NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE

10 October 2018

RECOMMENDED CASH OFFER

for

VERNALIS PLC

("Vernalis" or the "Company")

by

LIGAND HOLDINGS UK LTD.

(a wholly owned subsidiary of Ligand Pharmaceuticals Incorporated)

("Ligand UK")

Scheme of Arrangement (the "Scheme") becomes Effective

The Boards of Vernalis and Ligand UK are pleased to announce that, further to yesterday's announcement by Vernalis that the Court had sanctioned the Scheme, the Court Order has been delivered to the Registrar of Companies today and accordingly the Scheme has now become effective, in accordance with its terms and Vernalis is now a wholly owned subsidiary of Ligand UK.

As previously advised, trading in Vernalis Shares on AIM was suspended with effect from 7.30 a.m. this morning, 10 October 2018. The cancellation of trading of Vernalis Shares on AIM is expected to take place at 7.00 a.m. on 11 October 2018. As a result of the Scheme having become effective, share certificates in respect of Vernalis Shares will, by 7.00 a.m. on 11 October 2018, cease to be valid documents of title and entitlements to Vernalis Shares held in uncertificated form in CREST are being cancelled.

A Scheme Shareholder on the register of members of Vernalis at the Scheme Record Time, being 6.00 p.m. on 9 October 2018, will be entitled to receive 6.2 pence for each Scheme Share held. Settlement of the consideration to which any Scheme Shareholder is entitled will be effected by way of the despatch of cheques or the crediting of CREST accounts (for Shareholders holding Scheme Shares in certificated form and in uncertificated form respectively) as soon as practicable. The latest date for despatch of cheques and settlement of the Cash Consideration in relation to the Acquisition through CREST is 24 October 2018.

Full details of the Acquisition are set out in the scheme document dated 6 September 2018 (the "Scheme Document"). Defined terms used but not defined in this announcement (the "Announcement") have the same meanings set out in the Scheme Document.

The Company is no longer in an "Offer Period" as defined in the Code and accordingly the dealing disclosure requirements previously notified to investors no longer apply.

Enquiries

Important notices

Canaccord Genuity, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting solely for Vernalis as Nominated Adviser and broker in relation to the matters referred to in this Announcement and for no one else.  Canaccord Genuity will not be responsible to anyone other than Vernalis for providing the protections afforded to its clients or for providing advice in relation to the contents of this Announcement or any arrangement referred to herein. Neither Canaccord Genuity, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statue or otherwise) to any person other than Vernalis in connection with this Announcement, any statement contained herein or otherwise.

Evercore, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting solely for Vernalis as financial adviser in relation to the matters referred to in this Announcement and for no one else. Evercore will not be responsible to anyone other than Vernalis for providing the protections afforded to its clients or for providing advice in relation to the contents of this Announcement or any arrangement referred to herein. Neither Evercore, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statue or otherwise) to any person other than Vernalis in connection with this Announcement, any statement contained herein or otherwise.

finnCap, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to Ligand UK and for no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than Ligand UK for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this Announcement. Neither finnCap, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of finnCap in connection with this Announcement, any statement contained herein or otherwise.

MTS is acting exclusively as financial adviser to Ligand UK and for no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than Ligand UK for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this Announcement. MTS is a US registered broker dealer and is not advising Ligand UK for the purposes of the Code. Neither MTS, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of MTS in connection with this Announcement, any statement contained herein or otherwise.

This Announcement is for information purposes only and is not intended to, and does not, constitute or form any part of, an offer to sell or an invitation to subscribe for or purchase any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of the securities referred to in this Announcement in any jurisdiction in contravention of applicable law.

Overseas jurisdictions

The release, publication or distribution of this Announcement in or into jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements.  Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.  This Announcement has been prepared for the purpose of complying with English law, the rules of the London Stock Exchange, the AIM Rules and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of England & Wales.

Copies of this Announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction or any other jurisdiction where to do so would constitute a violation of the laws of that jurisdiction, and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send such documents in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of a  Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.

Further details in relation to Vernalis Shareholders in overseas jurisdictions are contained in the Scheme Document.

Notice to US holders of Vernalis Shares and Vernalis ADSs

The Acquisition relates to the shares of an English company and is being made by means of a scheme of arrangement provided for under English company law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in the United Kingdom to schemes of arrangement which differ from the disclosure requirements of United States tender offer and proxy solicitation rules. If, in the future, Ligand UK exercises the right to implement the Acquisition by way of a Takeover Offer and determines to extend such Takeover Offer into the United States, the Acquisition will be made pursuant to applicable UK tender offer rules and securities laws and otherwise in accordance with the requirements of the Code.  Accordingly, any such Takeover Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that are different from those applicable to tender offers made in accordance with US procedures and law.  Financial information included in this Announcement and the Scheme Document has been or will be prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

It may be difficult for US holders of Vernalis Shares (and Vernalis ADS Holders) to enforce their rights and any claim arising out of the US federal securities laws, since Vernalis is located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Vernalis Shares and Vernalis ADS Holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

Neither the SEC nor any securities commission of any state of the United States has approved the Acquisition, passed upon the fairness of the Acquisition or passed upon the adequacy or accuracy of this Announcement.  Any representation to the contrary is a criminal offence in the United States.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Ligand UK or its nominees or brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, Vernalis Shares outside the United States, other than pursuant to the Acquisition, until the date on which the Takeover Offer and/or Scheme becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to the Regulatory News Service of the London Stock Exchange and will be available on the London Stock Exchange website.

Publication on website and availability of hard copies

Pursuant to Rule 26.1 of the Code, a copy of this Announcement will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on the Ligand Group's website at www.investor.ligand.com/vernalisoffer and on Vernalis' website at www.vernalis.com promptly and in any event by no later than 12 noon (London time) on the business day following the Announcement. For the avoidance of doubt, the content of these websites is not incorporated by reference into, and does not form part of, this Announcement.

Pursuant to Rule 30.3 of the Code, a person so entitled may request a copy of this Announcement, free of charge. A person may also request that all future documents, announcements and information to be sent to that person in relation to the Acquisition should be sent by the party which publishes it in hard copy form. For persons who receive a copy of this Announcement in electronic form or via a website publication, a hard copy of this Announcement will not be sent unless so requested, by contacting Vernalis on +44 (0) 118 938 0015. If requested, copies will be provided, free of charge, within two business days of the request.