smh, Rick Harmon has been complaining about LGND dilution for a year or two (maybe three) now. LGND's dilution is due in part to its alliances, and that is how they generate funds for research (which is where their impressive pipeline originates).
LGND is rather unique (especially in its pipeline), and at this stage funds from partners is required to support R&D. LGND has an impressive list of partners (PFE, GLX, AGN, ABT, AHP, SBH, Sankyo, LLY), all of which have equity positions. These shares were sold at or above the market and are locked up. They do contribute to dilution, but not to the float. LGND has bought back a small amount (from PFE), by electing to take stock instead of cash as royalty payments.
Larger dilutions have come from acquisitions. In 1995 LGND acquired GLYC. In my view, this was largely for the $60 million that they had in the bank. LGND also received an impressive list of compounds, but th GLYC pipeline has not contributed significantly to the bottom line, and its not clear when or if it will.
In contrast, the SRGN acquisition was probably more for product (and profit) that technology (although the fusion technology has broad applications). This acquisition is expected to be acreative next year (product should be on the market this year).
LGND is rather unique and has created the best pipeline in the business. Some tend to focus more on the dilution than how efficiently the funds were used. LGND has 9 compounds in the clinic (oral and topical Panretin and Targretin, LGD1550, ONTAK, Droloxifene, CP-366,156, TSE424) and 7 INDs slated for filing in the next 12-15 months. They have about 40 ongoing clinical trials and about 40 products in active development. This was done with about 40 million outstanding shares. I think that the progress has been quite remarkable. |
