Document:

LGNDVikingMasterLicenseAgreement-Amendment

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Exhibit 10.1

SECOND AMENDMENT TO MASTER LICENSE AGREEMENT
This Second Amendment to Master License Agreement (this “Amendment”) is dated as of April 8, 2015 by and between Metabasis Therapeutics, Inc., a Delaware corporation organized having its place of business at 11119 North Torrey Pines Road, Suite 200, La Jolla, CA 92037 (including its successors and permitted assigns, “Metabasis”) and Ligand Pharmaceuticals Incorporated, a Delaware corporation organized having its place of business at 11119 North Torrey Pines Road, Suite 200, La Jolla, CA 92037 (including its successors and permitted assigns, “Ligand”) on the one hand, and Viking Therapeutics, Inc., a Delaware corporation organized having its place of business at 11119 North Torrey Pines Road, Suite 50, La Jolla, CA 92037, on the other hand (including its successors and permitted assigns, “Viking,” and together with Ligand and Metabasis, the “Parties”).
This Amendment amends and modifies that certain Master License Agreement, between Metabasis and Ligand on the one hand and Viking on the other hand, dated May 21, 2014, as amended by the First Amendment to Master License Agreement, dated September 6, 2014 (as amended, the “Agreement”), as follows:
1.Schedule 6 of the Agreement shall be replaced in its entirety with the Amended Schedule 6 attached hereto.  As of immediately prior to the consummation of any Financing Transaction, Viking will take all steps necessary, including without limitation any repurchase, recapitalization, reclassification, stock split, reverse stock split or similar transaction, necessary to effectuate the provisions of Schedule 6.
2.    Schedule 7 of the Agreement shall be replaced in its entirety with the Amended Schedule 7 attached hereto.  
3.    All of the other provisions of the Agreement shall remain in full force and effect.
4.    This Amendment may be executed in counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.  A facsimile or a portable document format (PDF) copy of this Amendment, including the signature pages, will be deemed an original.
[Signatures Follow]

IN WITNESS WHEREOF, the Parties have caused this Second Amendment to Master License Agreement to be executed and delivered by their respective duly authorized officers as of the day and year first above written.
Metabasis Therapeutics, Inc.    
By: /s/ John Higgins        
 
Name: John Higgins        
Title: Chief Executive Officer        
Ligand Pharmaceuticals Incorporated
By: /s/ John Higgins     
Name: John Higgins    
Title: Chief Executive Officer    

Viking Therapeutics, Inc.
By: /s/ Brian Lian    
Name: Brian Lian    
Title: President and Chief Executive Officer    

AMENDED SCHEDULE 6
ISSUANCE OF VIKING SECURITIES
	
				
	Licensed Program
	Viking Securities 
to be Issued To:
	Dollar Amount of Viking Securities 
to be Issued:
	Number of Shares of Viking Securities

	DGAT-1 Program
	Metabasis
	[***]
	(1)

	EPOR Program
	Ligand
	[***]
	(1)

	SARM Program
	Ligand
	[***]
	(1)

	TR-Beta Program
	Metabasis
	[***]
	(1)

	FBPase Program
	Metabasis
	[***]
	(1)

	TOTAL
	 
	$29,000,000
	 

** Includes the Exercise Fee
		
	(1)
	The aggregate number of shares of Viking Securities issued to Ligand and/or Metabasis (collectively) pursuant to Section 5.1(b) and this SCHEDULE 6 shall be as follows.

(a)    In the event the valuation of the Company as of immediately prior to the Financing Transaction, based on the number of shares of capital stock of Viking outstanding calculated on a Fully-Diluted Basis (as defined below) as of immediately prior to the Financing Transaction (and prior to giving effect to the issuance of any shares of Viking Securities in the Financing Transaction) (the “Pre-Money Valuation”), is up to or equal to [***], the aggregate number of shares of Viking Securities issued to Ligand and Metabasis (collectively) pursuant to this Agreement (for purposes of this subsection (a), the “MLA Shares”) shall be equal to:
[***]
Notwithstanding the previous sentence, and subject to the subsequent sentence, in the event the MLA Shares, when added to any shares of Viking Securities that Ligand purchases in the Financing Transaction, represents in excess of 49.90% of the outstanding Viking Securities immediately following the Financing Transaction, including without limitation any shares issued in connection with the Financing Transaction (the “Ownership Cap”), then the number of MLA Shares acquired hereunder shall be reduced by a number of shares (for purposes of this subsection (a), the “Cutback Shares”) which results in Ligand owning a number of Viking Securities immediately after the Financing Transaction not exceeding the Ownership Cap.

