SUMMARY

This summary highlights selected information contained or incorporated by reference in this proxy statement/prospectus. You should read carefully this entire proxy statement/prospectus and the documents referred to in this proxy statement/prospectus for a more complete description of the terms of the merger and related transactions. The merger agreement is attached as Annex A to this proxy statement/prospectus, and the forms of CVR agreements are attached as Annex B, Annex C, Annex D and Annex E to this proxy statement/prospectus. Additional documents and information, including important business and financial information about Ligand and Neurogen, are incorporated by reference into this proxy statement/prospectus. You are encouraged to read the merger agreement as it is the legal document that governs the merger, as well as the forms of CVR agreements and the additional documents incorporated by reference. In this proxy statement/prospectus, unless the context otherwise requires, “Ligand” refers to Ligand Pharmaceuticals Incorporated and its subsidiaries, “Neurogen” refers to Neurogen Corporation and its subsidiary, and “Merger Sub” refers to Neon Signal, LLC, a wholly-owned subsidiary of Ligand.

The Companies

Ligand Pharmaceuticals Incorporated

Ligand Pharmaceuticals Incorporated (NASDAQ: LGND), a Delaware corporation, is a biotechnology company that focuses on discovering and developing new drugs that address critical unmet medical needs in the areas of thrombocytopenia, anemia, cancer, hormone related diseases, osteoporosis and inflammatory diseases. Ligand aims to develop drugs that are more effective and/or safer than existing therapies, that are more convenient to administer and that are cost effective. Ligand plans to build a profitable company by generating income from research, milestone and royalty and co-promotion revenues resulting from its collaborations with pharmaceutical partners.

Ligand was incorporated in Delaware in 1987. Ligand’s principal executive offices are located at 10275 Science Center Drive, San Diego, California, 92121. Ligand’s telephone number is (858) 550-7500.

Neon Signal, LLC

Neon Signal, LLC, or Merger Sub, is a Delaware limited liability company and a wholly-owned subsidiary of Ligand organized on August 13, 2009. Merger Sub does not engage in any operations and exists solely to facilitate the merger. Its principal executive offices have the same address and telephone number as Ligand.

Neurogen Corporation

Neurogen Corporation (NASDAQ: NRGN) is a development company which has historically focused on new small molecule drugs to improve the lives of patients suffering from psychiatric and neurological disorders, including RLS and Parkinson’s disease. Small molecule drugs typically are suitable for oral administration as a pill, while large molecule drugs are typically administered by injection.

Neurogen was incorporated in Delaware in 1987. Neurogen’s principal executive offices are located at 45 Northeast Industrial Road, Branford, CT 06405. Neurogen’s telephone number is (203) 488-8201.

Special Meeting of Neurogen Stockholders

General. Neurogen is furnishing this proxy statement/prospectus to Neurogen stockholders in connection with the solicitation of proxies by the Neurogen board of directors for use at the special meeting of stockholders, including any adjournment or postponement of the special meeting.

Date, Time and Place. Neurogen will hold its special meeting on December 18, 2009 at 10:00 a.m., local time, at Neurogen Corporation, at 45 NE Industrial Road, Branford, CT 06405.

Purpose of the Meeting. At the special meeting, the Neurogen stockholders will be asked to consider and vote upon the following matters:

Quorum Required. Neurogen’s bylaws provide that the holders of a majority of the shares of Neurogen common stock issued and outstanding and entitled to vote at the special meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business at the special meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining the presence of a quorum.

Voting Rights. Neurogen common stock is the only type of security entitled to vote at the special meeting. On October 28, 2009, the record date for determination of stockholders entitled to vote at the special meeting, there were 69,038,691 shares of Neurogen common stock outstanding. Each Neurogen stockholder of record on October 28, 2009 is entitled to one vote for each share of Neurogen common stock held by such stockholder on that date. All votes will be tabulated by the inspector of election appointed for the meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.

Proxies. Whether or not you are able to attend Neurogen’s special meeting of stockholders, you are urged to complete and return the enclosed proxy, which is solicited by Neurogen’s board of directors and which will be voted as you direct on your proxy card when properly completed. In the event no directions are specified, such proxies will be voted FOR the adoption of the merger agreement and approval of the merger, FOR the proposal to adjourn the special meeting to permit further solicitation of proxies if there are not sufficient votes to adopt the merger agreement and approve the merger, and in the discretion of the proxy holders as to any other matters that may properly come before the special meeting. All shares represented by a valid proxy received before the special meeting will be voted.

