Bank of America Merrill Lynch 2015 Health Care Conference

May 12, 2015 NASDAQ: LGND

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The following presentation contains forward-looking statements regarding Ligand’s prospects, plans and strategies, drug development programs and collaborations. Forward-looking statements include financial projections, expectations regarding research and development programs, and other statements including words such as “will,“ “should,” “could,” “plan,” etc. Actual events or results may differ from Ligand’s expectations. For example, drug development program benefits may not be realized and there can be no assurance that Ligand will achieve its guidance in 2015 or thereafter or that third party research summarized herein is correct or complete. The forward-looking statements made in the presentation are subject to several risk factors, including, statements regarding intent, belief, or current expectations of Ligand, its internal and partnered programs, including Promacta™, Kyprolis®, and Duavee™, Ligand’s reliance on collaborative partners for milestone and royalty payments, royalty and other revenue projections based on third party research, regulatory hurdles facing Ligand's and partners’ product candidates, uncertainty regarding Ligand's and partners’ product development costs, the possibility that Ligand's and partners’ drug candidates might not be proved to be safe and efficacious and commercial performance of Ligand's and/or its partners’ products, risks related to Ligand’s internal controls, its compliance with regulations, accounting principles and public disclosure, and other risks and uncertainties described in its public filings with the Securities and Exchange Commission, available at www.sec.gov. Additional risks may apply to forward-looking statements made in this presentation. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our good faith beliefs (or those of the indicated third parties) and speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Ligand undertakes no obligation to revise or update this presentation to reflect events or circumstances or update third party research numbers after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Our trademarks, trade names and service marks referenced herein include Ligand and Captisol. Each other trademark, trade name or service mark appearing in this presentation belongs to its owner. The process for reconciliation between non-GAAP financial numbers presented on slide 10, and the corresponding GAAP figures is explained in the footnotes on that slide and a full reconciliation can be found in our earnings press release dated, May 11, 2015.

Safe Harbor Statement

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Ligand: 2015 and Beyond

• Ligand is a high-growth company with economic rights to some of the world’s most important medicines

• Largest portfolio ever and projected to continue to drive the business significantly

• Cutting-edge innovations with Captisol and LTP technology are making major drugs possible

• Well positioned for strong revenue and profitability growth

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Recent Events are Transforming Ligand

Date Program Event

December ’14 Duavive EU approval

December ’14 Promacta sNDA submission - Pediatric ITP

December ’14 CE-Melphalan NDA submission

January ‘15 Delafloxacin Phase 3 study - Positive interim results

January ’15 Sparsentan Orphan drug designation - Focal Segmental Glomerulosclerosis

January ’15 Kyprolis US and EU submissions - Relapsed Multiple Myeloma

February ’15 Lasofoxifene Sermonix licensing agreement

February ’15 Promacta EU submission - Pediatric ITP

March ’15 Kyprolis Phase 3 ENDEAVOR study - Positive results

March ’15 Promacta Promacta acquisition closed (GSK to Novartis)

March ’15 Kyprolis Priority FDA review – Relapsed Multiple Myeloma

April ‘15 SAGE-547 Phase 1/2 completion; Phase 3 trial initiated

April ’15 IRAK-4 Positive preclinical data presented

May ’15 Multiple Selexis 15+ program portfolio acquisition

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Ligand’s Portfolio Continues to Grow

120 +

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2008 2015

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Ligand’s Achievement: Portfolio Expansion

Partners’ Achievement: Products Generating Revenue for LGND

Excellent record as drug researcher, innovator and licensor

Our partners are doing their job getting new products to the market

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• In last several years, Ligand has deployed capital in the following ways

— Company acquisitions

— Royalty acquisitions

— Share buybacks

— Investment in a private company that has completed its IPO

— Invested in development of new technology platforms

• Investors have come to expect not any one specific type of deal from Ligand, but instead for us to take advantage of our market knowledge and the experience we gain from our vast roster of partners to find opportunities to invest and create value from the biopharma industry