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Notwithstanding the previous sentence, in the event the Financing Transaction is a Public Offering and the underwriters are granted and exercise an option to purchase additional shares (the “Overallotment Shares”), then Viking shall issue to Ligand at the time of the closing of the Overallotment Shares, a number of additional shares of Viking Securities equal to the number of Overallotment Shares, but not to exceed the number of Cutback Shares; provided that in no event shall the aggregate number of (i) MLA Shares, plus (ii) the shares of Viking Securities that Ligand purchases in the Financing Transaction, plus (iii) the shares of Viking Securities that Ligand receives upon the closing of the Overallotment Shares exceed the Ownership Cap.
For purposes of this Amended Schedule 6, “Fully-Diluted Basis” means the total number of shares that (i) includes (A) all then-outstanding shares and shares issuable under then-outstanding equity awards and warrants (if any) as of immediately prior to the Financing Transaction (and prior to giving effect to the issuance of any shares of Viking Securities in the Financing Transaction), (B) shares (and options to purchase shares) issuable pursuant to consulting agreements then in effect, (C) shares issuable to holders of then-outstanding convertible notes (but excluding convertible notes held by Ligand) and (D) any outstanding shares of common stock issued prior to the Financing Transaction, as may be adjusted pursuant to any repurchase, recapitalization, reclassification, stock split, reverse stock split or similar transaction, as well as the shares of Viking Securities to be issued to Ligand pursuant to Section 5.1(b) of the Agreement and this Schedule 6, and (ii) excludes (W) shares of common stock issuable pursuant to employment agreements and employee offer letters then in effect, (X) any other shares of common stock and equity awards issued or issuable in, upon or following the closing of the Financing Transaction, (Y) shares reserved pursuant to Viking’s equity incentive plan (unless the shares are subject to an award outstanding under the plan as of immediately prior to the Financing Transaction), and (Z) shares reserved pursuant to Viking’s employee stock purchase plan.
For the purposes of the dollar amounts, the shares of Viking common stock shall be valued at the price per share provided in Section 5.1(b) (in the case of an initial public offering, the IPO Price per share to the public as defined in Section 1.38 of the Agreement).
For example, if the Pre-Money Valuation is equal to [***], Ligand would be entitled to [***], or [***], of the total [***] shares, while the other holders of Viking Securities would be entitled to [***], or [***], of the total [***] shares; if the IPO Price [***], is equal to [***] per share, then in this example Ligand would receive [***] shares as MLA Shares and the other holders of Viking Securities would hold [***] shares as of immediately prior to the Financing Transaction. 

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Next, in this example, if Ligand purchases [***] in a Public Offering with an aggregate size of [***] with the same [***] per share IPO Price, Ligand would receive [***] shares in the Public Offering for an aggregate ownership of [***] shares and the other holders of Viking Securities would initially be allocated [***] shares in the Public Offering for an aggregate ownership of [***] shares.  With a post-Public Offering valuation of [***], the number of Viking Securities outstanding after giving effect to the issuance [***] shares in the Public Offering would be [***]. Investors in the Public Offering other than Ligand would own [***] shares (that is, [***]). To prevent Ligand from exceeding the Ownership Cap, and based on the aggregate ownership of the holders of Viking Securities other than Ligand, Ligand could not hold more than [***] shares (that is, [***]) and thus the Cutback Shares would equal [***], or [***] shares. The other holders of Viking Securities as of immediately prior to the Public Offering would own [***] shares of common stock (that is, [***]).
Finally, in this example, if the underwriters exercised their overallotment option for the full [***] Overallotment Shares (that is, [***] of the initial [***] shares offered at [***] per share for an aggregate offering price of [***]), then Ligand would receive an additional [***] shares, which is the number of shares required to increase Ligand’s ownership to [***].  At the end of this example, Ligand would own [***] shares (that is, [***]) and the other holders of Viking Securities would hold [***] shares, of which investors in the Public Offering other than Ligand would own [***] shares and the other holders of Viking Securities as of immediately prior to the Public Offering would own [***] shares.
 (b)    In the event the Pre-Money Valuation is greater than [***], the aggregate number of shares of Viking Securities issued to Ligand and Metabasis (collectively) pursuant to this Agreement (for purposes of this subsection (b), the “MLA Shares”) shall be equal to: 
[***]
Notwithstanding the previous sentence, and subject to the subsequent sentence, in the event the MLA Shares, when added to any shares of Viking Securities that Ligand purchases in the Financing Transaction, represents in excess of the Ownership Cap, then the number of MLA Shares acquired hereunder shall be reduced by a number of shares (for purposes of this subsection (b), the “Cutback Shares”) which results in Ligand owning a number of Viking Securities immediately after the Financing Transaction not exceeding the Ownership Cap.
Notwithstanding the previous sentence, in the event the Financing Transaction is a Public Offering and the underwriters are granted and exercise an option to purchase Overallotment Shares, then Viking shall issue to Ligand at the time of the closing of the Overallotment Shares, a number of additional shares of Viking Securities equal to the number of 