Revocation of Proxies. You may also revoke or change your proxy at any time before the special meeting. To do this, send a written notice of revocation or another signed proxy with a later date to the Secretary at Neurogen’s principal executive offices in time to arrive before the beginning of the special meeting. If you are a stockholder of record or you obtain a “legal proxy” from your broker, trustee or nominee, you may also revoke your proxy by attending the special meeting and voting in person.

Neurogen Votes Required. The affirmative vote of the holders of record of a majority of the outstanding shares of Neurogen common stock is required to adopt the merger agreement and approve the merger, and the affirmative vote of the holders of record of a majority of the shares of Neurogen common stock present and entitled to vote at the special meeting is required to adopt the proposal to adjourn the special meeting, if

necessary, to permit further solicitation of proxies. If a broker or other nominee holding shares of Neurogen common stock or a holder of Neurogen common stock fails to vote on the adoption of the merger agreement and the approval of the merger or responds to that proposal with an “abstain” vote, it will have the same effect as a vote against that proposal. If a broker or other nominee holding shares of Neurogen common stock or a holder of Neurogen common stock responds to the proposal to adjourn the special meeting, if necessary, to permit further solicitation of proxies with an “abstain” vote, it will have the same effect as a vote against that proposal. If a broker or other nominee holding Neurogen common stock or a holder of Neurogen common stock fails to vote on the proposal to adjourn the special meeting, if necessary, to permit further solicitation of proxies, it will have no effect on the outcome of the vote for that proposal.

As of October 28, 2009, (i) the directors and executive officers of Neurogen beneficially owned 10,637,130 shares of Neurogen common stock entitled to vote, representing approximately 15.4% of the outstanding shares of Neurogen common stock entitled to vote at the special meeting and (ii) Ligand and its affiliates beneficially owned 21,938,454 shares of Neurogen common stock entitled to vote, representing approximately 32.0% of the outstanding shares of Neurogen common stock entitled to vote at the special meeting. However, due to the voting agreements described below, approximately 12.1% of the outstanding shares of Neurogen common stock are included in both groups; and so, the aggregate total beneficially owned is 35.1%.

The President and Chief Executive Officer of Neurogen, Stephen R. Davis, who owns less than 1% of the outstanding shares of Neurogen common stock, along with various stockholders of Neurogen who collectively own approximately 32% of the outstanding shares of Neurogen common stock, have entered into voting agreements with Ligand Pharmaceuticals pursuant to which Mr. Davis and the various stockholders have agreed, among other things, to vote the shares of common stock of Neurogen owned by them in favor of adopting the merger agreement and approving the merger. For a description of the voting agreements, see “Certain Terms of the Merger Agreement—Voting Agreements” beginning on page 95 of this proxy statement/prospectus.

Solicitation of Proxies. Neurogen will bear the cost of this solicitation, including the printing and mailing of this proxy statement/prospectus, the proxy and any additional soliciting material furnished to the Neurogen stockholders. Copies of solicitation material will be furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward this solicitation material to such beneficial owners. In addition, Neurogen may reimburse such persons for their costs of forwarding the solicitation material to such beneficial owners. The original solicitation of proxies by mail may be supplemented by solicitation by telephone, email, facsimile or other means by directors, officers, employees or agents of Neurogen. No additional compensation will be paid to these individuals for any such services.

Risk Factors

You should carefully review the section of this proxy statement/prospectus entitled “Risk Factors” beginning on page 20 of this proxy statement/prospectus, which sets forth certain risks and uncertainties related to the merger, risks and uncertainties to which the combined company’s business will be subject and risks and uncertainties to which Ligand, as an independent company, is subject. These risk factors should be considered along with any additional risk factors in the reports of Ligand or Neurogen filed with the Securities and Exchange Commission, or SEC, and any other information included in or incorporated by reference into this proxy statement/prospectus.

