Common use of PRICING MILESTONE Clause in Contracts

PRICING MILESTONE. Within thirty (30) days after the date that the Products are first sold at any time during the Term in the United States [ * ] (the "Product Pricing Date") at an average net selling price or equivalent over a three-month period (the "Cycle Price") [ * ] reported to Lilly in a manner consistent with the reporting of Net Sales information pursuant to Section 2.3 (but excluding any prices which are clinical study, introductory, or special discount prices), Ligand shall issue shares (the "Pricing Shares") of its voting common stock to Lilly on the following terms and conditions determined with reference to the Cycle Price and the average trading price of Ligand's voting common stock over the twenty (20) consecutive trading days immediately preceding the date which is five (5) consecutive days prior to the Product Pricing Date (the "Average Stock Price"). If the Cycle Price never [ * ] or more during the Term, Lilly shall not be entitled to any Pricing Shares. Otherwise, the number of Pricing Shares to be issued to Lilly shall equal the number obtained by dividing the Target Value by the Average Stock Price, whereby the Target Value is $10 million for a Cycle Price [ * ] and the Target Value declines, but not below $5 million, in inverse proportion to any increase in the Cycle Price [ * ]. Examples of such calculation for certain Cycle Prices are set forth below: Target Value (in millions) (No. of Pricing Shares= Cycle Price Relevant Target Value Divided by Average Stock Price) [ * ] $10.00 [ * ] 8.75 [ * ] 7.50 [ * ] 6.25 [ * ] 5.00

PRICING MILESTONE. Within thirty (30) days after the date that the Products are first sold at any time during the Term in the United States [ *** ] (the "Product Pricing Date") at an average net selling price or equivalent over a three-month period (the "Cycle Price") [ *** ] as reported to Lilly in a manner consistent with the reporting of Net Sales information pursuant to Section 2.3 (but excluding any prices which are clinical study, introductory, or special discount prices), Ligand shall issue shares (the "Pricing Shares") of its voting common stock to Lilly on the following terms and conditions determined with reference to the Cycle Price and the average trading price of Ligand's voting common stock over the twenty (20) consecutive trading days immediately preceding the date which is five (5) consecutive days prior to the Product Pricing Date (the "Average Stock Price"). If the Cycle Price never [ *** ] or more during the Term, Lilly shall not be entitled to any Pricing Shares. Otherwise, the number of Pricing Shares to be issued to Lilly shall equal the number obtained by dividing the Target Value by the Average Stock Price, whereby the Target Value is $10 million for a Cycle Price [ *** ] and the Target Value declines, but not below $5 million, in inverse proportion to any increase in the Cycle Price [ *** ]. Examples of such calculation for certain Cycle Prices are set forth below: Target Value (in millions) (No. of Pricing Shares= -------------------------------------------------- Cycle Price Relevant Target Value Divided divided by Average Stock Price) [ Price ----------- ---------------------------------------------------- *** ] $10.00 [ *** ] 8.75 [ *** ] 7.50 [ *** ] 6.25 [ *** ] 5.005.00 *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission.

PRICING MILESTONE. Within thirty (30) days after the date that the Products are first sold at any time during the Term in the United States [ * ] for use in cancer indications (the "Product Pricing Date") at an average net selling price or equivalent over a three-month period (the "Cycle Price") [ *** ] as reported to Lilly in a manner consistent with the reporting of Net Sales information pursuant to Section 2.3 (but excluding any prices which are clinical study, introductory, or special discount prices), Ligand shall issue shares (the "Pricing Shares") of its voting common stock to Lilly on the following terms and conditions determined with reference to the Cycle Price and the average trading price of Ligand's voting common stock over the twenty (20) consecutive trading days immediately preceding the date which is five (5) consecutive days prior to the Product Pricing Date (the "Average Stock Price"). If the Cycle Price never [ *** ] or more during the Term, Lilly shall not be entitled to any Pricing Shares. Otherwise, the number of Pricing Shares to be issued to Lilly shall equal the number obtained by dividing the Target Value by the Average *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. Stock Price, whereby the Target Value is $10 million for a Cycle Price [ *** ] and the Target Value declines, but not below $5 million, in inverse proportion to any increase in the Cycle Price [ *** ]. Examples of such calculation for certain Cycle Prices are set forth below: Target Value (in millions) (No. of Pricing Shares= Cycle Price Relevant Target Value Divided divided by Average Stock Price) [ Price ----------- ---------------------------------------------------- *** ] $10.00 [ *** ] 8.75 [ *** ] 7.50 [ *** ] 6.25 [ *** ] 5.00

PRICING MILESTONE. Within thirty (30) days after the date that the Products are first sold at any time during the Term in the United States [ * ] for use in cancer indications (the "Product Pricing Date") at an average net selling price or equivalent over a three-month period (the "Cycle Price") [ *** ] as reported to Lilly in a manner consistent with the reporting of Net Sales information pursuant to Section 2.3 (but excluding any prices which are clinical study, introductory, or special discount prices), Ligand shall issue shares (the "Pricing Shares") of its voting common stock to Lilly on the following terms and conditions determined with reference to the Cycle Price and the average trading price of Ligand's voting common stock over the twenty (20) consecutive trading days immediately preceding the date which is five (5) consecutive days prior to the Product Pricing Date (the "Average Stock Price"). If the Cycle Price never [ *** ] or more during the Term, Lilly shall not be entitled to any Pricing Shares. Otherwise, the number of Pricing Shares to be issued to Lilly shall equal the number obtained by dividing the Target Value by the Average Stock Price, whereby the Target Value is $10 million for a Cycle Price [ *** ] and the Target Value declines, but not below $5 million, in inverse proportion to any increase in the Cycle Price [ *** ]. Examples of such calculation for certain Cycle Prices are set forth below: Target Value (in millions) (No. of Pricing Shares= --------------------------------------------------- Cycle Price Relevant Target Value Divided by Average Stock Price) [ ----------- ----------------------------------------------------- $ *** ] $10.00 [ $ *** ] 8.75 [ $ *** ] 7.50 [ $ *** ] 6.25 [ $ *** ] 5.00