Fugazi,
If you want to compare dilution with Isis you have a complicated analysis. Ligand has issued more shares 38M to 27 M. Comparable burn rates, and Liquid assets. Both have good science platforms. ISIS has borrowed $40M at 14% interest with a lot of the interest deferred. This compounds quickly. The 40 M is then used on targeted programs, Any profits from drugs out of this program are split 50/50. I'll argue that although ISIS has not issued shares for this collaborative agreement there is real and significant dilution to the potential earnings to the shareholder(14% interest and 1/2 the profits). Also check out the relationship with Novartis, Novartis owns 8% of ISIS and has significant rights to many of the products developed by ISIS, in many cases returning royalty payments to ISIS. Again I argue that dilution is present, just not directly in the form of stock.
I like Isip's antisense program and am watching it closely for a buy, much like you are waiting on Ligand to give you a buy signal.
Comparing ISIS and LGND, I believe that Ligand has more potential in its pipeline, and the relative dilution is comparable, all things considered.
However , the biotech game is very difficult, and getting to the large indications is the answer to real value creation, I believe that Ligand has to and is going through incremental steps with Karposi's and Ontak to get to help support the time, $, and credibility to launch the big indication drugs.
J.D. |
