Investor Presentation

November, 2016

NASDAQ: LGND

2

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 our and our partners’ 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 for 2016 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 regarding its internal and partnered programs and related projected market sizes, 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 commercialperformance of Ligand's and/or its partners’ products, risks related to the integration of OMT, including the potential for any OMT partners to terminate their partnership agreements for convenience, the intellectual property protection of the OMT platform, 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.

Actual events or results may differ from Ligand's expectations. 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, Captisol, OmniRat, OmniMouse, OmniFlic and OmniAb. Each other trademark, trade name or service mark appearing in this presentation belongs to its owner.

The adjusted earnings per diluted share on page 6 excludes non-cash stock-based compensation expense, non-cash debt-related costs, amortization related to acquisitions, changes in contingent liabilities, non-cash net losses of Viking Therapeutics equity, mark-to-market adjustment for amounts owed to licensors, fair value adjustments to Viking Therapeutics convertible note receivable and warrants, non-cash tax benefit (expense), unissued shares relating to the Senior Convertible Note and adjustments for discontinued operations, net of non-cash tax expense.

Safe Harbor Statement

Company Highlights

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

• “Shots-on-Goal” business model is stronger than ever and projected to continue to drive the business significantly

• Cutting-edge innovations with Captisol, OmniAb, LTP and Selexis technologies making major drugs possible

• Strong outlook for revenue and profitability growth

• Company well positioned for the short, mid and long-term

3

• Ligand is focused on building a large portfolio of fully-funded programs (“Shots-on-Goal”)

• Two primary business objectives:

— Drive R&D to earliest inflection point for partnering

— Acquire assets efficiently to further build portfolio

• The Goal: Above average returns, below average risk

— Economic rights to major pharma programs

— High-margin, high-growth, recurring revenue

— Low operating costs, low share count

— Broad business diversity: Technologies, Partner Portfolio, IP

Ligand: A Unique Biotech InvestmentCompany Aims for Above-Average Growth, Below-Average Risk

4

5

• Revenue: Significant contribution from three sources

― Royalties: Promacta and Kyprolis approved in more indications and countries. With recent addition of EVOMELA, more products generating revenue today with more approvals expected.

― Milestones/License: Driven by regulatory progress, as well as commercial success and business development

― Captisol Material Sales: Driven by commercial and clinical progress and events, continue to see growing interest in the technology

• Portfolio: 150+ programs; 14 commercial today

• Partners: Over 90 partners funding R&D to drive Ligand portfolio towards commercialization success

• Technology: 4 platforms addressing a diversity of industry needs

Ligand: More Diversified Than Ever

0

30

60

90

120

150

2008 2016

9

0

2

4

6

8

10

12

14

2008 2016

Fully

-Fu

nd

ed P

rogr

ams

(“Sh

ots

-on

-Go

al”)

Ligand’s Portfolio Continues to Grow

150 +

Ligand’s Achievement:Portfolio Expansion

Partners’ Achievement:Approved Products

Excellent record as drug researcher, innovator and licensor

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

Latest product approvals include EVOMELA and Carnexiv, both for which Ligand receives royalties1

14

Co

mm

erci

al P

rod

uct

s G

ener

atin

g R

even

ue

for

Liga

nd

6

Biotech52%

Big Pharma18%

Generic11%

Spec Pharma18%

Over 90 Partners and Licensees

Select Big Pharma

Select Biotech

Select Spec Pharma

Select Generic

Diverse Portfolio Among Health Companies

7

Medical Device (1%)

Diverse Capital Allocation Building Asset Base and Increasing Returns for Investors

8

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

— Company acquisitions

— Royalty acquisitions

— Share buybacks

— Invested in development of new technology platforms

— Invested in biotech company with Ligand partnerships

• Ligand takes advantage of market knowledge and experience gained from our partnerships to find opportunities to invest and create value from the biopharma industry

• Ligand will continue to explore opportunities that our programs and the markets present

