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

To: Torben Noerup Nielsen who wrote (29995)	1/9/2000 6:49:00 AM
From: Alper H.YUKSEL	Read Replies (2) \| Respond to of 32384

Torben, Your calculations make for a year-end price of around 40 which is really the nirvana scenario. I have no experience with other biotechs so I took your data and played around a little bit. I used three different annual sales figures ($50, $75 and $100 million) and three different P/S ratios (10, 15 and 20) and below are the resulting market caps. and prices : Annual Sales...P/S.....Cap.....Price ------------------------------- 50......10......500.....10 1/2 50......15......750.....15 3/4 50......20......1000....21 75......10......750.....15 3/4 75......15......1125....23 5/8 75......20......1500....31 1/2 100.....10......1000....21 100.....15......1500....31 1/2 100.....20......2000....42 With the exception of the first scenario (low sales, low P/S ratio), LGND seems undervalued. The middle-middle scenario ($75 million sales, P/S ratio of 15) makes for a price of 23 5/8 which would also seal your party. (BTW, 2001 April or May would be a good time for your party, of course you have the final word :) Unfortunately, the price does not advance by its own. What we need is institutional involvement, initiations of coverage, funds buying in etc. Maybe the upcoming H&Q will provide some of that, assuming that there are some news. If favorable human data from Targretin breast cancer trials are released (assuming such results exist at all), this would provide us the long awaited lift-off. Some LLY announcements regarding the advancing of some compounds in clinicals will probably move the price a bit, but the impact would be short lived. Same with new collaboration announcements. I don't know whether we'll get something from H&Q but in the face of the recent developments, my expectations are quite positive for Year 2000 in general. Firstly, ELAN started to exercise its option on the convertibles. They would do that only if they believed that the capital gains would exceed the interest income. Secondly, the agreement with the Italian pharma for LGND products included upfront payments to LGND, which would be small if they are only for CTCL sales. So, could ELAN and Alpha-Wassermann have had a glimpse of the breast cancer trials ? Of course, one is inclined to believe what one hopes, so we might all be reading too much into these events. In December 1998, I had posted here that 1999 will be the last year in which LGND could be bought at good prices. I still stand by this view. Cheers, Alper