Acquisition Would Result in Well Capitalized Company with Robust Royalty Assets and Broad Research Pipeline

Conference Call Today at 5:30 p.m. Eastern

Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) announced today that it has entered into a definitive merger agreement to acquire Pharmacopeia (NASDAQ: PCOP), in a deal valued up to $70 million. The transaction is structured as a stock-for-stock exchange and in addition, Pharmacopeia stockholders will be entitled to a Contingent Value Right (“CVR”). The CVRs will entitle holders under certain circumstances to a cash payment of an aggregate of $15 million for all Pharmacopeia stockholders.

“We are very excited about combining Pharmacopeia with Ligand,” said John L. Higgins, President and Chief Executive Officer of Ligand Pharmaceuticals. “Ligand stockholders will gain access to numerous royalty partnerships, additional pipeline assets, drug discovery resources and cash and NOLs. Pharmacopeia’s shareholders will receive a substantial amount of equity in a well capitalized company with lucrative potential royalties, an expanded pipeline and financial liquidity. We are committed to running a company that has a broad array of royalty assets and pipeline programs, backed by a strong balance sheet and staunch spending discipline. This is a unique opportunity for Ligand and Pharmacopeia shareholders. Both companies have similar growth strategies, and our respective drug discovery platforms are a great marriage of biology and chemistry resources. The acquisition of Pharmacopeia will complement and accelerate our product development programs, strengthen our research capability and increase our potential royalty streams.”

Joseph A. Mollica, Ph.D., Chairman of the Board and Interim President and Chief Executive Officer of Pharmacopeia, stated, “Pharmacopeia’s portfolio of programs is an excellent complement to Ligand’s pipeline and over the next decade we believe the combined company will have important product introductions. On behalf of our Board, I would like to thank all of our employees for the dedication they have shown in pursuit of our scientific goals and the value they have created for our shareholders. We are excited about this transaction and look forward to sharing in the potential upside of the combined businesses by joining forces with a strong company like Ligand.”

Details of the Proposed Transaction

• Under the terms of the agreement, Ligand will issue approximately 17.5 million shares, subject to adjustment for Pharmacopeia options at closing, or 0.58 shares for each outstanding Pharmacopeia share such that current Ligand stockholders would own approximately 84% of the combined company and Pharmacopeia stockholders would own approximately 16%.

• This exchange ratio is based on closing prices of Ligand shares between $3.00 and $3.75 for a period prior to the closing date and based on Ligand’s closing price on September 24, 2008 of $3.12 implies a purchase price of $1.81 per common share of Pharmacopeia, or an equity value of approximately $55 million and a premium over today's closing price of Pharmacopeia of 52%. These values exclude a potential for approximately $0.50 per share or an aggregate of $15 million related to the CVR.
• The transaction includes a collar that provides for a fixed exchange ratio within a stock price range of Ligand stock of $3.00 and $3.75. At prices between $3.75 and $4.50, value is fixed at $66 million. At prices above $4.50, the exchange ratio is fixed at 0.49. At prices below $3.00, value is fixed at $52.8 million, including some cash contribution at prices below $2.93 and above $2.38. Below $2.38 the consideration is fixed at 0.60 shares and $10 million in cash in the aggregate and at prices equal or less than $1.65 Pharmacopeia has the right to terminate the agreement.
• In addition, the Pharmacopeia stockholders will receive Contingent Value Rights (CVRs) under which they could receive an aggregate $15 million cash payment if Ligand enters into a license, sale, development, marketing or option agreement with respect to its DARA program by December 31, 2011. The CVRs will not be transferable.
• The transaction is expected to close by the first quarter of 2009 and is subject to the approval of Pharmacopeia stockholders and antitrust regulatory clearance, as well as other customary closing conditions.
• The transaction is intended to qualify as a tax-free reorganization.

Mr.