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Biotech / Medical : Ligand (LGND) Breakout!
LGND 184.82-2.0%Dec 5 9:30 AM EST
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To: jayhawk969 who wrote (25883)9/30/1998 1:10:00 AM
From: Henry Niman  Read Replies (2) of 32384
 
This morning BBRS also came out with a reiterated BUY:
September 1998
LIGAND PHARMACEUTICALS
Ligand Enters Strategic Alliance with Elan
Michael G. King, Jr. (212) 407-0248 michael_king@rsco.com
Gregory J. Miliotes (415) 676-2875 greg_miliotes@rsco.com
BancBoston Robertson Stephens BancBoston Robertson Stephens
LIGAND PHARMACEUTICALS LGND $11.63 9/30/98
Industry: Biotechnology
CHANGE IN... YES/NO WAS IS Michael G. King, Jr. 212 407 0248
...Rating No BUY Gregory J. Miliotes 415 676 2875
...EPS 1997: Actual ($1.06) FY Dec. 1997A 1998E 1999E
...EPS 1998E: No ($0.80) EPS: 1Q ($0.32) ($0.35) A NE
...EPS 1999E: No $0.00 2Q ($0.32) ($0.45) A NE
52-Week Range: $18-6 3Q ($0.35) NE NE
Shares Outstanding (MM): 38.8 4Q ($0.09) NE NE
Market Cap (MM): $451.6 FY ($1.06) ($0.80) $0.00
10-Day Avg Trading Volume (000): 378.5 FY P/E NM NM NM
6/98 Book Value/Share: $0.35 Revs($M): 1997A 1998E 1999E
6/98 Total Debt/Total Cap: 44% 1Q $9.8 $5.07 A NE
Price/Book Value: 32.9 2Q $9.9 $4.39 A NE
Net Cash/Share: $0.98 3Q $10.2 NE NE
Cash ($MM) $49 4Q $21.8 NE NE
Burn Rate ($MM): $25 Year $51.7 $50.0 $75.0
Years of Cash: 2.0 MktVl/Rev 8.7x NM NM
*Q4 & FY:97 exclude 1x charge of $65MM related to ALRT buyout
Key Points:
· Ligand and Elan have entered a strategic alliance with three main components: (1)
Elan will purchase $20 million in Ligand shares; (2) Ligand will issue to Elan $110
million of Zero Coupon Convertible Senior Notes; (3) Ligand receives an exclusive
license from Elan for U.S. and Canadian rights to Morphelan, an oral form of
morphine.
· With the consummation of this relationship, Ligand has gained a late-stage product
that could be filed with the FDA in 1999, as well as significant financial resources to
in-license additional novel products, acquire companies or further develop its R&D
pipeline.
· We are encouraged by Ligand's efforts to gain the financial resources and products
that should allow them to push forward towards commercialization and profitability;
however, we are somewhat concerned about the dilution costs that it will incur.
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