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Overallotment Shares, but not to exceed the number of Cutback Shares; provided that in no event shall the aggregate number of (i) the MLA Shares, plus (ii) the shares of Viking Securities that Ligand purchases in the Financing Transaction, plus (iii) the shares of Viking Securities that Ligand receives upon the closing of the underwriter’s option to purchase additional shares exceed the Ownership Cap.
For the purposes of the dollar amounts, the shares of Viking common stock shall be valued at the price per share provided in Section 5.1(b) (in the case of an initial public offering, the IPO Price per share to the public as defined in Section 1.38 of the Agreement).

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

AMENDED SCHEDULE 7

LICENSED PRODUCT MILESTONES AND ROYALTIES1 

A.    Development and Commercial Milestones. 
1.    FBPase Program: Viking shall pay Metabasis the following one-time, non-refundable milestone payments with respect to the first, second, third and fourth different Indication of a Licensed Product containing an FBPase Compound to achieve the following milestone events (without regard to whether the Licensed Product which addresses and achieves a milestone event with respect to a respective Indication also achieved the same (or any other) milestone event as to another one or more of the Indications) and whether achieved by Viking, its Affiliate or its Sublicensee. 

	
		
	Milestone event payable for each Indication up to the fourth Indication
	Milestone Payment

	[***]
	[***]

For the avoidance of doubt, the total maximum milestone payments payable under this Section A.1 for all Licensed Products containing an FBPase Compound and all Indications are $240,000,000.
With respect to each milestone event, the milestone payments to be made under this Section A.1 shall be due and payable only once (or up to four times, as the case may be) as indicated, even if an Indication is discontinued after a milestone payment has been made.
2.    DGAT-1 Program: Viking shall pay Metabasis the following one-time, non-refundable milestone payments with respect to the first and second different Indication of a Licensed Product containing a DGAT-1 Compound to achieve the following milestone events (without regard to whether the Licensed Product which addresses and achieves a milestone event with respect to a respective Indication also achieved the same (or any other) milestone event as to another one or more of the Indications) whether achieved by Viking, its Affiliate or its Sublicensee. 

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

	
		
	Milestone event payable for each Indication up to the second Indication

	Milestone Payment

	[***]
	[***]

For the avoidance of doubt, the total maximum milestone payments payable under this Section A.2 for all Licensed Products containing a DGAT-1 Compound are $156,000,000.
With respect to each milestone event, the milestone payments to be made under this Section A.2 shall be due and payable only once (or up to two times, as the case may be) as indicated, even if the Development of a particular Licensed Product is discontinued after a milestone payment has been made.
3.    EPOR Program: Viking shall pay Ligand the following one-time, non-refundable milestone payments with respect to the first, second and third different Indication of a Licensed Product containing an EPOR Compound to achieve the following milestone events (without regard to whether the Licensed Product which addresses and achieves a milestone event with respect to a respective Indication also achieved the same (or any other) milestone event as to another Indication) and whether achieved by Viking, its Affiliate or its Sublicensee. 

	
		
	Milestone event payable for each Indication up to the third Indication

	Milestone Payment

	[***]
	[***]

For the avoidance of doubt, the total maximum milestone payments payable under this Section A.3 for all Licensed Products containing an EPOR Compound are $144,000,000.
With respect to each milestone event, the milestone payments to be made under this Section A.3 shall be due and payable only (or up to three times, as the case may be) as indicated, even if the Development of a particular Licensed Product is discontinued after a milestone payment has been made.
4.    SARM Program: Viking shall pay Ligand the following one-time, non-refundable milestone payments with respect to the first and the second different Indication of a Licensed Product containing a SARM Compound to achieve the following milestone events (without regard to whether the Licensed Product which addresses and achieves a milestone event with respect to a respective Indication also achieved the same (or any 

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

other) milestone event as to another Indication) and whether achieved by Viking, its Affiliate or its Sublicensee. 

