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

To: B.D. who wrote (27154)	1/4/1999 7:35:00 PM
From: Machaon	Read Replies (1) \| Respond to of 32384

It seems to me that the institutional investors were able to exercise the warrants for about $5.50 ($12.5Mil / 2.27 million shares) = $5.50; instead of shelling out $7 1/8. On one hand, Ligand wanted to raise some more cash. On the other hand, the investors were willing to shell out hard cash to convert their warrants to LGND stock, at a 30% discount. Perhaps LGND wanted to make the bottom line look a little better since it does not seem that they received any milestones in the 4th quarter.

To: B.D. who wrote (27154)	1/4/1999 7:46:00 PM
From: Exacctnt	Read Replies (2) \| Respond to of 32384

B.D. <<What would be the benefit of exercising at this point, versus later when (hopefully) the warrants are worth double-digits?>> It is interesting that according to the press release, Ligand received $12.5M in the exercise of 2.27 million shares. That provides an exercise price at approx. $5.51 per share. That compares to the warrants stated exercise price of $7.12. It appears that a deal was made to allow these "institutions" to exercise at a lower price, which in turn, provides funds to Ligand. From the release, "Ligand has agreed to pay a cost of money incentive to the investors for the early exercise of these warrants." The cost of money incentive appears to be the difference between $7.12 and $5.51 or around $1.61 per share. Seems to me to be very generous deal for those institutions. The question to be answered, is Ligand desperate for cash? Kind of hard to believe after the Elan deal. Regards, Bob