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

To: AJAG who wrote (17707)	3/19/1998 10:43:00 AM
From: bob smith	Respond to of 32384

Here is the Lehman link :(Acrobat reader required) lehman.com

To: AJAG who wrote (17707)	3/19/1998 12:47:00 PM
From: Henry Niman	Respond to of 32384

Here's the full report: Headline: Ligand Pharmaceuticals: Signs lucrative obesity deal with SmithKline Author: CA Butler,PhD/E.Ende,MD(212)526-4410 Rating: 1 Company: LGND Country: COM CUS Industry: BIOTEC Ticker : LGND Rank(Prev): 1-Buy Rank(Curr): 1-Buy Price : $16 1/8 52wk Range: $18-9.13 Price Target: $ 24 Today's Date : 03/18/98 Fiscal Year : DEC ------------------------------------------------------------------------------ EPS 1997 1998 1999 2000 QTR. Actual Prev. Curr. Prev. Curr. Prev. Curr. 1st: -0.32A -0.32E -0.32E - -E - -E - -E - -E 2nd: -0.32A -0.33E -0.33E - -E - -E - -E - -E 3rd: -0.35A -0.25E -0.25E - -E - -E - -E - -E 4th: -0.09A -0.15E -0.15E - -E - -E - -E - -E ------------------------------------------------------------------------------ Year:$ -1.06A $ -1.05E $ -1.05E $ - -E $ - -E $ - -E $ - -E Street Est.: $ -0.82E $ -0.81E $ - -E $ 0.09E $ - -E $ - -E ------------------------------------------------------------------------------ Price (As of 3/18): $16 1/8 Revenue (1998): 54.5 Mil. Return On Equity (98): N/A Proj. 5yr EPS Grth: N/A Shares Outstanding: 35.2 Mil. Dividend Yield: N/A Mkt Capitalization: 567.4 Mil. P/E 1998; 1999 : N/M; N/A Current Book Value: $0.98 Convertible: YES Debt-to-Capital: 13.7% Disclosure(s): C ------------------------------------------------------------------------------ * Ligand Pharmaceuticals has expanded its prior collaborative deal with SmithKline Beecham plc to include the development of oral, small molecule drugs which regulate the Leptin cytokine for the treatment or prevention of obesity. * The collaboration includes an equity investment, milestone payments and future product royalties. * Because SmithKline has expanded its initial deal (for the second time) to include another target, we believe it provides validation of Ligand's expertise in cytokines and JAK/STATs. * The collaboration provides additional justification of our choosing Ligand as part of our second annual holiday gift list. * Over the next 12 months, we anticipate numerous additional clinical, regulatory, and strategic news events. We view the current stock price as attractive thus we reiterate our 1-Buy rating with a price target of $24. ------------------------------------------------------------------------------ SUMMARY Ligand Pharmaceuticals has expanded its prior collaborative deal with SmithKline Beecham plc to include the development of oral, small molecule drugs indicated in treating or preventing obesity. Products would target Leptin regulation of the JAK/STAT signal transduction pathway. The collaboration provides for a $5.0 million equity investment in LGND stock at a 20% premium, a $1.0 million purchase of a warrant exercisable into 150,000 shares of LGND at a price of $20 with expiration in five years. In addition, SmithKline will make milestone payments in the form of further equity investments at a 20% premium and cash payments and will pay royalties on the future sale of products stemming from the agreement. CONCLUSION Because SmithKline has expanded its initial deal (for the second time) to include another target, we believe it provides validation of Ligand's expertise in cytokines and JAK/STATs. It appears that SmithKline is confident in not only Ligand's technology but also in the company's future prospects as evidenced by its additional equity investment at a premium. The collaboration provides additional justification of our choosing Ligand as part of our second annual holiday gift list. Among product highlights at Ligand, Targretin capsules are being used in phase II/III trials for advanced lung cancer, phase IIb studies for ovarian cancer, head and neck cancer and KS and phase II trials for Targretin Gel in actinic keratosis. AHP, in collaboration with Ligand, will file an IND in 1Q98 for TSE424, an estrogen receptor partial agonist, in osteoporosis. NDAs in the 1998/99 time frame include those for Panretin Gel for KS in 1Q98, Targretin Topical for CTCL in 2H98 and Targretin Oral in 2H98. In conclusion, over the next 12 months, we anticipate numerous additional clinical, regulatory, and strategic news events. We view the current stock price as attractive thus we reiterate our 1-Buy rating with a price target of $24. BUSINESS DESCRIPTION: Ligand Pharmaceuticals is a molecularly-based drug discovery and development company. It is primarily focused on the development of drugs that regulate intracellular receptors (IRS). ------------------------------------------------------------------------------ Disclosure Legend: A-Lehman Brothers Inc. managed or co-managed within the past three years a public offering of securities for this company. B-An employee of Lehman Brothers Inc. is a director of this company. C-Lehman Brothers Inc. makes a market in the securities of this company. G-The Lehman Brothers analyst who covers this company also has position in its securities.