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

To: Andrew H who wrote (24569)	8/16/1998 9:59:00 AM
From: jayhawk969	Read Replies (2) \| Respond to of 32384

Creative financing? I hope that does not mean more dilution. My biggest concern about LGND is that there are an awful lot of shares out there. I still have questions about the Seragen acquisition. My feeling is that LGND needs to get its expenditures a bit more under control until it begins to get some product income. Yes,they have a great pipeline, but I think their current programs are more than sufficient to keep them busy. LGND could eventually be a goldmine, but I think there is a ways to go. The first few indications will have small markets. I would like to see some more data for the larger indications,including the diabetes data. I agree the price is pretty cheap here, but I also think another 10M shares would be very damaging. I am watching closely. Andrew I could not agree with you more. From recollection(my numbers are not perfect), Ligand just issued about 1.9 MM shares for the SGRN acquisition. If Ontak is approved then Ligand must come up with $36 million in stock or cash plus 8 million in stock or cash for Marathon. This $44 million (highly likely) expense would require another 5 million+ shares at today's price. I don't see Ligand paying cash. Lilly's milestone payments are expected to cost additional equity. Two new partnerships forecasted by Henry for 2nd half 1998, will most likely follow previous patterns and require equity. The warrants are not yet recorded as shares. I would hope that the warrants are exercisable in June of 2000. However I assume that if the stock price is not above 7 1/8 they will expire worthless. Given what we know this company could very easily dilute 30% to 40% in the next 12 months. Ligand's options are very limited, however, I would explore them fully before suffering dilution of this magnitude. I invite the thread to respond constructively to help analyze the expected dilution and forecasted cash flows. We already have excellent pipeline analysis. J.D.