Recommendation to Neurogen’s Stockholders

Neurogen’s board of directors has unanimously adopted the merger agreement and approved the merger. The board of directors of Neurogen recommends that Neurogen stockholders vote FOR the adoption of the merger agreement and approval of the merger, and FOR the approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the adoption of the merger agreement and approval of the merger, at the time of the special meeting.

Merger Structure; Merger Consideration

In the merger, Merger Sub will merge with and into Neurogen, with Neurogen continuing as the surviving entity. Upon completion of the merger, Ligand would issue to each Neurogen stockholder a number of Ligand shares equal to approximately $11 million (subject to dollar for dollar adjustments for any difference between Neurogen’s targeted and actual net cash as of the third trading day before the date of the Neurogen special meeting of stockholders) divided by the average of the daily volume weighted average prices of Ligand’s common stock over the 20 day trading period ending three trading days before the Neurogen stockholders meeting with respect to the merger, which result is then divided by the number of shares of Neurogen stock outstanding immediately before the merger. The number of Ligand shares to be issued in the merger is subject to a 4,200,000 share maximum, unless Ligand waives such maximum. Ligand may issue a number of Ligand shares equal to less than $11 million if such number is adjusted downward because either or both of the following conditions exist: (a) as of the third trading day before the date of the special meeting of Neurogen stockholders, Neurogen’s actual net cash is less than an agreed upon targeted net cash or (b) the average of the daily volume weighted average prices of Ligand’s common stock over the 20 day trading period ending three trading days before the special meeting of Neurogen stockholders is less than approximately $2.62 and the 4,200,000 share maximum is not waived. The average of the daily volume weighted average prices of Ligand’s common stock over the 20 day trading period ending on October 28, 2009 was $2.12. 4,200,000 Ligand shares times $2.12 would equate to approximately $8.9 million.

If Neurogen’s program for the development of Aplindore for the treatment of RLS and Parkinson’s disease is sold by Neurogen before the merger, Neurogen stockholders will also receive in the merger a pro-rata share of the cash and/or number of shares of third-party stock, as the case may be, paid pre-merger by the buyer for the program. In addition, if the real properties currently owned by Neurogen are sold by Neurogen before the merger, the pre-merger net cash proceeds from the sale shall also be paid in the merger to the Neurogen stockholders.

Each share of Ligand common stock that is issued in connection with the merger will be accompanied by an associated right under Ligand’s stockholder rights plan.

At the closing of the merger, Ligand, Neurogen and a rights agent will also enter into four contingent value rights agreements, or CVR agreements, attached to this proxy statement/prospectus as Annex B, Annex C, Annex D and Annex E. The CVR agreements set forth the rights that former Neurogen stockholders will have with respect to each CVR to be held by them after the closing of the merger. Each Neurogen stockholder will receive one CVR under each of the four CVR agreements for each share of Neurogen stock held. The CVRs will not be marketable or listed on any securities exchange and will be subject to general transfer restrictions subject to limited exceptions.

Aplindore CVR. If the Aplindore program is not sold or cancelled before the merger, each Neurogen stockholder shall be issued, for each Neurogen share that they own, one Aplindore CVR entitling them to receive (i) if the Aplindore program is sold before the six month anniversary of the merger, a pro-rata share of the cash and/or number of shares of third-party stock received by Ligand from the buyer of the Aplindore program less the reasonable costs and expenses of sale, plus any amount remaining in an operating expense reserve account, or (ii) if the Aplindore program is not sold before the six month anniversary of the merger, a pro-rata share of any amount remaining in the operating expense reserve account. See “Recent Neurogen Developments” on page 19.

H3 CVR. The H3 CVR agreement provides for the payment of a pro rata portion of (i) $4 million in cash if Ligand licenses the Neurogen antagonist program intended to create an H3 receptor drug on or before the third anniversary of the merger, (ii) 50% of the net cash proceeds from a sale of such program if Ligand sells the program before the third anniversary of the merger or (iii) 50% of the net proceeds if an option agreement to either license or sell the H3 antagonist program is entered into, in each case before the third anniversary of the merger. If any such option to license is exercised, the CVR holders would receive a pro rata portion of an additional amount up to $4 million (taking into account the option proceeds previously received by the CVR

holders) or if any such option to sell is exercised, the CVR holders would receive a pro rata portion of 50% of the net sale proceeds.

