News | Stem Cell Therapies | May 26, 2016

Ligand Acquires Portfolio of CorMatrix Cardiovascular for $17.5 Million

Transaction marks pharmaceutical company’s entry into the medical devices market

May 26, 2016 — Ligand Pharmaceuticals Inc. announced the acquisition of economic rights to multiple programs owned by CorMatrix. Ligand will pay $17.5 million and in return will receive a portion of revenue (synthetic royalty) from CorMatrix’s existing marketed products and will have the right to receive future synthetic royalties from potential future products.

CorMatrix’s products are medical devices that are designed to permit the development and regrowth of human tissue. This transaction will be immediately accretive to Ligand and represents Ligand’s entry into the field of medical devices.

Ligand will receive a share of revenue from the currently marketed CorMatrix portfolio of vascular, cardiac and pericardial tissue repair products. In addition, Ligand will receive a share of revenue and potential milestones from the currently marketed CorMatrix CanGaroo ECM Envelope for cardiac implantable electronic devices.

Ligand is owed a guaranteed minimum annual payment of $2.75 million. The currently marketed portfolio is expected to deliver approximately the annual minimum payments in the near term but has the potential to double over time based on the commercial success of the programs. Ligand will also potentially receive a mid-single digit royalty from CorMatrix’s development-stage Micronized ECM product and replacement valve products. CorMatrix’s existing and pipeline medical devices address market opportunities estimated to exceed $1 billion annually.

The technology foundation for the underlying assets is Extracellular Matrix (ECM), an implantable medical device that enables migration, vascularization and remodeling of pericardial, cardiac and vascular tissues, which remodels into the patient’s own native tissue with no foreign materials left behind. The programs are indicated or intended for use in a variety of cardiovascular procedures. The products are marketed and developed by CorMatrix Cardiovascular.

Ligand expects this transaction to add approximately $1 million for partial year revenue in 2016 and contribute approximately $0.04 of adjusted EPS in 2016. Ligand will not incur any expenses to develop or commercialize the underlying products. The amount Ligand will record as revenue will reflect deductions for deal amortization that will be recorded as an offset to revenue.

Greenhill & Co. LLC served as sole financial advisor to CorMatrix Cardiovascular.

For more information: www.ligand.com, www.cormatrix.com

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