
 method is applied
 retroactively:
   Net loss             $(12,704)   $(22,644) $   (59,277)   $(73,131)
   Basic and
    diluted net
    loss per share      $  (0.22)   $  (0.47) $     (1.06)   $  (1.55)


                  LIGAND PHARMACEUTICALS INCORPORATED
                CONSOLIDATED BALANCE SHEETS INFORMATION
                            (in thousands)

                                              December 31,
                                           2000         1999
Assets
Current assets:
   Cash, cash equivalents,
    investments and funds receivable    $  33,663    $  47,155
   Other current assets                    10,986        9,524
     Total current assets                  44,649       56,679
Restricted investments                      1,434        2,011
Property and equipment, net                10,972       20,542
Acquired technology, net                   40,924       38,969
Other assets                               15,443       16,444
                                        $ 113,422    $ 134,645

Liabilities and Stockholders' Deficit
Current liabilities                     $  28,415    $  20,701
Zero coupon convertible senior notes       79,766       85,250
Convertible subordinated debentures        44,651       41,977
Other long-term liabilities                15,715       12,307
Stockholders' deficit                     (55,125)     (25,590)
                                        $ 113,422    $ 134,645