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

To: Henry Niman who wrote (24590)	8/17/1998 11:05:00 PM
From: Spekulatius	Read Replies (2) \| Respond to of 32384

LGND dilution - Henri was indeed right and the annual dilution rate I calculated was too high. This is not only true for LGND but as well for the other Biotech stocks I follow.The average dilution rate from 1992 to 1998 is 17.4%. The big jump for the # of shares in 1996 was due to the LGND's acquisitions. The dilution rate for LGND has been essentially zero till 1995 but was quite high since then. This is due to the high burn rate... The SRGN acquisition also will lead to a high near term dilution rate. The deals with the big pharms are somewhat dilutive too but since the deals command a premium for the shares issued,these deals are actually favorable for LGND. From the standpoint of dilution,LGND is not in a good position,since the pipeline must be feeded with money and LGND has already taken on about 50Mill $ of debt. LGND has the cash to keep the research funding afloat for about one year,without further shares issuances.I consider this to be on the rather low side for a healthy biotech venture. For the near term future this could mean that LGND has to issue stocks regardless of the share price if things don't go well...