Lemelson Capital Management, a private investment management firm, today announced that it has further increased its short position in Ligand Pharmaceuticals Inc. (NASDAQ:LGND) and appended with additional concerns its initial June 16, 2014 research report.
Today’s appended report can be found here.
“The ancillary applications for Ligand Pharmaceuticals Inc. (NASDAQ:LGND)’s Promacta® and Kyprolis® have no commercial viability, and the company’s Duavee® sales remain immaterial,” Lemelson Capital
Management’s Chief Investment Officer Emmanuel Lemelson said in releasing today’s appended Ligand Pharmaceuticals report. “There is no circumstance where speculation has a legitimate value greater than zero,” he said.
Today’s appended research report on Ligand Pharmaceuticals includes new material information that has been added to the firm’s original June 16, 2014 research report, which can be found here.
Disclosure: Lemelson Capital is currently short shares of Ligand Pharmaceuticals Inc. (NASDAQ:LGND) for its clients.
About Lemelson Capital Management:
Lemelson Capital Management, LLC is a private investment management firm focused on deep value and special situation investments. The firm’s flagship fund, The Amvona Fund, has been named repeatedly one of the world’s top performing hedge funds. For more information, see: http://www.lemelsoncapital.com
Ligand Pharmaceuticals Overview
Despite a significant downward correction in the share price of Ligand Pharmaceuticals Inc. (NASDAQ:LGND) since the June 16,2014 publication of its original research report on LGND, Lemelson Capital Management has since continued to increase its short position in the Company.
Lemelson Capital’s original June 16, 2014 report can be found here.
Promacta sales, which represented as much as 72 percent of Ligand royalty revenue as recently as Q4 2013, have slowed sharply in Q1 and are expected to continue to decline, a point recognized in recent analyst commentary. There is no evidence of a significant market for Promacta® outside of Hepatitis C indications, and suggestions that idiopathic thrombocytopenic purpura (ITP) is a commercially viable alternative application are false.
Amgen’s total revenue from Kyprolis® in Q1 2014 was just $68 million, representing royalties to LGND of just $1,020,000.
Contrary to recent analyst commentary regarding “significant revenue contribution in the near term” from sales of Duavee® and Captisol-enabled® (CE) Melphalan, Duavee® sales have been and will continue to be immaterial for the foreseeable future, while an NDA has not even been filed for CE Melphalan.
There are no indications that Captisol® sales will increase materially in the future, and it is likely to become the company’s only significant source of future revenue. Recent analyst commentary concedes that single-sourced Captisol® represents the majority of the Company’s “pipeline.”
The company’s recent and highly complex arrangement with Viking Therapeutics, a sub-tenant in one of Ligands buildings, deserves close scrutiny, since the latter of the two appears to serve only as shell for Ligand to further access pubic markets via a $58 million IPO and an arrangement (not disclosed in related press releases) to convey 50% of Viking equity, post successful offering to Ligand.
Given extraordinary and growing liabilities associated with Ligand’s key products, as well as questionable transactions associated with the Viking IPO, Lemelson Capital reaffirms downside risk for Ligand Pharmaceuticals Inc. (NASDAQ:LGND) at 100%.
See full report here.