In March, Ligand Pharmaceuticals, a San Diego-based biotech company, suffered a series of setbacks that prompted company executives to scramble to control the fallout and preserve its reputation. First, accounting issues prompted a delay in filing financial reports with the Securities and Exchange Commission. Then, two pivotal studies of a late-stage cancer drug under development failed to meet endpoints. To top it off, NASDAQ delisted Ligand's stock after the company repeatedly failed to file financial reports.
There was "a barrage of bad news," wrote Derek Jellinek, a biotech and pharmaceuticals analyst at Roth Capital Partners, in a July report in which he bemoaned "guidance missteps, inadequate internal controls, and clinical disappointments." To cope, Ligand quickly issued press releases, reached out to clinical investigators, and scheduled conference calls for Wall Street analysts. The multi-pronged effort was made in hopes of soothing the frayed nerves of its various constituents, especially investors.
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