Henry, oh where oh where have you been on this of all days, when we need you most? (:>)
I had a long conversation with squetch, and we put together a long list of questions which we hope you will answer. Everyone else on the thread please feel free to answer also. Please answer at your convenience. We don't expect you to have all the answers, but would appreciate your speculation where appropriate. It might be helpful if you would copy the question and then answer directly below it, if you would be so kind. That way we would have a better chance of understanding the answer. (:>)
1. What are the 2 additional 2nd generation oral diabetes compounds in preclinical development to which LLY will have exclusive rights? What about 3rd and 4th generation compounds?
2. When they say "exclusive rights to LGND's metabolic disease technology to develop more advanced diabetes, cardiovascular and related therapies" (obeisty, others?), does this include ALL LGND's present compounds, ALL the compounds they will get from the ALRI deal, and ALL future compounds they will develop which target RXRs and PPARs? We were concerned about this since the first sentence of the first paragraph under "Specifics of Collaboration" reads, "LLY will receive worldwide, exclusive rights to LGND's compounds and technology associated with the Retinoid X Receptor." The first sentence of the second paragraph reads, "Ligand will also receive worldwide exclusive rights in certain areas to LGND's PPAR technology." Seems like the RXR rights are more comprehensive than the PPAR rights. But it appears they are giving LLY basically all the compounds (for RXR work, in any case) that LGND is receiving from the ALRI deal, That seems like a lot to give away for what they are getting, no?
3. Can you elaborate any on LLY receiving "additional rights to use LGND's technology to develop a compound in combination with a SERM in cancer"? Does this have anything to do with Evista? In return for the development of this RXR, LGND will be receivng various goodies (milestones, royalties, etc.)
4. LGND may receive up to $49M in research funding from LLY over the next 5 years (and possibly an addition 3 years of funding). I assume that we are talking here about only projects in collaboration with LLY, like the SERM cancer project, the leptin promoter project, the cardiovascular projects, etc. Is that correct? Will LLY be doing all of the development and trial funding of all metabolic and cardiac compounds and indications?
5. "LGND may receive up to $75M in additional milestone payments over 8 years, assuming successful development of oral targretin and five other compounds." Do you know which 5 compounds they are referring to? Also could you try to clarify which compounds would qualify for double digit royalties and which qualify as single digit? What would your best guess be on the exact size of the double digit? V1, care to help us here?
6. A very interesting aspect of the agreement is LGND's ability to select one LLY specialty pharmaceutical. Any idea what LGND has in mind here? Apparently LGND has 90 days to select this product. If they do, they may have to pay LLY 20M in LGND stock in milestones. If LGND does not exercise this option, then LLY will have to buy another 20M worth of LGND stock at a 20% premium to the market. Also, Targretin royalties will increase 1.5%. Kind of turns the tables on LLY.
7." LLY will also receive worldwide exclusive rights in certain areas to LGND's PPAR technology." Would you guess we are talking metabolic and cardiovascular only here? Any idea what kinds of royalties we are talking?
8. "LGND and LLY will also begin to research programs aimed at discovering novel compounds that therapeutically activate PPAR subtypes for treatment of cardiovascular disease." Is funding for this likely to come from the $49M? Will LGND have more of a partnership role here in terms of royalties, would you guess.
9. "LLY will receive exclusive rights to the HNF4 receptor and the obesity gene promoter technology. Could you explain this a bit more? Does LGND give up all rights to this forever? And do they get anything specific in return, besides the royalties? Or don't we know any of these details?
10. Do you expect we will see the results of the P2 diabetes trial? Or will this forever be hidden under LLY's cloak of secrecy?
Well, according to my notes that's all. Stan if I have left anything out, please post it. Thanks to stan for the help in putting together the questions and double thanks to Henry in advance for answering them. We know its a lot, Henry. But we are especially concerned since we both have a very large portion of our portfolios in LGND.
stan and I are mostly concerned that LGND gave away an awful lot of the indications from the rich pipleline of compounds it received from the ALRI deal. While they got a good bit in return, it does not seem like enough. What do you think Henry. Do we think they gave away more than they did?
One more comment. This deal is a pr nightmare. What happened to the pr firm they hired to make their case understandable to the Street? Someone failed miserably in this regard. I assume you will talk to IR before too long. Maybe mention this to them and let us know if they are planning any clarifications? Thanks, again.
Regards, Andy |
