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

To: SKaye who wrote (17364)	3/12/1998 11:15:00 PM
From: Machaon	Respond to of 32384

SKaye, welcome to the thread. Thanks for taking the time to post your detailed analysis of LGND, and how you view it's future path. Now, to go back and read it again! Regards, Bob

To: SKaye who wrote (17364)	3/12/1998 11:17:00 PM
From: Proton	Respond to of 32384

Re: Thanks for Freshening up Lake Ligand [No New Info] If SI awards a "Best First Post of Membership" Award, I'll happily nominate you. Mind you, I don't know if I agree with all your premises, but you have delivered a provocative defense of management. Thanks. Pý

To: SKaye who wrote (17364)	3/13/1998 1:44:00 AM
From: Jack Be Quick	Read Replies (1) \| Respond to of 32384

SKaye, Thanks for your post. You present an interesting thesis. Re:<<However, I now detect a clarity that was not previously apparent. IMO, the Ligand Management focus is on long-term shareholder interests.>> Just my $0.02, but as a shareholder who is simply a member of the general investing public, I would also hope that this clarity and focus will be reflected in simpler and more straightforward business relationships in the future. While many here are willing to undertake an in-depth study of Ligand's various alliances and partnerships, my guess is that relatively few in the general investment community are willing or able to undertake that task. IMO, for the emerging business model to become convincing to a wider audience of investors, it must become clearer and more focused, as you suggest, and also simpler to apprehend. For instance, while you were able to navigate your way through the ALRT-ALRIZ-AGN-etc. combination to your satisfaction, thinking about any part of those transactions simply makes my head hurt. Admittedly, several of my interlocutors have pointed out that I am a moron, but that is also how many brokerage house research analysts are perceived. Fwiw, I think that until a tangible earnings stream is produced that would make the matter moot, Ligand will have a large problem with investors such as myself until they learn to do things a whole lot more simply. With a management culture that seems to take great pride in the "creativeness" of their approach, I expect that this will be a problem until there is a major change in management style to accompany the clearer, more focused business strategy you see developing. JMO. John

To: SKaye who wrote (17364)	3/13/1998 7:04:00 AM
From: Henry Niman	Read Replies (2) \| Respond to of 32384

SKaye, Thanks for the detailed analysis. I suspect that posts with content (pro or con) will be welcomed almost universally. Many readers use this board to gather information, although I'm sure that some read it for entertainment purposes. As you know, my background is in the science area, but I would like to make a few comments on the business side, to stimulate some discussion and to expand on a few of the areas that you mentioned. Although the LLY deal is a watershed of sorts, it's really not that different than the earlier deals, except it is bigger and in effect replaces a few of the earlier deals. In effect it takes the AGN and GLX programs, and folds them into a multi-pronged program with LLY. However, it's an extension, not a replacement. Thus AGN will move forward, presumably with new partners, and LGND will get royalties. GLX will take a compound forward also and LGND will get milestones and royalties. However, LGND will move both of these programs forward. LGND will bring the dermatological and cancer aspects in-house and will let LLY move the broader indications (metabolic diseases) forward. Since these areas cross into PPARs and Leptin, pieces of these programs are folded into the LLY deal. Thus, management's performance is somewhat dependent of the evaluator's goals. Some look at LGND as a JAB (Just Another Biotech), while others realize that there is a much bigger potential here. At H&Q this year, there was a debate on the importance or product or platform. Some Biotechs have been able to get a blockbuster drug to market, but it's not clear that they can repeat. Thus their balance sheet looks good short term, but it will fade as new products come to market. Others have a great platform, but they haven't really developed a product or the license out the platform and wait for milestones and royalties. LGND of course does both. They develop products in-house to keep the lion's share of profits in those targeted markets (cancer, women's health, and now dermatology) and they also license out their technology via Alliances so that larger markets can be addressed (diabetes, atherosclerosis, inflammation, hematopoietic growth factors, energy metabolism). Thus, in contrast to the vast majority of JABs, LGND has products and platforms.

To: SKaye who wrote (17364)	3/13/1998 9:48:00 AM
From: WTDEC	Respond to of 32384

SK, welcome. You have brought a clear and thoughtful perspective with which I have much sympathy. I, for one, strongly urge you to continue to participate. Judging by the responses to your post thus far, most of the others feel that way as well. More later. Walter

To: SKaye who wrote (17364)	3/13/1998 10:59:00 AM
From: Flagrante Delictu	Read Replies (1) \| Respond to of 32384

S.Kaye, >> LGND management << I swing & sway to what you say.What a pleasure it is to welcome a former lurker whose first contribution is positive,valuable, and predictive of more value awaiting us in subsequent posts.Bernie

To: SKaye who wrote (17364)	3/13/1998 1:37:00 PM
From: Andrew H	Read Replies (1) \| Respond to of 32384

LOL. Attack poodle welcomes you. He only chases those who have nothing to say about the company. (:>) Great post!!

To: SKaye who wrote (17364)	3/13/1998 7:32:00 PM
From: WTDEC	Respond to of 32384

SKaye, "give me a place to rest my lever and I will move the world". Your post today reminded me of those words attributed to Archemedies (sp?). As I see LGND, they have found a place to rest their lever - - great science, 200 patents, 200 more pending, small molecule breakthrough, etc. and must carefully build the lever. They are building the lever by, as you say, licensing products outside of their core areas of interest and then using the revenue from that activity to take drugs in the core areas all the way to market. I agree completely that building LGND into a pharma will create the greatest value for stockholders. (A 35% venture return is simply not enough given the risk here and the opportunity cost of not investing elsewhere, DELL for example). I have seen buyouts which cut the public stockholders off just when the real 'sweet spot' in the value creation had been reached. I gather you have as well. LGND has, I believe, has some protective provisions, but I think we would agree they only work if management wants them to. Otherwise, those provisions wind up being used by management to negotiate a better deal for themselves (wow, am I a skeptic tonight). The structural protections you noted are the best answer, but here too, there are probably ways to circumvent them. Fortunately, management seems to be headed in the right direction. Unless they do something clearly against long-term stockholder interests, I'd be inclined to cut them a little slack. We don't always have enough info to make a well informed decision. For example, Henry, BJ and I all seem to feel LGND is probably further along with small molecule development than the recent presentations would indicate. That is the wise approach from a business standpoint. I think the dip which you foresee it is a reasonable expectation. My own sense of it is that there is a very good chance a material dip won't occur until LGND has moved solidly into new high ground, at which time a correction to the old highs would be rather typical. I do hope you will share your thoughts with us again. I would especially welcome any comments you might have on this 'term paper'. Regards, Walter