Ligand’s news this week was that it entered into a definitive merger agreement where Ligand will acquire Neurogen, where Neurogen holders would receive an estimated $11 million in Ligand common stock and will be granted Contingent Value Rights under four agreements. The CVR’s entitle Neurogen shareholders to cash payments for the sale or licensing of certain assets and the achievement of a specified clinical milestone.  The deal has also been approved by both boards of directors.

Ligand stockholders will gain access to a partnership with Merck (NYSE: MRK) for Vanilloid Receptor Subtype 1 (VR1) Antagonists, additional pipeline assets and drug discovery resources, and approximately $7 million in net cash.  Neurogen also has more than $180 million in net operating loss carryforwards.  Today’s filing shows that on August 24, 2009, which is roughly when the news came out about the merger, BVF Inc. sold some 4,552,550 at a price of $2.57 for a value of about $11.7 million.  If you review the entire day’s trading volume, there were only about 5.8 million shares that traded all day and you have to go to the end of June before you can find a single day where 1 million shares or more traded hands.

Current filings with data as of June 30, 2009 show that WELLINGTON MANAGEMENT COMPANY, LLP is now the largest holder of Ligand with some 15,814,671 coming to a take of 13.99%.  The FORM 4 filed with the SEC shows that BVF now holds some 10,617,400 shares of direct/indirect ownership.  We have placed a call into BVF to see if further sales are coming or if this was over any specific reasons.  BVF sold shares worth back in June worth some $2.4 million as well.

JON C. OGG
August 27, 2009

Biosante Pharmaceuticals, Inc. (NASDAQ: BPAX) has Deutsche as its advisor in its exploration of strategic alternatives.  This stock is at $2.06 and its 52-week range is $0.81 to $5.85.  This used to be a $10 stock and it has been public since 2001.  Back in December, Kingsbridge committed to provide up to $25 million of capital for a period of two years.  This one was set up to explore treatments for female sexual health, menopause, contraception, and male hypogonadism.

Cell Genesys, Inc. (NASDAQ: CEGE) retained Lazard last month to help it explore strategic alternatives now that most of its operations have been wound down.  Some were once hoping it would have the same sort of hope that Dendreon had for prostate cancer, but that is history now.  Amazingly enough, this one has been public since the early 1990′s and shares used to be massively higher than now.

EPIX Pharmaceuticals, Inc. (NASDAQ: EPIX) has JPMorgan to help it explore strategic alternatives.  This one is at $0.30 and the 52-week range is $0.21 to $2.50.  EPIX has been public since 1997 and was usually above $10.00 until late in 2005.  It never saw that again.  This is set up to treat diseases of the central nervous system and lung conditions.

IDM Pharma, Inc. (NASDAQ: IDMI) continues to review strategic options for itself after hiring JMP Securities as its advisor. The company said that the review will continue until the third quarter.  Shares are at $1.70, and the 52-week range is $1.42 to $3.75.  This has been public since 2005 and for all practical purposes it has never traded north of $10.00.

Neurogen Corporation (NASDAQ: NRGN) has MTS Health Partners as its advisor in the review of strategic alternatives.  This one is (or was) focused on improved drugs for psychiatric and neurological disorders.  Neurogen is pursuing a sale of the company or its assets, and is conserving capital while it pursues these options.  AT $0.18, its 52-week trading range is $0.06 to $2.07.  The company has been public since about 1992 and spent years and years at levels much higher than $10.00.

TorreyPines Therapeutics, Inc. (NASDAQ: TPTX) has Merriman Curhan Ford as its advisor for strategic alternatives and may be forced to file for bankruptcy or liquidate per its going concern note.  At $0.26, its 52-week trading range is $0.15 to $1.60.  If you can believe that this used to be north of $100 per share, it was.  This came public in 1998 and the company said its aim is to develop versatile small molecule product candidates capable of treating a number of acute and chronic diseases and disorders such as migraine, chronic pain, xerostomia and cognitive disorders.  That is probably all past tense.

The saddest part of this is that these are nowhere near all of the biotech companies with some operations that are exploring strategic alternatives.  There are many other biotech zombies out there which are too many to cover.

La Jolla Pharmaceutical Co. (NASDAQ: LJPC) is reviewing its alternatives, yet the status there is not known after the ‘rights’ to possible lupus treatment was returned.  Its stock is at $0.31 and the 52-week range is $0.04 to $3.20.  Northfield Laboratories Inc. (NASDAQ: NFLD) is not what we would consider a biotech in the classic sense, but it failed miserably after a more than 10-year quest to create a Holy Grail of artificial blood or blood substitutes.

The long march continues.  Unfortunately, this looks a lot like the Bataan Death March.

JON C. OGG