S.D., N.Y. Drug Firms Join in Osteoporosis Research

Pfizer Inc., a New York-based pharmaceutical giant, will pump an unspecified amount of cash into Ligand Pharmaceuticals, a San Diego-based biotechnological firm that is developing drugs to treat a common bone disorder, the companies said Monday.

According to the terms of the five-year agreement, Pfizer will receive worldwide rights to market drugs developed by the two companies. Ligand will receive royalty payments, Ligand President Howard Birndorf said Monday.

Pfizer and Ligand declined to comment on the dollar value of the agreement. However, Birndorf described the cash infusion as “a very large deal, one of the most significant that I’ve seen recently.” Pfizer also has agreed to make a “substantial” equity investment in Ligand, Birndorf said.

The Pfizer agreement “will absolutely speed up our timetable,” Birndorf said. “We’re looking at a five-year program . . . but with all the regulatory stuff, we’re looking something in the neighborhood of 7 to 10 years before we hit the market.”

Pfizer will fund research into drugs to treat osteoporosis, a disorder that causes a decrease in the mineral content of bones that eventually leads to the thinning of bone tissue. The disease, which occurs most often in postmenopausal women and elderly men, often leads to bone fractures. Birndorf set the worldwide market for osteoporosis drugs at about $2 billion.

The deal includes funding for about 40 additional researchers, 20 of whom will join Ligand’s research staff at the company’s headquarters in San Diego. The remainder will work at Pfizer’s research facility at Groton, Conn.

Privately held Ligand, which was formed in 1987, has raised about $12 million in venture capital. The company has yet to report any revenue, Birndorf said. Ligand has about 50 employees, including 40 researchers.

Birndorf described the agreement announced on Monday as a “drug discovery program . . . we’re going to be working on the lead compounds here, we’ll be doing the initial drug discovery and the molecular biology.” Pfizer will concentrate on “medicinal chemistry . . . and the clinical regulatory process,” Birndorf said.

Ligand allied itself with Pfizer because the company “has the marketing capability and financial resources” to sell an osteoporosis drug to doctors’ offices around the country, Birndorf said.

Pfizer, a diversified health-care company, reported $6.4 billion in 1990 revenue. The company recently has entered a series of similar agreements with small firms, Pfizer spokesman Brian McGlynn said Monday.