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

To: jayhawk969 who wrote (23351)	7/19/1998 12:18:00 PM
From: John O'Neill	Read Replies (3) \| Respond to of 32384

I own the stock and also some Nov calls....I like LGND's pipeline, but have wondered about their management. The stock price is reflection of the "markets" valuation...& they know LGND has a strong pipeline..does that mean the don't have confidence in the company focus to deliver? Second, most of the drugs right now have small markets...I think there could be many off-lable uses, yet the stock price, once again, doesn't reflect this?? Comments are appreciated...these questions have probably occurred to many of us.. JO

To: jayhawk969 who wrote (23351)	7/19/1998 7:35:00 PM
From: Proton	Respond to of 32384

Re: Company vs. Stock Performance Au contraire, I have not seen enough evidence that LGND has done a particularly bad job to date. The following are not necessarily contradictory: 1. Ligand has a valid business plan and is executing it well (arguendo, since valid criticisms have been made about executive compensation and excessive dilution -- beyond what we naifs ought to have expected). 2. LGND and LGNDW are not particularly good investments. In the message to which you replied, J.D., I mentioned the importance of the transition from research collaborator to revenue generator for biotechs. I also stated my belief that there will be a lot of money to be made in LGND after that inflection point is reached (and with a better risk/reward profile than currently exists). What I did not say was that Ligand has not executed well. It just may have been unrealistic to assume that LGND would come through the development stage with an appreciably better stock price than it has. Hindsight can always point to errors, however, this is not exactly fair. No executive team is correct 100% of the time. Therefore our discussion should be about plans going forward given what we know. I have several responses to this: Not everyone has been blindsided by LGND's performance, and it's not fair to ignore that. To the extent that we can learn anything from the perspicacity of others, discussion of past performance is valid. There is also a general lesson about biotechs that LGND investors (including your correspondent) have ignored at their peril: as a group, development stage biotechs do not have good risk/reward profiles (i.e., they are lousy investments). One thing has not changed with LGND between past and present: it's still a development-stage biotech (one of THREE HUNDRED pursuing cancer treatments). Sure, there will always be a few who master investing in these stocks (if they have been in LGND to date, they have put their master ranking at risk). The relative scarcity of such people ought to be a lesson to us mortals. Waiting until a company has approved product is an excellent risk control technique. The past may give us insight into what will happen to LGND in the future. Look at how many things have not moved LGND stock. There is a strong case for ignoring LGND until it can move significant products out of the approval process. Given the substandard performance of LGND stock, I do not believe the presumption of correctness rests with the "hold until it's gold" thesis. I am not unwilling to eat some humble pie: the last time I was so vociferous about LGND's canine performance was in... well, er... late January of this year. Right around the time it moved south of 11. Caveat lector. Pý