Replies to post #127259 on Biotech Values

[mcbio]

I think you have to look at it from the buyers perspective. I would prefer cash upfront too but I doubt they can agree on that upfront. I'd imagine a CVR along the lines of Genzyme's. Say $5 on approval, another $5 if first generic approved and maybe $5 on for each of first three anniveraseries remain sole generic.

Yeah, it's definitely in the acquiring company's best interests to issue a CVR rather than having to pay cash up-front. I would hope any potential CVR for mC would also include a component tied to sales levels of mC.

Ligand management (Higgins) may have made some mistakes in the past but since I've been a shareholder I've been pretty impressed at how they cut costs and were creative in their deal making both in limiting dilution, paying peanuts yet giving the acquired entity a bone or two.

I would say maybe half a bone, at best. ; ) As a former PCOP shareholder, I thought the offer was terrible. I also found it funny that the CVR tied to the partnering of the DARA drug would not pay off if the drug was partnered to BMY (I believe BMY was the party). I just thought that was a funny clause and assumed that BMY was the most likely partner for the drug, which would allow LGND to not have to make payment on the CVR.

All told though, after seeing so many cheap deals done, I did take more of an interest in LGND due to the "if you can't beat 'em, join 'em" school of thought. I keep an eye on them but haven't taken a position.