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

To: growthvalue who wrote (24450)	8/13/1998 1:59:00 PM
From: Machaon	Read Replies (1) \| Respond to of 32384

<< I've never heard of a unanimous advisory panel being overturned. >> That's good news. << I haven't done a present value calculation for ONTAK, but I will say that I think the market had already priced an ONTAK approval into SRGN's stock >> I haven't either. Robinson said that it would significantly help Ligands earnings. We're in a bearish biotech market. I have no idea when we'll see another biotech bull market, or what will make things turn around. Until that time, I suspect LGND will be in the dumps. Regards, Bob

To: growthvalue who wrote (24450)	8/13/1998 2:13:00 PM
From: medsunman	Read Replies (2) \| Respond to of 32384

growthvalue: I've been reading this thread for several months, and I was happy to see you recently join the discussion. I find your perspectives very insightful and knowledgeable. My question to you is this: If the market had already included an ONTAK approval in SRGN's price, and it had a market cap of only $11M, the market wasn't according ONTAK much value was it? Or was the lowly market cap based on concerns of SRGN's ability to continue in business? In any event, how much additional value, if any, do you see the market according LGND's shares if and when ONTAK is approved?

To: growthvalue who wrote (24450)	8/13/1998 5:27:00 PM
From: jayhawk969	Respond to of 32384

GV, If one assumes that it is a forgone conclusion that Ontak will meet approval. As of today one could buy 100 shares of SRGN for $44. This results in a payout of part A + part B. Part A is 3.6 shares of LGND current value of $33.75. Part B is the $23 bonus six months after Ontak approval. Total return is $56.75 minus time premium on $23. If one considers the approval a slam dunk, this is a decent arbitrage. I believe the market is assigning greater risk to the Ontak approval than exists. As a hedge I converted 20% of my LGND holdings to SRGN. To further hedge I sold the LQPBB's(Feb 10 calls) for aprox $2.00. With yesterday's vote this reduced my SRGN costs by $7.20 per 100 shares. Still have my fingers crossed. J.D.