Andy, I don't think that a count can be made yet because the shares are based on LGND's future price. I think that just under 1.9 million shares were given to SRGN shareholders. Marathon currently costs $5 million, but its not clear if that is cash or stock, and if it's stock, what the conversion rate is (it was just under $14 per share for SRGN). An additional payment of $37 million is due 6 months after ONTAK is approved. The approval date seems to be around the end of the year. I think that there is another $3 million due to Marathon, and LLY gets a milestone payment, but I don't think that the milestone event has been publicly described (I would guess its sales of ONTAK reaching a predetermined number). Thus, the additional stock will be based on LGND's future stock price and I'm guessing that the payment will be due in the middle of next year.
At that time, LGND should be much more mature than they are now. ONTAK and topical Panretin should be launched, Targretin (oral?) should be approved and ready to launch. Targretn topical should be ready to go before the FDA advisory committee and a filing date for the Panretin oral NDA should be clear. On the clinical front, several new compounds should be in the clinic and data on diabetes and breast cancer should be much clearer. I suspect by then LGND will also have announced several additional deals and received several milestones from clinical progress of partnered products.
Predicting LGND's share price in the middle of next year is difficult. As you know, last fall when LGND was around $18 and had the many upcoming events, I thought that LGND would be at $30 by the end of this month. Most analysts were looking for LGND to be north of $20 this year and I don't think anyone was predicting LGND below $10 when it was trading around $18 last fall. Obviously, LGND is not currently living up to last fall's expectations.
I had expected the Biotech sector to have had many more positive pieces of news on the clinical front. LGND did their share, but much of the sector did not. Clinical failures, coupled with a jittery market, caused the entire sector to tank. Smaller Biotechs began to lose institutional support, and short sellers looked to take advantage of the situation.
Of course the sector is now very cheap, as is LGND. Biotech road shows are coming up, and LGND is making steady progress. LGND should be very attractive to institutions at this point, and they can move the price very far very fast. |
