Ligand OKs Early Conversion Of $50M Elan Notes
SAN DIEGO -- Ligand Pharmaceuticals Inc. (LGND) said Elan Corp. (ELN) agreed to convert three zero coupon convertible notes with a total original issue price of $50 million, $61.8 million including accrued interest, into 4.4 million shares of Ligand common stock.
In a press release Wednesday, Ligand said it plans to record a fourth quarter charge of $5 million from the agreement, and will eliminate, beginning in 2002, $5 million of annual accretion from these notes.
A Thomson Financial/First Call survey of three analysts produced a mean earnings estimate of a loss of 9 cents a share for the Ligand's fourth quarter. Ligand reported a loss of $12.7 million, or 22 cents a share, on revenue of $13.8 million for its year-ago fourth quarter ended Dec. 31.
Nasdaq trading in shares of Ligand, which has about 59.8 million shares outstanding, closed Monday up 42 cents, or 2.3%, $18.80.
Ligand issued two notes Nov. 9, at $40 million, and a third note Dec. 29, at $10 million.
Ligand said it is "pleased with Elan's early conversion decision," which enables the company to improve its capital structure by reducing debt and lower expenses.
After the conversion, Elan's ownership in Ligand will be 18.9% on a primary basis, and 19.2% on a fully diluted basis. The fully diluted figure assumes conversion of $20 million in original issue price zero coupon convertible notes still outstanding to Elan convertible at $14 a share.
Elan is an Ireland-based pharmaceuticals company.
Ligand develops small-molecule drugs used to mimic or block the activities of various hormones and cytokines to regulate gene activity and the genetic processes affecting many diseases.
Companies Web sites: ligand.com and elancorp.com |
