>> Historically, LGND moved up in anticipation of good news,
>> but always fell back after the news was released.
>>I don't recall LGND ever releasing bad news, so why has it tanked?
Looks to me like the recently released 2Q Report
sec.yahoo.com
was bad news -- particularly
(1) their weaker than expected (IMO) cash position:
"Working capital decreased to $32.7 million
as of June 30, 1998, from $62.4 million at the end of 1997.The decrease in working capital resulted from a decrease in cash due to increases in clinical trials and product development expenses in late 1997, increased selling expenses, semi-annual interest payments due on convertible subordinated debentures and convertible notes offset by a decrease in accrued liabilities from year end 1997.
For the same reasons, cash and cash equivalents, short-term investments and restricted cash decreased to $52.0 million at June 30, 1998 from $86.3 million at December 31, 1997."
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and (2) the cloud due to the coming $37million due for ONTAK,
possibly paid for with stock depressed by a bear market:
"The merger agreement also calls for an additional $37 million payment in cash and/or Company Common Stock, at the Company's option, to be paid six months after the date of receipt of final U.S. Food and Drug Administration ("FDA") clearance to market ONTAK(TM).
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>> Now that they [Allergan and Falleron] have unloaded large positions,
>> I would think that the stock should have recovered, but it hasn't.
The 3 biotechs I've been tracking have all recovered somewhat from their RECENT lows , LGND less than the other two.
SYMB $R-Low $Sept 18 --- (closing prices) Fairly parallel movement, I'd say ...
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ISIP 7 01/16 10.375 ------- had good news on 8/27 (NDA), and 9/16 Milestone Pmt
VIcl 7 21/32 10.500
Lgnd 5 03/04 07.125 ------- has ONTAK financing cloud
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Question - Can hype on Internet boards sufficiently impact a stock, enough to move the quantities sold by Allergan and Falleron ?
Of course it's possible. But I doubt it.
In fact, I've been afraid that the type of hype lately roaring over the web might cause such embarrassment to Ligand, that it might scare off serious investors.
True, neither do I believe Kennedy was shot by a lone assassin.
But, for perspective
--- Ligand, after all, is just a pre-profit biotech, whereas
--- Kennedy was a Yankee President riding in an open car over a predictable route in the South, in one of the most volatile, hate-laden periods of American history.
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My conclusion: I'm HOPING for Ligand to weather the ONTAK payment in *decent* financial shape, at which time investor confidence will recover, along with the stock price.
I'm hoping the Clinton turmoil will subside by the time the Ontak payment is due.
But, being a bear, and anticipating plenty of emerging-market turmoil to impact our own economy, well ... I'm not expecting a huge pop in LGND anytime soon.
Just my .02
Regards,
Cheryl |
