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JJSchaible

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  • Ligand Pharmaceuticals - The Bull Case [View article]
    SPA,

    While I'll give you that $LGND's stock compensation is on the rich side, understand that such expense is proportional to the number of shares of the granted, as well as the gains in the stock. As $LGND has had a number of years now of exceptional growth, the amount of this expense has likewise grown.
    Aug 5 11:48 AM | Likes Like |Link to Comment
  • Update: Lemelson Capital Further Increases Short Stake In Ligand Pharmaceuticals As EPS Plunges 76% In Q2 2014 [View article]
    CaptisolFollower,

    Transcripts released on SA are notorious for errors, likely given the software used for production. Please not they are not produced by the reporting company or their agents. In a day or so, alternative versions will be released by other sites that have more vigorous QA/QC.
    Aug 5 08:22 AM | Likes Like |Link to Comment
  • Update: Lemelson Capital Further Increases Short Stake In Ligand Pharmaceuticals As EPS Plunges 76% In Q2 2014 [View article]
    OK, this is beyond "silly" now. You've moved to shameless.

    "$LGND reports, non-GAAP net income from continuing operations for the second quarter of 2014 was $5.2 million, or $0.24 per diluted share, compared with non-GAAP net income from continuing operations attributable to common shareholders for the second quarter of 2013 of $2.5 million, or $0.12 per diluted share."

    Yet you think this is a 76% decline? You're comparing apples and oranges... look at how the GAAP impacted in '13 quarterly revs given some of the last large income statement realization from long prior consummated deals (2007 sales of marketed products).

    Your claim of the company being "essentially insolvent" is insane, given today confirmed the company is now entirely debt free. Insolvent mean you can't pay your current debt...so it is IMPOSSIBLE to be insolvent if you HAVE NO DEBT.

    Your claim that Promacta is "going away" but the GSK 2Q earnings reported sales GREW 17% from Q2 over Q1 in the US. HCV has never been the largest portion of Promacta sales (which has been ITP) and the major driver of its future sales is Oncology related thrombocytopenia. If anything, the launch of oral Solvaldi seems to be helping oral Promacta, which is taking share from injectable Nplate in HCV, given the era of all oral treatment for HCV 2&3.

    By the way, R&D collaboration stopped being a material part of Ligand's strategy a decade ago. I should know. I negotiated the last true R&D collab at Ligand (SARM with TAP) in about 2001 (that collab phase of that deal wrapped in ~2006). Since then, $LGND deals have been predominately sublicense agreements and program out licensing. Not R&D collabs which required huge headcount to support and for which $LGND shared profits from such with third parties.

    Now you have raised some valid issues. Some of the past deals have raised eyebrows. And historic dilution driven to acquire new revenue streams has been high. But over all, you clearly are just talking your book, and in doing so show you don't even have a passing understanding of the $LGND business model or the pharma industry in general.
    Aug 4 03:55 PM | 4 Likes Like |Link to Comment
  • Amgen's Focus On Kyprolis Data Shows Need To Aspire [View article]
    Interim data out today showed ASPIRE has robust PFS:

    Kyprolis ® (carfilzomib) for Injection in combination with Revlimid ® (lenalidomide) and low-dose dexamethasone (KRd) lived significantly longer without their disease worsening (median 26.3 months) compared to patients treated with Revlimid and low-dose dexamethasone (Rd) (median 17.6 months) (HR=0.690, 95 percent CI, 0.570, 0.834, p<0.0001).

    Just as important, safety reported in line with label. Not only a huge win for $AMGN, but also for $LGND (given royalty rights), which has been a fav short by those who expected negative results in ASPIRE.
    Aug 4 12:10 PM | Likes Like |Link to Comment
  • Ligand Pharmaceuticals - The Bull Case [View article]
    Small Pharma Analyst,

    Amgen's report of strong 2Q growth of Kyprolis provides further support to the bull case. With the strong 2Q Promacta results, it should be a nice 3Q14 for $LGND.

    Also in Amgen's report, it was interesting to see the clear divergence of injected Nplate (0% growth from Q2/Q1 in the US) vs oral Promacta (17% growth from Q2/Q1 in the US). As Sovaldi ushers in an era of "all oral Rx" for HCV, Promacta has an improved competitive profile in those HCV pts who do still get treatment for thrombocytopenia. But I suspect much of the growth in Promacta is in Oncology Related T.
    Aug 1 01:57 PM | Likes Like |Link to Comment
  • Ligand Pharmaceuticals: Appendix [View article]
    To confirm what @Birdsnest reported via IMS data, this week GSK announced their 2Q14 sales of Promacta, the #1 source of near term royalty revenue for $LGND.

