San Diego’s Ligand Takes Advantage of the Great Recession to Build New Drug Pipeline

Xconomy San Diego — 

Aside from the name, there isn’t much at Ligand Pharmaceuticals (NASDAQ: LGND) that resembles the San Diego biotech that went public in 1992.

During the 15 years that followed its IPO, Ligand brought five drugs to market, reported 2005 sales of more than $176 million, and once employed 650 people. The same company posted annual revenue of just $23.5 million in 2010 and now has only 26 employees.

Ligand came of age during the golden years of biotech. None other than Brook Byers of Silicon Valley’s renowned venture capital firm Kleiner Perkins Caufield & Byers founded the biotech in 1987. The first CEO, Howard Birndorf, and his successor, David Robinson, built the company on breakthrough research in nuclear orphan receptors—a class of proteins found within cells that are triggered by certain hormones. The idea was to develop drugs that targeted such receptors, triggering specific biochemical reactions that would combat cancers, hormone-related diseases, and metabolic disorders, among other things.

In all that time, however, Ligand has never reported a profit.

“They actually hit it better than most,” says Rob McKay, who joined Ligand as a senior director for business development and investor relations after a tumultuous shareholder revolt pushed Robinson to resign in 2006. “They developed drug candidates and got them approved. The problem was that the company was run by scientists—they over-promised and under-delivered year after year after year.”

Today, Ligand is pursuing a fundamentally different … Next Page »

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5 responses to “San Diego’s Ligand Takes Advantage of the Great Recession to Build New Drug Pipeline”

  1. Anon says:

    Sad. Higgins quotes slam Robinson’s team more than even the worst of Loeb’s SEC letters.

    He’s conveniently forgetting the double body blows of the two PhIII failures on Targretin, which was to be Ligand’s blockbuster.

    But his lame attempts to re-write history are expected given his tenuous situation.

    When he took the reigns in Jan 2007, the stock was about $78, post reverse split adjusted.

    Today, it’s about $10.

    That is a WRETCHED 87% destruction of shareholder value completely under his watch.

    And with the broader markets back to even, he can’t even blame the economy anymore.

    Much of this was driven by his string of bad deals. One so bad that on the day announced, Ligand actually lost more in market cap than the total market cap of the company they acquired! Now that’s hard to do.

    Still, Ligand has a great set of under valued assets – the most valuable being those built by the prior team and their partners, which are now maturing.

    In 2007, two month after tapping Higgins to sell the company, Loeb sold out of Ligand.

    The clock is now clearly running down on his boy as well.

  2. mj poppe says:

    Only $10 for this stock? Did you say it trades on NASDAQ?

  3. SandyEggoJake says:

    >That is a WRETCHED 87% destruction of shareholder value completely under his watch.

    To be fair, some of the crash was due to $2.50 dividend that Third Point forced in the Spring of 2007. So one can’t blame ALL of the fall from $78 (adjusted) to $10 on Mr. Higgins.