• We will continue to explore original opportunities that our programs and the markets present us

Diverse Capital Allocation Building Asset Base and Increasing Returns for Investors

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Technology and Novel R&D Drive Deal Making

Potential Launch

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Our Platform Technologies

Our Novel R&D

LTP Technology™

Glucagon Receptor Antagonist Program for Diabetes Phase 1

Positive Phase 1a data showing robust effects after single dose Phase 1b study expected to complete in coming weeks

Change in fasting glucose(24 hr post dose)

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Solving solubility and stability challenges

Designed to selectively deliver broad range of pharmaceutical agents to the liver

Oral GCSF Preclinical Leveraging our technology and heritage in small molecule discovery

Biotech44%

Big Pharma29% Generic

18%

Spec Pharma10%

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Over 70 Partners

Select Big Pharma

Select Biotech

Select Spec Pharma

Select Generic

Diverse Portfolio Among Drug Companies

• Continued strong financial performance

• Business model provides tremendous earnings leverage

— Growing total revenues

— Flat cash operating costs

— Significant estate of tax assets

• Accelerating revenue and earnings growth going forward

Financial Overview

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Quarterly Results

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Q1 Reported

Q2 Outlook

2015 Full Year Outlook

Revenue $14.6M $17.0M - $17.5M

$81.0M - $83.0M

Adjusted EPS $0.33

$0.37 - $0.40

$2.14 - $2.18

• Strong growth in quarterly Royalty Revenue. Increase of 31% Q1 2015 over Q1 2014

• Strong growth in operating cash generation Q1 2015 over Q1 2014

Note: Adjusted EPS excludes changes in contingent liabilities, mark-to-market adjustment for amounts owed to licensors, non-cash stock-based compensation expense and non-cash debt related costs.

Accelerating Projected Revenue Growth

$0

$30

$60

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$120

$150

2011 2012 2013 2014 2015 2016 2017

• Growth due to:

– New products launched

– Growth in existing brands

– Higher royalties

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$ m

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Commercial Product

Highlights

• Oral medicine that boosts platelets. Ligand owed royalties

• Long patent protection, Orange Book patent expiration in 2027

• Blockbuster commercial potential (>$1 billion) due to growing and large list of potential therapeutic indications

ITP HCV ORT Idiopathic

Thrombocytopenia

Thrombocytopenia Induced by Hepatitis C

Oncology Related

Thrombocytopenia

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Promacta®: Blockbuster Commercial Potential

Aplastic Anemia

95 Countries

Recently filed in the EU Recent Pediatric ITP filings

53 Countries

Global filing and launch investment

Major clinical investment ongoing: MDS, AML, CLL, CIT,

others

AA Currently Approved Indications

Ongoing Development New Markets

3 Countries

70

85

GSK Novartis

1,300

8,000

GSK Novartis

$2.0

$11.7

GSK Novartis

GSK and Novartis: Business Unit Profiles1

Novartis has a superior oncology business, ~6 times larger than GSK’s; Promacta® transitioned to Novartis on March 1st

Oncology Employees Countries with Presence 2014 Oncology Revenue ($B)

1 GSK and Novartis company disclosures relating to revenue and business unit structures; GSK.com, Novartis.com

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• Leading 3rd-line treatment for multiple myeloma (MM) in the US

— Viewed as best-in-class proteosome inhibitor

— 25% year-over-year growth in 2014

Kyprolis®

• Royalty rates of 1.5% to 3.0%

ASPIRE Phase 3 Data

Dr. Keith Stewart The Mayo Clinic

“We are observing an unprecedented duration of remission, without additional toxicity, in relapsed and heavily pretreated patients.”

