PURCHASE AGREEMENT

                                     BETWEEN

              PHARMACEUTICAL ROYALTIES INTERNATIONAL (CAYMAN) LTD.


                                       and


                       LIGAND PHARMACEUTICALS INCORPORATED

                            Dated as of March 6, 2002





                        TSE-424 ("BAZEDOXIFENE") ROYALTY

                      CP-336, 156 ("LASOFOXIFENE") ROYALTY



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                                TABLE OF CONTENTS

                                                                       
PURCHASE AGREEMENT..........................................................1
ARTICLE I - DEFINITIONS.....................................................1
   1.01 DEFINITIONS.........................................................1
ARTICLE II - PURCHASE AND SALE OF RIGHTS....................................4
   2.01 PURCHASE AND SALE...................................................4
   2.02 OPTIONS.............................................................5
   2.03 EXPIRATION OF RIGHTS TO RECEIVE PAYMENTS............................6
   2.04 EXCLUDED LIABILITIES AND OBLIGATIONS................................6
   2.05 EXCLUDED ASSETS.....................................................7
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLER......................7
   3.01 CORPORATE EXISTENCE AND POWER.......................................7
   3.02 CORPORATE AUTHORIZATION.............................................7
   3.03 GOVERNMENTAL AUTHORIZATION..........................................7
   3.04 NON-CONTRAVENTION...................................................7
   3.05 NO UNDISCLOSED MATERIAL LIABILITIES.................................8
   3.07 COMPLIANCE WITH LAWS................................................8
   3.08 NO PRIOR TRANSFER...................................................8
   3.09 ENABLING AGREEMENTS.................................................8
   3.10 INTELLECTUAL PROPERTY...............................................9
   3.11 FINDERS' FEES.......................................................9
   3.12 OTHER INFORMATION...................................................9
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYER.......................10
   4.01 ORGANIZATION AND EXISTENCE.........................................10
   4.02 CORPORATE AUTHORIZATION............................................10
   4.03 GOVERNMENTAL AUTHORIZATION.........................................10
   4.04 NON-CONTRAVENTION..................................................10
   4.05 FINDERS' FEES......................................................10
   4.06 FINANCING..........................................................10
   4.08 COMPLIANCE WITH LAWS...............................................11
ARTICLE V - COVENANTS......................................................11
   5.01 MAINTENANCE OF ENABLING AGREEMENTS.................................11
   5.02 CONFIDENTIALITY....................................................11
   5.03 PUBLIC ANNOUNCEMENT................................................11
   5.04 PAYMENTS...........................................................11
   5.05 CERTAIN NOTICES....................................................12
   5.06 AUDITS.............................................................12
   5.07 BREACH OF THE ENABLING AGREEMENTS..................................13
   5.08 COMMERCIALLY REASONABLE EFFORTS; FURTHER ASSURANCES................14
ARTICLE VI - SURVIVAL; INDEMNIFICATION.....................................14
   6.01 INDEMNIFICATION....................................................14
   6.02 PROCEDURES; NO WAIVER; EXCLUSIVITY.................................14
ARTICLE VII - TERM.........................................................15
   7.01 TERM...............................................................15
ARTICLE VIII - MISCELLANEOUS...............................................15
   8.01 NOTICES............................................................15
   8.02 AMENDMENTS; NO WAIVERS.............................................16
   8.03 EXPENSES...........................................................16
   8.04 SUCCESSORS AND ASSIGNS.............................................16
   8.05 GOVERNING LAW; JURISDICTION........................................16
   8.06 COUNTERPARTS; EFFECTIVENESS........................................16
   8.07 ENTIRE AGREEMENT...................................................17
   8.08 CAPTIONS...........................................................17


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EXHIBITS

            
Exhibit A-1     AHP Agreement
Exhibit A-2     Pfizer Agreement
Exhibit B       Patents





                                       ii

<PAGE>


                               PURCHASE AGREEMENT


          AGREEMENT dated as of March 6, 2002 between Ligand Pharmaceuticals
Incorporated, a Delaware corporation ("Seller"), and Pharmaceutical Royalties
International (Cayman) Ltd., a company organized under the laws of the Cayman
Islands (including each of its successors, assigns and legal representatives,
"Buyer").

                              W I T N E S S E T H:

          WHEREAS, Buyer desires to purchase the rights to receive certain
royalty-based payments from Seller, and Seller desires to sell, assign and
transfer such rights to Buyer, upon the terms and subject to the conditions
hereinafter set forth;

          NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          1.01 DEFINITIONS. The following terms, as used herein, have the
following meanings:

          "Affiliate" means with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with such other
Person.

          "Agreement" means this Purchase Agreement between Buyer and Seller.

          "AHP" means American Home Products Corporation, a Delaware
corporation.

          "AHP Agreement" means the Research, Development and License Agreement
between AHP and Seller dated September 2, 1994, as amended by agreements dated
January 16, 1996; May 24, 1996; September 2, 1997; and September 9, 1999,
together with the Option Agreement between Seller and AHP dated September 2,
1994, each of which is attached hereto as EXHIBIT A-1.

          "AHP Net Sales" means that portion of "Net Sales" as defined in the
AHP Agreement on which royalties are due on sales of Products (as defined
therein) containing TSE-424 ("bazedoxifene") during a given royalty payment and
reporting period under the AHP Agreement.

          "AHP Payment" means a payment of royalties from AHP or any other
Person to Seller or Seller's assignee (if any) as scheduled in the AHP Agreement
which includes royalties paid on AHP Net Sales.


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          "Applicable First Commercial Sale" shall mean (i) with respect to the
Region consisting of North America, the first commercial sale in the United
States, (ii) with respect to the Region consisting of Europe, the first
commercial sale in a member country of the European Union, and (iii) with
respect to the Region consisting of Japan, that country, (iv) with respect to
the Region consisting of the Rest of World, the first commercial sale in a
country within the Rest of the World.