	
		
	Milestone event payable for each Indication up to the second Indication

	Milestone Payment

	[***]
	[***]

For the avoidance of doubt, the total maximum milestone payments payable under this Section A.4 for all Licensed Products containing a SARM Compound are $170,000,000.
With respect to each milestone event, the milestone payments to be made under this Section A.4 shall be due and payable only once (or up to two times, as the case may be) as indicated, even if an Indication is discontinued after a milestone payment has been made.
5.    TR-Beta Program: Viking shall pay Metabasis the following one-time, non-refundable milestone payments with respect to the first, the second and the third different Indication of a Licensed Product containing a TR-Beta Compound to achieve the following milestone events (without regard to whether the Licensed Product which addresses and achieves a milestone event with respect to a respective Indication also achieved the same (or any other) milestone event as to another one or more of the Indications) and whether achieved by Viking, its Affiliate or its Sublicensee. 

	
		
	Milestone event payable for each Indication up to the third Indication

	Milestone Payment

	[***]
	[***]

For the avoidance of doubt, the total maximum milestone payments payable under this Section A.5 for all Licensed Products containing a TR-Beta Compound are $225,000,000.
With respect to each milestone event, the milestone payments to be made under this Section A.5 shall be due and payable only once (or up to three times, as the case may be) as indicated, even if an Indication is discontinued after a milestone payment has been made.
6.    Payment of Development, Commercial and Special Milestones. Viking shall promptly, but in no event later than [***] following each achievement of a milestone 

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

event set forth in this Section A, notify Ligand in writing of the achievement of such milestone event and shall pay the relevant milestone payment within [***] thereafter.

B.    Sublicense Milestone Payments. Viking shall pay Metabasis a one-time, non-refundable milestone payment of Two Million Five Hundred Thousand Dollars ($2,500,000) upon the occurrence of a First Commercial Sale of an FBPase Compound by a Sublicensee (which, for clarity, shall not include a Sublicense to a contract manufacturer in connection with Commercialization).

Viking shall promptly, but in no event later than [***] following the achievement of the milestone event set forth in this Section B, notify Ligand in writing of the achievement of such milestone event and shall pay the milestone payment within [***] thereafter. 

C.    Sales Milestone Payments.

1.    DGAT-1. Viking shall pay Metabasis the following one-time, non-refundable milestone payments with respect to Licensed Products containing a DGAT-1 Compound as follows: 

	
		
	Milestone event payable 

	Milestone Payment

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a DGAT-1 Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a DGAT-1 Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a DGAT-1 Compound reach or surpass [***]
	[***]

2.    FBPase. Viking shall pay Metabasis the following one-time, non-refundable milestone payments with respect to Licensed Products containing a FBPase Compound as follows: 

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

	
		
	Milestone event payable 

	Milestone Payment

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a FBPase Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a FBPase Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a FBPase Compound reach or surpass [***]
	[***]

3.    EPOR. Viking shall pay Ligand the following one-time, non-refundable milestone payments with respect to Licensed Products containing an EPOR Compound as follows: 

	
		
	Milestone event payable 

	Milestone Payment

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing an EPOR Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing an EPOR Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing an EPOR Compound reach or surpass [***]
	[***]

4.    SARM. Viking shall pay Ligand the following one-time, non-refundable milestone payments with respect to Licensed Products containing a SARM Compound as follows: 

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

	
		
	Milestone event payable 

	Milestone Payment

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a SARM Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a SARM Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a SARM Compound reach or surpass [***]
	[***]

5.    TR-Beta. Viking shall pay Metabasis the following one-time, non-refundable milestone payments with respect to Licensed Products containing a TR-Beta Compound as follows: 

	
		
	Milestone event payable 

	Milestone Payment

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a TR-Beta Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a TR-Beta Compound reach or surpass [***]
	[***]

	The end of the [***] during which cumulative Net Sales for all Licensed Products containing a TR-Beta Compound reach or surpass [***]
	[***]

6.    Payment of Sales Milestones. Viking shall include in its report delivered each [***] under Section 5.5 of this Agreement a notation regarding the achievement of such milestone event and for which category or categories of Licensed Products it has been achieved. Viking shall pay the relevant milestone payment concurrently with the payment of royalties based on the applicable [***] report.

