...the company faces it biggest existential threat in what is likely to be a momentous impairment of its largest royalty generating asset, Promacta,"
Fr. Emmanuel Lemelson, June 16, 2014 Research Report
Now on the left side of this chart, with Promacta... the inevitable patent termination, product comes off patent sales decline and they will go to zero"
John Higgins, Ligand Pharma CEO, March 5, 2019 Conference Call
Shares of Ligand Pharmaceuticals (NASDAQ: LGND) continued its downward spiral, plunging almost 13 percent in early trading today, March 6, 2019, falling as much as 63 percent since September 30, 2018 and hitting a 2-year low. Yesterday after market close the company reported it was disposing of its single-largest asset, the 25-year-old Promacta, stating in part:
We do not control the IP and some of the initial patents come off as early as 2021," (referring to the event as a 'patent cliff').
The company further stated:
When it [Promacta] does royalties are expected to quickly diminish significantly... when off patent, the following year the company estimated it could lose over $125 million of revenue,"
In June 2014, Lemelson Capital Management issued its first report pointing out competitive threats to Promacta, its limited future potential as well as the risks associated with Ligand's revenue streams. Since that time, Fr. Emmanuel has publish 4 additional research reports, issued 16 articles/press releases, posted 66 tweets, given 11 interviews, and written two letters to Congress, making nearly 1,000 distinct allegations, including accounting and securities fraud perpetrated by Ligand.
In January 2019 multiple law firms announced investigations into Ligand for possible violations of federal securities laws.
On July 17, 2018, Fr. Emmanuel released a letter he provided members of The U.S. House Committee on Oversight and Government Reform, The U.S. Senate Special Committee on Aging and the SEC Office of the Inspector General, further outlining extensive alleged abuses of accounting, pharmaceutical reimbursement and classification guidelines and regulations by Ligand Pharmaceuticals. In the letter, Lemelson urged the Committees in both the House and the Senate to commence an investigation into these alleged abuses, as well as the Securities and Exchange Commission’s (SEC) failure to stop them.
On July 27, 2018 Ligand was sued for $3.8 billion by investors in eight bond funds, including Citadel,1 this followed multiple class-action lawsuits, alleging securities fraud, filed against Ligand beginning in 2016.2 According to the complaint, Ligand unfairly modified the agreement and never filed the required amendment with the U.S. Securities and Exchange Commission (SEC) to deny investors more than $3.8 billion in payouts. If the investors prevail the company could be forced into bankruptcy.
On August 14, 2014, Lemelson Capital Management, LLC published a report outlining the risk of the bond offering, questioned the representations made by the company, and pointing out that the offering may eventually lead to solvency risks.
- Lemelson's full July 13, 2018 letter to Congress is available online here
- His December 2016 letter to the U.S. Senate Special Committee on Aging, regarding the company, is available online here
1 Read more online here
Letters to Congress Regarding Ligand:
- December 19, 2016 - Lantern Foundation Founder Urges Senate Committee to Commence Investigation into Ligand Pharmaceuticals
- July 13, 2018 - Rev. Fr. Emmanuel Lemelson Calls on Congress, Office of Inspector General to Investigate SEC Failures
The Ligand Research Reports:
- June 14, 2014 - Ligand Pharmaceuticals - Severe competitive threat to key royalty program and “going concern” risk drive 100 percent downside
- July 3, 2014 - Ligand Pharmaceuticals (NASDAQ: LGND): Appendix
- August 4, 2014 - Update: Lemelson Capital Further Increases Short Stake in Ligand Pharmaceuticals (NASDAQ: LGND) as LGND EPS Plunges 76 percent in Q2 2014
- August 14, 2014 - Lemelson Capital Says Ligand Pharmaceuticals’ (NASDAQ: LGND) $225M Debt Issuance Solidifies Company’s Insolvency, Substantially Raises Specter of Bankruptcy
- August 22, 2014 - Ligand Pharmaceuticals (NASDAQ: LGND): Institutional holders wasting no time dumping stock in response to mounting insolvency and bankruptcy risks
The Ligand Interviews:
- Rev. Emmanuel Lemelson of Lemelson Capital Management - #PreMarket Prep for June 19, 2014
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for August 13, 2014
- Rev Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for September 16, 2014
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for October 16, 2014
- Rev. Emmanuel Lemelson, Lemelson Capital Management - #PreMarket Prep for November 18, 2014
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for February 20, 2015
- Rev. Emmanuel Lemelson, Lemelson Capital Management CIO - #PreMarket Prep for March 24, 2015
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for April 27, 2015
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for June 5, 2015
- Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management - #PreMarket Prep for August 12, 2015
- Listen to Fr. Emmanuel live discussing The Amvona Fund, LP and his recent letter to the US Senate
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