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Ligand Pharmaceuticals Incorporated Message Board

  • sandyeggojake sandyeggojake Feb 27, 2013 6:47 PM Flag

    The Royalty Pharma / Elan deal will draw eyes to $LGND.

    The world learned a few days back that Royalty Pharma has made a $6.6 billion offer for Elan. That is a lot of dough, but actually reasonable if you net out the cash $ELN just received from selling Tysabri for $3.25bn in cash and continuing royalties. Now this deal has been snubbed by $ELN, and likely to get pushback from the Irish, so I'm not convinced it will see a close. But it will light a fire under $ELN to put that cash to work.

    So what does all this mean for $LGND?

    Well, given years of relationships between $ELN and $LGND (Avinza and a former board member), I'd not be suprised to learn Ligand is on the short target list as it moves to become a streaming co.

    And if Royalty Pharma walks? Well, they certainly will be on the hunt for a victory, which again may lead to $LGND. Of course HealthCare Royalty Partners founder and $LGND board member Todd Davis might be tempted to make a bid of his own.

    Clearly, this is all speculation. But at a minimum, the RP/Elan deal will cause every IBs to dust off their decks on other large royalty cash flow / low MCap companies, and you can bet they are all shopping $LGND as a potential RP/Elan like deal.

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    • Sandy,
      There is a lot of consolidation in the pharma industry, and LGND looks to be a ripe plum to pick. Good cash flows and more in the pipe to expand. I am in it to win it, thanks to Long_Vrts.
      Good luck to all longs!!!


      Sentiment: Strong Buy

      • 1 Reply to asj1953
      • We are seeing a bit of overhead resistance at $20.75, so if/when we break through, she should run. But technical buy-if for Thurs & Fri, for which confirmation includes a close above $20.57. We are looking to bolt on a new trading tranche in part as we see $LGND as a lower risk way to play the pending $GTXI's SARM phIII data.

        As for longer term buyout potential you are right about the industry trends, but as I see it, few of the $LGND partners would be tempted to take out the company. GSK being the most likely, but even then it is a coin flip dependant on how they feel about the Promacta franchise and other programs. For example, GSK is one of the few large pharma to have a stated interest in sarcopenia and cachexia.

        The most natural parnters I see are PE taking out $LGND for a break up play, or they get rolled up by one of the other biopharma streaming plays.

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