          "Applicable Percentage" has the meaning set forth in Section 2.01.

          "Business Day" means any day that is not a Saturday, Sunday or a day
on which banks are required or permitted to be closed in the city of New York,
New York.

          "Closing" has the meaning set forth in Section 2.01.

          "Confidential Disclosure Agreement" has the meaning set forth in
Section 5.02.

          "Enabling Agreements" means the AHP Agreement and the Pfizer
Agreement.

          "Exception Notice" means a notice in writing delivered pursuant to
Section 2.02(b) by one party to the other party hereto (i) specifying which of
such party's representations and warranties contained herein are not true and
correct in all material respects as of any applicable Exercise Date and (ii)
providing, in reasonable detail, the facts and circumstances that render each
such representation and warranty not true or correct.

          "Excluded Liabilities and Obligations" has the meaning set forth in
Section 2.04.

          "Exercise Date" has the meaning set forth in Section 2.02(a).

          "Exercise Notice" has the meaning set forth in Section 2.02(b).

          "Governmental Authority" means any government, court, regulatory or
administrative agency or commission, or other governmental authority, agency or
instrumentality, whether federal, state or local (domestic or foreign),
including, without limitation, the PTO and the U.S. National Institutes of
Health.

          "Indemnified Party" has the meaning set forth in Section 6.02.

          "Indemnifying Party" has the meaning set forth in Section 6.02.

          "Lien" means, with respect to any agreement or other asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset.

          "Loss" has the meaning set forth in Section 6.01.

          "Notice Date" has the meaning set forth in Section 2.02.

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<PAGE>


          "Notice Period" has the meaning set forth in Section 2.02.

          "Option Exercise Price" has the meaning set forth in Section 2.02.

          "Patents" means the patents and applications listed in EXHIBIT B
hereto which arise from or in relation to the Enabling Agreements.

          "Person" means an individual, corporation, partnership, association,
trust or other entity or organization, but not including a government or
political subdivision or any agency or instrumentality of such government or
political subdivision.

          "Pfizer" means Pfizer, Inc., a Delaware corporation.

          "Pfizer Agreement" means the agreement between Seller and Pfizer dated
May 1, 1991, the Supplementary Agreement between the same parties dated October
1, 1993 and the Settlement Agreement and Mutual Release of All Claims between
the same parties dated April 20, 1996, all of which are attached hereto as
EXHIBIT A-2.

          "Pfizer Net Sales" means that portion of "Net Sales" as defined in the
Pfizer Agreement on which royalties are due on sales of CP-336,156
("lasofoxifene") during a given royalty payment and reporting period under the
Pfizer Agreement.

          "Pfizer Payment" means a payment of royalties from Pfizer or any other
Person to Seller or Seller's assignee (if any) as scheduled in the Pfizer
Agreement which includes royalties paid on Pfizer Net Sales.

          "PTO" means the United States Patent and Trademark Office.

          "Purchase Price" has the meaning set forth in Section 2.01.

          "Region" means (i) North America (consisting of the United States,
Canada and Mexico), (ii) Europe (consisting of the member countries of the
European Union), (iii) Japan or (iv) the Rest of World.

          "Rest of the World" means every country of the world other than those
countries in North America, Europe and Japan.

          "Seller's Knowledge" means the actual knowledge of the executive
officers of Seller.

          "UCC" means the U.S. Uniform Commercial Code as in effect in the State
of California and any successor statute, as in effect from time to time.

                                       3

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                                   ARTICLE II

                           PURCHASE AND SALE OF RIGHTS

          2.01 PURCHASE AND SALE. Upon the terms and subject to the conditions
of this Agreement:

          (a) Buyer agrees to purchase from Seller, and Seller agrees to sell,
transfer, assign and deliver, or cause to be sold, transferred, assigned or
delivered, to Buyer, upon execution of this Agreement, free and clear of all
Liens, the right to receive from Seller payments of 0.25% (the "Applicable
Percentage") of the AHP Net Sales and the Applicable Percentage of the Pfizer
Net Sales within ten (10) business days of and conditioned upon, the receipt by
Seller (or any of Seller's assignees) of each AHP Payment or Pfizer Payment,
respectively. The Applicable Percentage shall be increased from time to time by
the additional percentage(s) specified in Section 2.02 upon the exercise of the
option(s) and the payment of the applicable Option Exercise Price set forth
therein. In order to secure its obligations to Buyer under this Agreement,
Seller hereby grants to Buyer a continuing first security interest in and lien
to all of Seller's right, title and interest in and to the Enabling Agreements,
including, without limitation, its right to receive the AHP Payments and the
Pfizer Payments.

          (b) For and in consideration of this right, Buyer shall pay to Seller
six million US dollars ($6,000,000) (the "Purchase Price"). The payment of the
Purchase Price by Buyer to Seller shall be made upon execution and delivery of
this Agreement. The occurrence of such execution and delivery and payment is
sometimes hereinafter referred to as the "Closing". Except to the extent
otherwise provided in Section 6.01, the Purchase Price is non-refundable and is
not conditioned on the receipt of any royalties by Seller.

          (c) At the Closing, Seller shall cause to be delivered to Buyer:

               (i) a certified copy of the resolutions of the Board of Directors
of Seller authorizing this Agreement and the transactions contemplated hereby;

               (ii) a receipt for the Purchase Price;

               (iii) an opinion of counsel to Seller addressed to Buyer
confirming the matters warranted in Sections 3.01, 3.02, 3.03, 3.04, 3.06 and
3.07; and

               (iv) a letter authorizing Buyer to file, pursuant to the security
interest granted by Seller to Buyer in Section 2.01, a UCC financing statement
on Form UCC-1, and all amendments and modifications thereto, securing Buyer's
rights hereunder.

