Ligand's Largest Holder BVF Lightens Up Stake (LGND, NRGN, MRK)

August 27, 2009 · Filed Under M&A · Comments Off 

LIGAND PHARMACEUTICALS INC. (NASDAQ: LGND) has been one of the small cap low-priced biotech stocks for some time, and it is a fraction of what it once was.  This week the company said that it would acquire Neurogen Corporation (NASDAQ: NRGN) for $11 million plus some contingent value rights.  But what is interesting is that Ligand’s largest holder, a BVF Partners (BVF Investments and BVF Inc.), trimmed its stake by roughly one-third. The sale of 4,552,550 at $2.57 per share took place on August 24, 2009.

Ligand’s news this week was that it entered into a definitive merger agreement where Ligand will acquire Neurogen, where Neurogen holders would receive an estimated $11 million in Ligand common stock and will be granted Contingent Value Rights under four agreements. The CVR’s entitle Neurogen shareholders to cash payments for the sale or licensing of certain assets and the achievement of a specified clinical milestone.  The deal has also been approved by both boards of directors.

Ligand stockholders will gain access to a partnership with Merck (NYSE: MRK) for Vanilloid Receptor Subtype 1 (VR1) Antagonists, additional pipeline assets and drug discovery resources, and approximately $7 million in net cash.  Neurogen also has more than $180 million in net operating loss carryforwards.  Today’s filing shows that on August 24, 2009, which is roughly when the news came out about the merger, BVF Inc. sold some 4,552,550 at a price of $2.57 for a value of about $11.7 million.  If you review the entire day’s trading volume, there were only about 5.8 million shares that traded all day and you have to go to the end of June before you can find a single day where 1 million shares or more traded hands.

Current filings with data as of June 30, 2009 show that WELLINGTON MANAGEMENT COMPANY, LLP is now the largest holder of Ligand with some 15,814,671 coming to a take of 13.99%.  The FORM 4 filed with the SEC shows that BVF now holds some 10,617,400 shares of direct/indirect ownership.  We have placed a call into BVF to see if further sales are coming or if this was over any specific reasons.  BVF sold shares worth back in June worth some $2.4 million as well.

JON C. OGG
August 27, 2009

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Record Number of Biotechs Under Strategic Review (BPAX, CEGE, EPIX, IDMI, NRGN, TPTX, LJPC, NFLD)

May 13, 2009 · Filed Under Cancer, R&D, dendreon, fda · Comments Off 

It is hard to know if this is a record of the number of biotech stocks which are under strategic review, but the number is above and beyond normal. Biosante Pharmaceuticals, Inc. (NASDAQ: BPAX), Cell Genesys, Inc. (NASDAQ: CEGE), EPIX Pharmaceuticals, Inc. (NASDAQ: EPIX), IDM Pharma, Inc. (NASDAQ: IDMI), Neurogen Corporation (NASDAQ: NRGN), and TorreyPines Therapeutics, Inc. (NASDAQ: TPTX) are all under strategic reviews and many of their futures are probably questionable at best.  Even La Jolla Pharmaceutical Co. (NASDAQ: LJPC) is in this group; and Northfield Laboratories Inc. (NASDAQ: NFLD) fits loosely into this category while not being a classic biotech.

Biosante Pharmaceuticals, Inc. (NASDAQ: BPAX) has Deutsche as its advisor in its exploration of strategic alternatives.  This stock is at $2.06 and its 52-week range is $0.81 to $5.85.  This used to be a $10 stock and it has been public since 2001.  Back in December, Kingsbridge committed to provide up to $25 million of capital for a period of two years.  This one was set up to explore treatments for female sexual health, menopause, contraception, and male hypogonadism.

Cell Genesys, Inc. (NASDAQ: CEGE) retained Lazard last month to help it explore strategic alternatives now that most of its operations have been wound down.  Some were once hoping it would have the same sort of hope that Dendreon had for prostate cancer, but that is history now.  Amazingly enough, this one has been public since the early 1990’s and shares used to be massively higher than now.

EPIX Pharmaceuticals, Inc. (NASDAQ: EPIX) has JPMorgan to help it explore strategic alternatives.  This one is at $0.30 and the 52-week range is $0.21 to $2.50.  EPIX has been public since 1997 and was usually above $10.00 until late in 2005.  It never saw that again.  This is set up to treat diseases of the central nervous system and lung conditions.
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