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

To: Mudcat who wrote (23048)	7/10/1998 1:26:00 PM
From: Henry Niman	Read Replies (2) \| Respond to of 32384

Mudcat, Let me try explaining LGND's business one more time. LGND has three ways of generating income. They can licensed out compounds to get up front money, like the $200 million from LLY, followed by their partner taking the compound(s) through the clinic which generate milestone payments as the product progresses, and royalty payments when the products begin to sell. Alternatively, LGND can assume all of the costs and risks and develop a compound on their own. Today's Science article indicates that LGND has developed a approach that allows for identification of small molecules that mimic a large polypeptide hormone binding to its extracellular domain. This technology is patentable and LGND will file the patents. The technology is applicable to a wide range of compounds which are currently on the market (Humalin - insulin, Epogen, Neupogen, Aldesleukin, Betaseron, Avonex, Myotropin, etc). Indentification of the mimics and taking them through clinical trials takes a considerable amount of time and money. One of LGND's partner's SBH is stepping forward to put up the money for the clinicals for several mimics (Epogen, Neupogen, Thromobopoietin, Leptin). In these cases LGND will screen and do some or all of the pre-clinical work and SBH will do the clinicals, marketing, and sales. LGND will get milestone and royalty payments. I suspect that other areas will be farmed out via additional alliances (LLY for an oral insulin?), which will create additional upfront payments, followed by milestone and royalty payments. Other compounds will be developed internally. LGND has an interferon and IL-4 program that they are developing on their own. Consequently, they will have to pay for the pre-clinicals as well as clinicals and marketing, but they will get most or all of the profits. In addition to the above examples, I believe that the SBH alliance has a licensing component which allows LGND to develop discovered compounds for cancer treatment. Thus if a compound is approved for an indication other than cancer, LGND can license back the drug for cancer clinical trials (which will be shorter and cheaper because the safety issues will have been resolved in the earlier trials). Thus, todays news is on the technology that LGND will patent and develop for creation of income from a variety of sources and compounds.