chirodoc, LGND is very strong in the management area. Unlike most biotechs who recruit from academia or other Biotcechs, LGND's senior management comes almost exclusively from big pharmas. When Ligand was initially formed (as Progenx in 1987), the lead venture firm was Kleiner Perkins Caufield & Byers. The are widely considered the premier venture group in the world (in Biotechs the were the lead group for GNE, Hybritech, and many San Diego Biotechs - in high tech they did SUNW, AOL, and a host of others).
They initially used top management from San Diego Biotechs, but went to the big pharmas before going public in 1992. I believe that the senior mangement has brought over 40 multi-million dollar drugs to market.
LGND is top drawer up and down the line (lead underwiters of their IPO were Lehman Brothers, Smith Barney, and Hambrecht & Quist - their secondary was H&Q, Bear Stearns, and Robertson Stephens - the five analysts that cover them are from Bear Stearns, Robertson Stephens, Raymond James, H&Q, and Lehman Bros). They have also been followed by Merrill Lynch and have presented at their very selective Biotech/Pharma meeting.
LGND has made strategic alliances with the top pharmas (PFE, GLX, AGN, ABT, AHP, SBH, and Sankyo) and they have managed to devide up their technology so they have much more to license ( especially with STATs).
Their biggest stumble to date has been the premature announcemnt of the leptin signaling deal (to be signed last January). I still don't know exactly what happened and I don't have a good feel for its current status, but all other projections have been met (and even the delayed Leptin deal was only announced at the H&Q conference - LGND has never mentioned a signing date in their press releases).
LGND has extremely powerful technology and I expect an upcoming diabetes deal which will transform the company. So far the above deals have really be research alliances (other than the joint venture with AGN). I expect the diabetes deal will create significant up front payments and a very large royalty rate (of the research alliances mentioned above, I think PFE is the only one that has single digits).
Profitability for LGND is projected for 1999 or 2000. Robertson Stephens (which made very conservative estimated for diabetes) projected profitability in 2000 (EPS=$0.10), but 100% annual increases through 2006 (EPS for that year was $14.55 fully diluted to 50 million outstanding shares). Annual retinoid sales are expect to hit about $500 million by then, but a good deal of additional income is projected for LGND's extremely extensive pipeline. |
