Citron Says Ligand Has 80% Downside in Explosive Note

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Citron Research, the dissident short merchant headed by Andrew Left, has uncovered some frightful proof against Ligand Pharmaceuticals Inc. (LGND).

In a 23-page report, Citron denounced the San Diego-based biopharmaceutical organization of deceiving financial specialists, including that its future income estimations are an “unrealistic fantasy.” The short merchant at that point slapped a $35 value focus on the stock, suggesting an 80% drawback from the report’s distribution date.

The Allegations Subsequent to neglecting to effectively build up its own medications, Ligand exchanged its plan of action to concentrate on gathering sovereignties and achievement instalments from mixes

and protected innovation that it licenses to other medication engineers.

Ligand tries to demonstrate its validity by telling financial specialists that the greater part of its future incomes originates from Sage Therapeutics Inc. (SAGE), Retrophin Inc. (RTRX), Sermonix Pharmaceuticals, Bristol-Myers Squibb Co. (BMY), Eli Lilly and Co. (LLY) and Roivant Sciences, also called “The Big 6.” However, Citron guaranteed that those organizations represent only 7% of its potential achievement installments and that Ligand’s pipeline is rather subject to a progression of sketchy looking firms. Viking Therapeutics Inc. (VKTX) was recognized as Ligand’s fundamental client, representing over half, or $1.5 billion, of potential achievements installments. Citron addressed if this pipeline is practical, taking note that Ligand would have purchased out Viking in the event that it was. The short vendor additionally cautioned that Viking insiders have been auctioning off stock over the previous year, demonstrating that they have little trust in the organization’s possibilities.

From that point, the examination turns out to be much even more accursing. Citron uncovered that a further 20% of Ligand’s future incomes are said to originate from drugs created by secretly held Sermonix Pharmaceuticals, Chiva Pharmaceuticals, metabolic BioPharma, and Seelos Therapeutics.

Citron researched these organizations and found that they scarcely exist. The short dealer found that Sermonix’s street number can be followed to a post box in a UPS store in Columbus, Ohio, Chiva shares its location with a selling firm in Los Altos Hills, California, Seelos’ New York address has not been involved for longer than a year and iMetabolic’s recorded location is home to a richness community.

Source: investopedia.com

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