Ligand announces hiring of UBS to explore "shareholder value" options

By E. Janene Geiss

Philadelphia, Nov. 18 - Ligand Pharmaceuticals Inc. announced Friday that it hired UBS Investment Bank to assist its board and management in pursuing strategic alternatives to improve shareholder value in the company.

Although it believes operational actions will translate into improved shareholder value, the company said management has decided "it is also now appropriate to initiate an external process to explore strategic alternatives to enhance shareholder value," according to a company news release.

No other details were released and spokesman Paul V. Maier said he would not elaborate.

For the past several months, Ligand has been engaged in a bitter back-and-forth with shareholder Third Point LLC over the investor's view that the stock price is undervalued, the lack of an annual meeting and the late filing of current and restated financial reports.

Third Point chief executive officer Daniel Loeb has lambasted Ligand management, demanded the formation of a special committee and called for a sale of the company to the highest bidder.

Third Point sued Ligand in October in the Delaware Chancery Court for not having held an annual stockholders' meeting since June 11, 2004. Third Point and Ligand reached a settlement Nov. 11 and the annual stockholders' meeting to elect directors is scheduled for Jan. 31, 2006, according to Securities and Exchange Commission filings.

Because Ligand management has, he says, refused to respond to Loeb's request for a special committee or the addition of three of his nominees to the board, Loeb has put out a proxy to elect Third Point's three nominees, according to a Nov. 11 SEC filing.

"We expect that the Third Point nominees, if elected, would provide a new voice and fresh perspective to the board of directors. Although the Third Point entities believe the company should explore strategic alternatives, including putting itself up for sale, they have not reached a definitive conclusion in regard to any particular strategic alternative and believe that such alternatives deserve immediate and very close scrutiny by the board of directors," Loeb said in the filing.

Ligand is a San Diego pharmaceutical company that develops and markets new drugs based on gene transcription technology, primarily related to intracellular receptors. It has has research and development collaborations with Abbott Laboratories, Allergan, Bristol-Myers Squibb, Eli Lilly & Co., GlaxoSmithKline plc, Organon (Akzo Nobel), Pfizer Inc., TAP Pharmaceutical Products and Wyeth and a strategic alliance with Elan Corp. plc.

The company also said it filed its Form 10-K for fiscal year 2004, containing audited results for fiscal 2004, restated audited results for fiscal years 2003 and 2002 and a restatement of financial data for 2001 and 2000, according to the news release.

The company said it has prepared preliminary revenue estimates for its third quarter of fiscal 2005 and preliminary financial results for its first and second quarters of 2005. The company said it expects to file its first, second and third quarter form 10-Qs by early December, as well as submitting an application for relisting of its common stock on Nasdaq. The stock was recently shifted from Nasdaq to the Pink Sheets due to late financial reports.

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