Hi Henry,
What is the impact of LGND bought back shares from ALRI ???
Would you comment on this news ......Is this a contributing factor to the
price drop of HIGH 17 7/8 in the early morning...then when this news came out at 3:23....price went down to the high 16s.
BUT I think that in a long run...LGND will be free to associate with a big brother
such as J&J without worrying about the old connection and obligations at ALRI
This is my humble opinion......
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Thursday September 25 3:23 PM EDT
Allergan, Ligand to Buy Out Retinoid Therapeutics
ALLERGAN LIGAND RETINOID THERAPEUTICS INC. Allergan Inc., Ligand Pharmaceuticals Inc. Exercise Options to Buy Out Co.--
Ticker: ALRIZ
Highlight: M&A
Date: 970925
Sept. 24, 1997, Allergan Inc. (AGN) and Ligand Pharmaceuticals Inc. (LGND) reported that they exercised their options to purchase the callable common stock and assets of Allergan Ligand Retinoid Therapeutics Inc. (ALRI - news).
The companies also said they agreed to restructure the terms and conditions relating to research, development, commercialization and sublicense rights for the ALRI compounds in the period following closing of the options exercise.
The companies said LGND notified AGN, as well as the shareholders and board of ALRI, that LGND is exercising its stock purchase option for all of ALRI's callable common stock. AGN also notified LGND, ALRI's shareholders and board, that AGN will exercise its asset purchase option to pay LGND $8,900,000 in cash to acquire "an undivided one-half interest" in the assets and technologies of ALRI when LGND exercises its stock purchase option.
LGND said its option to purchase the callable common stock of ALRI is exercisable for $71,400,000, or $21.97 per share, from June 3, 1997, until June 3, 1998. The record date for the purchase of the callable common stock is October 14, 1997, and the closing date is November 3, 1997, pending an effective securities registration statement with the SEC. LGND intends to pay a combination of cash and LGND common stock for ALRI's callable common stock.
LGND said it will file to register with the SEC a number of shares sufficient to exercise the stock purchase option with a combination of at least $25,000,000 in cash and up to $46,400,000 in shares of LGND common stock.
Upon closing of the transactions, the companies said AGN will record a one-time charge, net of tax, related to the option payment. In addition, AGN will record a one-time decrease to its effective tax rate related to the tax benefit associated with their original $50,000,000 contribution to ALRI. Also upon the closing, LGND will record a one-time charge related to the excess of the purchase option price over the fair value of assets acquired.
LGND noted that "whatever net cash is left" in ALRI at the closing date will be divided between LGND and AGN, and each company's portion "could be used to reduce the effective buyout cost." ALRI had cash and equivalents of about $31,700,000 at the end of the second quarter, LGND said.
AGN and LGND also said they amended and restated previous agreements, effective as of the option closing date, so that among other things, existing ALRI compounds and development programs will be divided up between AGN and LGND, and each company will receive exclusive rights under ALRI's technology for use with their respective compounds and programs. The earlier agreements provided for a joint development and joint commercialization arrangement following exercise of the buyout options by AGN and LGND.
The companies noted that ALRI compounds allocated to LGND include ALRT 268, ALRT 324, ALRT 1550, and Oral and Topical Panretin, while those allocated to AGN include ALRT 4310, ALRT 326 and ALRT 4204. Each company will pay royalties to the other on net sales of its respective compounds, if any.
The companies said they will participate in a lottery for each of ALRI's approximately 2,000 remaining retinoid compounds as of the closing date. Each company will pay to the other royalties equal to 6% of worldwide net sales on all lottery compounds selected, on all indications. Each company will be granted appropriate exclusive, worldwide licenses, with sublicense rights under ALRI technology, to make, use and sell the lottery compounds, subject to certain restrictions.
LGND noted that, as a result of the restructured agreements, it and AGN will gain exclusive worldwide rights to various retinoid compounds and be better able to focus their respective research and development resources on those retinoid compounds that each "believes are most consistent with its strategic direction."
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More news for referenced ticker symbols: ALRI.
Additional news and quotes:AGNAllergan IncLGNDLigand Pharmaceuticals Inc |
