In March 2002, Royalty Pharma purchased from Ligand Pharmaceuticals a percentage of the royalties the company was entitled to for three selective estrogen receptor modular (SERM) products that were in Phase III clinical trials being conducted by Pfizer and Wyeth.  The purchase agreement was structured in a way that provided Ligand with immediate cash at closing and granted Royalty Pharma options to acquire additional rights at escalating prices, exercisable over a period of two years.  

Ligand has been able to fund itself partially through this arrangement, with Royalty Pharma providing capital over time for additional portions of Ligand’s royalty interests.  In addition to being a non-dilutive mechanism to raise money, Ligand also was able to assign the risks associated with the clinical trials and regulatory hurdles to Royalty Pharma.