Ligand Pharmaceuticals Inc. (NASDAQ:LGND) partner Viking Therapeutics Inc (NASDAQ:VKTX) announced that it had closed its initial public offering (the “Viking IPO”) of 3,000,000 shares of its common stock at an initial offering price to the public of $8.00 per share. Viking granted the underwriters a 30-day option to purchase up to an additional 450,000 shares of common stock at the same price to cover over-allotments, if any. The shares are trading on the Nasdaq Capital Market under the ticker symbol “VKTX.”
In connection with the pricing of the Viking IPO, the Company purchased 1,125,000 shares of Viking common stock for an aggregate price of $9.0 million at the price offered to the public. In addition, pursuant to the Master License Agreement, dated May 21, 2014 (as amended, the “Master License Agreement”) by and between the Company, Metabasis Therapeutics, Inc., a wholly-owned subsidiary of the Company, and Viking, the Company received 3,427,859 million shares of Viking common stock on closing of the Viking IPO, subject to adjustment in the event the underwriters exercise their option to purchase additional shares to cover over-allotments, if any. As of the closing date, the Company owned an aggregate of 49.9% of Viking, based on the shares of outstanding Viking common stock at the closing of the Viking IPO.
As a result of the Viking IPO, the Company will make a cash payment to the holders of contingent value rights under the TR Beta Contingent Value Rights Agreement, dated January 27, 2010 (as amended, the “TR Beta CVR”) and the General Contingent Value Rights Agreement, dated January 27, 2010 (as amended, and together with the TR Beta CVR, the “CVR Agreements”). Pursuant to the CVR Agreements, the Company estimates that the aggregate cash payment will be approximately $3.3 million, subject to adjustment in the event the underwriters exercise their option to purchase additional shares to cover over-allotments, if any. The payment is expected to be made on or about January 1, 2016.
Ligand will provide a summary of the accounting impact of this offering by June 30, 2015. (Original Source)
Shares of Ligand closed yesterday at $79.85 . LGND has a 1-year high of $90.48 and a 1-year low of $41.99. The stock’s 50-day moving average is $79.81 and its 200-day moving average is $62.11.
On the ratings front, Ligand has been the subject of a number of recent research reports. In a report issued on April 1, Deutsche Bank analyst Gregg Gilbert reiterated a Buy rating on LGND, with a price target of $94, which implies an upside of 17.7% from current levels. Separately, on March 5, Cantor Fitzgerald’s Irina Rivkind Koffler reiterated a Hold rating on the stock and has a price target of $65.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Gregg Gilbert and Irina Rivkind Koffler have a total average return of 21.3% and 36.1% respectively. Gilbert has a success rate of 79.5% and is ranked #211 out of 3589 analysts, while Koffler has a success rate of 71.9% and is ranked #10.
Ligand Pharmaceuticals Incis a biopharmaceutical company with a business model that is based upon the concept of developing or acquiring royalty revenue generating assets and coupling them with a lean corporate cost structure.