AndrewGreenBull (97.71)

LGND: The One You Can Hold for Life Long

September 09, 2009 – Comments (0)

  At the first glance of LGND, I was so shocked. It was not only because of the stunning collaborations and the pipeline, but also the unbelievable low stock price which was far undervalued.  

You gotta Check these names out who have collaborations with LGND: 

GlaxoSmithKline                                      Wyeth

Pfizer                                                       Bristol-Myers Squibb 

Schering-Plough                                       Celgene

Cephalon                                                 King Pharmaceuticals 

LGND's research:

 *DARA(PS433540) is leading independent program of LGND. In February 2009, Ligand announced positive preliminary results from the Phase IIb study for PS433540. It was found to be safe and well tolerated and demonstrated statistically significant greater reductions in blood pressure than placebo. The high dose of PS433540 produced a statistically significantly greater reduction in blood pressure than the active comparator, irbesartan which was tested at its highest approved dose

 .*Tissue-selective SARMs(LGD-4033) is a novel class of non-steroidal, orally active molecules that selectively modulate the activity of the androgen receptor in different tissues, providing a wide range of opportunities for the treatment of many diseases and disorders in both men and women. Tissue-selective androgen receptor agonists may provide utility in the treatment of patients with frailty, cachexia, osteoporosis, sexual dysfunction and hypogonadism. Ligand initiated a Phase I trial for LGD-4033 in June 2009.

LGND’s partner programs:

*PROMACTA for the treatment of thrombocytopenia in patients with chronic immune (idiopathic) thrombocytopenic purpura (ITP) was approved by FDA in 12/2008; it is the achievement of dozen years’ cooperative research with GSK, and it also is the first oral TPO receptor agonist therapy for the treatment of adult patients with chronic ITP.

Further more, GSK initiated two Phase III trials in patients with hepatitis C in the fourth quarter of 2007 and a Phase III trial in patients with chronic liver disease (CLD) in early 2008. As I see from the clinical trial calendar, they are expected to be finished in the middle of next year.

* LGD－4665 for Immune Thrombocytopenic Purpura had finished phase 2 clinical trial in May this year, it is also in collaboration with GSK. I am expecting that GSK will initiate the phase 3 clinical trial soon.

* VIVIANTTM (Bazedoxifene) and APRELATM (bazedoxifene in combination with PREMARIN) collaborated with Wyeth are under FDA review.

*FABLYN® (lasofoxifene) collaborated with Pfizer is also under FDA review. The FDA Panel had a positive vote (9-3) on September 8, 2008 that benefits could outweigh its risks, including blood clots and vaginal bleeding for the osteoporosis treatment indication for FABLYN®. It should be time for FDA to make the decision.

* AVINZA was sold to King Pharmaceuticals. in 2007. If the sale of AVINZA exceed 200 Million dollars, King will pay more than 5% royalty to LGND. The company said: “as a result of the sale, we received the right to future royalties on the net sales of AVINZA through 2017. Through October 2008, we received a 15% royalty on AVINZA net sales.” That means the total sale of AVINZA was greater than $250.0 million and there was a more than 40 million dollars royalty payment from King Pharmaceuticals.

*LGND also has collaborations with Schering-Plough、Bristol-Myers Squibb、Celgene and Cephalon, whenever milestone is achieved, LGND with receive royalty payment.

LGND is so fabulous, but how come the stock price is so cheap? The financial crisis is of cause the first culprit, but it was also attributed to the short-sighted deal in 2006 when LGND sold its AVINZA and 4 other cancer drugs. We have seen that it more or less hurted the confidence of investors，lucky is that LGND keeps coming up with gorgeous drugs and programs, I have my faith on it:

1, Two phase 3 clinical trials of PROMACTA in collaboration with GSK + two long-run NDA submissions collaborated with Wyeth + One very promising NDA submission collaborated with Pfizer. No matter which one come out first, I am expecting that LGND will double its current stock price.

2，Once LGND starts its DARA phase 3 clinical trial(I can feel that it is on the way), investors will have new expectation on the company. When the clinical trial is successfully completed, it will be a historical time for LGND. I have 100% confidence that the stock price of LGND will at least go back to the 2007 level. 

3，On August 4, Merriman Curhan Ford downgraded LGND from buy to neutral, but the reason was so ridiculous, so I would rather put it here as a good news: “the company has great cash management and longer-term opportunities, but unfortunately catalysts are lacking.” “We currently expect royalty growth from two approved products, Avinza and Promacta, and see near term potential from the potential approvals of Fablyn and Viviant. However, we are currently on the sidelines as we do not see a significant stock moving catalyst in the relative near term.” 

Thanks for your comment Merriman Curhan Ford, you make up my mind to get in LGND.

4，Tomorrow(09/09/09)，LGND will attend Thomas Weisel Partners Healthcare Conference, this is a good opportunity to present its gorgeous drugs and programs. There will be tons of top institutional investors from all over the world, if LGND could release some good news of its ongoing trials and regain the attention of institutional investors, we will see a huge gain of its stock price. 

Anyway, the current stock price of LGND is oversold. Any price below $3 is very attractive even without any short-term catalysts (As I mentioned above, there are tons of them)

Current Price $2.37　　　　My 3 Month Target：$5　　　My One Year Target：$10 

References:

 10－Q:

http://files.shareholder.com/downloads/LGND/719469881x0xS1193125-09-162736/886163/filing.pdf　 

LGND Collaborations and Pipeline:

http://www.ligand.com/collaborations.php 

Merriman Curhan Ford’s Article：

http://www.streetinsider.com/Downgrades/Merriman+Curhan+Ford+Downgrades+Ligand+Pharmaceuticals+(LGND)+to+Neutral/4841396.html　 

Thomas Weisel Partners Healthcare Conference 2009：http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20090826005212&newsLang=en　 

* Statement: The author of this article is not a licensed analyst and
the purpose of this article is for information sharing and discussion
only, not recommendation for any stock buying, selling and shorting
activities. Please do your own research before making any trading
decision.