Merck CVR. The Merck CVR agreement provides for the payment of a pro rata portion of (i) $3 million if a milestone payment from Merck is received upon the initiation of a Phase 3 clinical trial of a vanilloid receptor subtype 1, or VR1, antagonist drug for the treatment of pain, or (ii) 50% of the net proceeds if such program is sold back to Merck before the milestone payment is made.

Real Estate CVR. If the real estate is not sold before the merger, each Neurogen stockholder will be issued one real estate CVR. The real estate CVR agreement provides for the payment of a pro rata portion of the cash paid by any buyer of the real estate currently owned by Neurogen and received by Ligand on or before the six month anniversary of the merger, less any costs and expenses reasonably incurred by Ligand in connection with such sale. See “Recent Neurogen Developments” on page 19.

For a description of the CVR agreements, see “Certain Terms of the Merger Agreement—CVR Agreements” beginning on page 91 of this proxy statement/prospectus.

Treatment of Stock Options and Warrants

Neurogen’s board of directors will take all requisite actions such that each holder of outstanding Neurogen options shall be entitled to exercise in full all Neurogen options held by such holder immediately before the effective time of the merger. All outstanding Neurogen options not exercised, other than any unexercised Neurogen options remaining outstanding under Neurogen’s 1993 Omnibus Incentive Plan, shall be terminated and canceled without any payment by Neurogen.

If any Neurogen warrant or option remains outstanding after the effective time of the merger and the holder thereof exercises such Neurogen warrant or option before its expiration or termination date, then Ligand shall issue and pay in respect of each such exercised Neurogen warrant or option, on a per-exercised-share basis, equivalent consideration to the consideration (or the proceeds thereof) as was paid in respect of each issued and outstanding share of Neurogen common stock in the merger; provided that any such payment in respect of options shall be made in compliance with Section 409A of the Code.

See the section entitled “Certain Terms of the Merger Agreement—Neurogen Stock Options and Warrants” beginning on page 77 of this proxy statement/prospectus.

Ownership of Ligand After the Merger

Ligand will issue a maximum of 4.2 million shares of common stock to Neurogen stockholders in the merger (unless Ligand agrees to waive such maximum). See the section entitled “Certain Terms of the Merger Agreement—Manner and Basis of Converting Shares” beginning on page 75 of this proxy statement/prospectus. Assuming Ligand does not waive such share maximum, Neurogen stockholders will own approximately 3.6% of the outstanding Ligand common stock after the merger. The above calculation is based on the number of shares of Ligand common stock and Neurogen common stock outstanding on the record date and the price of Ligand common stock as of such record date and assume that no Neurogen stock options or warrants will be exercised on a cashless basis, but does not take into account stock options or warrants of Ligand.

Neurogen’s Reasons for the Merger

After careful consideration, Neurogen’s board of directors adopted the merger agreement and approved the merger and unanimously declared that the merger agreement and the merger, upon the terms and subject to the conditions set forth in the merger agreement, are advisable and in the best interests of Neurogen and its stockholders. Neurogen’s board of directors consulted with Neurogen’s senior management, as well as Neurogen’s financial advisor and legal counsel, in reaching its decision to approve the merger.

Neurogen’s board of directors recommends that you vote FOR the adoption of the merger agreement and approval of the merger, and FOR the adjournment of the special meeting, if necessary, to solicit additional proxies. Please see the section entitled “The Merger—Neurogen’s Reasons for the Merger; Recommendation of Neurogen Board of Directors” beginning on page 51 of this proxy statement/prospectus for a full discussion of the factors that Neurogen’s board of directors considered in reaching its decision to approve the merger.

Opinion of Neurogen’s Financial Advisor

On August 20, 2009, MTS Securities, LLC, or MTS, an affiliate of MTS Health Partners, L.P., or MTS Health Partners, rendered its opinion to Neurogen’s board of directors that, as of August 20, 2009, and based upon and subject to the factors and assumptions set forth therein, the merger consideration to be received by the holders of Neurogen common stock, other than Ligand, Merger Sub, and their affiliates, pursuant to the merger agreement is fair from a financial point of view to such holders.

