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Biotech / Medical : AMLN (DIABETES DRUGS)
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To: celeryroot.com who wrote (874)10/20/1997 4:41:00 PM
From: Henry Niman   of 2173
 
Thestreet.com ( thestreet.com )has a nice story today on the LGND deal. Indicated thatit was better than expected. David Malowa of Bear Stearns thought market reaction was clssic "buy on rumor, sell on news" and when weak hands are gone, price will head north. Positive comments by H&Q also, Mentions AGN royalty, but thought that rights to new compound was a surprise. David Malowa thought product could come to market in 2-3 years, but I think it will be sooner and it is part of Robinson's plan to be profitable in 1999. LGND has 90 days to decide after diabetes deal closes, which should be right after Nov 3 (ALRI buyback).

On CNBC, Robinson indicated that LLY diabetes deal would be worth "several hundreds of millions to LGND". LGND was too small to develop rexinoids themselves so they looked for a "world leader" and LLY was the the top of their list. Also mentioned ALRI buyback with AGN. It was a $100 million off-balance sheet funding vehicle for retinoid R&D. Funds used up, so it was bought back. ALRI compounds are part of LLY deal. Robinson thought diabetics will have rexinoids within 5 years (I thought that was very conservative).

LLY CEO Randall Tobias was on CNBC an hour later. Talked about Prozac going off patent and need for pipeline. Joe Kernan asked about Ligand. Tobias indicated LLY was impressed with technology and products and wanted research to stay "first class". CNTO's Reopro was also mentioned as an example of LLY's use of laboratories "without walls".
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