    Net Sales of Promacta in the quarter topped analyst consensus, with sales growth up 31% over prior year quarter, and suprisingly up in the US by 17% Q2/Q1 (were many feared a loss) and up 50% in ROW.
    So Lemelson, care to share how exactly you see sales of Promacta "going away"?
    Jul 25 01:03 PM | 1 Like Like |Link to Comment
  • Ligand Pharmaceuticals - The Bull Case [View article]
    @pimmoban,

    The 10% WACC used by Roth is only used on performing royalty streams portion of the $LGND business. And note that other analysts already use much higher WACC (Cantor Fitz uses 13%, but consistently has way underestimated Promacta sales), Summer Street (15% WACC, but sill has a $91 PT). But I stand with those that believe that while 10 to 15% WACC might be appropriate for a high risk R&D focused emerging biotech, $LGND has not been an R&D focused company for years... it is a royalty streaming play, so has a much lower risk profile and much higher operating margins.

    Also, all the analysts honestly covering $LGND appropriately use additional industry standard risk adjustments for all projections based on programs still in development with partners...and no value for any unpartnered assets. And no one yet has any material value in their price targets for Merck's BACE1 for AD now in Phase III. If $LGND was only the Merck BACE1 partnership at any other company using standard probability of technical success, it would yielded an EASY raNPV of $400 to $700 mil alone.

    And while on the NPV topic, while I agree with you interests rates may not always be this low, but in the early years - key to any NPV analysis - no one in their right mind is suggesting rates will spike to anything close to 10%. So our read is that ALL NPVs calcs that use 10% over the next 5 yrs are massively underestimating fair market value.

    By the way, I also agree with biotech_maven that your static view of $LGND is rather naive. You make no allowance for $LGND to either add more NOLs via acquisitions of new royalty bearing streams, and/or advancing a tax inversion (though my bet is that it is with a UK firm to gain advantage of that country's patent box provision).

    Finally, you believe a mere 20 is the correct multiple on LGND? Seriously? That is the same multiple as that of the current S&P 500 PE Ratio is 19.71. However, given $LGND's fresh royalty streams coming on board, plus its total debt payoff and now start of the buyback, $LGND EPS is growing MUCH faster than the ave S&P 500. Heck, large cap pharma as a sector trades at 26.4 even as it only has EPS growth rate of 0.9%.
    Jul 25 12:30 PM | 3 Likes Like |Link to Comment
  • Ligand Pharmaceuticals - The Bull Case [View article]
    Having spent years at Ligand and managing several of these partnerships, LGND would disclose more if they could, but such information is nearly always covered by terms of confidentiality agreements with these partners, and many of LGND's pharma partners simply do not wish to have such royalty and milestone rate obligation information made public.

    Think about it... such info of expenses is key competitive info for drug manufactures. And also as soon as high rates of deal are disclosed, then such terms will be used as comps in negotiations with that company in other future deals.

    So such information becomes public mostly when it becomes a matter of public record or when it becomes material to one of the parties current financial reports. As such, many of the disclosed rates are those for products in late development or already marketed.
    Jul 8 12:53 PM | 2 Likes Like |Link to Comment
  • Quantum Fuel Systems: Inflection Point Has Been Reached, At Least 50% Upside Ahead [View article]
    Nice review.

    For the warrants, they shouldn’t be much of an issue till the $15.40 range. So far feverish short covering has overpowered all concerns of dilution.

    And yes LNG is losing favor to CNG, which as you mention plays right to $QTWW strengths. While LNG has higher energy density, it also suffers from wastage & ghg emissions from cryogenic leaking. But the real killer for LNG as an onboard surface fuel will be ANG, the next gen technology that allows more CNG per volume at lower pressures in form fitting tanks. $QTWW is working w/ BASF using "MOF" on this next step in the revolution beyond pressurized cylinders.

    As for competitors, major players such as 3M (which you mention) and Luxfer (which you didn’t) traditional buy out smaller competition to secure IP and key customer relations. It shouldn’t be a surprise to anyone to see $QTWW get purchased once it has divested the wind biz.
    Nov 26 03:11 PM | 3 Likes Like |Link to Comment
  • BofA note spooks Amgen, Ligand investors [View news story]
    Of course Celgene (who has a pair of ther own dogs in the MM hunt) will suggest a competitor product should be used with caution. What I find amazing it that this one note resulted in a 12% swoon in the price of $LGND stock. Sure, they get Kyprolis royalties and sell them captisol, but the royalties are rather small as a % of Kyprolis sales and they still sell captisol to a wide array of customers.