The full text of the written opinion of MTS, dated August 20, 2009, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex G to this proxy statement/prospectus and is incorporated by reference herein. MTS provided its opinion for the information and assistance of Neurogen’s board of directors in connection with its consideration of the merger. The MTS opinion is not a recommendation as to how any holder of Neurogen common stock should vote with respect to the merger or any other matter.

Ligand’s Reasons for the Merger

Ligand believes that the merger will enable Ligand to enhance its portfolio of partnerships, pipeline assets and drug discovery resources and increase its cash position, allowing the combined company to increase the potential revenue earned from partnerships, and build long-term stockholder value.

However, there can be no assurance that the benefits of the potential growth, synergies or opportunities considered by Ligand’s board of directors will be achieved through completion of the merger. Achieving Ligand’s objectives is subject to particular risks which are discussed in the section entitled “Risk Factors” beginning on page 20 of this proxy statement/prospectus.

Interests of Neurogen’s Officers and Directors in the Merger

In considering the recommendation of Neurogen’s board of directors that you vote to adopt the merger agreement, you should be aware that some of Neurogen’s executive officers and directors may have economic interests in the merger that are different from, or in addition to, those of Neurogen’s stockholders generally. See “The Merger—Interests of Neurogen’s Executive Officers and Directors in the Merger” beginning on page 64 of this proxy statement/prospectus.

Neurogen’s board of directors was aware of and considered these interests, among other matters, in approving the merger agreement and the merger, and in making its recommendation that Neurogen’s stockholders vote to adopt the merger agreement and approve the merger.

Conditions to the Merger

The obligations of Ligand, Merger Sub and Neurogen to consummate and effect the merger are subject to the satisfaction, at or before the effective time of the merger, of a number of conditions, including, among others, the following:

In addition to the conditions above, the merger agreement provides that the obligations of Ligand and Merger Sub to consummate and effect the merger are subject to the satisfaction, at or before the effective time of the merger, of the following conditions, among others:

The merger agreement also provides that the obligation of Neurogen to consummate and effect the merger is subject to the satisfaction, at or before the effective time of the merger, of the following conditions, among others:

Either Ligand or Neurogen may choose to waive the conditions to its obligation to complete the merger, provided that any such waiver is in compliance with applicable law.

Termination of the Merger Agreement

Each of Ligand and Neurogen may terminate the merger agreement by mutual consent or if:

Ligand may terminate the merger agreement if:

Neurogen may terminate the merger agreement if:

Limitation on Neurogen’s Ability to Consider Other Acquisition Proposals

Neurogen has agreed that it will not, shall cause all of its subsidiaries not to and shall use its reasonable best efforts to cause Neurogen’s and Neurogen’s subsidiaries’ directors, officers, employees, investment bankers, attorneys and other agents or representatives not to, directly or indirectly, subject to specified exceptions:

See “Certain Terms of the Merger Agreement—Limitation on Neurogen’s Ability to Consider Other Acquisition Proposals” beginning on page 84 of this proxy statement/prospectus.

Termination Fee

The merger agreement provides that Neurogen shall pay a $475,000 termination fee to Ligand if the Neurogen board of directors authorizes Neurogen to accept a superior proposal (as defined under “Certain Terms of the Merger Agreement—Limitation on Neurogen’s Ability to Consider Other Acquisition Proposals” beginning on page 84 of this proxy statement/prospectus).

The merger agreement also provides that Neurogen shall pay a $475,000 termination fee to Ligand if:

The merger agreement further provides that Neurogen shall pay a $225,000 termination fee, instead of a $475,000 termination fee, to Ligand if Neurogen terminates the merger agreement because the value of the stock consideration to be received by Neurogen stockholders in the merger is less than $11 million, as adjusted, and Ligand does not nullify the termination by waiving the 4.2 million maximum share amount.

Fees and Expenses

The merger agreement provides that, regardless of whether the merger is consummated, each party will pay its own expenses incident to preparing for, entering into and carrying out the merger agreement and the transactions contemplated by the merger agreement. Neurogen’s expenses of this kind would reduce Neurogen’s net cash and thus would reduce the number of shares of Ligand common stock payable in the merger to Neurogen stockholders.

