ONTAK ® (denileukin diftitox) Post-approval Clinical Commitment Oncologic Drugs Advisory Committee Meeting March 12-13, 2003 Bethesda, MD

2 ODAC Meeting Ligand Attendees James L’Italien, Ph.D. Sr. Vice President, Regulatory Affairs & ComplianceJames L’Italien, Ph.D. Sr. Vice President, Regulatory Affairs & Compliance Gordon Bray, M.D. (Speaker) Sr. Medical Director of Clinical ResearchGordon Bray, M.D. (Speaker) Sr. Medical Director of Clinical Research Andrés Negro-Vilar, M.D., Ph.D. Sr. Vice President, Research & Development Chief Scientific OfficerAndrés Negro-Vilar, M.D., Ph.D. Sr. Vice President, Research & Development Chief Scientific Officer Eric Groves, M.D., Ph.D. Vice-President, Project ManagementEric Groves, M.D., Ph.D. Vice-President, Project Management Francine Foss, M.D. (Consultant) Professor of Medicine Tufts-New England Medical Center Boston, MAFrancine Foss, M.D. (Consultant) Professor of Medicine Tufts-New England Medical Center Boston, MA

3 Presentation Objectives Review structure, mechanism of action and clinical characteristics of denileukin diftitox (ONTAK ® )Review structure, mechanism of action and clinical characteristics of denileukin diftitox (ONTAK ® ) Review clinical basis for accelerated approval and key development milestonesReview clinical basis for accelerated approval and key development milestones Describe the outstanding clinical commitment for final approvalDescribe the outstanding clinical commitment for final approval – progress to date – ongoing efforts to achieve completion of the study – challenges encountered SummarySummary

4 Denileukin Diftitox Structure Diphtheria toxin enzyme activity Cleavage domain Diphtheria toxin translocation function S|SS|S S|SS|S IL-2 Fusion protein that targets cytocidal activity of diphtheria toxin to tumor cells expressing the receptor for IL-2 (IL-2R) Fusion protein that targets cytocidal activity of diphtheria toxin to tumor cells expressing the receptor for IL-2 (IL-2R) Leukemic and lymphoma cells of B and T cell origin (including cutaneous T-cell lymphoma), constitutively express one or more subunits of IL-2R Leukemic and lymphoma cells of B and T cell origin (including cutaneous T-cell lymphoma), constitutively express one or more subunits of IL-2R

5 Denileukin Diftitox (ONTAK  ) Mechanism of Action ONTAK ® HIGH affinity IL2 receptor MEDIUM affinity IL2 receptor Cleavage & Toxin release IL2 DT protein synthesis CELL DEATH Protein synthesis terminated by toxin- mediated ADP ribosylation of elongation factor 2 Internalization of IL2R with bound toxin Cell exterior Cell interior Cell membrane    IL2 DT  IL2 DT IL2 DT IL2 DT

6 ONTAK  – Clinical Characteristics Indicated for the treatment of patients with persistent or recurrent, CD25 (+) cutaneous T-cell lymphoma (CTCL)Indicated for the treatment of patients with persistent or recurrent, CD25 (+) cutaneous T-cell lymphoma (CTCL) Acceptable safety profileAcceptable safety profile Minimal myelosuppressionMinimal myelosuppression

7 Clinical Data Supporting ONTAK  Approval Accelerated approval based on data in CTCL patients from 2 clinical studies:Accelerated approval based on data in CTCL patients from 2 clinical studies: – 37% response rate (Phase I/II Study) – 30% response rate (Phase III Study) Full approval requires completion of 3 arm, blinded, placebo controlled CTCL trial L Full approval requires completion of 3 arm, blinded, placebo controlled CTCL trial L

8 Study L On target for submission of a final study report in early 2006, per prior communications with FDA Post-approval Clinical Commitment for ONTAK 

9 Key Regulatory/Development Milestones Ligand Pharmaceuticals assumes all development responsibility February 1999 Accelerated approval granted December 1997 BLA submitted by Seragen, Inc. August 1996 Orphan Drug designation

