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

To: james who wrote (10130)	10/25/1997 9:06:00 PM
From: Andrew H	Respond to of 32384

>>Hi Guys. Diabetes trials take 6-10 years for phase III alone. They have not started phase I yet. Why get excited so early? Put your changes in the bank, & checkout this one in 2005.<< >>I have been told that human is only one light year away from mice in evolution.<< james--your ignorance of the company is second only to your ignorance of biotechnology in general. Come back and post when you know something about the subject. Do a little homework. Evolution is not measured in light years. Were you on that spaceship following the comet?

To: james who wrote (10130)	10/25/1997 9:15:00 PM
From: tdinovo	Read Replies (2) \| Respond to of 32384

James, I seriously doubt if LLY would be investing $50 million in 1997 to fill their 2007 pipeline, especially given other holes in it between now and then. If they believed your analysis, I doubt their managers would have been as upbeat in their statements. On the price front, if we're headed for Armageddon, a lot of stocks will be a lot lower. But bio's in general have held up exceptionally well during October, in the face of rather ugly performance from many of their semiconductor-based brethren. One of the reasons October is so often ugly is because many mutual funds need to sell in order to book profits in the current year. We probably have about another week of real pressure. I expect several weeks consolidation and then a solid end of year rally. But markets are made to accommodate differences of opinion. If your confident of your opinion, I suggest you short a little Ligand and see how well you sleep Ted

To: james who wrote (10130)	10/25/1997 9:33:00 PM
From: dbuki	Read Replies (2) \| Respond to of 32384

Since you are affiliated with Metabolex, a biotech company concentrating on diabetes, there may be some conflict of interest which undermines the credibility of your depreciative remarks about LGND.

To: james who wrote (10130)	10/25/1997 10:03:00 PM
From: lavalamp	Read Replies (1) \| Respond to of 32384

James, I am a little confused with your position. We are excited about LGND because they do not have to pay for the additional work necessary for the diabletes trials. Instead, they took a discovery in an area that is not LGND's stated niche and received several items of value. Exactly what the entire value of these items is still an open question. But, it seems clear that LGND will not be out of pocket for any additional diabetes work. Thus, LGND is moving faster to profitability . Your question about how LGND will pay for their burn rate seems answered already. 1988 seems to have been funded by the equity purchase by LLY. 1999 LGND is expected to be profitable by the CEO. I would assume Robinson does not expect 1999 to be the only year of profitablity. I had always been under the impression that mice were used for all tests (not just diabetes) because there was a more than casual relationship in the results of mice and humans. But to give the devil his due...you may see me at 11,did you also see me at 9 3/8 this year, cause I was there ?

To: james who wrote (10130)	10/26/1997 9:39:00 AM
From: tonyt	Read Replies (1) \| Respond to of 32384

> But how the hell LGND will make it through in between. Their class of compounds > is in the stage of "proving of concepts". They'll just have another secondary to raise the cash (BTW, better not be so negative here or you'll be told to go to the Amylin thread with me and bob ;-)) --Tony

To: james who wrote (10130)	10/26/1997 10:16:00 AM
From: Henry Niman	Respond to of 32384

james, Although you are new to the thread, others have been spreading misinformation here for some time. LGND has done one secondary (about a year ago), since they went public in 1992, and they expect to be profitable in 1999. The LLY deal includes about $60 million up front with additional significant milestone payments in 1998 (start of Targretin diabetes trials in the US as well as the other two rexinoids entering the clinic) and I know of no plans for another secondary. Lehman Brothers just came out (after the LLY deal was announced) with a reiterated BUY and gave some additional details on the milestones. They made no mention of a secondary and I know of no reason why such a secondary would be under consideration. Their short term financial plans seem rather obvious, and they do not include a secondary.

