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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: Torben Noerup Nielsen who wrote (29420)	11/18/1999 8:33:00 PM
From: Arthur Radley	Read Replies (1) \| Respond to of 32384

Torben, You are absolutely correct....there is a reason that they are undertaking this action at this time. With the stock action one has to wonder if the "smart money" doesn't like the reason, that isn't know or at least understood by people like me.

To: Torben Noerup Nielsen who wrote (29420)	11/19/1999 1:17:00 AM
From: Cheryl Galt	Read Replies (2) \| Respond to of 32384

> What I would like to know is why they're doing this right now? They have enough cash to tide them over for some time to come < My field is NOT finance, so I'm probably missing something. But I see nothing sinister or disturbing in this warrant offering or its timing. I thought the Company's action was prudent. For once, I completely accept the company's explanation, and logic! ("Ligand will use net proceeds from the exchange offer to strengthen the Company's cash .... and to fund working capital needs associated with the expanding commercialization of Ligand's products. ``We believe that the exchange of the warrants ... [is] the least dilutive and lowest cost of capital alternative available to us to achieve our objectives,' said Paul Maier) ----------------- Why make this offer NOW ??? The way I figure it, by May or June -- the time the warrants expire -- Ligand will need at least $15M fresh cash to fund operations. So, they need to do something NOW to provide for that cash need. My reasoning: IMO Ligand is "on the cusp" of independence, and they are NOT flush with cash. They had $35M Working Capital on Sept 30, have only $10M remaining of the Elan Notes, have ~$15M quarterly Net Loss FROM OPERATIONS (Thanks, Jeff. Good point.), and will need to fund commercialization of Targretin. So, come May or June where will they get that fresh infusion of cash? 1) It's highly unlikely that Targretin and the other products will be bringing in that kind of surplus that soon. 2) Given uncertainties about the TIMING of FDA's response (What if we get an Approvable Letter, followed by delays?), Ligand can't be SURE of a strong stock price that would get the warrants exercised come June. I think it would be foolish to play FDA-roulette, with no other funding fallback than the expiring warrants. 3) If Ligand decided to set up some kind of (dilution causing) private placement or offering, they'd have to start NOW to work on it. So, I like the idea of getting the warrant $bird out of the bush, and into the hand right now. And i like the Dec 17th cut-off date. Everyone takes their chances, sharing the same uncertainty about the FDA's decision. ------------- Sorry for rambling and "thinking out loud" ... Now, explain what I'm missing .... For example, how do the "arbs" fit into the picture ? Are we getting rid of them?? Cheryl