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

To: Andrew H who wrote (9788)	10/20/1997 11:35:00 PM
From: Arthur Radley	Read Replies (1) \| Respond to of 32384

Andy and Stan, Great questions for Henry. Obvious your late nap today allowed you to be a clear thinker tonight.(:>)

To: Andrew H who wrote (9788)	10/20/1997 11:45:00 PM
From: Dom B.	Read Replies (1) \| Respond to of 32384

Hi Andy...did u get the url on H&Q? i don't see ewolf's response... thanks...//dom

To: Andrew H who wrote (9788)	10/20/1997 11:59:00 PM
From: Henry Niman	Respond to of 32384

<<1. What are the 2 additional 2nd generation oral diabetes compounds in preclinical development to which LLY will have exclusive rights? What about 3rd and 4th generation compounds?>> I think that you can answer many of your questions by just looking at LGND's annual reports for the past several years. They all say the same thing. LGND targets its niche areas (cancer and women's health). The other areas are licensed out because they are outside of LGND's niche and they are very expensive to develop. LGND has licensed out certain areas of diabetes, obesity, and cardiovascular areas to LLY. LGND identifies compounds and LLY is supposed to develop them. LLY pays for the trials and development costs. LGND gets milestone and royalty payments. This argreement primarily targets rexinoids, since they are the most advanced and have applications for diabetes. Other areas of metabolic diseases will be explored and where appriate, LLY will develop those compounds. For question #1, the 2nd generation compounds are LGD1268 and LGD1324, as described in the press release. LGD1268 is the same as ALRT268. This compound is similar to Targretin except it binds more strongly to the 3 RXRs and provides somewhat better results in the mouse models. I'm not sure if LGD1324 is yet another version or if it is another name for LG100754. LG100754 can change the shape of RXRs so they react with partners such as PPARs without PPARs being activated (by TZDs such as Rezulin). LG100754 could be considered a 3rd genertation compound (because it replaces rexinoids and TZDs). Other advanced compounds would have subtype specificity. Targretin and LGD1268 recognize all three RXRs. However, only RXRalpha is involved with PPARgamma. The heterodimer then turns on genes too overcome insulin resistance. LLY is targeting RXRs, so I would assume that they would also be involved in the development of 3rd and 4th generation compounds (which would also require extensive clinical trials and costs).

To: Andrew H who wrote (9788)	10/21/1997 12:16:00 AM
From: Henry Niman	Read Replies (2) \| Respond to of 32384

<<When they say "exclusive rights to LGND's metabolic disease technology to develop more advanced diabetes, cardiovascular and related therapies" (obeisty, others?), does this include ALL LGND's present compounds, ALL the compounds they will get from the ALRI deal, and ALL future compounds they will develop which target RXRs and PPARs? We were concerned about this since the first sentence of the first paragraph under "Specifics of Collaboration" reads, "LLY will receive worldwide, exclusive rights to LGND's compounds and technology associated with the Retinoid X Receptor." The first sentence of the second paragraph reads, "Ligand will also receive worldwide exclusive rights in certain areas to LGND's PPAR technology." Seems like the RXR rights are more comprehensive than the PPAR rights. But it appears they are giving LLY basically all the compounds (for RXR work, in any case) that LGND is receiving from the ALRI deal, That seems like a lot to give away for what they are getting, no?>> ALRI is a R&D shell for retinoids and rexinoids. The LLY deal targets rexinoids and their applications for metabolic diseases. LGND has also developed PPARs. PPAR alpha is involved in energy metabolism (obesity and possibly cardiovascular disease). PPAR gamma is involved with type II diabetes (its activated by TZDs like Rezulin). LGND is getting a partner to develop these compounds for these indications.

To: Andrew H who wrote (9788)	10/21/1997 12:34:00 AM
From: Henry Niman	Respond to of 32384

<< 3. Can you elaborate any on LLY receiving "additional rights to use LGND's technology to develop a compound in combination with a SERM in cancer"? Does this have anything to do with Evista? In return for the development of this RXR, LGND will be receivng various goodies (milestones, royalties, etc.)>> Evista is raloxifene which LLY is devoloping for osteoporosis. It is related to Tamoxifen which is ZEN's hormone treatment for breast cancer (through interactions with the estrogen receptor, ER). Its also related to PFE's Droloxifene and CP-366,156 as well as compounds in AHP's library. LGND already has alliances with PFE and AHP to develop SERMs to compete with LLY's Evista for treating osteoporosis. PFE's Droloxifene is finishing up Phase III trials for Breast Cancer. It's fairly clear that the SERMs will have osteoporosis and cancer applications. SERMs interact with the estrogen receptor which is structurally similat to the various IRs that LGND spends 80% of its time and resources to develop. Like RARs, PPARs, LXRs and other various receptors, ERs probably form duplexes to become fully activated. Thus, part of the researchh will target drugs that activate a heteroduplex partner of ER (and the partner may vary from tissue to tissue). Since LGND already has programs with AHP and PFE for SERMs, they may already have candidates for partners. What most investors fail to realize is the complexity of biology as well as the rapid progress that is being made through basic research. These discoveries quickly turn 1st geration products into 2nd generation products, and they create markets which LGND keeps relicensing. Although Evista hasn't come to market, new and improved products are at earlier stages of development and LGND keeps getting a piece of the action.

