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

To: bluejeans who wrote (25898)	9/30/1998 9:50:00 AM
From: Henry Niman	Respond to of 32384

Bob, BBRS predicts flat earnings for 1999. However, the estimate is old and uses very round numbers (income for 1998 was projected at $50 million and income for 1999 at $75 million), so I'm not sure how precise the $0.00 is for 1999. Other firms (Bear Stearns, H&Q, Legg Mason) with more exact income projections, expect a profit of $0.06 to $0.09. A more precise estimate was made in 1996 when Robertson Stephens initiated coverage and at they time they predicted a loss in 1999 and a profit of $0.10 in 2000 (with a profit of $14.55 in 2006). Recently (at Bear Stearns), LGND predicted that income in 2001 would be in the $200 - $300 million range, expanding to $400 - $500 million in 2003, with gross margins in the 40% range, which of course would translate into a triple digit price per share.

To: bluejeans who wrote (25898)	9/30/1998 10:25:00 AM
From: Henry Niman	Read Replies (3) \| Respond to of 32384

Legg Mason came out with a reiterated BUY this morning (and lowered 1999 estimates from $0.08 to $0.02): LIGAND PHARMACEUTICALS, INC. (LGND) Analyst: Stefan D. Loren, Ph.D. PRICE 52-WEEK EPS — (FY Dec) P/E RATIO DIV SHRS MKT CAP LT DEBT INV./RISK TARGET 9/29/98 PRICE RANGE 1997A 1998E 1999E 1998E 1999E YIELD OUT(M) $M TO CAP RATINGS PRICE $11 $18–$6 ($1.06) ($1.14) $0.02 NM NM Nil 41.2 $453.2 89% B/4 $20 was..........$0.08 Legg Mason Wood Walker, Inc. makes a market in this security. · Ligand announced a multifaceted strategic alliance with Ireland-based Elan Corporation. · Elan will purchase $20 million in Ligand stock at $11.65 per share, a 6% premium to yesterday's closing price. · Elan will purchase $30 million in Ligand 8%, 10 year zero coupon convertible senior notes that have a conversion price of $14 per share. · Elan agreed to purchase up to an additional $80 million of senior notes at Ligand's request. · Ligand will acquire certain co-promotional rights to Morphelan, a once a day, oral formulation of morphine. · The deal with be slightly dilutive to earnings in 1999 and 2000. · We are lowering our FY99 estimate from $0.08 per share to $0.02 per share to reflect a number of factors. · The deal amounts to a product inlicensing combined with a reasonable financing vehicle. · The stock purchase and take down should provide sufficient cash to hold the company over until profitability in late 1999. · We are maintaining our Buy rating on Ligand, with a 12–18 month target price of $20 per share.