Tax Matters

The receipt of the merger consideration by a United States holder in exchange for Neurogen common stock should be a taxable transaction for United States federal income tax purposes. The amount of gain or loss a United States holder recognizes, and the timing and potentially the character of a portion of such gain or loss, depends on the United States federal income tax treatment of the CVRs, with respect to which there is substantial uncertainty. A Neurogen stockholder’s gain or loss will also be determined by the stockholder’s tax basis in his shares of Neurogen common stock. For a more complete description of the tax consequences of the merger, see the section entitled “The Merger—Material United States Federal Income Tax Consequences of the Merger” beginning on page 67 of this proxy statement/prospectus.

Tax matters are very complicated, and the tax consequences of the merger to a particular stockholder will depend in part on such stockholder’s circumstances. Accordingly, you are urged to consult your own tax advisor for a full understanding of the tax consequences of the merger to you, including the applicability and effect of federal, state, local and foreign income and other tax laws.

Anticipated Accounting Treatment

Ligand will account for the merger under the acquisition method of accounting in accordance with Statement of Financial Accounting Standards No. 141 (revised 2007), “Business Combinations.” See “The Merger—Anticipated Accounting Treatment” beginning on page 70 of this proxy statement/prospectus.

Regulatory Filings and Approvals

Neither Ligand nor Neurogen is aware of any material governmental or regulatory requirements that must be complied with regarding the merger, other than the effectiveness of the registration statement of which this proxy statement/prospectus is a part and compliance with applicable provisions of Delaware law.

Ligand Will List Shares of Ligand Common Stock issued in the Merger on Nasdaq

If the merger is completed, Neurogen stockholders will be able to trade the shares of Ligand common stock they receive in the merger on Nasdaq, subject to restrictions on affiliates of Ligand as of the effective time of the merger as described in the section entitled “The Merger—Sales of Shares of Ligand Common Stock Received in the Merger” beginning on page 66 of this proxy statement/prospectus.

If Ligand and Neurogen complete the merger, Neurogen stock will no longer be listed for trading on Nasdaq or any other market or exchange. See “The Merger—Delisting and Deregistration of Neurogen Common Stock” beginning on page 66 of this proxy statement/prospectus. CVRs issued in the merger will not be marketable or listed on any securities exchange and will be subject to general transfer restrictions with limited exceptions.

Appraisal Rights

Holders of Neurogen common stock are entitled to appraisal rights under Delaware law. See the section entitled “The Merger—Appraisal Rights of Dissenting Neurogen Stockholders” beginning on page 71 of this proxy statement/prospectus.

Material Differences in Rights of Neurogen Stockholders and Ligand Stockholders

When the merger is completed, Neurogen stockholders will automatically become Ligand stockholders and holders of CVRs. The rights of Ligand stockholders differ from the rights of Neurogen stockholders in certain important ways. See the section entitled “Comparative Rights of Ligand Stockholders and Neurogen Stockholders” beginning on page 107 of this proxy statement/prospectus.

COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND DATA

Ligand common stock is listed on Nasdaq under the symbol “LGND.” Neurogen common stock is listed on Nasdaq under the symbol “NRGN.”

The table below sets forth, for the periods indicated, the high and low closing sale prices per share of Ligand common stock as reported on Nasdaq and the high and low closing sale prices per share of Neurogen common stock as reported on Nasdaq.

As of the record date, there were approximately 4,600 record holders of Neurogen common stock. Neurogen has never declared or paid any cash dividends on its common stock. Other than the 2007 cash dividend referenced above, Ligand has never declared or paid any cash dividends on its capital stock. Ligand does not intend to pay any additional cash dividends in the foreseeable future and currently intends to retain future earnings, if any, to finance future growth. Following completion of the merger, Ligand common stock will continue to be listed on Nasdaq, and there will be no further market for Neurogen common stock.

The following table sets forth the per share closing sale price of Ligand common stock as reported on Nasdaq, the per share closing sale price of Neurogen common stock as reported on Nasdaq, and the estimated equivalent per share price, as explained below, of Neurogen common stock if the merger occurred on August 21, 2009, the last full trading day before the public announcement of the proposed merger and if the merger occurred on October 28, 2009, the latest practicable date before the date of this proxy statement/prospectus.

The estimated equivalent Neurogen per share price does not give effect to any possible sale of Neurogen’s Aplindore program or real properties before closing or any CVR payments.