          At and after the Closing, if requested by Buyer, Seller will execute
and deliver to Buyer such instruments and documents as may be reasonably
requested by Buyer in order to evidence its ownership of the rights acquired
hereunder, including without limitation such further UCC registration forms as
Buyer may request.

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          2.02 OPTIONS. (a) Seller hereby grants to Buyer the following options,
each exercisable at Buyer's sole discretion, to acquire rights to receive
additional percentages of both AHP Net Sales and Pfizer Net Sales on the same
terms as described above in Section 2.01(a). For clarity, such options may be
exercised only for additional percentages of both AHP Net Sales and Pfizer Net
Sales. Payment of the Option Exercise Price specified below represents payment
for the additional percentages of both the AHP Net Sales and the Pfizer Net
Sales.



-------------------- ------------------------ ---------------------------- ---------------------------
                                                                             Additional Percentage of
Notice Date (each a   Exercise Date (each an         Exercise Price           both AHP Net Sales and
  "Notice Date")         "Exercise Date")      (each, an "Option Exercise        Pfizer Net Sales
                                                        Price")
-------------------- ------------------------ ---------------------------- ---------------------------
                                                                              
-------------------- ------------------------ ---------------------------- ---------------------------
May 1, 2002          May 15, 2002                       $3,000,000                   0.125%
-------------------- ------------------------ ---------------------------- ---------------------------
December 20, 2002    December 31, 2002                  $8,000,000                   0.250%
-------------------- ------------------------ ---------------------------- ---------------------------
September 15, 2003   September 30, 2003                $12,500,000                   0.250%
-------------------- ------------------------ ---------------------------- ---------------------------
March 16, 2004       March 31, 2004                    $16,000,000                   0.250%
-------------------- ------------------------ ---------------------------- ---------------------------
May 17, 2004         May 31, 2004                      $10,500,000                   0.125%
-------------------- ------------------------ ---------------------------- ---------------------------


          (b) If Buyer desires to exercise any option, Buyer shall give written
notice (an "Exercise Notice") to Seller at any time from the date which is 30
days prior to the applicable Notice Date up to and including 5:00 p.m. (New York
City time) on the applicable Notice Date (or, if not a Business Day, on the next
following Business Day). If Buyer delivers an Exercise Notice, then:

               (i) unless, at least two (2) Business Days prior to the
          applicable Exercise Date, Seller delivers to Buyer an Exception
          Notice, Seller shall be deemed to have represented and warranted to
          Buyer that, as of the applicable Exercise Date, all of Seller's
          representations and warranties contained herein are true and correct
          in all material respects on and as of the applicable Exercise Date as
          if made on such Exercise Date;

               (ii) unless, at least two (2) Business Days prior to the
          applicable Exercise Date, Buyer delivers to Seller an Exception
          Notice, Buyer shall (A) be deemed to have represented and warranted to
          Seller that, as of the applicable Exercise Date, all of Buyer's
          representations and warranties contained herein are true and correct
          in all material respects on and as of the applicable Exercise Date as
          if made on such Exercise Date and (B) have, as of the applicable
          Exercise Date, sufficient funds available to pay the applicable Option
          Exercise Price; and

               (iii) on the applicable Exercise Date (or, if not a Business Day,
          on the next following Business Day), Buyer shall pay to Seller the
          applicable Option Exercise Price.

If Seller delivers to Buyer an Exception Notice as provided above, Buyer shall
have the option, in its sole discretion, either (A) to withdraw the Exercise
Notice at any time on or before the applicable Exercise Date or (B) to pay to
Seller the applicable Option Exercise Price on the applicable Exercise Date. If
Buyer elects to pay the Option Exercise Price pursuant to clause (B)

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in the immediately preceding sentence, Buyer shall be deemed to have waived the
misrepresentation or breach of warranty to the extent specified in Seller's
Exception Notice; provided that Buyer shall not be deemed to have waived any
willful or intentional misrepresentation or breach.

If Buyer delivers to Seller an Exception Notice as provided above, Buyer shall
be liable to Seller for any Loss suffered by Seller as a result of such
misrepresentation or breach of warranty.

Except to the extent otherwise provided in Section 6.01, each Option Exercise
Price shall be non-refundable and is not conditioned on the receipt of any
payments by Seller from AHP, Pfizer or others.

          2.03 EXPIRATION OF RIGHTS TO RECEIVE PAYMENTS. Each of the rights set
forth in Sections 2.01 and 2.02, whether granted pursuant to Section 2.01 or
acquired by the exercise of an option pursuant to Section 2.02, shall expire as
follows:

          (a)  for all lasofoxifene-related rights (including those related to
               any lasofoxifene combination products), on the 10th anniversary
               of the Applicable First Commercial Sale on a Region by Region
               basis of any lasofoxifene product under the Pfizer Agreement or
               any amendment, modification or continuation thereof;

          (b)  for rights based on AHP Net Sales of bazedoxifene not sold in
               combination with other drugs, on the 10th anniversary of the
               Applicable First Commercial Sale on a Region by Region basis of
               any bazedoxifene product under the AHP Agreement or any
               amendment, modification or continuation thereof;

          (c)  for rights based on AHP Net Sales of bazedoxifene sold in
               combination with Premarin, on the 10th anniversary of the
               Applicable First Commercial Sale on a Region by Region basis of
               any bazedoxifene-Premarin combination product under the AHP
               Agreement or any amendment, modification or continuation thereof;

          (d)  for rights based on AHP Net Sales of bazedoxifene sold in
               combination with any other drug(s), on the later to occur of (b)
               and (c) above.