9

Ligand Revenue and Earnings Growth

$0.92

$1.52

$2.09

$3.37 - $3.44

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

2013 2014 2015 20162 1

Adjusted EPS

$49

$65

$72

$110 - $114

$0

$20

$40

$60

$80

$100

$120

2013 2014 2015 20161

($MM)Revenue

1 – Revised on November 3, 2016 from previous revenue guidance of between $115M - $119M and EPS guidance of between $3.41 and $3.46

2 – Excludes effects of one-time Viking equity milestone payment of $28.2M, or $1.36 per share

Highlights of Key Portfolio Assets

• Oral medicine that boosts platelets

• Long patent protection, Orange Book patent expiration in 2027

• Blockbuster commercial potential (>$1 billion) due to growing and large list of potential therapeutic indications, with largest indications in development

ITP HCV ORTIdiopathic

Thrombocytopenia

Thrombo-cytopeniaInduced byHepatitis C

Oncology-Related Thrombocytopenia

Promacta® Overview

AplasticAnemia

>100Countries

>50Countries

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

AA

Currently Approved Indications Ongoing Development

>45Countries

11

PromactaMajor Commercial Assets Paying Royalties

12Reference: Novartis Q3 earnings call, October 25, 2016

• Novartis executive management continues to highlight the promise of Promacta as a key growth driver for Novartis’ global business

• Q3 2016 highest sales ever, up 44% over Q3 2015

• Novartis acquired Promacta from GSK in 2015, putting a much larger commercial organization behind the product

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

Promacta Quarterly Revenue

2009

Rep

ort

ed R

even

ue

(USD

,MM

)

13

2010 2011 2012 2013 2014 2015 2016

Source: NVS and GSK quarterly filingsPromacta is developed and marketed by Novartis

Novartis acquired product rights

Kyprolis®Major Commercial Assets Paying Royalties

14Reference/Note: Amgen Q3 earnings call, October 27, 2016; see Amgen disclaimer above; Kyprolisis developed and marketed by Amgen and is a registered trademark of Amgen.

Sean E HarperEVP, Research and Development

“I would stress that we are committed to advancing Kyprolis into first-line therapy and we’re close to finalizing a study design”

• Developed and marketed by Amgen, uses Captisol in its formulation

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

Kyprolis Quarterly RevenueR

epo

rted

Rev

enu

e (U

SD,M

M)

15

2012 2013 2014 2015 2016

Source: AMGN and ONXX quarterly filings1 – Pharmapoint: Multiple Myeloma – Global Drug Forecast and Market Analysis to 2023 GlobalData, 2015 Kyprolis is developed and marketed by Amgen

• Strong, consistent quarterly sales growth leading to increasing royalties to Ligand

• Global multiple myeloma market at approximately $9 billion, expected to grow to over $22 billion by 20231

$0

$10

$20

$30

$40

$50

$60

$70

2016 2017 2018 2019 2020 2021

Source: Thomson Reuters Cortellis and analyst reports - 18 Amgen and Ono Pharmaceuticals covering analysts as of 11/4/16Royalties calculated on a one quarter lag

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

$2.0

$2.2

$2.4

$2.6

2016 2017 2018 2019 2020 2021

Kyprolis Projections: AMGN Sell-Side Analysts

16

These Revenue Projections … …Yield these Royalty Projections

$ B

illio

ns

$ M

illio

ns

HighLowAverage

• Captisol improves product stability, and enables the removal of propylene glycol, which is associated with renal and cardiac toxicities

• Product licensed to Spectrum Pharmaceuticals, who completed development and launched EVOMELA in Q2

― 20% royalty to Ligand

• Fits seamlessly into Spectrum’s established commercial infrastructure

17

EVOMELA®Recently Approved Drug Generating Royalties

• Captisol-enabled formulation of chemotherapy drug used for stem cell transplant conditioning in multiple myeloma (MM) approved in March 2016

― Stem cell transplant an important course of therapy in MM, increasing in total as patients are living longer

• Initial adoption strong given label and clear benefits

• Product highlighted by Spectrum Management:

18

$0.9

$5.9

$0

$2

$4

$6

$8

Q2'16 Q3'16

EVO

MEL

A S

ales

($

MM

)