• Amgen has submitted US and EU applications for relapsed MM

— Granted priority FDA review; July 26, 2015 PDUFA date — Also granted EU Accelerated Assessment

• Major investment by Amgen focused on further expansion of the label

— Front-Line MM: Phase 3 (CLARION) — Small-cell Lung Cancer: Phase 2

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• Recent data and events have continued to demonstrate the significant potential of Kyprolis

Kyprolis®

• APSIRE Phase 3 trial demonstrated an unprecedented PFS (26.3 months) in relapsed MM

• ENDEAVOR Phase 3 trial demonstrated a DOUBLING of median PFS over Velcade® (18.7 vs. 9.4 months) in relapsed MM

• Significant unmet needs remain in MM, and the market is expected to double to over $13 billion by 2020

Reference AMGN March 2, 2015 corporate presentation

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DUAVEE™

Source: Bloomberg/Symphony Health

• Product for post-menopausal hot flashes and osteoporosis

• Direct-to-consumer campaign launched in September

• US prescriptions over 12,200 per month in March, a 26% increase over prior month

• EU approved in December, premium pricing expected to be finalized in Q2 2015

• Ligand is owed royalties in the range of 0.5%-2.5%

US Monthly Prescriptions

Lig

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2011

Nexterone: Royalty Revenue

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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2012 2013

• Captisol-enabled product for treatment of ventricular fibrillation

• Shown consistent growth over recent quarters

• Quarterly royalties to Ligand up over 70% Q1 2015 vs Q1 2014

• Baxter is dedicated to the brand and is pursuing expansion

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2014

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Merck reported quarterly reports 19

2011

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2012 2013 2014 2010

Noxafil: Total Quarterly Revenue

• Captisol-enabled IV form of a super-potent anti-fungal

• Launch of IV form appearing to reinvigorate growth for the brand

US: March 2014

EU: September 2014

Canada: November 2014

• LTM revenues up 38% ($120 million) over prior 12 months

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The Big Six

• Certain portfolio assets stand above others, having the potential to add significantly to Ligand’s top and bottom line

• They do so as a result of a mixture of factors, including:

— Market size or therapy area addressed

— Upcoming potential milestone events

— Royalty rate or specifics of deal economics

• Major news catalysts expected over the next 6 to 24 months

• More potential programs could move into the Big Six

The Big Six: Major Pipeline Assets

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Partner

Program (Therapy Area)

Stage

Royalty Rate

Potential Launch

Potential 2015 Events

CE- Melphalan (Oncology)

NDA

20% 2015 Approval

Delafloxacin IV (Infection)

Phase 3 Undisclosed 2016 Phase 3 data

SAGE-547 (Neurology)

Phase 2 Undisclosed 2017 Pivotal Initiation

Sparsentan (FSGS - Kidney Disease)

Phase 2 9% 2017 Enrollment Completion

MK-8931 (Alzheimer’s Disease)

Phase 3 Undisclosed 2018 Updates

IRAK-4 (Oncology)

Preclinical 6.0-9.5% 2019 Clinical Start

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The Big Six: Major Pipeline Assets

Viking Therapeutics

VKTX: Company Overview

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• San Diego-based biotech, developing novel, first-in-class or best-in-class drugs for metabolic disorders

— Leading clinical-stage programs with preliminary efficacy signals in humans

SARM VK5211:Non-steroidal selective androgen receptor modulator

Entering Phase 2 Development for Hip Fracture

Data Expected 2Q 2016

TR-β VK0214, VK2809: Novel,

Selective thyroid receptor-β Agonists

Strong scientific rationale for application in X-ALD with potential

Human POC data in 1H 2016

Additional opportunities in NASH and cholesterolemia

• Three additional programs also partnered with Ligand, targeting diabetes, anemia, lipid disorders

VKTX: Investment Overview

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• Initial single-program partnership with Ligand in 2012

• Partnership expanded to five programs in 2014

• Viking IPO closed May 5, 2015

— Ligand received ~3.4M shares of stock as an equity milestone for license programs

— Ligand purchased an additional ~1.1M shares in offering

• Benefits to Ligand

— Potential to receive significant future royalties through 5 additional Shots-on-Goal

— Equity stake in promising growth biotech

Selexis Portfolio Acquisition

• May 2015 acquired royalty rights to over 15 biotech programs

• Selexis technology increases yields for biologic manufacturing

• Royalty assets an excellent fit with Ligand’s business model

• Expands Ligand’s royalty portfolio further into novel biologics and biosimilars