For clarity, each such right of Buyer to receive payment from Seller shall in
any event expire not later than the expiration of Seller's right to receive
royalties on the corresponding product under the Enabling Agreements or any
amendment, modification or continuation thereof.

          2.04 EXCLUDED LIABILITIES AND OBLIGATIONS. Notwithstanding any
provision in this Agreement or any other writing to the contrary, Buyer is
acquiring only the rights and options to receive payments from Seller as
expressly set forth herein and is not assuming any liability or obligation of
Seller of whatever nature, whether presently in existence or arising or asserted
hereafter, whether under any of the Enabling Agreements or otherwise. All such
liabilities and obligations shall be retained by and remain obligations and
liabilities of Seller (the "Excluded Liabilities and Obligations").

          2.05 EXCLUDED ASSETS. Buyer does not, by purchase of the rights
granted hereunder, acquire any assets or contract rights of Seller under the
Enabling Agreements, except to the

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extent of the security interest granted by Seller to Buyer pursuant to Section
2.01(a). Buyer acknowledges that milestone payments made to Seller pursuant to
the Enabling Agreements are not included in the rights and options granted
hereunder.

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF SELLER

          Seller hereby represents and warrants to Buyer that:

          3.01 CORPORATE EXISTENCE AND POWER. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.

          3.02 CORPORATE AUTHORIZATION. The execution, delivery and performance
by Seller of this Agreement, and the consummation by Seller of the transactions
contemplated hereby are within Seller's corporate powers and have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly executed and delivered and constitutes a valid and
binding agreement of Seller, enforceable against Seller in accordance with its
terms.

          3.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Seller of this Agreement does not require any notice to, action
or consent by or in respect of, or filing with, any Governmental Authority
except for filings required by the Securities Act of 1933 , the Securities
Exchange Act of 1934 or actions taken or filings made, if any.

          3.04 NON-CONTRAVENTION. (a) The execution, delivery and performance by
Seller of this Agreement does not and will not (i) contravene or conflict with
the corporate charter or bylaws of Seller, (ii) contravene or conflict with or
constitute a violation of any provision of any law or regulation binding upon or
applicable to Seller, the AHP Payments or the Pfizer Payments which
contravention, conflict or violation could reasonably be expected to have a
material adverse effect on the AHP Payments or the Pfizer Payments; (iii)
contravene or conflict with or constitute a violation of any judgment,
injunction, order or decree binding upon or applicable to the Seller, the AHP
Payments or the Pfizer Payments which contravention, conflict or violation could
reasonably be expected to have a material adverse effect on the AHP Payments or
the Pfizer Payments; (iv) constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or obligation of
Seller or to a loss of any benefit relating to the AHP Payments or the Pfizer
Payments, or (v) result in the creation or imposition of any Lien on the AHP
Payments or the Pfizer Payments (except for any Lien in favor of the Buyer).

          (b) Other than pursuant to this Agreement, Seller has not granted, and
there does not currently exist, any Lien on the AHP Payments or the Pfizer
Payments, on any of the Enabling Agreements.

          3.05 NO UNDISCLOSED MATERIAL LIABILITIES. There are no material
liabilities or obligations of Seller related to the AHP Payments or Pfizer
Payments of any kind whatsoever,

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whether accrued, contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of circumstances which
could reasonably be expected to result in such a liability or obligation, other
than those which could not reasonably be expected to adversely affect Buyer's
rights hereunder.

          3.06 LITIGATION. There is no action, suit, investigation or proceeding
(or any basis therefor), of which Seller has received notice, pending or, to
Seller's Knowledge, threatened, before any Governmental Authority or arbitrator
that has or could materially adversely affect the AHP Payments or the Pfizer
Payments. To Seller's Knowledge, there have been no claims made by any Person
with respect to, and no actions, suits or other proceedings relating to the AHP
Agreement or Pfizer Agreement which could reasonably be expected to have a
material adverse effect on Buyer's rights hereunder.

          3.07 COMPLIANCE WITH LAWS. Seller is not in violation of, has not
violated, and to the knowledge of Seller, is not under investigation with
respect to and has not been threatened to be charged with or given notice of any
violation of, any law, rule, ordinance or regulation, or judgment, order or
decree entered by any Governmental Authority applicable to the AHP Agreement or
the Pfizer Agreement which could reasonably be expected to have a material
adverse effect on Buyer's rights hereunder.

          3.08 NO PRIOR TRANSFER. Seller has not assigned and has not in any
other way conveyed, transferred, or encumbered all or any portion of its right,
title and interest to the AHP Payments or the Pfizer Payments, except as could
not reasonably be expected to adversely affect Buyer's rights hereunder. Seller
has received no notice from AHP or Pfizer that could reasonably be construed to
mean that any future payment from AHP or Pfizer will not be timely made under
the AHP Agreement or the Pfizer Agreement, respectively.

