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strategy under John Higgins, a onetime investment banker who was named CEO in January 2007. Instead of swinging for the fences—and consuming extensive corporate resources on drug discovery, development, and sales and marketing—Higgins has focused on generating more chances at bat by acquiring dozens of new drug candidates, on keeping costs low, and on forming drug development partnerships as soon as possible.
Higgins, who was brought in by dissident shareholders (including Dan Loeb of New York-based Third Point Management) from Palo Alto, CA-based Connetics, says Ligand had some “good assets” in its drug pipeline, but there had been “a shameful waste of assets in terms of overfunding programs.” He also voiced dismay that Ligand never made money in the years that Robinson headed Ligand—“with a veteran board and management team who were too caught up in their own expectations or egos to change course.”
And then there is a nearly three-year period—from 2002 through most of 2004—that Higgins described as “a miserable period from an accounting and financial reporting point of view.” With revenue in four consecutive quarters overstated by $100 million, Ligand’s restatement of its financial reports came with a massive investigation by the Securities and Exchange Commission. The SEC ultimately terminated its probe of Ligand with no enforcement action, but “it was a very, very messy, ugly investigation,” Higgins says. “This was a broken company. The shareholders wanted to get this thing focused and disciplined, and that’s why they hired me.”
Higgins was fortunate in one respect. Before he took over, Ligand already had begun cleaning house under then-chairman and CEO Henry F. Blissenbach. It was Blissenbach who carried out many of the unpleasant tasks, in terms of shedding … Next Page »
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