D.    Royalty Payments.

1.    DGAT-1. Viking shall, during the applicable Royalty Term, pay to Metabasis a royalty on aggregate annual worldwide Net Sales by Viking and its Affiliates and Sublicensees of all Licensed Products with one or more Valid Claims Covering any DGAT-1 Compound contained in such Licensed Products, at the percentage rates set forth below:

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

	
		
	Annual worldwide Net Sales of Licensed Products Containing a DGAT-1 Compound per Calendar Year (U.S. Dollars)
	Incremental Royalty Rate

	For Net Sales of such a Licensed Product from [***] up to and including [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***] and less than or equal to [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***]
	[***]

By way of illustration, assume in a Calendar Year that aggregate worldwide annual Net Sales of all such Licensed Products total $950,000,000. The total royalties due and payable by Viking to Metabasis for such Net Sales would be [***], calculated as follows:
[***]
2.    FBPase. Viking shall, during the applicable Royalty Term, pay to Metabasis a royalty on aggregate annual worldwide Net Sales by Viking and its Affiliates and Sublicensees of all Licensed Products with one or more Valid Claims Covering any FBPase Compound contained in such Licensed Products, at the percentage rates set forth below:

	
		
	Annual worldwide Net Sales of Licensed Products Containing a FBPase Compound per Calendar Year (U.S. Dollars)
	Incremental Royalty Rate

	For Net Sales of such a Licensed Product from [***] up to and including [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***] and less than or equal to [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***]
	[***]

By way of illustration, assume in a Calendar Year that aggregate worldwide annual Net Sales of all such Licensed Products total $950,000,000. The total royalties due and payable by Viking to Metabasis for such Net Sales would be [***], calculated as follows:
[***]
3.    EPOR. Viking shall, during the applicable Royalty Term, pay to Ligand a royalty on aggregate annual worldwide Net Sales by Viking and its Affiliates and Sublicensees of all Licensed Products with one or more Valid Claims Covering any EPOR Compound contained in such Licensed Products, at the percentage rates set forth below:

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

	
		
	Annual worldwide Net Sales of Licensed Products Containing an EPOR Compound per Calendar Year (U.S. Dollars)
	Incremental Royalty Rate

	For Net Sales of such a Licensed Product from [***] up to and including [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***] and less than or equal to [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***]
	[***]

By way of illustration, assume in a Calendar Year that aggregate worldwide annual Net Sales of all such Licensed Products total $950,000,000. The total royalties due and payable by Viking to Ligand for such Net Sales would be [***], calculated as follows:
[***]
4.    SARM. Viking shall, during the applicable Royalty Term, pay to Ligand a royalty on aggregate annual worldwide Net Sales by Viking and its Affiliates and Sublicensees of all Licensed Products with one or more Valid Claims Covering any SARM Compound contained in such Licensed Products, at the percentage rates set forth below:

	
		
	Annual worldwide Net Sales of Licensed Products Containing a SARM Compound per Calendar Year (U.S. Dollars)
	Incremental Royalty Rate

	For Net Sales of such a Licensed Product from [***] up to and including [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***] and less than or equal to [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***]
	[***]

By way of illustration, assume in a Calendar Year that aggregate worldwide annual Net Sales of all such Licensed Products total $950,000,000. The total royalties due and payable by Viking to Ligand for such Net Sales would be [***], calculated as follows:
[***]
5.    TR-Beta. Viking shall, during the applicable Royalty Term, pay to Metabasis a royalty on aggregate annual worldwide Net Sales by Viking and its Affiliates and Sublicensees of all Licensed Products with one or more Valid Claims Covering any TR-Beta Compound contained in such Licensed Products, at the percentage rates set forth below: 

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

	
		
	Annual worldwide Net Sales of Licensed Products Containing a TR-Beta Compound per Calendar Year (U.S. Dollars)
	Incremental Royalty Rate

	For Net Sales of such a Licensed Product from [***] up to and including [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***] and less than or equal to [***]
	[***]

	For that portion of Net Sales of a Licensed Product that is greater than [***]
	[***]

By way of illustration, assume in a Calendar Year that aggregate worldwide annual Net Sales of all such Licensed Products total $950,000,000. The total royalties due and payable by Viking to Metabasis for such Net Sales would be [***], calculated as follows:
[***]
6.    Royalty Payable if no Valid Claim. Notwithstanding the foregoing, in each country where     there is no Valid Claim Covering the applicable Compound contained in the Licensed Products that would be infringed by the sale of such Licensed Product in such country absent a license with respect     to Licensor Patents under this Agreement, then the applicable royalty rate set forth in this Section D above as applied to the sale of such Licensed Product in each such country shall be [***] as follows:     (a) with respect to Licensed Products containing a SARM Compound or a TR-Beta Compound, by [***] (i.e., the applicable royalty rate shall be [***] the rates set forth in the tables above) and such [***] royalty shall be payable for the remaining Royalty Term for such Licensed Products; and (b) with respect to all other Licensed Products, by [***] (i.e., the applicable royalty rate shall be [***] the rates set forth in the tables above) and such [***] royalty shall be payable for the remaining Royalty Term for all other Licensed Products. 

