The transaction is structured as a stock-for-stock exchange for thefirst part of the deal and in the second part there is an addedkicker.  Pharmacopeia stockholders will be entitled to a ContingentValue Right which will entitle shareholders under certain circumstancesto receive an aggregate cash payment of $15 million for allPharmacopeia stockholders.

Ligand will issue approximately 17.5 million shares, subject toadjustment for Pharmacopeia options at closing, or 0.58 shares for eachoutstanding Pharmacopeia share.  This will give Ligand 84% of thecombined company. 

This exchange ratio is based on closing prices of Ligand shares between$3.00 and $3.75 for a period prior to the closing date and based onLigand’s closing price on September 24, 2008 of $3.12 implies apurchase price of $1.81 per common share of Pharmacopeia.  This excludes a potential for approximately $0.50 per share or anaggregate of $15 million related to the Contingent value right.  Hereare the other price contingencies:

• At prices between $3.75 and $4.50, value is fixed at $66 million.
• At prices above $4.50, the exchange ratio is fixed at 0.49.
• At prices below $3.00, value is fixed at $52.8 million, including some cash contribution at prices below $2.93 and above $2.38.
• Below $2.38 the consideration is fixed at 0.60 shares and $10 million in cash in the aggregate.
• At prices equal or less than $1.65 Pharmacopeia has the right to terminate the agreement.

Shareholders could also receive an aggregate $15 million cash paymentas the terms of the Contingent Value Right if Ligand enters into alicense, sale, development, marketing or option agreement with respectto its DARA program by December 31, 2011. Please note, the CVRs willnot be transferable.

Jon C. Ogg
September 24, 2008

The company said that PS433540, its first-in-class Dual Acting Receptor Antagonist, showed statistically significant blood pressure reductions in a Phase IIa study in patients with mild to moderate hypertension.

PS433540 is being evaluated and developed as a potential treatment for hypertension and diabetic nephropathy, and the company said this is a novel blood pressure product candidate that possesses two validated action mechanisms in a single molecule.

The data will be presented today at the at the American Society of Hypertension Scientific Meeting and Exposition in New Orleans.

The company has also announced that it will seek to release a Phase IIb result of 375 subjects in Stage I and II hypertension to evaluate safety and efficacy at three different doses versus placebo at the end of 2008.

While there are millions of Americans with hypertension and while there are many hypertension medications that have been on the market for years, the novel aspect of this is the single molecule that addresses hypertension and the possible complications from that mixed with diabetes.

Shortly after the open, shares are up almost 40% at $4.49 on nearly 1 million shares.  Its 52-week trading range is $2.89 to $6.14 and its current market cap is only $133 million.  As of last look, the company had $61.4 million in cash on the books.

Jon C. Ogg
May 16, 2008

The trigger for the additional milestone was Pharmacopeia’s completion of certain early discovery activities under its agreement with Glaxo. This alkso notes that Pharmacopeia is entitled to success-based milestone payments that can total up to $83 million per program for any drug development program pursued through the multi-program alliance.  It can also receive up to double-digit royalties on the sales of any products commercialized by Glaxo under the alliance.

Before any pop here, Pharmacopeia had a mere $102 million market cap and had roughly $71.3 million in cash and equivalents on the books, and it also carried $67.3 million in total liabilities.

Jon C. Ogg
March 18, 2008

Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) is set to report earnings after the closing bell, with First Call estimates at -$0.44 EPS on revenues of $202.58 million Shares were up less than 1% at $32.74 on the day ahead of earnings.

Carl Icahn has nominated three individuals for the board of directors in Biogen-Idec (NASDAQ: BIIB) in his activist efforts to move the shares.  Biogen-Idec shares were down $0.90 to $58.02 mid-day.

Celgene Corporation (NASDAQ: CELG) was cleared today by German regulation to proceed with its acquisition of Pharmion. Stocks are up over 3% to $53.31 at mid-day. Pharmion Corp. (NASDAQ: PHRM) shares were up 1.8% to $67.44.

CombinatoRx Inc. (NASDAQ: CRXX) shares fell almost 7% to $4.80 mid-day on thin trading volume.  Technically there was no news today, although this followed guidance last week of losses below view.

Lipid Sciences, Inc. (NASDAQ: LIPD) announced positive trial results in non-human SIV-infected primates in its proprietary deplidated autogolous virus vaccine. Share prices were up more than 15% or $0.09 to $0.65 at mid-day.

Medivation, Inc. (NASDAQ: MDVN) rose after it announced that, based on its end-of-Phase 2 meeting with the FDA, it plans to begin a pivotal confirmatory Phase III trial of Dimebon for mild-to-moderate Alzheimer’s Disease in the second quarter of 2008.  Shares rose $2.36 to $17.21 by mid-day on this data.

Pharmacopeia, Inc. (NASDAQ: PCOP) shares fell over 10% to $4.37 at mid-day on thin-trading volume. There has been no recent news.

Jon C. Ogg
January 28, 2008

• Activision (ATVI) raised guidance on Guitar Hero III sales; stock up 8% pre-market.
• Barrier Therapeutics (BTRX) announced positive results of higher dose escalation clinical safety study with pramiconazole.
• Casual Male (CMRG) indicated lower after missing earnings and guiding lower.
• CIGNA (CI) is acquiring Great-West Healthcare for $1.5 Billion.
• Citigroup (C) sold a $7.5 Billion stake to Abu Dhabi Fund.
• GlobalSantaFe (GSF) has received a subpoena from the SEC seeking documents related to the company’s ongoing internal investigation.
• Hydrogenics (HYGS) received a $1.7 million order for three fuel cell hybrid MiniBuses for an Expo in Spain.
• Osiris Therapeutics (OSIR) announced positive one-year data from Chondrogen trial for knee repair in its preparation of adult stem cells formulated for direct injection into the knee.
• Penford Corp (PENX) announced a 2 Million share common stock offering, although this was under the existing shelf offering.
• Pharmacopeia (PCOP) and GlaxoSmithKline identified two new additional lead compounds that will trigger milestone payment of $1 million to Pharmacopeia.
• Qiao Xing (XING) telegraphss medium and long-term business plans and will continue to take steps to ensure growth of 20% to 30% per year for the next 5-years.
• Sepracor (SEPR) announced the completion of its SEC investigation and no enforcement action was recommended.
• Smith & Nephew (SNN) announces precautionary knee recall.
• Staples (SPLS) $0.42 EPS vs $0.40 est.
• Tech Data (TECD) $0.73 EPS vs $0.60 est. (unsure if comparable) sales guidance for Q4 looks a tad light.
• Tenet Healthcare (THC) entered into a new national insurance coverage agreement with UnitedHealthcare (UNH).

Jon C. Ogg
November 27, 2007

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.