Cheryl,
Shareholder dilution has been a major concern of mine. However I now believe it to be secondary to Cash. It is now Sept 19th, there are eight(8) business days left in the quarter. I recall no announcements this quarter regarding milestone achievements/payments or new alliances to create income.
1) their weaker than expected (IMO) cash position:
"Working capital decreased to $32.7 million
as of June 30, 1998, from $62.4 million at the end of 1997.The decrease in
working capital resulted from a decrease in cash due to increases in clinical trials
and product development expenses in late 1997, increased selling expenses,
semi-annual interest payments due on convertible subordinated debentures and
convertible notes offset by a decrease in accrued liabilities from year end 1997.
For the same reasons, cash and cash equivalents, short-term investments and
restricted cash decreased to $52.0 million at June 30, 1998 from $86.3 million at
December 31, 1997."
Without any positive announcements we can expect working capital to shrink to approximately $11 to $13MM. This is due to the $4MM Seragen 3rd quarter payment and the cash burn for the 3rd quarter. So far Ligand has consume cash at the rate of 17.15MM per quarter in 1998. Admittedly there have been xtra expenditures for NDA filings, that should slow in the 3rd quarter. However, interest income will be down substantially. -----If we get a November 3rd quarter report stating that working capital is now less than is needed for the fourth quarter---well you be the judge!
I would hope that the milestones start arriving, it is now critical. If the milestones are in the form of equity, well that is critical too- oh the dilution at these prices. I can never recall Ligand needing good news more than it needs it now.
J.D. |
