Ligand calls 6% convertibles

By Angela McDaniels

Seattle, Oct. 30 - Ligand Pharmaceuticals Inc. will redeem the remaining $128.15 million outstanding of its 6% convertible subordinated notes due November 2007 on Nov. 29, according to a company news release.

Noteholder will receive 101.2% of par plus accrued interest.

The notes may be converted into common stock at roughly $6.17 per share. The company's stock (Nasdaq: LGND) closed at $10.84 on Monday.

"We are calling the notes to help strengthen our balance sheet and fulfill our obligations under the purchase agreement we signed with King Pharmaceuticals," chairman and interim chief executive officer Henry F. Blissenbach said in a company news release.

Ligand and King Pharmaceuticals entered into a definitive asset purchase agreement in September under which Ligand will sell King Pharmaceuticals the U.S. and Canadian rights to Avinza (morphine sulfate extended release) for an up-front cash consideration of $313 million plus a tiered royalty agreement through 2017.

"Assuming the noteholders convert given our recent stock price, we will have successfully eliminated virtually all of our long-term debt. We believe the redemption will substantially increase our financial flexibility while reducing our cash interest expense."

Ligand is a pharmaceutical company based in San Diego, Calif.

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