    Cowen, Roth and now Summer Street are all out defending, which is why $LGND has regained 100% of what they lost.
    Nov 22 10:09 AM | Likes Like |Link to Comment
  • Cummins' New 12-Liter Natural Gas Engine Is A Game Changer For Clean Energy [View article]
    Nice article, though expecting a 25% pop in $CMI based off this engine alone is rather aspirational.

    If you want a huge pop off this news and the trend in general, consider that much of the incremental dollars in the NGV market is actually in the fuel tank and injectors. With the engines, $CMI is selling a new NG engine, but mostly at the expense of not selling a desiel engine. And now some of the profit flows to $WPRT from these new engines. So its not pure gray if you know what I mean. And then there is a booming biz in desl to CNG/LNG conversions.

    The most expensive part of these conversions or incremental parts on a NVG OEM is the tank. And there are many tank options, but as short haul and industrials go CNG (rather than LNG to avoid cyrogenic loss) many are selecting the type IV tanks (ligher and can carry more fuel).

    The name I've been invested in here is the turn around story of a small SoCal company called Quantum Fuel Systems. ($QTWW) They had a near death experience last year as they were also the EV engine producer of the Fisker Karma. When A123 went B/K, Fisker couldn't get batteries and as it was already on the ropes, it went B/K too. Nearly killed $QTWW who also had all sorts of ill advised investments such as in wind farms. But all that and the old management team is gone, and now it is all about back to their roots and Type 4 CNG tanks.

    The stock has started to come back strong of late, except for a quick pullback after some fundraising. But the company recently was awarded a teir 1 supplier agreement with GM for type iv tanks for the new Impala bifuel (think taxi and fleets). And they are already doing tank work for $CMI and others truck OEM producers, as well as retrofitters like http://www.zheo.com.
    Nov 6 04:23 PM | Likes Like |Link to Comment
  • Why Zohydro's Market Opportunity Will Be Very Limited [View article]
    I've read both your articles. Respectfully, you have some massive logical gaps in your flawed thesis. If your thesis was correct, your short would be profitable. But you're not. Be stubborn if you wish, but when the facts change, you should act. And if I was you, I would do everything I could to cover here and now... especially as there are many alternative companies to be short.

    Yes, I was surprised by the FDA move to approve Zohydro over its ADCOM's objection. But my real surprise was the '12 ADCOM vote against it. Now that it is approved, I see it having massive upside potential. And I say this based on years focused on drug development in the extended release opioid area.

    Several years ago, I headed pain CorpDev for Ligand, as we developed and then marketed Avinza (extended release morphine). Our projections on Avinza at first were quite modest as there were other ERMS on the market already, so we were looking at other concepts that might have larger potential. We conducted market research to KOLs in the field at a pair of major pain conferences on several new opioid product concepts. And we found that a higher dose pure hydrocodone extended release w/o APAP was by far the most sought after 505b2 concept we tested. Hydrocodone has a perception of being a weaker opioid, but that is not really the case. At higher doses, it is as effective as others, and even has some molecular characteristics that make it useful for opioid switching. But the issue preventing its usage in severe pain at higher doses has been the APAP found all US marketed hydrocodone products like Vicodin. The risk of high dose APAP to the liver made it a nonstarter. Take out the APAP, and it becomes a useful tool at higher doses for severe pain. And given the FDA is on a mission to position all opioids for severe pain, this approval is very much in keeping with their mission. And this is just conjecture, but this approval might even signal the ultimate removal of Vicodin from the US market. Vicodin has decent efficacy in moderate pain, but the FDA has withdrawn moderate indication from opioids. And at approved doses Vicodin is just not very useful in severe pain.

    By the way, the pain market brand selection is highly promotion sensitive, so having seasoned pain company like Mallinckrodt as a copromo partner will help open doors fast. Still the start of the launch will be slow given REMS, DEA and state regs, but once thorough all that red tape, I would not be surprised to see sales of Zohydro quickly reach $200 Mil/yr and peak well north of $500 Mil/yr if backed by the right commercialization plan.

    While I see a financing event coming, more than likely it will not have nearly as much immediate dilution as you bears fear. And like many small pain companies before it, expect it to be rolled up into a midsize player looking for an accretive bolt-on M&A.

    For full disclosure, I added a trading allotment today sub $3 on top of a core position added sub $2. And I plan to add a second trading allotment once their financing plan is announced.
    Oct 29 01:42 PM | 3 Likes Like |Link to Comment
  • New Study: EPA Reduces Cardiovascular Events - Enough For Amarin Approval? [View article]
    To Gary Head.

    Actually, I disagree. While an ADCOM member gave voice to MO PBO "concerns", the FDA is on the record at the meeting downplaying this issue.