7.    Required Third Party License. If Viking, after arm’s-length negotiation, obtains a license from a Third Party to an issued and unexpired Patent the claims of which would be infringed by Viking making, using, selling, offering for sale or importing a Licensed Product, Viking may offset [***] of the royalty payments due to such Third Party against royalties due to Licensor with respect to Net Sales of the applicable Licensed Product in the applicable country; provided that in no event shall the royalty rates payable to Licensor with respect to the applicable Licensed Product in the applicable country be reduced by more than [***].

***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.LGNDVikingLoanandSecurityAgreement-Amendment

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Exhibit 10.2

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT, dated as of April 8, 2015 (this “Amendment”), made by and between VIKING THERAPEUTICS, INC., a Delaware corporation (“Borrower”), and LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation (the “Lender”), amends the terms of the Loan and Security Agreement, dated May 21, 2014, by and between the Borrower and Lender (the “Agreement”) pursuant to Section 25(c) of the Agreement as follows:
1.Definitions. 
(a)    The definition of “Borrower Equity” in Schedule A to the Agreement is amended and restated to read in its entirety as follows:
“Borrower Equity” means: (i) if the Equity Financing is a Qualified Private Financing, the New Preferred and/or other securities of the Borrower to be issued by the Borrower in the Qualified Private Financing; (ii) if the Equity Financing is an Initial Public Offering or Qualified Follow-on Public Offering, the securities of the Borrower to be issued by the Borrower in such offering.
(b)    The following definition is hereby added to Schedule A:
“Equity Financing” means a Qualified Private Financing, an Initial Public Offering, or a Qualified Follow-on Public Offering.
(c)    The following definition is hereby added to Schedule A:
“Qualified Follow-on Public Offering” means a firmly underwritten public offering pursuant to the Securities Act, on Form S-1 or Form S-3 (each, as defined in the Securities Act) or any successor forms subsequent to an Initial Public Offering with an initial aggregate offering size of at least Twenty Million Dollars ($20,000,000).
(d)    The following definition of is hereby added to Schedule A:
“Secured Promissory Note Record” means a schedule of the amounts and dates of Loans made by Borrower, which shall be kept by the Lender. 
2.    Loans and Terms of Payment and/or Conversion. Section 2 of the Agreement shall be amended and restated to read in its entirety as follows:
2.    Loans and Terms of Payment and/or Conversion.
(a)    Promise to Pay.  Borrower hereby unconditionally promises to pay Lender the outstanding principal amount of all Loans advanced to Borrower by Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when due in accordance with this Agreement.
(b)    Loans.  Subject to the terms and conditions of this Agreement, the Lender agrees to make loans to Borrower in an aggregate amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00) (such loans are hereinafter referred to singly as a “Loan”, and collectively as the “Loans”).  After repayment by Borrower, no Loan may be reborrowed.
(c)    Conversion of Loans; Mandatory Prepayment.
(i)    Upon the earlier of (x) the consummation of a Qualified Private Financing, (y) the consummation of a Qualified Follow-on Public Offering or (z) one year after the closing of an Initial Public Offering, the Lender shall have the option, at its sole election and discretion, to elect, in an irrevocable writing delivered to Borrower, (a) to receive that number of fully paid and nonassessable shares of Borrower Equity as is equal to 200% of the quotient obtained by dividing the entire principal amount of the Loans then outstanding plus all accrued and previously unpaid interest thereon by (I) in the case of clause (x), the lowest per share price paid by investors in such Equity Financing, rounded down to the nearest whole share or (II) in the case of clauses (y) or (z), the lowest per share price paid by investors in the Initial Public Offering (the “Conversion Shares”); (b) to require the Borrower to prepay the entire then outstanding principal amount of the Loans plus all accrued and previously unpaid interest thereon in cash equal to an amount that shall equal 200% of the principal amount of the Loans then outstanding plus all accrued and previously unpaid interest thereon (“Prepayment”), or (c) to receive a combination of shares under clause (a) and cash under clause (b) up to the aggregate value of 200% of the principal amount of the Loans then outstanding plus all accrued and previously unpaid interest thereon; provided, however, if the first to occur event under this Section 2(c)(i) is an Equity Financing which is a Qualified Private Financing, the Lender may also elect to extend the Maturity Date, at its sole option and discretion, to a date to be agreed upon by Borrower and Lender in writing.  For clarity, the Lender may exercise its option to receive Conversion Shares and/or cash at any time one year after the closing of an Initial Public Offering. 
