Ligand Pharma Pounded

Ligand Pharmaceuticals (LGND) shares dropped almost 17% after the company announced a first-quarter loss that was better than a year ago, but missed Wall Street expectations by a wide margin.

Ligand announced a first-quarter net loss of $10.3 million, or 18 cents a share, an improvement from the loss of $12.6 million, or 29 cents a share. While Ligand continues to staunch its losses, the company missed the Wall Street estimate of a 6-cent loss by a wide margin.

The results disappointed investors, who moved to sell shares early Wednesday morning, dropping Ligand shares $3.66, or 16.9%, to $18 million on 2.9 million shares traded, well above its average daily trading volume of 1.8 million shares.

Total revenue came in at $36.6 million, up nearly 60% from the year-ago $23.1 million, driven by a big jump in sales of Avinza, a therapy for chronic pain. Analysts, who had been lowering expectations in the month before Ligand's earnings release, expected the company's revenue to more than double from year-ago levels, coming in at $47.3 million.

Going forward, the company issued guidance that was at the low end of current expectations. For fiscal 2004, the company said that earnings per share would range between 12 cents and 19 cents a share, against current Wall Street expectations of a 16-cent EPS profit. Ligand said 2004 revenue would come in between $240 million and $265 million. Analysts expect about $259 million.

"Given the timing of potential product milestones and other revenue items, we expect other revenues for 2004 will grow going forward, with more than two-thirds occurring in the third and fourth quarters," said Paul Maier, chief financial officer.

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