Organon and Ligand agree to terminate AVINZA co-promotion

Arnhem, the Netherlands, January 17, 2006 – Akzo Nobel’s human healthcare business, Organon, and Ligand Pharmaceuticals Incorporated have signed an agreement to terminate their Avinza® co-promotion agreement and return AVINZA rights to Ligand.

Although the effective date of the termination agreement is January 1, 2006, both parties have agreed to continue to cooperate during a transition period ending September 30, 2006 to promote the product. This transition period will include a minimum number of product sales calls per quarter (100,000 for Organon and 30,000 for Ligand with an aggregate of 375,000 and 90,000 respectively for the transition period) as well as the transition of ongoing promotions, managed care contracts, clinical trials and Key Opinion Leader relationships to Ligand. During the transition period Ligand will pay Organon an amount equal to 23 percent of AVINZA net sales as reported by Ligand. Ligand will also pay and be responsible for the design and execution of all clinical, advertising and promotion expenses and activities. “We are pleased to reach this agreement on AVINZA with Organon which better aligns the strategic and financial interests of both parties to the realities of each party’s business and situation today,” said David E. Robinson, Ligand chairman, president and CEO. “This new agreement will give us the flexibility to explore all strategic alternatives for AVINZA and Ligand with various potential strategic partners in the coming months.” Michael Novinski, President, Organon USA Inc, said: “This agreement aligns with Organon’s strategic and financial interests today to better focus our resources on our current and future product portfolio. At the same time, we remain committed to a smooth transition in the near term including continued sales calls and transition activities on AVINZA. We look forward to its continuing success given our long-term financial interest to earn a return for our shareholders on our investments in AVINZA over the past three years.” The companies have resolved their disagreement concerning prior co-promotion fees and Ligand will pay Organon USD 14.75 million by January 30, 2006. In consideration of the early termination and return of rights under the terms of the agreement, Ligand will unconditionally pay Organon USD 37.75 million on or before October 15, 2006. Ligand will further pay Organon USD 10.0 million on or before January 15, 2007, provided that Organon has made its minimum required level of sales calls. Under certain conditions, including change of control, the cash payments will accelerate. In addition, after the termination, Ligand will make quarterly royalty payments to Organon equal to 6.5 percent of AVINZA net sales through December 31, 2012 and thereafter 6 percent through patent expiration, currently anticipated to be November of 2017. ---