(ii)    Upon the occurrence of a Change of Control prior to the earlier of the occurrence of either (a) the Maturity Date or (b) the closing of the first to occur Equity Financing, the Lender shall, at its sole option and discretion, elect to either, in an irrevocable writing delivered to Borrower, (I) receive that number of fully paid and nonassessable shares of the Borrower’s securities, as is equal to 200% of the quotient obtained by dividing the entire principal amount of the Loans then outstanding plus all accrued and previously unpaid interest thereon by the lower of (A) the deemed Common Stock per share price used to calculate the purchase price paid by the acquirer of Borrower in such Change of Control or (B) the lowest per share price paid by investors for shares of New Preferred prior to the Change of Control (if New Preferred has been issued prior to the Change of Control), in each case rounded down to the nearest whole share, or (II) require the Borrower to make the Prepayment.  The Borrower’s securities to be issued in connection with a Change of Control shall be New Preferred (if New Preferred has been issued prior to the Change of Control) or Common Stock, par value $0.00001 per share, of the Borrower (“Common Stock”) (if no New Preferred has been issued prior to the occurrence of the Change of Control) (“Change of Control Securities”).
(d)    Mechanics of Conversion.
(i)    Notice to Lender.  The Borrower shall promptly, but in all events at least [***] days prior to consummation of an Equity Financing or [***] days prior to the consummation of a Change of Control, as applicable, deliver to the Lender written notification of the proposed consummation of an Equity Financing or a Change of Control, as applicable, which notice shall describe the material terms and conditions of such Equity Financing or Change of Control (“Notice of Transaction”), and the Lender shall have [***] days from the date of such notice to elect, by written notice to the Borrower, to convert the Loans or require the Prepayment, which election shall be irrevocable and may be made contingent on the closing of the Equity Financing or Change of Control, as applicable.  The Borrower shall include in the Notice of Transaction the number of voting securities of the Borrower anticipated to be issued and outstanding following the consummation of the Equity Financing or immediately prior to the Change of Control.
(ii)    Stock Certificates.  The Borrower shall, as soon as practicable following consummation of an Equity Financing or Change of Control for which Lender has elected to convert the Loans as permitted hereunder, issue and deliver to the Lender, or to its nominee or nominees, a certificate or certificates for the number of shares of Borrower Securities to which it shall be entitled as aforesaid.  Such conversion shall be deemed to have been made, as applicable, immediately prior to the close of business on the date of the closing of the Equity Financing or the Change of Control, as applicable.  The person or persons entitled to receive the Borrower Securities issuable upon such conversion shall be treated for all purposes as the record holders of such Borrower Securities on such date.
(iii)    Registration of Borrower Securities Issued Hereunder.  Concurrently with the execution of this Agreement, Borrower and Lender and an Affiliate of Lender are entering into a Registration Rights Agreement, dated as of even date herewith. 
(iv)    Charges, Taxes and Expenses.  Issuance of a certificate for shares of Borrower Securities upon conversion of the Loans shall be made without charge to the Lender for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Borrower, and such certificate shall be issued in the name of the Lender, or such certificates shall be issued in such name or names as may be directed by the Lender.  The Lender shall execute such documents, and perform such acts, which are reasonably required to assure that the conversion hereof is consummated in compliance with all applicable laws.
(v)    No Rights as Stockholder.  The conversion rights set forth in this Agreement do not entitle the Lender to any voting rights or other rights as a stockholder of the Borrower prior to the conversion of the Loans into Borrower Securities pursuant to the terms of this Agreement.
(vi)    Restricted Securities.  The Lender acknowledges that the Borrower Securities acquired upon the conversion of the Loan will be subject to restrictions upon resale 
(vii)    imposed by state and federal securities laws and may be subject to transfer restrictions set forth in the Borrower’s bylaws or in one or more agreements that may be entered into by and among the Borrower, the Lender and the holders of the Borrower Securities.
(e)    Repayment; Optional Prepayment.  If the Loans are not fully repaid, prepaid or converted into Borrower Equity pursuant to Section 2(c) prior to the Maturity Date, the remaining Loans will automatically mature and, at the Lender’s sole option and discretion, (i) the Conversion Shares, (ii) the Prepayment amount, or (iii) a combination of shares under clause (i) and cash under clause (ii) up to the aggregate value of 200% of the principal amount of the Loans then outstanding plus all accrued and unpaid interest thereon, shall become due and payable (or issuable with respect to Conversion Shares) upon written demand by the Lender, which demand may be made at any time on or after the Maturity Date.  In addition to the Prepayment at Ligand’s option in accordance with Section 2, concurrently with the closing of, or any time after, an Equity Financing, Viking may prepay a portion of or the entire then outstanding principal amount of the Loans plus all accrued and previously unpaid interest thereon in cash, Conversion Shares or a combination thereof (provided that the form of payment and mix of cash and Conversion Shares shall be at the Lender’s sole election and discretion) equal to an amount that shall equal 200% of the principal amount of the Loans then outstanding plus all accrued and previously unpaid interest thereon.
