Updated from 2:46 p.m. EST

Shares of Ligand Pharmaceuticals ( LGND) were among the worst-performing health-related stocks Thursday after the company delayed the filing of its annual report because its audit committee needs more time to review issues related to the way the company accounts for product sales and returns.

Ligand said the review is expected to focus on the company's revenue recognition policies and practices for current as well as past reporting periods. The company is also reviewing the accounting and classification of its sales of royalty rights. The audit committee is working as quickly as possible to complete the review but Ligand said that it couldn't estimate when the 2004 audit will be completed.

As a result, Ligand has notified the Securities and Exchange Commission and Nasdaq that its annual report will be delayed until the review is finished. Since the company has not sought a 15-day extension to file its 10-K, and because the company does not believe that it will be filed by March 31, Ligand is no longer in compliance with continued Nasdaq listing requirements, it said. The company plans to meet with a Nasdaq panel regarding its compliance with listing standards. Shares, which had fallen by almost 43% earlier in the trading session, traded down $1.12, or 12.6%, to $7.75.

Gene Logic ( GLGC) fell 6% after the company said that it would post a 2005 loss that could be as high as $28 million. Gene Logic said that it expects to post a loss of $26 million to $28 million on sales of $83.5 million to $85.5 million. The company plans to invest about $14 million to develop its drug repositioning and selection business, an area of interest, the company said, for pharmaceutical customers. Despite the 2005 forecast, the company did say that it expects to post a profit during 2007 on sales that will exceed $100 million. Gene Logic expects to have about $70 million to $75 million in cash at the end of 2005 and expects to generate cash in 2007. Shares traded down 21 cents to $3.28.

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