• $4.0 million acquisition price

• Potential for more than $20 million in milestones and an estimated over $40 million in peak annual royalties from these assets

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Selexis Acquisition: Highlights

Novel Biologics:

• Partners pursuing monoclonal antibodies for large market opportunities in oncology, inflammatory and rare inherited diseases:

― Inflammatory disease targets include rheumatoid arthritis, Crohn’s disease and multiple sclerosis

― Cancer targets include lung, colorectal, breast, gastric and non-hodgkin lymphoma

― Rare inherited disease targets include epidermolysis bullosa and Gaucher’s disease

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Selexis Acquisition: Portfolio Summary

55%

45%

Novel Biologics Biosimilars

― Humira

― Avastin

― Aranesp

― Cerezyme

― Rituxan

― Herceptin

Biosimilars:

• Biosimilars market projected to potentially exceed $35 billion worldwide in 2020

• Biosimilars for blockbuster novel biologics in the acquired Selexis portfolio include:

Source: Allied Market Research “Global biosimilars/follow-on-biologics market (types, applications and geography) - Size, Share, Global Trends, Company Profiles, Demand, Insights, Analysis, Research, Report, Opportunities, Segmentation and Forecast, 2013 - 2020”, July 2014

Ligand’s Novel R&D:

Glucagon Receptor Antagonist

• Novel, highly potent, oral GCGR antagonist for treatment of type 2 diabetes completed Phase 1a trial in mid-2014, and Phase 1b trial initiated late last year

— One of Ligand’s most promising un-partnered assets

— Potential best-in-class properties

• Diabetes market is expected to double to $60 billion by 20201

— Combo therapy highly prevalent and necessary to optimize management of disease

— Creates significant opportunity for novel treatment mechanisms

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Novel R&D: Glucagon Receptor Antagonist LGD-6972 for Diabetes

1 Brinson Patrick report 12/3/12; SunTrust report 6/25/13

Existing Class

Product Profile GCGR Advantage

DPP-IV Inhibitors

Modest reduction of plasma glucose Higher glucose

reduction

GLP-1 Agonists

Only available as injectables Oral

SGLT-2 Inhibitors

Contraindicated for renally impaired patients Spares kidney

• Product profile and recent clinical data suggest significant market advantages for a safe, highly potent, oral GCGR antagonist as compared to existing classes of new mechanisms

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Novel R&D: Glucagon Receptor Antagonist Advantages of Potent GCGR Antagonist

Novel R&D: Glucagon Receptor Antagonist Positive Phase 1a Clinical Data for LGD-6972

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Change in fasting glucose(24 hr post dose)

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• Positive clinical data presented in 2014

• Excellent safety profile

• Dose-dependent decreases in fasting plasma glucose in normals

• Robust decreases in glucose in type 2 diabetics after just a single dose

• Recent scientific ripening of the field, glucagon receptor antagonism widely seen as one of the most promising novel approaches to treatment of diabetes

• Multi-dose trial currently in progress, data expected in coming weeks

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Potential Upcoming Events

Target Date Program Event

Q2’15 Duavive EU product pricing/launch

Q2’15 LGD-6972 Phase 1b results

7/26/15 Kyprolis Multiple Myeloma sNDA PDUFA date

2H’15 Promacta Pediatric ITP NDA and MAA approvals

2H’15 Kyprolis Relapsed multiple myeloma NDA and MAA approvals

2H’15 NS-2 Phase 2 trial initiation

2H’15 Delafloxacin NDA Submission

Q4’15 Promacta Severe Aplastic Anemia MAA approval

Q4’15 CE-Melphalan NDA approval

Q4’15 Carbella NDA approval

Q4’15 Topiramate Phase 2 trial initiation

Q4’15 IRAK-4 Phase 1 trial initiation

Bank of America Merrill Lynch 2015 Health Care Conference

May 12, 2015 NASDAQ: LGND