Why Ligand Pharmaceuticals Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Ligand Pharmaceuticals (NASDAQ: LGND  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Ligand and see what CAPS investors are saying about the stock right now.

Ligand facts

Headquarters (founded)

La Jolla, Calif. (1987)

Market Cap

$437.9 million

Industry

Biotechnology

Trailing-12-Month Revenue

$31.4 million

Management

CEO John Higgins
CFO John Sharp

Return on Equity (average, past 3 years)

(26.5%)

Cash/Debt

$12.4 million / $28.3 million

Competitors

Eli Lilly
Merck
Roche Holding

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 32% of the 129 members who have rated Ligand believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, succinctly summed up the Ligand bear case for our community:

For years I couldn't understand why Ligand wasn't getting any love for their deep and extensive pipeline that had led to many approved drugs. Then after seeing revenues fail to materialize quarter after quarter, I understood that the company was incapable of extracting shareholder value from their partnerships. Now it seems that a new generation of traders has their eye on the Captisol platform as an apparent pathway to profitability, but I remain skeptical. Revenues upticked to [$13.6M] last quarter but the breakdown was typically opaque. The 2013 revenue guidance was a disappointing [$41-$44M]. ... The share price has risen nicely so far in 2013 but I think Ligand doesn't qualify for the buy and hold category.

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