          3.09 ENABLING AGREEMENTS. A true, correct and complete copy of each of
the Enabling Agreements is attached hereto as EXHIBIT A-1 and A-2. Each of the
Enabling Agreements is in full force and effect in the forms attached hereto as
EXHIBIT A-1 and A-2. There have been no amendments or modifications to any of
the Enabling Agreements, other than attached as exhibits hereto. Neither AHP nor
Pfizer has been released, in whole or in part, from any of its obligations under
the AHP Agreement and the Pfizer Agreement, respectively. Neither the AHP
Payments nor the Pfizer Payments is subject to any existing claim of rescission,
offset, counterclaim or defense for any other liability or obligation of Seller.
To Seller's Knowledge, no event has occurred or circumstance exists that would
entitle either AHP or Pfizer to exercise any such right of rescission, offset,
counterclaim or defense. Seller is in compliance with the Enabling Agreements
and is not in breach of its obligations with respect thereto which breach could
reasonably be expected to have a material adverse effect on its rights
thereunder. AHP and Pfizer are, to Seller's Knowledge, in material compliance
with, respectively, the AHP Agreement and the Pfizer Agreement and Seller has no
reason to believe that either AHP or Pfizer does not intend to comply with its
obligations pursuant to the AHP Agreement and the Pfizer Agreement,
respectively, including their respective obligations to pay royalties on
products covered thereby. Except for the Enabling Agreements and this Agreement,
there are no other contracts, arrangements, or understandings relating to AHP
Payments or the Pfizer Payments, except as could not reasonably be expected to
adversely affect Buyer's rights hereunder. Each of the AHP

                                       8

<PAGE>

Agreement and the Pfizer Agreement is the legal, valid and binding obligation of
Seller enforceable against Seller in accordance with its respective terms.

          3.10 INTELLECTUAL PROPERTY. (a) Seller has not received any notice in
writing to the effect that any Person has claimed that the Patents are invalid
or unenforceable. To Seller's Knowledge, there is no set of facts or
circumstances that if presented to a Governmental Authority could reasonably be
expected to render the Patents invalid or unenforceable.

          (b) To Seller's Knowledge, the manufacture, use, sale or import of
bazedoxifene or lasofoxifene would not infringe a patent or other intellectual
property right of another Person. To Seller's Knowledge, there is no pending or
threatened action, suit, proceeding or claim by others that the manufacture,
sale or proposed sale of bazedoxifene or lasofoxifene would infringe any patent
or other intellectual property right of another Person.

          (c) Pursuant to the Enabling Agreements, (i) Seller is entitled to
receive a royalty stream from (A) Pfizer based on the sale of lasofoxifene and
(B) AHP based on the sale of bazedoxifene and (ii) Seller has not received
notice from either AHP or Pfizer that the development of bazedoxifene or
lasofoxifene, as the case may be, has been discontinued.

          3.11 FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Seller who might be entitled to any fee or commission from Buyer or any of
its Affiliates upon consummation of the transactions contemplated by this
Agreement.

          3.12 OTHER INFORMATION. Neither this Agreement nor any of the exhibits
appended hereto contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein not misleading, except as could not reasonably be expected to have a
material adverse effect on Buyer's rights hereunder.

                                   ARTICLE IV

                     REPRESENTATIONS AND WARRANTIES OF BUYER

          Buyer hereby represents and warrants to Seller that:

          4.01 ORGANIZATION AND EXISTENCE. Buyer is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has all applicable powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.

          4.02 CORPORATE AUTHORIZATION. The execution, delivery and performance
by Buyer of this Agreement and the consummation by Buyer of the transactions
contemplated hereby are within the powers of Buyer and have been duly authorized
by all necessary action on the part of Buyer. This Agreement constitutes a valid
and binding agreement of Buyer.

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          4.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Buyer of this Agreement does not require any action by or in
respect of, or filing with, any Governmental Authority (except for actions taken
or filings made, if any).

          4.04 NON-CONTRAVENTION. The execution, delivery and performance by
Buyer of this Agreement does not and will not (i) contravene or conflict with
the organizational documents of Buyer, (ii) contravene or conflict with or
constitute a violation of any provision of any law or regulation binding upon or
applicable to Buyer; or (iii) contravene or conflict with or constitute a
violation of any judgment, injunction, order or decree binding upon or
applicable to Buyer, except as could not reasonably be expected to materially
adversely affect Seller's rights to receive or retain the Purchase Price and any
Option Exercise Price paid hereunder.

          4.05 FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary that has been retained by or is authorized to act on behalf
of Buyer who might be entitled to any fee or commission from Seller upon
consummation of the transactions contemplated by this Agreement.

          4.06 FINANCING. At the Closing, Buyer will have sufficient funds
available to pay the Purchase Price.

          4.07 LITIGATION. There is no action, suit, investigation or proceeding
(or any basis therefor), of which Buyer has received notice, pending against, or
to the knowledge of Buyer, threatened against or affecting, Buyer before any
court or arbitrator or any governmental body, agency or official which could
reasonably be expected to materially adversely affect Seller's rights to receive
or retain the Purchase Price and any Option Exercise Price paid hereunder.

          4.08 COMPLIANCE WITH LAWS. Buyer is not in violation of, has not
violated, and to the knowledge of Buyer, is not under investigation with respect
to and has not been threatened to be charged with or given notice of any
violation of, any law, rule, ordinance or regulation, or judgment, order or
decree entered by any Governmental Authority which could reasonably be expected
to materially adversely affect Seller's rights to receive or retain the Purchase
Price and any Option Exercise Price paid hereunder.

                                    ARTICLE V

                                    COVENANTS

          Buyer and Seller agree that:

          5.01 MAINTENANCE OF ENABLING AGREEMENTS. (a) Seller shall exercise
fully all of its rights, and comply fully with all of its obligations, under the
Enabling Agreements, except as could not reasonably be expected to adversely
affect the AHP Payments or the Pfizer Payments. Seller shall not permit any
amendment to the Enabling Agreements that could reasonably be expected to reduce
the AHP Payments or the Pfizer Payments below 1.25% of AHP Net Sales or Pfizer
Net Sales, respectively. Subject to Section 5.02, Seller shall provide to Buyer
a copy of any amendment or modification to, or waiver under, any of the Enabling
Agreements.