(f)    Interest Rate; Default Rate.  Subject to this Section 2(f), the principal amount outstanding under the Loans shall accrue interest at a fixed per annum rate of the lesser of (a) five percent (5.0%) and (b) the maximum interest rate permitted by law, which interest shall accrue on each Loan commencing on, and including, the funding date of such Loan (the “Funding Date”), and shall accrue on the principal amount outstanding under such Loan through and including the day on which such Loan is paid (or converted into Borrower Securities) in full.  Interest shall be computed on the basis of a three hundred sixty (360) day year consisting of twelve (12) months of thirty (30) days.  Upon the occurrence and during the continuance of an Event of Default and upon written notice to the Borrower from the Lender, Obligations shall accrue interest at a fixed per annum rate of the lesser of (a) eight percent (8%) and (b) the maximum interest rate permitted by law (the “Default Rate”).  Payment or acceptance of the increased interest rate provided in this Section 2(f) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Borrower.
(g)    Cash Payments.  Except as otherwise expressly provided herein, all cash payments by Borrower under this Agreement or under any other Loan Document, including payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be made to the Lender at Lender’s office in immediately available funds on the date specified herein.  All cash payments to be made by Borrower hereunder or under any other Loan Document, including payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be made without set off, recoupment or counterclaim, in lawful money of the United States and in immediately available funds.
(h)    Withholding.  Payments received by the Lender from Borrower hereunder will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any governmental authority (including any interest, additions to tax or penalties applicable thereto), except as required by law.
3.    Lock-Up Period.  Section 13 of the Agreement shall be amended and restated to read in its entirety as follows:
13.    Lock-Up Period.  The original Lender hereby agrees that it shall not, to the extent requested by Borrower or an underwriter of securities of Borrower, sell or otherwise transfer or dispose of Borrower Equity Securities then or thereafter owned by the original Lender for up to the earlier of (i) 270 days from the date of conversion of the Secured Promissory Note into Borrower Equity Securities pursuant to Section 2 or (ii) one year following the date of the final prospectus filed with the Securities and Exchange Commission relating to an effective registration statement of Borrower filed under the Securities Act in connection with an Initial Public Offering (the “Lock-Up Period”).  For purposes of this Section 13, the term “Borrower” shall include any wholly-owned subsidiary of Borrower into which Borrower merges or consolidates.  In order to enforce the foregoing covenant, Borrower shall have the right to impose stop-transfer instructions with respect to Borrower Equity Securities until the end of such Lock-Up Period.  The original Lender further agrees to enter into any agreement reasonably required by any underwriter to implement the foregoing provisions within any reasonable timeframe so requested.
4.    Assignment. Section 25(f) of the Agreement shall be amended and restated to read in its entirety as follows:
(f)    This Agreement shall be binding upon and inure to the benefit of each party hereto and its successors and permitted assigns. Neither this Agreement nor the Secured Promissory Note may be assigned by Borrower without the prior written consent of Ligand, except that Borrower may assign this Agreement along with the Secured Promissory Note to one or more of its Affiliates, without Lender’s prior consent.  Lender may assign this Agreement or the Secured Promissory Note at any time without Borrower’s prior consent.
5.    All of the other provisions of the Agreement shall remain in full force and effect. 
6.    This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same agreement.  In the event that any signature is delivered by facsimile, a portable document format (PDF) or similar electronic format, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile, PDF or other electronic format signature were the original thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Loan and Security Agreement to be duly executed on the day and year first above written.
BORROWER:
VIKING THERAPEUTICS, INC.
 
By:  /s/ Brian Lian                     
Name:  Brian Lian 
Title:  Chief Executive Officer
 
LENDER:
LIGAND PHARMACEUTICALS INCORPORATED
By:  /s/ John Higgins                     
Name: John Higgins
Title: Chief Executive Officer

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