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

To: squetch who wrote (18420)	4/1/1998 11:14:00 AM
From: Flagrante Delictu	Read Replies (2) \| Respond to of 32384

squetch, I certainly don't think the Seragen deal is bigger than it appears. Whether it is a good deal at all is in question. Fortunately. LGND management has sufficient experience in oncology to make the decision. I've said all along that if profitability in '99 is the only reason for the deal, I don't think that's a worthy goal. If LGND thinks it will be a decent income producer for many years, that would be a preferable motive I do think the LLY deal could be significantly larger than we might guess from the press release. Some comments from the 10k: " Lilly shall have the exclusive option to distribute all LGND Systemic Products in the U.S., the European Union, & Japan for such period of time as LLY shall have the inchoate or actual obligation to pay LGND a royalty on Net Sales of Drug Products." "NOVEL PROTEIN PROGRAM LLY may, at its option, add one or MORE research programs directed to the discovery of research targets that use a NOVEL PROTEIN for use in the Field, unless LGND is prohibited from doing so under the terms of an existing collaboration with a third party." "LLY shall have the right to submit to LGND for Screening such LLY compounds as it deems appropriate. LLY may also use any LGND technology licensed to LLY under this agreement at LLY facilities for screening compounds in the Field." "If a LLY compound does not reach the status equivalent to a Development Candidate within a year after the end of the Research Program Term, LLY shall have the right to develop & commercialize such compound WITHOUT the obligation to make royalty or other payments set forth in this Agreement." This seems to give them an incentive to dawdle. " LLY shall have the right to select _ Research Compounds that are RXR modulators for use in a SERM oncology Product." A hint as to what is being worked on comes from the statement that LLY is going to have rights to all oncology products except those "LGND sells to [those] board certified in oncology &/or hematology". We haven't seen an exception for hematology compounds being reserved for LGND previously. The deal with LLY is a " Strategic Alliance". The deals with other pharmas are "collaborations". IMO, if LLY reserved the right to screen all its compounds in LGND's screens, which LGND feels are state of the art, & which can accurately detect hits for agonists & antagonists, as well as actively predict how the compounds will fare in humans, it seems to me they are preparing for the possibility of doing compounds across very broad areas with LGND. Any comments?