Folks,
forgive me for intruding on the bickering, but I wanted to raise an issue relevant to LGND ...
I think we're assuming that there's a LGND-specific reason for the stock price at current levels. And one of the things I appreciate on a thread like this is the picking apart of the bear and bull case for the company ... there's always both cases at any time.
But we're discussing LGND in the context of a biotech bear market that has seem many quality development stage companies drop to 50% of their highs, or below. Except for a tiny number of first tier companies, price to valuation ratio of many of these companies is at or below those reached at the end of 1994, when the biotechs had one final blow-off on the downside with year-end tax selling after a 3 year bear market for biotech stocks. Btw, biotechs stocks were up about 100% in 1995, fwiw.
There is a complex, nuanced argument either way on LGND, both fundamentals, and stock price. But we have to look at LGND in the context of a bear market in its sector.
Regardless of what you think of the stock price, AGN overhang, dilution ... all of which are material and relevant, there's also the following to consider in assessing LGND:
- lead compounds or early stage clinical development of products which should produce multiple multi-billion dollar products by the middle and latter part of the next decade. No kidding. There is a significant current value to these products in aggregate. Since these products are in primary care markets, they all are and should be partnered.
- LGND has 5 niche indication products up for review or in registration trials. With apparently reasonable, but conservative estimates on market penetration, and with the assumption of value-based pricing in these under-served markets, LGND has set as an achievable but aggressive goal of profitability in 1999. Several Wall Street analysts have reviewed their models with LGND and have adjusted their estimates accordingly ... so there's a measure of a reality check here. These are not just fairy tales being spun here, this is a credible goal. And since LGND has not done a recent offering, and has no plans for one in the near to intermediate term, the analyst reports at this point are not sales documents for their banking departments.
- LGND's near term, niche indication products also have upside in potential for off-label use. There's a comprehensive program of PII trials, which may produce compelling data which would support off-label use of one or more of these products, and may do so in fairly good-sized indications. Psoriasis and breast cancer for Targretin are examples of these, though there's an issue of timing of those results.
Folks, I have questions about LGND, too. I share many of the concerns Rick Harmon has expressed on this thread.
But let's not lose sight of two things. We're somewhere in the middle to later stages of a biotech bear market. In large part, LGND is trading lower because its entire sector has dropped through the floor. And second, LGND represents an asset of substantial value. There is incredible value here. Cytokine mimics. SERM technology. SARM technology. RXR compounds for metabolic disease. LGND is the leader, or among the leader in each of these areas which represent a significant part of the pharmaceutical real estate in the next decade.
ok, you guys can go back to kicking and spitting and pulling each others hair ... |
