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

To: CYBERKEN who wrote (16104)	2/28/1998 8:06:00 PM
From: Mudcat	Read Replies (1) \| Respond to of 32384

I am new to the thread and I'm sort of confused about portions of the Lilly deal. One area of confusion is in that Lilly initially made a $35M equity investment in LGND at a 20% premium to the price (approx. $17.23per share) . Does this mean they purchased approximately 2.2M shares of LGND ($35M/17.23)? Second question - If Lgnd does not decide to take a drug from Lilly then it appears Lilly will purchase an additional $20M equity at a 20% premium. This equates to $18 per share (15+20%) or another 1.1M shares. So it appears LGND will gain approximately $3.3M from this ($3 x 1.1M shares) plus increased royalties. This may cause a stock dilution of approximately 3% (1.1M/35M?shares outstanding) so should we assume a potential 45 cent (15 x 3%) drop in share price Monday if this should be the case? Agian I may have some of the facts wrong and would like some opinions.