Ligand Pharmaceuticals has completed the acquisition of Neurogen following approval of the transaction by Neurogen stockholders. As a result, Ligand gains a fully funded partnership with Merck & Co., additional pipeline assets, drug discovery resources and additional cash balances.
The company claims that acquired assets include fully funded partnership with Merck for vanilloid receptor subtype 1 (VR1) antagonists, and Merck will fund 100% of program costs and make milestone and royalty payments upon the achievement of certain development events and commercialization of any applicable VR1 compounds.
Neurogen has developed an intellectual property estate and identified multiple clinical candidates for blockade of the histamine H3 receptor. The H3 receptor is a target for the potential treatment of sleep disorders, attention deficit hyperactivity disorder (ADHD), and cognitive deficits (e.g., schizophrenia and Alzheimer’s disease).
Accordingly, Neurogen has conducted its own drug discovery efforts in the area and provides novel chemical scaffolds and additional know-how that could further enhance Ligand’s oral EPO program.
Ligand will gain approximately $7.4m net in cash from this transaction, after taking into account the $600,000 paid to Neurogen shareholders at closing. Neurogen also has more than $180m of NOLs.
While there will be significant limitation to the utilization of the net operating loss carryforwards (NOLs) over time given the tax laws governing use of acquired NOLs, the NOLs may be usable to some extent by Ligand, should the combined company become profitable, said the company.