To: james who wrote (10130)	10/26/1997 10:59:00 AM
From: Henry Niman	Respond to of 32384

james, There seems to be some confusion about up front payments, not milestones. The San Diego Union actually indicated that the upfront payments were $99 million. In general, upfront payments are paid "up front", or at the beginning of the agreement. All of LGND's Startegic Alliances include an equity position, as do most Biotechs. LGND will get $12.5 million up front to offset some of the development that has already happened (Targretin has been in the clinic for 3 years in cancer trails and LGND began a Phase II diabetes trial in Europe this spring). In addition to the development costs, LLY will take an equity position a pay LGND up front $37.5 million. In addition, there is a 5 year $49 million research agreement and I assume that LGND will get about $10 million up front (at the beginning of the deal). Thus, the San Diego Union throws in the $49 million in research funnding and comes up with $99 million up front. I have used only $10 of the $49 million, because I suspect that LGND will get about $10 million per year. Thus LLY will write LGND a check for about $60 million up front (at the beginning of the deal). However, LGND is expected to get considerably more than the $60 million in up front fees in the near term. As described by Lehman Brothers, much of the milestone payments ($75 million) will be tied to clinical progress of the three rexinoids described in the press release. Targretin is already in cancer trails (Phase III) in the US and diabetes trials (Phase II) in Europe. LGND will get a milestone payment when Targretin enters US trials which is expected to be at the beginning of 1998. Moreover, last January LGND indicated that ALRT268 would enter clinical trials in early 1998. ALRT268 is the same as LGD1268 which will begin clinical trials in early 1998, as will the other rexinoid, LGD1324. The start of each of these drugs in the clinic also triggers milestone payments. The above of course brings us to the false issue of a secondary. The $60 million up front (this year) coupled with milestone payments early next year (1998) and projected profitability in 1999 really makes a secondary extremely unlikely.

To: james who wrote (10130)	10/26/1997 11:05:00 AM
From: Henry Niman	Respond to of 32384

james. Here's the article in the San Diego Union (I have bolded the statement on the $99 million in upfront payments): The Lehman Brother's report, describing the 1998 milestone payments (estimated to be $20 million) as well as the option LGND has to a LLY cancer compound can be read at: techstocks.com Ligand links for diabetes research Thomas Kupper STAFF WRITER 21-Oct-1997 Tuesday Ligand Pharmaceuticals yesterday announced a diabetes research collaboration with Eli Lilly & Co. that could bring the San Diego company $200 million or more if the work is successful. The deal gives Lilly, the Indianapolis pharmaceutical powerhouse, rights to continue testing the effectiveness of Ligand's Targretin drug on diabetes, a disease that afflicts more than 100 million people worldwide. It also gives Lilly a 4.7 percent stake in Ligand and rights to market the drug if it works. Ligand, which specializes largely in cancer drugs, also is studying Targretin for cancer. But researchers found it might help diabetics, and Ligand sought a larger company to continue that work. "Diabetes in general is a very complicated area," said analyst David Molowa of Bear, Stearns in New York. "You can't do it all, so they're going to keep the rights to Targretin in certain cancer areas." Though Ligand has no drugs approved in the United States, the company is conducting a long list of research projects, with clinical trials under way in about a dozen diseases. Last year, the company lost $37.3 million on revenues of $36.6 million, all from research fees. Lilly, on the other hand, is already a leading marketer of insulin for diabetics. The complex deal announced yesterday includes $99 million in upfront payments to Ligand, another $75 million in potential milestone payments if the work pays off and royalties on any drugs that are approved. Additionally, Ligand gets an option on an undisclosed Lilly compound that Ligand said appears to hold promise in an area it is interested in. Ligand shares closed at $16.50, up 43 3/4 cents. Lilly has been seeking access to potential blockbuster drugs because its patent on the big-selling Prozac antidepressant runs out in 2002, analyst Anthony Butler at Lehman Brothers in New York said. With more than 100 million people suffering from diabetes worldwide, a drug that works would carry a huge payoff for both companies. Under the deal, Lilly also gets two other unnamed compounds that Ligand believes may hold promise in diabetes as well as a 4.7 percent equity stake in Ligand. Ligand Chairman David E. Robinson said he is optimistic about the collaboration because Targretin is already in human trials and because the two other compounds Lilly receives could begin human testing next year. After discovering Targretin's potential effectiveness against diabetes, Ligand tested it in mice last year and conducted human safety trials this year. The drug is in the second of three trials generally conducted before approval. Ligand is also conducting phase three trials on Targretin for a form of lymphoma and is looking at it for other cancers.