To: Andrew H who wrote (9788)	10/21/1997 12:40:00 AM
From: Henry Niman	Respond to of 32384

<<4. LGND may receive up to $49M in research funding from LLY over the next 5 years (and possibly an addition 3 years of funding). I assume that we are talking here about only projects in collaboration with LLY, like the SERM cancer project, the leptin promoter project, the cardiovascular projects, etc. Is that correct? Will LLY be doing all of the development and trial funding of all metabolic and cardiac compounds and indications?>> Research funding is at a fairly basic level (identifying compounds and maybe some pre-clinical). LLY would be expected to do all of the clinicals and marketing.

To: Andrew H who wrote (9788)	10/21/1997 12:43:00 AM
From: Henry Niman	Respond to of 32384

<<5. "LGND may receive up to $75M in additional milestone payments over 8 years, assuming successful development of oral targretin and five other compounds." Do you know which 5 compounds they are referring to? Also could you try to clarify which compounds would qualify for double digit royalties and which qualify as single digit? What would your best guess be on the exact size of the double digit? V1, care to help us here?>> I don't think that ANYONE knows which five compounds will be developed by LLY. Advanced compounds would be those named in the press release (Targretin, LGD1268, LGD1324). Less advanced are no name compounds (at least no public names).

To: Andrew H who wrote (9788)	10/21/1997 12:47:00 AM
From: Henry Niman	Read Replies (1) \| Respond to of 32384

<<6. A very interesting aspect of the agreement is LGND's ability to select one LLY specialty pharmaceutical. Any idea what LGND has in mind here? Apparently LGND has 90 days to select this product. If they do, they may have to pay LLY 20M in LGND stock in milestones. If LGND does not exercise this option, then LLY will have to buy another 20M worth of LGND stock at a 20% premium to the market. Also, Targretin royalties will increase 1.5%. Kind of turns the tables on LLY. >> Yes, I know exactly what LGND has in mind. This compound is sufficiently advanced and will produce enough income to allow LGND to achieve profitability in 1999.

To: Andrew H who wrote (9788)	10/21/1997 12:53:00 AM
From: Henry Niman	Read Replies (2) \| Respond to of 32384

<<7." LLY will also receive worldwide exclusive rights in certain areas to LGND's PPAR technology." Would you guess we are talking metabolic and cardiovascular only here? Any idea what kinds of royalties we are talking?>> I assume its for screening LLY's library for PPARalpha specific compounds for cardiovascular and obsity, and PPARgamma specific compounds for type II diabetes. What most posters fail to understand is the importance of this agreement to LLY. They are using LGND's technnology to move their research into the next mellinium. LGND will harness an extraordinary share of LLY's R&D budget for developing potent oral treaments for several metabolic diseases, including but certainly not limited to diabetes. It was NOT a coincidence that LGND and LLY were on CNBC today, nor was it a coincidence that the deal was announced on the same day as LLY's earnings.

To: Andrew H who wrote (9788)	10/21/1997 12:56:00 AM
From: Henry Niman	Respond to of 32384

<<8. "LGND and LLY will also begin to research programs aimed at discovering novel compounds that therapeutically activate PPAR subtypes for treatment of cardiovascular disease." Is funding for this likely to come from the $49M? Will LGND have more of a partnership role here in terms of royalties, would you guess.>> I'm fairly certain that LGND has the receptors and LLY has the library of compounds for screening. I think that LGND will do the screening very quickly and funding will come from the $49 million. LLY will do the more advanced development including clinicals.

To: Andrew H who wrote (9788)	10/21/1997 1:00:00 AM
From: Henry Niman	Respond to of 32384

<<9. "LLY will receive exclusive rights to the HNF4 receptor and the obesity gene promoter technology. Could you explain this a bit more? Does LGND give up all rights to this forever? And do they get anything specific in return, besides the royalties? Or don't we know any of these details?>> I think that you are asking the same question for another area. LGND has the HNF4 receptor. They will screen LLYs library for active compounds which will be used to treat the various forms of MODY. There may also be cardiovascular applications. Similar story for leptin promoter. LGND will screen compounds and LLY will develop appropriate candidates for appropriate indications.

To: Andrew H who wrote (9788)	10/21/1997 1:02:00 AM
From: Henry Niman	Respond to of 32384

<<10. Do you expect we will see the results of the P2 diabetes trial? Or will this forever be hidden under LLY's cloak of secrecy?>> I don'tknow what LLY's policy is. I didn't find a great deal on Evista (Raloxifene) in earlier trails. Many if not most of the big boys like to keep secrets.

To: Andrew H who wrote (9788)	10/21/1997 1:06:00 AM
From: Henry Niman	Read Replies (3) \| Respond to of 32384

Andy, I think that you are looking at the deal from the wrong prospective. LGND is looking for partners to develop the drugs that they discover. They have discovereed far more than they can develop by themselves anytime soon. The broader the deal, the more products under development. ALL of these 1st and 2nd generation products will soon be replaced by 3rd and 4th generation products. These products don't do anyone any good sitting on laboratory shelves (as many have for many years).

To: Andrew H who wrote (9788)	10/21/1997 7:58:00 AM
From: squetch	Read Replies (1) \| Respond to of 32384

Andy, If there were that many questions, what did the release tell us?(:>) I have 50 posts to go thru and an am appt, so it will take awhile to slog thru. Thanks for postting them. squetch