Ligand (LGND) Breakout! Message Board

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Biotech / Medical : Ligand (LGND) Breakout!

LGND 188.41

-2.4%

3:59 PM EST

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To: growthvalue who wrote (25841)	9/29/1998 3:35:00 PM
From: aknahow	Read Replies (2) of 32384

GV, we live in a world of the doable. There is little value in wishing for things that can't be done. A straight debt offering could not be made. Even a straight junk bond or high yield bond can't be issued. Straight debt means it will be paid off, and while projections of future earnings are fine for equity holders I have yet to see a debt issue without projection of ability to finance and repay made on historic, actual, earnings as well as collateral. Biotechs burn cash. As you point out, floorless convertibles are less than desirable. Given the difficulties of obtaining continuous funding I think management deserves some credit for putting this deal together. I do not know if looking at acquisitions of other drugs or mergers will be good for LGND. However, I would rather have management at least consider these uses of capital than not consider them at all. Did it make sense to license ELAN's drug? Don't know but as was pointed out this was a minor part of the deal. It was perhaps something both sides thought helped the deal work and i would have trouble thinking that it was really of critical importance in determining if this financing was a good deal for LGND.

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