“Customers are recognizing the operational benefits of EVOMELA to more efficiently administer treatment to their patients.” – Raj Shrotriya, Chairman/CEO

“We are encouraged by the fact that several top-tier transplant centers have committed to adopting EVOMELA. As a result, we expect an inflection in sales going forward.” – Joe Turgeon, President & COO

Reference: SPPI August 9, 2016 earnings call

EVOMELARecently Approved Drug Generating Royalties

Retrophin: Sparsentan® Partnership

• Ligand acquired rights to Sparsentan (formerly known as DARA) upon acquisition of Pharmacopeia in 2008

• Ligand licensed the program to Retrophin in 2012

• Sparsentan was Retrophin’s lead program and a cornerstone of its ability to raise initial capital and complete a reverse merger into a public entity

• Under the license, Ligand is eligible to receive a combined total of over $75 million in upfront and milestone payments and a 9% royalty1

• Sparsentan is in development for treatment of focal segmental glomerulosclerosis (FSGS), a rare kidney disease with an estimated 40,000 patients in the United States

19 1 – All figures net of amounts owed to third parties

SparsentanRetrophin Management Commentary

20 Source: RTRX September 2016 Investor Presentation

SparsentanRetrophin Management Commentary

21 Source: RTRX September 2016 Investor Presentation

“Overall, we are extremely pleased with the outcome of the study and view the results as an important step forward for both Retrophin and the FSGS community.” – Stephen J. Aselage, CEO & Director, Retrophin

Upcoming Developments Late-Stage Captisol-enabled Programs

22

BAXDELA Carnexiv™

Captisol-enabled IV delafloxacinMultiple Indications:

Hospital-treated skin infections, community-acquired pneumonia,

complicated urinary tract infection

2.5% Royalty

NDA filed in October 2016 FDA approval in October 2016

Captisol-enabled IV carbamazepinefor seizure treatment in

hospital settings

2.75% Royalty

SAGE-547

Phase 3 data expected 2017

Captisol-enabled allopregnanolonefor treatment of Super-Refractory

Status Epilepticus (SRSE)

3.0% Royalty

Diabetes Program Overview: LGD-6972

• Ligand is developing LGD-6972, a glucagon receptor antagonist (GRA)

• GRA is a novel approach for the treatment of diabetes

• Many traditional therapies target insulin, a pancreatic hormone which reduces blood glucose

— Administration of insulin increases glucose storage in the liver and glucose utilization in tissues and therefore reduces blood glucose

• LGD-6972 blocks the action of glucagon, a pancreatic hormone which increases blood glucose

— Blocking the glucagon receptor decreases the liver’s ability to release glucose, and therefore reduces blood glucose

• Phase 2 trial initiated in Q3 2016

23 Note: Phase 2 trial expected to begin in 2016

Major Global Market for Diabetes Drugs

2013 2022E

$38 B

$68 B• Diabetes is one of largest drug markets

– Global market projected to grow to $68 billion by 2022, 75% increase in 10 years

• LGD-6972 is a potentially major novel treatment

• Over past 5 years there have been 32 licensing deals (preclinical to Phase 3) in diabetes with disclosed deal payments of >$11 billion

24

Sources: EvaluatePharma June 2014;Global Data: Type 2 Diabetes-Global Drug Forecast & Market Analysis to 2022Thomson Reuters Cortellis

Advantages of Potent GRA

ExistingClass

Product Profile GRA AdvantageGRA Potentially

Competitive with Class

Potential GRA Combo with

Class

DPP-IVModest reduction of plasma glucose

Expected higher glucose

reduction√ √

GLP-1Only available as

injectablesOral √ √

SGLT-2

Contraindicated for renally impaired patients, safety considerations

Potentially effective in

renallyimpaired

√ √

Product profile and recent clinical data suggest significant market advantages for a safe, highly potent, oral GRA

25

Technology Platforms Supporting Licenses

Solving solubility and stability challenges predominantly for small molecules

Allows for higher and more stable

expression of recombinant

proteins

SUREtechnology Platform™

Proven, unrestricted Fully Human

Antibody technology enabling drug

discovery in infectious diseases, cancer and

autoimmunity

Selectively delivers broad range of

pharmaceutical agents to the liver

LTP Technology™

26Note: SUREtechnology Platform™ owned by Selexis and Ligand does not have rights to future developments from the platform

