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

To: Mudcat who wrote (16990)	3/9/1998 7:59:00 PM
From: Andreas Helke	Read Replies (1) \| Respond to of 32384

In option 2 besides of the equity investment Ligand gets a higher royalty rate for one of its compounds. No matter how Ligand decides we get some dilution but in one case Ligand gets cash for the shares in the other case it gets an additional late stage compound for its pipeline. From the wording of the press release I expect that Ligand chooses the compound from Eli Lilly. Andreas

To: Mudcat who wrote (16990)	3/9/1998 8:59:00 PM
From: Henry Niman	Read Replies (1) \| Respond to of 32384

There is nothing new in the press release, except for the extension (and European sales?). LGND is not buying some stock and selling it to LLY for a 20% profit. They are either issuing stock to increase LLY's equity position or they are licensing a drug from LLY. If they take the cash, they also get a higher royalty rate on the rexinoid of their choice. Thus, the cash part increases LGND's bank account in two ways (cash and royalty). If they choose the drug, the $20 million paid to LLY would be from the profits, which would be higher than $20 million. I think that the extension is to determine if the net will be positive by 1999. I suspect that the initial cost of setting up the sale of the drug may be higher and/or more complicated than LGND initially expected. I also don't recall Europe being mentioned previously for the new compound (although LGND is seeking European approval for the in-house drugs).