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

To: Tim who wrote (23387)	7/20/1998 2:57:00 PM
From: Henry Niman	Respond to of 32384

The SRGN acquisition is supposed to be acreative next year.

To: Tim who wrote (23387)	7/20/1998 3:46:00 PM
From: jayhawk969	Respond to of 32384

Tim, The following excerpts are taken from various press releases. "Under the terms of the merger agreement, Ligand will pay merger consideration at the closing in the amount of $30 million, $4 million of which will be in cash and $26 million of which will be in the form of approximately 1,858,800 shares of Ligand Common Stock valued at $13.9875 per share. From the upfront payment, Seragen's common shareholders will receive at the time of closing approximately .036 of a share of Ligand stock for every share of Seragen Common Stock owned immediately prior to the closing. The remainder of the $30 million in merger consideration to be paid at closing will be used to settle claims of Seragen's creditors and preferred shareholders. Of this portion of the merger consideration, Ligand has the option, exercisable at closing, to pay an additional $5.9 million in cash instead of stock. The merger agreement has been approved by the board of directors of each company and is subject to approval by a majority of stockholders of Seragen at a meeting presently scheduled to be held August 12. In connection with the merger agreement, certain stockholders of Seragen delivered to Ligand irrevocable proxies representing approximately 57 percent of the voting power of Seragen's currently outstanding capital stock. The transaction, following a favorable stockholder vote, is expected to close in the third quarter of 1998. The merger agreement also calls for an additional $37 million payment in cash and/or Ligand Common Stock, at Ligand's option, to be paid six months after the date of receipt of final U.S. Food and Drug Administration (FDA) clearance to market ONTAK for cutaneous T-cell lymphoma (CTCL). The $37 million payment will not be made, however, if ONTAK is not cleared by the FDA within two years of the initial closing. From the $37 million, Seragen's common and Series D Preferred shareholders will receive $0.23 in, at Ligand's option, cash or the equivalent value of Ligand Common Stock (based on the average closing share price for the 10 trading days immediately preceding the second closing), for every Seragen common share owned. The remainder of the $37 million payment will be used to settle claims of Seragen's creditors and preferred shareholders. If the $37 million payment is made, Seragen's common shareholders will, as a result of the $30 million and $37 million payments together, have received a 49 percent premium over the closing price for Seragen's common stock on Monday, May 11. Additionally, Ligand's agreement with Lilly calls for up to $10 million, payable in cash or Ligand Common Stock, at Ligand's option, in potential milestone payments to Lilly, if ONTAK is approved by the FDA, and upon certain other events. Upon certain other events, Lilly could receive an additional $10 million in milestones. In a related transaction, Ligand and Marathon Biopharmaceuticals, LLC, the organization which has a service contract with Seragen for manufacturing and development services, executed an agreement providing for Ligand's acquisition of substantially all of Marathon assets for $5 million, and an additional $3 million to be paid six months after FDA approval of ONTAK. Ligand may purchase the assets of Marathon at any time before Jan. 31, 1999, and has the option to extend the closing date in certain circumstances, though Ligand may not purchase Marathon's assets prior to the closing of the Seragen merger transaction. The purchase payments for Marathon can be paid in cash or Ligand common stock, at Ligand's option."

To: Tim who wrote (23387)	7/20/1998 5:29:00 PM
From: Joe S Pack	Respond to of 32384

Thread, I have been a long-term ?(since Dec. 1996) following this dog. It was hyped at that time that my purchase price of 16.50 will be the last chance to get in. Well time proved otherwise. There are several compelling reasons why this dog will not be making money soon as many would like to or wish. 1) Wall street gives a damn about science. They want to see $. That is the bottom line. Similarly technology alone will not make returns on investment. High priority should be given to marketing and everything else plays secondary role. A simple example is MSFT. This is the sucessful company right now in the world which started with no research and no original technology. (Which is true to some extend even today!.) But thanks to their marketing machine they are the number one software company in the world. There are several examples where companies had great technology but ended dead without a show becase of poor marketing. Unless LGND management hypes a lot and makes a better show, their technology alone will not make the kind of return we would like to have. 2) I read in several places claiming that 90s is the decade of biotech. Well it is not and won't be so. It was preempted in the last 5 years by the new market driven by Internet. This I call the "I-factor". Internet technology and its spinoffs like e-commerce has dried whatever other potential technologies are suppose to get their share of attention from the street. If the I-factor was not there, we could have seen even bio-tech companies getting P/E multiples like those of YHOO or AMZN. But they are real and have potential to make money very soon than LGND or any other bio-techs can dream of. 3) The I-factor has another dimension to it. Look at AMZN and YHOO, they are nothing but pawn shops on the I-net world. All these companies were there at right time and started with a very small capital but made their names very common by clever marketing on the internet. Now hundreds of million of people can easily see and interact. This is not true with all these bio-techs. Look at the pathetic situation at LGND. They cannot even put a decent home page even after 5 years since the WEB has become a common outlet. 4) Even if these bio-techs have strong pipeline their potential is very limited because drug industry is like a mafia controlled by big name pharmas with marketing and money muscle to buy or starve (through FDA torture, patent and joint venture and licensing) new startups. So it will take very very long wait (1 to 5 years) before we can realize 100 to 200% percentage return. I have a position which I consider as a write off to Robinson and co. All are MHO. All the best. -Karun