    As I see it, the FDA is looking at ANCHOR on the background of JELIS and other negative studies, and so has two concerns. And only one actually has anything to do with Amarin's data.

    First, the FDA is unsure if VASCEPA is really that clinically different from EPA used in JELIS, Lovaza or even others Omega 3, as they seem entranced by a posiblity that ANCHOR might be merely a statistical outlier.

    But as I see it, their other concern is really where the FDA is hung up. This is a concern that there might be no medical need here, combined with that so far there is no validation that TG <500 is a qualified surrogate endpoint for MACE. Note the FDA choose to make no mention of recent evidence the provides support that TG>200<500 need be treated. No mention of this JoA&T study. And no mention of the recent AACE treatment guidelines.

    In fact, late in the AdCom, the FDA rep explained that they do not see Vascepa qualifing for accelerated approval (but without using that term of art). Given there is currently no approved treatment for TG <500, the indication could meets the definition of "unmet". However, in the absence of any CVOTs linking an intervention to TG <500 and a meaningful delta in MACE, the FDA is as yet unconvinced on medical need. And yes, it is a circular argument. If the FDA was to agree that Tx TG<500 was a medical need, they they would have little choice but to agree it is also an unmet medical need, and thus the Vascepa sNDA would qualify for accelerated approval - thus opening the door for this sNDA approval even over it's fist concern, given such would be linked to a post approval requirement.

    Oct 21 01:29 PM | 3 Likes Like |Link to Comment
  • The 3 Signs Of Apocalypse Amarin Longs Missed [View article]
    You see, Black Gold. we disagree.

    Read the new AACE dislipidemia guidelines... their treatment recomendation is that TG be kept below 150 NOW. So the AACE cares.... It's just that the FDA is on the fence still. And without any approval in this indication, it is much more difficult to make doctors and potential patients aware of the added MACE risks.

    As for "no one is going to die from waiting for label expansion", you are dead wrong here too.

    Consider the following. If one takes it as a GIVEN that

    a) AACEE is right, and that TG >200 causes an increased risk of MACE, and

    b) some 30 to 40% of Americans fall into the group of having TG>200<500, and

    c) without the label, Amarin will not legally promote Rx of Vascepa for this group, and

    d) without the label, payors will be less likely to reimburse and may decline Rx for Vascepa in the absence of TG<500, and

    e) with the REDUCE-IT in track for data in 2017, even if good data, is not likely to yeild an expanded approval till 2018.

    Therefore, it is a virtual certainty that some amount of incremental dealths will occur in Americans from an indirect result of FDA inaction here. The only question is how many.

    Given the scale of the issue, lack of awareness, and payor pushback, I would place additional MACE related dealths in the hundreds to thousands over the next 5 yrs as the result of not having an FDA approved medication to treat this population.
    Oct 18 10:02 AM | 1 Like Like |Link to Comment
  • The 3 Signs Of Apocalypse Amarin Longs Missed [View article]
    What do you mean by the "ADCOM panel on Wednesday seemed to focus - yet again - on the safety and efficacy of Vascepa...".

    Yesterday's AdCom was the first and only on Vascepa. The MARINE indication was approved without one, so that comment makes no sense.

    While late to the $AMRN party, I recently built a bullish position going into the AdCom and PDUFA based on the new AACE guidelines finding an increase in triglyceride (TG) levels 200 mg/dL or greater may indicate a substantial increase in CAD risk, and advocating TG levels be held to less than 150 mg/dL in both men and women.

    Seems the FDA could care less about the AACE’s findings for they were not even mentioned in their briefing documents. I took that as a red flag, but failed to act on it. Clearly the FDA is not yet a believer that TG<500 is a qualified surrogate endpoint for major adverse cardiac events (MACE). Years from now, when and if we have CVOT data in hand, it will be interesting to calculate what I and the AACE expects may prove to ultimately be thousands of the additional MACE deaths that resulted indirectly from yesterday’s decision. But it may be many years, for there can be no certainly now that Amarin will have the stomach to make the additional investments in REDUCE-IT. It might best optimize its raNPV by halting that trial and just focus on milking Vascepa based on data in hand, given such is vastly superior to $1 bil Lovaza, while diverting R&D spend to new projects. Or at a minimum, stop recruiting for REDUCE-IT and allow it to read out earlier, or modify REDUCE-IT somehow to permit swap to an EVOO PBO under a new SPA.

    As the company said yesterday, everything is on the table. And while it will be sad for society if they halt REDUCE-IT, it might just be the best thing they can do to protect the remaining shareholder value.
    Oct 17 11:42 AM | 4 Likes Like |Link to Comment
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