                                       10

<PAGE>

          (b) Seller shall not sell, transfer, assign or otherwise dispose of
any right, title or interest in or to the AHP Payments, the Pfizer Payments or
the Enabling Agreements if such sale, transfer, assignment or disposition could
reasonably be expected to reduce Seller's economic interest therein below 1.25%
of AHP Net Sales or 1.25% of Pfizer Net Sales. Seller shall not grant any Lien
on the AHP Payments, the Pfizer Payments or the Enabling Agreements except any
such Lien as would be subordinate in priority and right of payment to the
security interest granted by Seller to Buyer pursuant to Section 2.01 hereof.

          5.02 CONFIDENTIALITY. The parties have entered into a Confidential
Disclosure Agreement dated January 24, 2002 (the "Confidential Disclosure
Agreement") which, to the extent not otherwise inconsistent with this Agreement,
remains in full force and effect.

          5.03 PUBLIC ANNOUNCEMENT. The Confidential Disclosure Agreement
notwithstanding, each party shall have the right to make disclosures relevant to
this Agreement that are required by law, governmental rules and regulations or
the rules and regulations of any applicable securities exchange or trading
system. The parties agree to consult with each other before issuing any other
press release or making any other public statement with respect to this
Agreement.

          5.04 PAYMENTS. Within ten (10) business days of receipt of an AHP
Payment or Pfizer Payment, or in the absence of such receipt, the making by AHP
or Pfizer of an AHP Payment or Pfizer Payment to any other Person, Seller will
remit to Buyer payments due hereunder, pursuant to Section 2.01, in US dollars
by federal funds wire transfer at New York pursuant to instructions received
from Buyer. The amount of the payment shall be determined based upon AHP Net
Sales or Pfizer Net Sales reported under the Enabling Agreements, as applicable
and shall be calculated by multiplying (a) such AHP Net Sales or Pfizer Net
Sales, as the case may be, by (b) the Applicable Percentage (expressed as a
decimal). By way of example only, if first and second options were exercised,
the amount due Buyer hereunder would be:


(portion of reported Net Sales for payment    x    (0.0025 + 0.00125 + 0.0025)
 period due on royalty-bearing bazedoxifene
 or lasofoxifene sales)


If AHP Net Sales or Pfizer Net Sales are not separately reported in the
applicable royalty reports received by Seller from AHP or Pfizer, then Buyer and
Seller shall jointly determine in good faith the amount of each such payment
owed by Seller to Buyer hereunder, using such information as they jointly decide
is appropriate including, without limitation, any publicly available
information, it being understood that such public information shall not
necessarily be determinative. If the parties are not able to jointly determine
any such payment, within three (3) business days of Buyer's or Seller's request,
Seller's CEO or CFO and a Managing Director of Buyer (or other executive officer
of an Affiliate of Buyer) shall meet in person in Chicago, Illinois to determine
such payment. Seller shall immediately pay any amount not in dispute. If,
notwithstanding each party's good faith efforts to jointly determine such
payment, the parties

                                       11

<PAGE>

remain unable to agree upon such payment, then Seller shall use reasonable
commercial efforts to obtain separately reported AHP Net Sales and Pfizer Net
Sales.

          Any payment due hereunder (pursuant to Section 2.01) which is not made
when due shall bear interest until paid at the prime interest rate as announced
by Citibank, N.A., plus 2%, compounded monthly. Any payment due hereunder
(pursuant to Section 2.01) shall be made without offset or deduction for any
claim of rescission, offset or counterclaim or for any defense or other
liability or obligation of Seller or any of its Affiliates to AHP, Pfizer or any
of their respective Affiliates. By notice to Seller in writing, Buyer may
instruct Seller to make such payments to another of its accounts or the
account(s) of Buyer's Affiliate(s); PROVIDED that Buyer provides to Seller any
applicable tax forms exempting Seller from any withholding, transfer,
value-added or sales tax imposed against Seller by any Governmental Authority.

          5.05 CERTAIN NOTICES. Seller shall provide written notice to Buyer
within five (5) business days of receipt by Seller of any notice or report from
AHP or Pfizer that the development of bazedoxifene or lasofoxifene, as the case
may be, has been discontinued.

          5.06 AUDITS. (a) Not more than once in any calendar year, at Buyer's
request and at Buyer's expense, Seller shall cause a certified public accountant
mutually acceptable to the parties to conduct an audit of the relevant books and
records of Seller, for the purposes of verifying amounts due Buyer hereunder.
Buyer's then-current independent accountant shall be deemed mutually acceptable
to the parties under the preceding sentence. Such books and records are
confidential information of Seller, AHP and/or Pfizer and may not be disclosed
to Buyer. Accountant shall report to Buyer only that the amounts paid hereunder
have been correct, or the amount of shortfall or overpayment, if any. Seller
shall promptly pay any shortfall reported by such accountant and Buyer shall
promptly refund any overpayment. If any shortfall in payments owed to Buyer
exceeds 5% of the aggregate payments for Buyer for such calendar year, then
Seller shall reimburse Buyer for the cost of such audit.

          (b) If at any time Seller disposes of its entire interest in the AHP
Payments or the Pfizer Payments (not including the Applicable Percentage of the
Pfizer Net Sales or AHP Net Sales sold to Buyer hereunder), then at Buyer's
request and at Buyer's expense, Seller's successors or assigns shall direct a
certified public accountant mutually agreeable to the parties to perform an
audit of the relevant books and records of AHP and/or Pfizer on the terms
provided for in the AHP Agreement and the Pfizer Agreement; provided that such
audit shall only be directed to bazedoxifene or lasofoxifene products, as the
case may be; and provided that Buyer shall be entitled to any recoupment of
expenses pursuant to provisions governing audit rights under the AHP Agreement
and the Pfizer Agreement.

