Ligand To Spin-Off Its OmniAb Business Through Merger With Avista Public Acquisition II; Transaction Guarantees $130M In Gross Cash To Combined Company

Ligand Pharmaceuticals Incorporated (Ligand) (NASDAQ:LGND) today announced the signing of a definitive merger agreement with Avista Public Acquisition Corp. II (APAC) (NASDAQ:AHPA), a publicly traded special purpose acquisition company (SPAC), providing for the spin-off of OmniAb, Inc. (OmniAb), Ligand's antibody discovery business, immediately followed by a merger with a newly formed subsidiary of APAC. The combined company will be led by Ligand's President, Matt Foehr, and will be renamed "OmniAb, Inc."

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Upon the closing of the transaction, Avista Capital Partners (Avista), APAC's sponsor and a leading private equity firm focused on the healthcare industry, has agreed to invest up to $115 million in the combined company, and Ligand will contribute $15 million. The combined company will have an initial pre-money equity valuation of $850 million. Immediately prior to the transaction close, Ligand intends to distribute 100% of its ownership of OmniAb to Ligand shareholders in a tax-free distribution. The transaction is expected to close in the second half of 2022.

Ligand's OmniAb antibody discovery platform provides pharmaceutical industry partners with access to diverse antibody repertoires and high-throughput screening technologies to enable discovery of next-generation therapeutics. At the heart of the OmniAb platform is the Biological Intelligence™ (BI) of its proprietary transgenic animals including OmniRat, OmniChicken and OmniMouse, which have been genetically modified to generate antibodies with human sequences to facilitate the development of human therapeutic candidates. Over 55 partners currently have access to OmniAb-derived antibodies and more than 250 programs are being actively developed or commercialized. In 2021, nine antibodies derived from the OmniAb platform entered clinical testing and two royalty-bearing antibodies received regulatory approvals.

"In late 2021, Ligand's Board of Directors decided to separate Ligand into two public companies given the growth prospects and needs of our various proprietary technology platforms, and to unlock value to Ligand's shareholders," said John Higgins, CEO of Ligand. "We considered multiple ways to pursue a separation with the goals of ensuring a smooth transition of operations, a healthy balance sheet for both OmniAb and Ligand, and strong market sponsorship. As we were preparing for a first-half 2022 direct spin-off of OmniAb to Ligand's shareholders, as discussed on our recent earnings call, we received an offer from Avista to merge OmniAb with their SPAC. The Avista team is comprised of high-quality healthcare operators and investors with an excellent track record. They have done extensive due diligence and see the potential and value of OmniAb, a highly competitive, leading platform with strong momentum given recent major clinical and regulatory successes. We are very pleased to partner with APAC and its shareholders to take OmniAb to the next level."

"The OmniAb business is positioned for continued growth and success as we provide partners with access to diverse antibody repertoires and cutting-edge high-throughput screening technologies that enable the discovery of next-generation therapeutics," said Mr. Foehr. "Two OmniAb-derived antibodies recently received regulatory approvals in China and a third approval is expected in the United States later this year. Our growing roster of partners and new programs illustrates the value our technology offers. We are excited to join forces with Avista to further build and expand our differentiated capabilities with applicability to a variety of modalities, and to leverage our technical strengths to become the industry's partner of choice."

David Burgstahler, CEO of APAC, added, "OmniAb's merger with APAC and its subsequent status as a standalone public company will help propel the company toward a new phase of growth and value creation. The merger will empower OmniAb with access to the capital markets, strong cash reserves, the agility to drive innovation and a superb leadership team. We look forward to partnering with Matt and the entire organization as they continue to differentiate OmniAb as a critical partner in advancing drug discovery and development."

Matt Foehr will lead OmniAb as CEO and will resign from his role as Ligand's President and COO at closing. Kurt Gustafson has joined the OmniAb management team as CFO, bringing over 25 years of diverse experience in corporate finance and senior management roles in growth-oriented publicly traded biopharmaceutical companies, most recently as CFO of Spectrum Pharmaceuticals. Mr. Gustafson previously served as CFO of Halozyme Therapeutics and held senior finance roles at Amgen.