Analyst Makes The Case For Ligand As A 'Core' Holding

Analysts at H.C. Wainwright & Co. continue to see Ligand Pharmaceuticals Inc. LGND as a "core long term holding" for investors. The firm's Joseph Pantginis initiated coverage of the biopharmaceutical company with a Buy rating and $150 price target, mostly due to the company's business model.

Ligand seeks out value-based acquisitions of companies and technologies that have led to both current and anticipated revenue streams, Pantginis commented in his initiation note. This has also resulted in the company's reputation of reporting sustained profitability.

Ligand is also an early pioneer of contingent value rights for its acquisitions, the analyst continued. As such, earnings growth is supported by the company's increasing royalty streams that are also a "significant spreading out of risk" across multiple assets. On top of that, the reduced risk profile offers protection against downside to the stock on negative news relative to a typical biotechnology company.

The company's management team also adds to the bullish story, Pantginis added. Specifically, John Higgins has been with the company since 2007 at which point Ligand was burning through approximately $100 million per year. Since then the executive oversaw a streamlining of operations and reduced expenses to approximately $20 million per year.

Bottom line, Ligand's stock is appealing to investors that are both revenue and earnings minded and want exposure to the biotechnology drug development sector with risk spread out across various assets.

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