          5.07 BREACH OF THE ENABLING AGREEMENTS. Upon any occurrence of a
breach by AHP or Pfizer under the AHP Agreement or Pfizer Agreement, as the case
may be, which is not cured as provided in the applicable agreement and which
would adversely affect Buyer's rights hereunder, Seller shall give prompt
written notice thereof to Buyer and at Buyer's request, the parties hereto shall
meet and confer to determine a course of action with respect to such breach.
Seller shall have the right to control any litigation or other proceeding unless
otherwise agreed in writing; PROVIDED that, solely to the extent necessary to
protect its interests in the AHP Net Sales

                                       12

<PAGE>

and the Pfizer Net Sales, Buyer may, at its option and expense, participate in
any such litigation or other proceeding, including any counterclaim alleging
invalidity of the Patents or otherwise alleging that the AHP Agreement or the
Pfizer Agreement is invalid or unenforceable and including in all settlement
discussions or meetings; and provided that Buyer shall be entitled to share, pro
rata as to its proportion of the AHP Payments and Pfizer Payments, in any
judgment awarded in such circumstances, net of Buyer's pro rata share of
Seller's reasonable expenses and reasonable attorneys' fees relating to AHP Net
Sales or Pfizer Net Sales. For greater certainty, it is understood and agreed
between the parties that the right of Buyer to "participate" in any such
litigation or other proceeding shall be limited to: (i) the right to review and
comment on all draft pleadings and other documents to be filed with any
Governmental Authority, arbitrator or mediator, but not the right to require
that any changes be made thereto, (ii) the right to review and comment on all
proposed settlement agreements, but not the right to require that any changes be
made thereto; and (iii) unless the opposing party(ies) object, the right to be
present at any hearings or conferences and at settlement discussions or other
meetings and the right to communicate at such hearings or conferences,
discussions or meetings with Seller and counsel for Seller, but not the right to
communicate directly with the applicable Governmental Authority, arbitrator or
mediator or with the opposing party at any such hearings, conferences,
discussions or meetings. Nothing in this Section 5.07 is intended to affect the
rights and obligations of the parties hereto set forth elsewhere in this
Agreement, including without limitation in Sections 5.01 and 5.04 hereof.

          5.08 COMMERCIALLY REASONABLE EFFORTS; FURTHER ASSURANCES. Subject to
the terms and conditions of this Agreement, each party will use its commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary under applicable laws and regulations to
consummate the transactions contemplated by this Agreement; PROVIDED that Buyer
shall not be obligated to pay any amount of money or deliver any goods or
services to Seller or any third party except as otherwise expressly provided in
this Agreement. Buyer and Seller agree to execute and deliver such other
documents, certificates, agreements and other writings (including any UCC
filings requested by Buyer) and to take such other actions as may be reasonably
necessary in order to consummate or implement expeditiously the transactions
contemplated by this Agreement.

                                   ARTICLE VI

                            SURVIVAL; INDEMNIFICATION

          6.01 INDEMNIFICATION. (a) Seller hereby indemnifies Buyer and its
Affiliates against, and agrees to hold each of them harmless from, any and all
damage, loss, liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) (collectively, "Loss") incurred
or suffered by Buyer and its Affiliates arising out of any misrepresentation or
breach of warranty, covenant or agreement made or to be performed by the Seller
pursuant to this Agreement, including any failure by the Seller to satisfy any
of the Excluded Liabilities and Obligations.

                                       13

<PAGE>

          (b) Buyer hereby indemnifies Seller and its Affiliates against, and
agrees to hold each of them harmless from, any and all Loss incurred or suffered
by Seller and its Affiliates arising out of (i) any misrepresentation or breach
of warranty contained in Article IV; (ii) any breach of Section 5.02; and (iii)
any failure by Buyer, after delivery to Seller of any Exercise Notice, to pay
the applicable Exercise Price on the applicable Exercise Date, in accordance
with, and subject to the terms and conditions of, Section 2.02(b), provided that
this clause (iii) shall not apply if Seller delivers an Exception Notice to
Buyer and Buyer withdraws the Exercise Notice prior to the applicable Exercise
Date in accordance with Section 2.02(b).

          6.02 PROCEDURES; NO WAIVER; EXCLUSIVITY. (a) The party seeking
indemnification under Section 6.01 (the "Indemnified Party") agrees to give
prompt notice to the party against whom indemnity is sought (the "Indemnifying
Party") of the assertion of any claim, or the commencement of any suit, action
or proceeding in respect of which indemnity may be sought under Section 6.01;
PROVIDED that the failure to give such notice shall not affect the Indemnified
Party's rights hereunder except to the extent the Indemnifying Party is
materially prejudiced by such failure. The Indemnifying Party shall control the
defense of any such third party suit, action or proceeding at its own expense.
The Indemnifying Party shall not be liable under Section 6.01 for any settlement
effected without its prior consent of any claim, litigation or proceeding in
respect of which indemnity may be sought hereunder; provided that such consent
may not be unreasonably withheld.

          (b) No investigation by Buyer of the Enabling Agreements or by either
party of other matters shall limit such party's rights to indemnification
hereunder.

          (c) After the Closing, Section 6.01 will provide the exclusive remedy
for any misrepresentation, breach of warranty, covenant or other agreement or
other claim arising out of this Agreement or the transactions contemplated
hereby.

          (d) The representations, warranties, covenants and agreements
contained herein shall survive the Closing. The expiration of any term of this
Agreement shall not excuse any party hereto from its liability in respect of any
breach hereof prior to such expiration.

                                   ARTICLE VII

                                      TERM

          7.01 TERM. This Agreement will expire simultaneously with the last to
expire right to receive payment under Section 2.03; PROVIDED, that Buyer shall
have received all applicable payments due hereunder. The provisions of Section
5.02, Section 8.03 and Article VI in respect of any breaches prior to the
expiration date of this Agreement, shall survive any expiration of this
Agreement.