• Over past five years, Ligand has significantly expanded its portfolio by leveraging technologies that help make drugs possible

• Key advantages:

— Human antibodies have reduced immunogenicity

— Using transgenic rodents avoids the need for genetic engineering to “humanize” antibodies and accelerates antibody discovery

— Broad diversity of high-quality antibodies

OMT TransgenicAnimal

Human AntibodiesImmunization

OmniAb Antibody Platforms

• Ligand's recent acquisition of OMT provides the company a major platform to participate in the significant and growing field of antibody research

• OMT’s genetically engineered novel, transgenic rodents produce fully human antibodies

27

Antibodies Are a Major Driver of Pharma 2015 Global Sales

DrugTherapeuticArea

2015 sales ($ billions)

DrugTherapeuticArea

2015 sales ($ billions)

Sovaldi/Harvoni Hepatitis C $19.1 Humira Autoimmune $14.3

Humira Autoimmune $14.3 Remicade Autoimmune $8.9

Enbrel Autoimmune $9.1 MabThera/Rituxan Cancer $7.1

Remicade Autoimmune $9.0 Avastin Cancer $6.8

Lantus Diabetes $7.2 Herceptin Cancer $6.6

Abilify CNS Disorders $7.2 Lucentis Ophthalmology $3.6

MabThera/Rituxan Cancer $7.1 Soliris Orphan Diseases $2.6

Avastin Cancer $6.8 Stelara Autoimmune $2.5

Herceptin Cancer $6.6 Erbitux Cancer $2.0

Seretide/Advair Asthma $6.0 Tysabri Autoimmune $1.9

5 of Top 10 Selling Drugs are Antibodies Top 10 Antibodies Sold $56 B in 2015

Note: Lucentis is an antibody fragment

Source: 2015 Sales of Recombinant Therapeutic Antibodies and Proteins (La Merie Publishing, March 2016); company earnings

Antibody-based medicine

28

0

100

200

300

400

500

2008 2015

150

An

tib

od

ies

in c

linic

al d

evel

op

men

t

468

• Antibodies are a promising and rapidly growing category of therapeutic research

• Number of antibodies in clinical development has tripled since 2008

Antibodies in Clinical Development

29Sources: Nelson et al., Nature Reviews, 2010.

Reichert Biotechnology Consulting LLC, 2015.

OmniAb Partners22 Partnerships, with Potential to Grow

• Growing roster of currently active partners validates the utility of the technology

30

• Project up to three OmniAb antibodies will be in human Phase 1 trials by the end of 2017 and as many as 15 antibodies could be in Phase 1 or more advanced trials by 2020

Upcoming Potential EventsPotential Milestones for Ligand and Partners in Coming Quarters

Company Program Milestone

Lundbeck Carnexiv U.S. Launch

Melinta Therapeutics BAXDELA FDA approval

Novartis Promacta Phase 2 completion (MDS, CLL, Aplastic Anemia)

Coherus Biosciences CHS-0214 MAA Filing

Retrophin Sparsentan Regulatory path update

Sage Therapeutics SAGE-547 Phase 3 completion (Super-Refractory Status Epilepticus)

Sage Therapeutics SAGE-547 Phase 2 completion (Postpartum Depression)

VentiRx VTX-2337 Phase 2 completion (ovarian cancer; head & neck cancer)

CURx Pharma IV-Topiramate Phase 2 start (epilepsy)

Precision Biologics NPC-1C Phase 1/2 completion (pancreatic cancer)

Viking Therapeutics VK5211 Phase 2 completion (hip fracture)

Viking Therapeutics VK2809 Phase 2 completion (hypercholesterolemia/NASH)

Merrimack MM-121 Phase 2 completion (NSCLC)

Merrimack MM-302 Phase 1 completion (breast cancer)

Takeda TAK-020 Phase 1 completion (rheumatoid arthritis)

Allergan AGN-195263 Phase 3 completion

31