10 Persistent/refractory CTCLPersistent/refractory CTCL – Disease Stage Ia-III – CD25 (+) – ≤ 3 prior therapies Efficacy endpoints:Efficacy endpoints: – response rate – time-to-progression, response duration L Study Design (1)

11 L Study Design (2) Following discussion with FDA during 1999, study population was increased from 120 (40:40:40) to 195 (39:78:78):Following discussion with FDA during 1999, study population was increased from 120 (40:40:40) to 195 (39:78:78): – maintains original size of the placebo group – weights randomization toward active study drug to encourage enrollment

12 L Study Design (3) 5 daily treatments every 21 days; tumor burden is assessed at Baseline and Day 1 of each course after Course 1

13 Enrollment in L Progress to Date Patients Enrolled Year Through Approval 1Q Q 03

14 Ongoing Efforts to Complete Study L Cumulative Active Sites Year Q 03

15 Current Status of L Enrolled 105 of 195 patients needed to complete studyEnrolled 105 of 195 patients needed to complete study 28 active enrolling sites28 active enrolling sites Seven patients enrolled in the first two months of 2003Seven patients enrolled in the first two months of 2003 We estimate that 29 of 39 required placebo patients have enrolledWe estimate that 29 of 39 required placebo patients have enrolled On target for submission of a final study report in early 2006On target for submission of a final study report in early 2006

16 Small population size; few large clinical research centersSmall population size; few large clinical research centers Practice patterns for CTCL managementPractice patterns for CTCL management Impact of prior therapies on eligibilityImpact of prior therapies on eligibility Impact of the placebo armImpact of the placebo arm Challenges Encountered in Conduct of L

17 CTCL constitutes only 2.2% of all lymphoma cases in the U.S.*CTCL constitutes only 2.2% of all lymphoma cases in the U.S.* Annual incidence – approximately 4 per million*Annual incidence – approximately 4 per million* Approximately 1,100 new U.S. cases of CTCL reported per year*Approximately 1,100 new U.S. cases of CTCL reported per year* Approximately 400 CTCL patients treated with ONTAK in 2002Approximately 400 CTCL patients treated with ONTAK in 2002 Small Population Size *Surveillance, Epidemiology and End Results (SEER) data, NCI (1973 through 1992)

18 Impact of Practice Patterns and Prior Therapies on Accrual >3 therapies topical therapies Nitrogen mustard, BCNU, bexarotene, UVB, PUVA, electron- beam therapy Prevalent Topical Therapies Ineligible for L IA IB IIAIIB III IVA IVB Clinical Stage Eligible for L Prevalent Oral and Parenteral Therapies bexarotene, interferon α, ONTAK, oral MTX, purine analogues, combination chemotherapy

19 Patients often decline participation in placebo study due to symptoms/complications associated with CTCL (severe pruritis, ulcerations)Patients often decline participation in placebo study due to symptoms/complications associated with CTCL (severe pruritis, ulcerations) Investigators are reluctant to consider a placebo controlled study, especially for late stage patientsInvestigators are reluctant to consider a placebo controlled study, especially for late stage patients Governmental opposition – attempts to conduct study at six sites in France were unsuccessfulGovernmental opposition – attempts to conduct study at six sites in France were unsuccessful – After approval by local Ethics Committees, the French MOH declined the clinical trial application, citing the revised Declaration of Helsinki Impact of the Placebo Arm

20 Summary Study enlarged from 120 to 195 patients to encourage patient enrollment while maintaining original size of placebo groupStudy enlarged from 120 to 195 patients to encourage patient enrollment while maintaining original size of placebo group Multicenter, international expansion of study L to a total of 28 study sitesMulticenter, international expansion of study L to a total of 28 study sites – 1.5 – 2.0 patients/site/yr will achieve the goal of completion by 2006 On target for submission of a final study report in early 2006On target for submission of a final study report in early 2006