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

To: growthvalue who wrote (24481)	8/14/1998 12:47:00 AM
From: schadenfreude	Read Replies (1) \| Respond to of 32384

>> As I have said, unless there is some huge surprise, it looks very likely that the present value of Ontak was discounted in the value of Seragen. This means that regardless of whether the drug is accretive to earnings, the acquisition of Seragen at market adds little if any - especially since LGND is paying a PREMIUM for SRGN.<< I don't entirely agree with this statement. First, SRGN is worth more to LGND than it was as an independent company because (1) there are operating synergies with LGND's other CTCL drug and (2) the risk of bankruptcy is removed. SRGN was very low on cash and that was priced in the stock. If SRGN was not in danger of going bankrupt, SRGN stock would have been higher. Second, the premium is really only paid if ONTAK is approved. Had SRGN got approval for ONTAK on their own, the stock would have popped. On another note, I agree with J.D. that SRGN has been and remains underpriced.