                                       14

<PAGE>


                                  ARTICLE VIII

                                  MISCELLANEOUS

          8.01 NOTICES. All notices, requests and other communications to either
party hereunder shall be in writing and shall be given by regular mail or
courier as follows:

            (a)         if to Buyer, to:

                        c/o Royalty Pharma AG
                        675 Third Avenue
                        Suite 3000
                        New York, NY 10017
                        Attention:  Alexander B. Kwit, Esq.
                        Telecopy:   (917) 368-0021

                        with a copy to:

                        Testa, Hurwitz & Thibeault, LLP
                        125 High Street
                        Boston, MA  02110
                        Attention:  F. George Davitt, Esq.
                        Telecopy:   (617) 248-7100

            (b)         if to Seller, to:

                        Ligand Pharmaceuticals Incorporated
                        10275 Science Center Drive
                        San Diego, CA  92121
                        Attention: General Counsel
                        Facsimile: (858) 550-1825

or to such other address as any party may have furnished to the other in writing
in accordance herewith. All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt.

          8.02 AMENDMENTS; NO WAIVERS. (a) Any provisions of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Buyer and Seller or in the case of a
waiver, by the party against whom the waiver is to be effective.

          (b) No failure or delay by either party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

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<PAGE>

          8.03 EXPENSES. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.

          8.04 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. After the Closing, without limiting the generality of
the foregoing, nothing herein shall prohibit or restrict Buyer from assigning
any of its rights and obligations hereunder to any Affiliate of Buyer or any
other Person; provided that, without the consent of Seller, no such assignment
shall relieve Buyer from its obligations hereunder.

          8.05 GOVERNING LAW; JURISDICTION. This Agreement shall be construed in
accordance with and governed by the law of the State of New York. Process in any
such suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court.

          8.06 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.

          8.07 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, and the
Confidential Disclosure Agreement constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements, understandings and negotiations, both written and oral, between the
parties with respect to the subject matter of this Agreement; PROVIDED that in
the event of any inconsistency between this Agreement and the Confidential
Disclosure Agreement, the provisions of this Agreement shall govern. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein has been made or relied upon by either party hereto. None of
this Agreement, nor any provision hereof, is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.

          8.08 CAPTIONS. The titles and captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       16

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

LIGAND PHARMACEUTICALS INCORPORATED

By:      /s/ Paul Maier
         Name: Paul V. Maier
         Title: Senior VP, CFO


PHARMACEUTICAL ROYALTIES INTERNATIONAL (CAYMAN) LTD.

By:      /s/ David Madden
         Name: David Madden
         Title: Attorney-in-fact



By:      ________________________________
         Name:
         Title:





                                       17


<PAGE>



                                   EXHIBIT A-1
                                  AHP AGREEMENT

*This exhibit was previously filed as part of, and is hereby incorporated by
reference to exhibit 10.77 filed with the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1994.



<PAGE>


                                   EXHIBIT A-2
                                PFIZER AGREEMENT

*This exhibit was previously filed as part of, and is hereby incorporated by
reference to exhibit 10.35 filed with the Company's Registration Statement on
Form S-1 (No. 33-47257) filed on April 16, 1992 as amended.

*This exhibit was previously filed as part of, and is hereby incorporated by
reference to exhibit 10.151 filed with the Company's Quarterly report on Form
10-Q for the period ended June 30, 1996


<PAGE>


                                    EXHIBIT B
                         PATENTS AND PATENT APPLICATIONS


<PAGE>


U.S. Patent Rights Relating to CP-336,156

(i)  U.S. Patent No. 5,552,412, which issued from U.S. Serial No. 08/369,954,
     filed January 9, 1995.

(ii) U.S. Patent No. 6,204,286, which issued from U.S. Serial No. 08/849, 726,
     filed June 30, 1997.

(iii) U.S. Patent No. 6,153,622, which issued from U.S. Serial No. 09/141,613,
     filed August 28, 1998.

(iv) U.S. Patent Application, Publication Number 20010025051, which published
     from U.S. Serial No. 09/820,158, filed March 28, 2001.

(v)  U.S. Patent No. 6,323,232, which issued from U.S. Serial No. 09/117, 972,
     filed December 23, 1996, which claims the benefit of U.S. Provisional
     Application 60/012,412, filed February 28, 1996.

(vi) U.S. Patent Application, Publication Number 20010009920, which published
     from U.S. Serial No. 09/736,051, filed December 13, 2000.

U.S. Patent Rights Relating to TSE-424

(i)  U.S. Patent No. 5,998,402, which issued from U.S. Serial No. 08/833,271,
     filed April 4, 1997, which claims the benefit of U.S. Provisional
     Application, Serial No. 60/015,553, filed April 19, 1996.

(ii) U.S. Patent No. 6,326,367, which issued from U.S. Serial No. 09/388,581,
     filed September 2, 1999.

(iii) U.S. Patent No. 6,127,404, which issued from U.S. Serial No. 09/388,580,
     filed September 2, 1999.

(iv) U.S. Patent No. 6,232,307, which issued from U.S. Serial No. 09/416,078,
     filed October 12, 1999.

(v)  U.S. Patent No. 6,225,308, which issued from U.S. Serial No. 09/416,318,
     filed October 12, 1999.

(vi) U.S. Patent No. 6,291,451, which issued from U.S. Serial No. 09/779,048,
     filed February 8, 2001.

(vii) U.S. Patent No. 6,326,392, which issued from U.S. Serial No. 09/185,058,
     filed November 3, 1998, which claims the benefit of U.S. Provisional
     Application, Serial No. 60/093,051, filed November 6, 1997.

Source: OneCLE Business Contracts.