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

To: Doug Baer who wrote (13418)	1/16/1998 10:23:00 PM
From: Andreas Helke	Respond to of 32384

Ligand is fully valued on those two small cancer indications that the street bothers to recognize. The other 30 indications in the pipeline wich will ultimately be a big part of the company get almost no recognition today. You can find a realaudio interview with CEO David Robinson where he talks about this problem if you check the Ligand news at nasdaq.com Andreas

To: Doug Baer who wrote (13418)	1/17/1998 12:44:00 PM
From: Proton	Read Replies (3) \| Respond to of 32384

Re: Possible LGND Tactics Please see the recent Bear Stearns research report on LGND (on 1/6) by David Molowa and Ethan Lovell which projects a fair value today of $18, $25 at end of 1998 and $62 at end of 2002... First some caveats: I'm analyzing one firm's prognostications for this stock. I'm not advocating any specific strategy. I'm doing this for fun, O.K.? There are two conclusions I reach from the fair value projections: 1. LGND's best appreciation may be over the next year, rather than holding for the full five years of the analysis. This would happen because of the dual factors of improving intrinsic value of the stock and recovery to intrinsic value from current depressed levels. 2. The best "buy-and-hold" strategy may be to plot the three fair value projections given by Bear Stearns ($18 now, $25 on 12/31/1998, and $62 on 12/31/2002), fit a curve to the three points, and sell at any time the price penetrates the "fair value" curve (I have better ideas, to capture possible overvaluation caused by a population explosion at Lake Ligand, but I'll save those for another day). Here's an analysis of the Bear Stearns numbers: 1. Bear Stearns is saying that LGND is 32% undervalued today. 2. If the one-year fair value estimate is corretct, and if LGND rises to meet that intrinsic value, the annualized return is approximately 110%. Very nice, if that happens. 3. If f.v. estimate is correct, but LGND remains at a 32% discount in one year, the projected 1/1/1999 stock price is 17, which provides a one-year return of 39%. Not bad, but is it on the correct side of the "worth-the-risk" frontier? 4. Say LGND hits Bear Stearns fair value targets. They are then saying that the stock will go from $25 to $62 in four years (12/31/1998-12/31/2002). That is a 25% annualized return. Good, but, again, is it worth the risk? 5. If one buys LGND now and it achieves fair value in 2002, it would return 38% per annum. An excellent long-term rate, but one is assuming five years of research, competitive, financial, and regulatory risks in pursuing it. 6. Same as 5, but there is the 32% discount: the stock will be at $42.16 (remember, we'll have decimal pricing by then). The annualized return is 28%. This scenario is highly unlikely, as uncertainty about LGNDs profitability will be resolved (one way or another) by 2002. Pý