Ligand business model improving despite 60% share selloff, says H.C. Wainwright

Shares of Ligand Pharmaceuticals (LGND) are down 60% from September 28 to yesterday while the company’s business model continues to improve, H.C. Wainwright analyst Joseph Pantginis tells investors in a research note titled “Yelling Fire in a Quality Filled Theater; Bear Case Has Been Winning But Remains Misguided.” The analyst writes, “We think it may be a waste of energy to refute all the misperceptions and false comments we have read in other firms’ freely accessible research and therefore highlight what we believe to be the main points which continue to solidify our bullish thesis on Ligand.” Growing revenue led by royalties, approximately $1B of cash on the balance sheet, and a broad portfolio of assets support Ligand’s “consistently improving” business model, Pantginis contends. With more than 178 current “shots on goal” in the form of fully funded partnered programs, the analyst sees the company’s risk as “significantly diversified from a valuation standpoint.” Further, Ligand’s partnerships provide long-term revenue growth potential even if the roughly “one in 10 drugs make it” concept is met, adds the analyst. He reiterates a Buy rating on Ligand Pharmaceuticals with a $281 price target. The stock in afternoon trading is down 30c to $109.75.

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