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

To: RXGOLF who wrote (24253)	8/8/1998 11:54:00 PM
From: Henry Niman	Respond to of 32384

Greg, Big boy buyers tend to attract big boy buyers. The AGN situation is somewhat analogous to what happened in Dec, 1995. At that time the VCs were distributing. Kleiner Perkins was the leading investor back in 1987 when I formed Progenx, so they had had some of their money tied up for over 8 years which is a long time for VCs. They were natural sellers (so they could invest in startups as they had done previously with GNE, Sun, and AOL. H&Q was handling the overhang and H&Q deals primarily with institutions. When the swapping began, it quickly accelerated. Daily volume was in the 1/2 to 1 million share range and I believe that the overhang was something like 3.5 million shares. The price actually slowly rose from about 10 to 11 over a two to three week period. Then the price took off and within a few months, LGND hit its all time high of 19 3/4. AGN is of course another "natural" seller. They were LGND's partner in developing retinoids. Now, although they have royalty agreements, they are really more competitors in just about every area. LGND is moving forward with Panretin and Targretin for treating skin disorders such as psoriasis and actinic keratosis (two of AGN's area) and they each have a major metabolic disease partner for rexinoid development (LGND has LLY and AGN has WLA). Thus, it is not all that surprising that AGN is selling all or most of its LGND stake. Now that the price has fallen to an extremely attractive level, at least some big boys have begun some big time buying. If more hop on board, the overhang could disappear very quickly (AGN plans on selling over several quarters, so I'm not sure that this quarter's overhang is that large anymore anyway). Next month LGND begins their road show with Bear Stearns followed by Oppenheimer and Robertson Stephens. These conferences are highly attended by institutions, and the buying that began last week, coupled with AGN's public announcement of its plans to sell, could attract significant interest (which could take out a potential Farallon overhang also). Thus, its hard to say, but substantial overhangs have ben known to disappear in a matter of 1-2 weeks.