PDL BioPharma Inc (NASDAQ:PDLI) Surges After Strong Revenue Report

PDL BioPharma Inc (NASDAQ:PDLI) Surges After Strong Revenue Report


PDL BioPharma Inc (NASDAQ:PDLI) is up 30% for the last 30 days and seeing average 10-day volume well over one million. The catalyst for the surge has been that PDLI beat their 4Q revenues. The biotechnology company posted revenue of $68 million in the period. For the year, the company reported a profit of $110.7 million, or 71 cents per share. Revenue was reported as $320.1 million.

Notably, PDLI received cash payments of $32.8 million from the royalty rights acquired from Depomed, primarily related to Glumetza, a product marketed by Valeant Pharmaceuticals International, Inc. VRX. An authorized generic version of Glumetza was also launched by a Valeant subsidiary in February 2017 for which, PDL BioPharma got royalties per the same terms as the branded Glumetza agreement.

PDL BioPharma Inc (NASDAQ:PDLI) seeks to provide return for its shareholders by acquiring and managing a portfolio of companies, products, royalty agreements and debt facilities in the biotechnology, pharmaceutical and medical device industries. The Company’s segments include income generating assets and product sales. The income generating assets segment consists of royalties from issued patents in the United States and elsewhere, covering the humanization of antibodies, which it refers to as the Queen et al. patents; notes and other long-term receivables, royalty rights-at fair value and equity investments. The Company’s product sales segment consists of revenue derived from Tekturna, Tekturna HCT, Rasilez and Rasilez HCT (collectively, the Noden Products or Tekturna) sales. It is focused on the acquisition of additional products. As of December 31, 2016, it had a total of five notes receivable transactions outstanding and one note/royalty (hybrid) receivable transaction outstanding.

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“2017 was a great year for us and one where we experienced a 31 percent increase in revenue from the previous year,” stated John P. McLaughlin, chief executive officer of PDL. “Since 2012, we have built a rich portfolio of income generating assets and products to replace revenues from our expired Queen et al patents. We expect the revenues from these assets, whose net book value is $5.54 per share, to fuel the building of our specialty pharma business. It’s important to note that $264 million, or 83 percent of our 2017 revenues, came from sources other than the Queen et al patents. In 2018, we need to continue to execute successfully on our business model as well as close the gap between our share price and our book value per share.”

Here are two other important highlights from the operating front for PDLI:

  • Operating expenses were $38.2 million for the three months ended December 31, 2017, compared to $74.2 million for the same period of 2016. The decrease in operating expenses for the three months ended December 31, 2017, as compared to the same period in 2016, was primarily a result of the prior year period loss on extinguishment of Direct Flow Medical notes receivable, partially offset by the increase in operating expenses related to the acquisitions and operations of Noden and LENSAR, contributing an additional $13.8 million of cost of product revenue and $6.0 million in sales and marketing expenses due to an increase in Noden’s sales force.
  • Operating expenses were $126.3 million for the year ended December 31, 2017, compared to $114.9 million for the year ended December 31, 2016. The increase in operating expenses in 2017 was a result of the acquisitions and operations of Noden and LENSAR, contributing an additional $26.5 million of cost of product revenue, $12.7 million of intangible asset amortizations, $17.1 million in sales and marketing expenses, and $3.6 million in research and development costs for the completion of a pediatric trial for Tekturna. General administrative expenses increased by $5.9 millionof which $7.5 million was related to Noden and $3.2 million was related to LENSAR, partially offset by a decrease of $51.1 million from the loss on extinguishment for the Direct Flow Medical notes receivable in 2016.

PDL BioPharma Inc (NASDAQ:PDLI) has a market cap of 469M with a 153.54M shares out. As already noted, the volume is surging here for PDLI and investors should be watching here as the company could be taking a leap upward. Sign-up for continuing coverage on shares of $PDLI stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $PDLI, either long or short, and we have not been compensated for this article.

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