LIGAND PHARMACEUTICALS INCORPORATED

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

The following selected historical consolidated financial information are qualified by reference to, and should be read in conjunction with, Ligand’s consolidated financial statements and the related notes thereto and the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” from Ligand’s annual report on Form 10-K and quarterly reports on Form 10-Q, which are incorporated by reference in this proxy statement/prospectus. Ligand’s selected statement of operations data set forth below for each of the five years ended December 31, 2008, 2007, 2006, 2005, and 2004 and the balance sheet data as of December 31, 2008, 2007, 2006, 2005, and 2004 are derived from Ligand’s consolidated financial statements, and for the six-month period ended June 30, 2009 and 2008 as derived from Ligand’s unaudited interim consolidated financial statements.

The unaudited interim consolidated financial statements include, in Ligand’s opinion, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of the unaudited periods. You should not rely on these interim results as being indicative of results Ligand may expect for the full year or any other interim period. Historical results are not necessarily indicative of the results to be obtained in the future. In August 2009, Ligand entered into a lease termination agreement for its corporate facility in San Diego. Under the terms of the agreement, Ligand will pay a termination fee of $14.3 million as follows: $4.5 million upon signing, $4.5 million in July 2010 and $5.3 million in April 2011. In addition, Ligand entered into a new lease for a period of 27 months commencing October 2009, for premises consisting of office and lab space located in San Diego to serve as its new corporate headquarters.

NEUROGEN CORPORATION

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

The following selected historical consolidated financial information should be read in conjunction with Neurogen’s financial statements and the related notes thereto and the sections entitled, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” from Neurogen’s annual report on Form 10-K and quarterly reports on Form 10-Q, which are incorporated by reference in, and delivered with, this proxy statement/prospectus. Neurogen’s selected consolidated Statement of Operations data set forth below for each of the five years ended December 31, 2008, 2007, 2006, 2005, and 2004 and the Balance Sheet data as of December 31, 2008, 2007, 2006, 2005, and 2004 are derived from Neurogen’s consolidated financial statements, and for the six-month period ended June 30, 2009 and 2008 as derived from Neurogen’s unaudited interim condensed consolidated financial statements.

The unaudited interim condensed consolidated financial statements include, in Neurogen’s opinion, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of the unaudited periods. You should not rely on these interim results as being indicative of results Neurogen may expect for the full year or any other interim period. Historical results are not necessarily indicative of the results to be obtained in the future.

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The selected unaudited pro forma condensed combined financial information presented below is based on, and should be read together with, the historical information that Ligand and Neurogen have presented in their respective filings with the SEC and the pro forma information that appears elsewhere in this proxy statement/prospectus. See the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information” and “Where You Can Find More Information” beginning on pages 99 and 110, respectively, of this proxy statement/prospectus.

The selected unaudited pro forma condensed combined balance sheet as of June 30, 2009 gives effect to the proposed merger as if it had occurred on June 30, 2009, and combines the historical balance sheets of Ligand and Neurogen as of June 30, 2009. The selected unaudited pro forma condensed combined statements of operations for the year ended December 31, 2008 and for the six months ended June 30, 2009 are presented as if the proposed merger had occurred on January 1, 2008, and combines the historical results of Ligand and Neurogen for the year ended December 31, 2008 and for the six months ended June 30, 2009, respectively.

The pro forma adjustments related to the merger are based on a preliminary purchase price allocation whereby the estimated cost to acquire Neurogen was allocated to the assets acquired and the liabilities assumed based upon their estimated fair values. A final purchase price allocation will be performed using fair value as of the date of completion of the merger. Differences between the preliminary and final purchase price allocations could have a material impact on the accompanying unaudited pro forma condensed combined financial statement information and Ligand’s future results of operations and financial position.

The selected unaudited pro forma condensed combined financial statements do not reflect the realization of potential cost savings or synergistic advantages, or any related restructuring or integration costs. Certain cost savings or synergistic advantages may result from the merger, however, there can be no assurance that these cost savings or synergistic advantages will be achieved.

The selected unaudited pro forma condensed combined financial information is presented for illustrative purposes only and is not necessarily indicative of the combined financial positions or results of operations in future periods or the results that actually would have been realized if the proposed merger had been completed as of the dates indicated.