Ligand (LGND) Breakout! Message Board

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Biotech / Medical : Ligand (LGND) Breakout!

LGND 184.82

-2.0%

Dec 5 9:30 AM EST

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To: growthvalue who wrote (25894)	9/30/1998 8:40:00 AM
From: Henry Niman	Read Replies (1) of 32384

GV, I suspect that the "dumb" part referred to the financing without an equity component, not the remark that the death spiral possibility was markedly diminished by the ELN agreement. In fact the ELN agreement was on rather favorable terms, considering the current status of the Biotech sectors. Usually, financing using equity priced in the mid teens is a goal for Biotechs, and LGND seems to have come up with a significant deal in that price range. The funds are sufficient to cover the SRGN payment at a well defined price range (between $14 and $20 per share of LGND, which avoids the death spiral). Moreover 2/3 of the potential cash can be used to acquire additional products or companies, which are currently available at fire-sale prices. Although LGND has one of the best pipelines in the industry, developing these drugs is rather expensive, and the late stage product acquisitions secure products for LGND's new sales force, which then takes advantage of economies of scale (resources committed to the oncology sales force are used more efficiently when the sales force is selling 6-8 oncology drugs rather than 3-4 drugs).

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